Section 115J. Special provisions relating to certain companies

115J. Special provisions relating to certain companies .—(1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee being a company[2] [(other than a company engaged in the business of generation or distribution of electricity)], the total income, as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 1988[3] [but before the 1st day of April, 1991] (hereafter in this section referred to as the relevant previous year), is less than thirty per cent of its book profit, the total income of such assessee chargeable to tax for the relevant previous year shall be deemed to be an amount equal to thirty per cent of such book profit. 4[(1A) Every assessee, being a company, shall, for the purposes of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956 (1 of 1956).] Explanation .—For the purposes of this section, "book profit" means the net profit as shown in the profit and loss account for the relevant previous year[5] [prepared under sub-section (1A)], as increased by— (a) the amount of income-tax paid or payable, and the provision therefor; or (b) the amounts carried to any reserves[2] [(other than the reserves specified in section 80HHD 6[or sub-section (1) of section 33AC])], by whatever name called; or (c) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; or (d) the amount by way of provision for losses of subsidiary companies; or (e) the amount or amounts of dividends paid or proposed; or (f) the amount or amounts of expenditure relatable to any income to which any of the provisions of Chapter III[7] [applies; or] 2[(g) the amount withdrawn from the reserve account under section 80HHD, where it has been utilised for any purpose other than those referred to in sub-section (4) of that section; or (h) the amount credited to the reserve account under section 80HHD, to the extent that amount has not been utilised within the period specified in sub-section (4) of that section;] 6[(ha) the amount deemed to be the profits under sub-section (3) of section 33AC,] 8 [if any amount referred to in clauses (a) to (f) is debited or, as the case may be, the amount referred to in clauses (g) and (h) is not credited] to the profit and loss account, and as reduced by,— (i) the amount withdrawn from reserves[2] [(other than the reserves specified in section 80HHD)] or provisions, if any such amount is credited to the[9] [profit and loss account: 1. Ins. by Act 11 of 1987, s. 43 (w.e.f. 1-4-1988). 2. Ins. by Act 3 of 1989, s. 19 (w.e.f. 1-4-1989). 3. Ins. by Act 12 of 1990, s. 32 (w.e.f. 1-4-1990). 4. Ins. by Act 13 of 1989, s. 19 (w.e.f. 1-4-1989). 5. Subs. by s. 19, ibid ., for "prepared in accordance with the provisions of Parts II and III of the Sixth Schedule to the Companies Act, 1956 (1 of 1956)" (w.e.f. 1-4-1989). 6. Ins. by Act 36 of 1989, s. 12 (w.e.f. 1-4-1990). 7. Subs. by Act 3 of 1989, s. 19, for "applies," (w.e.f. 1-4-1989). 8. Subs. by s. 19, ibid ., for "if any such amount is debited" (w.e.f. 1-4-1989). 9. Subs. by Act 13 of 1989, s. 19, for "profit and loss account; or" (w.e.f. 1-4-1988). Provided that, where this section is applicable to an assessee in any previous year (including the relevant previous year), the amount withdrawn from reserves created or provisions made in a previous year relevant to the assessment year commencing on or after the 1st day of April, 1988 shall not be reduced from the book profit unless the book profit of such year has been increased by those reserves or provisions (out of which the said amount was withdrawn) under this Explanation ; or] (ii) the amount of income to which any of the provisions of Chapter III applies, if any such amount is credited to the profit and loss account; or 1[(iii) the amounts [as arrived at after increasing the net profit by the amounts referred to in clauses (a) to (f) and reducing the net profit by the amounts referred to in clauses (i) and (ii)] attributable to the business, the profits from which are eligible for deduction under section 80HHC or section 80HHD; so, however, that such amounts are computed in the manner specified in sub-section (3) or sub-section (3A) of section 80HHC or sub-section (3) of section 80HHD, as the case may be; or] 2[(iv)] the amount of the loss or the amount of depreciation which would be required to be set off against the profit of the relevant previous year as if the provisions of clause (b) of the first proviso to sub-section (1) of section 205 of the Companies Act, 1956 (1 of 1956), are applicable. (2) Nothing contained in sub-section (1) shall affect the determination of the amounts in relation to the relevant previous year to be carried forward to the subsequent year or years under the provisions of sub-section (2) of section 32 or sub-section (3) of section 32A or clause (ii) of sub-section (1) of section 72 or section 73 or section 74 or sub-section (3) of section 74A or sub-section (3) of section 80J.] 3 [115JA. Deemed income relating to certain companies .—(1) Notwithstanding anything contained in any other provisions of this Act, where in the case of an assessee, being a company, the total income, as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 1997[4] [but before the 1st day of April, 2001] (hereafter in this section referred to as the relevant previous year) is less than thirty per cent of its book profit, the total income of such assessee chargeable to tax for the relevant previous year shall be deemed to be an amount equal to thirty per cent of such book profit. (2) Every assessee, being a company, shall, for the purposes of this section prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956 (1 of 1956): Provided that while preparing profit and loss account, the depreciation shall be calculated on the same method and rates which have been adopted for calculating the depreciation for the purpose of preparing the profit and loss account laid before the company at its annual general meeting in accordance with the provisions of section 210 of the Companies Act, 1956 (1 of 1956): Provided further that where a company has adopted or adopts the financial year under the Companies Act, 1956 (1 of 1956), which is different from the previous year under the Act, the method and rates for calculation of depreciation shall correspond to the method and rates which have been adopted for calculating the depreciation for such financial year or part of such financial year falling within the relevant previous year. 1. Ins. by Act 3 of 1989, s. 19 (w.e.f. 1-4-1989). 2. Clause (iii) renumbered as clause (iv) by s. 19, ibid . (w.e.f. 1-4-1989). 3. Ins. by Act 33 of 1996, s. 39 (w.e.f. 1-4-1997). 4. Ins. by Act 10 of 2000, s. 50 (w.e.f. 1-4-2001). Explanation .—For the purposes of this section, "book profit" means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2), as increased by— (a) the amount of income-tax paid or payable, and the provision therefor; or (b) the amounts carried to any reserves by whatever name called; or (c) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; or (d) the amount by way of provision for losses of subsidiary companies; or (e) the amount or amounts of dividends paid or proposed; or (f) the amount or amounts of expenditure relatable to any income to which any of the provisions of Chapter III applies; 1[(g) the amount or amounts set aside as provision for diminution in the value of any asset, if any amount referred to in clauses (a) to (g) is debited to the profit and loss account, and as reduced by,—] (i) the amount withdrawn from any reserves or provisions if any such amount is credited to the profit and loss account: Provided that, where this section is applicable to an assessee in any previous year (including the relevant previous year), the amount withdrawn from reserves created or provisions made in a previous year relevant to the assessment year commencing on or after the 1st day of April, 1997[2] [but ending before the 1st day of April, 2001] shall not be reduced from the book profit unless the book profit of such year has been increased by those reserves or provisions (out of which the said amount was withdrawn) under this Explanation ; or (ii) the amount of income to which any of the provisions of Chapter III applies, if any such amount is credited to the profit and loss account; or 3[(iii) the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account. Explanation .—For the purposes of this clause,— (a) the loss shall not include depreciation; (b) the provisions of this clause shall not apply if the amount of loss brought forward or unabsorbed depreciation is nil; or] (iv) the amount of profits derived by an industrial undertaking from the business of generation or generation and distribution of power; or (vii) the amount of profits of sick industrial company for the assessment year commencing from the assessment year relevant to the previous year in which the said company has become a sick industrial company under sub-section (1) of section 17 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) and ending with the assessment year during which the entire net worth of such company becomes equal to or exceeds the accumulated losses. Explanation.— For the purposes of this clause, "net worth" shall have the meaning assigned to it in clause (ga) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986);[4] [or] 5[(viii) the amount of profits eligible for deduction under section 80HHC, computed under clause (a), (b) or (c) of sub-section (3) or sub-section (3A), as the case may be, of that section, and subject to the conditions specified in sub-sections (4) and (4A) of that section; (ix) the amount of profits eligible for deduction under section 80HHE, computed under sub-section (3) of that section.] (3) Nothing contained in sub-section (1) shall affect the determination of the amounts in relation to the relevant previous year to be carried forward to the subsequent year or years under the provisions of sub-section (2) of section 32 or sub-section (3) of section 32A or clause (ii) of sub-section (1) of section 72 or section 73 or section 74 or sub-section (3) of section 74A. (4) Save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee, being a company, mentioned in this section.] 6 [115JAA. Tax credit in respect of tax paid on deemed income relating to certain companies. —(1) Where any amount of tax is paid under sub-section (1) of section 115JA by an assessee being a company for any assessment year, then, credit in respect of tax so paid shall be allowed to him in accordance with the provisions of this section. 7[(1A) Where any amount of tax is paid under sub-section (1) of section 115JB by an assessee, being a company for the assessment year commencing on the 1st day of April, 2006 and any subsequent assessment year, then, credit in respect of tax so paid shall be allowed to him in accordance with the provisions of this section.] 1. Subs. by Act 27 of 1999, s. 90, for "sub-clause (b) or sub-clause (c) of clause (iv) of sub-section (2) of section 80-IA" (w.e.f. 1-4-2000). 2. Subs. by s. 90, ibid ., for "profits and gains under sub-section (5) of section 80-IA" (w.e.f. 1-4-2000). 3. Subs. by s. 90, ibid., for "under sub-section (12) of section 80-IA, and subject to fulfilling the conditions laid down in sub-section (4A) of section 80-IA" (w.e.f. 1-4-2000). 4. Ins. by Act 26 of 1997, s. 37 (w.e.f. 1-4-1997). 5. Ins. by s. 37, ibid . (w.e.f. 1-4-1998). 6. Ins. by Act 26 of 1997, s. 38 (w.e.f. 1-4-1997). 7. Ins. by Act 18 of 2005, s. 35 (w.e.f. 1-4-2006). 1[(2) The tax credit to be allowed under sub-section (1) shall be the difference of the tax paid for any assessment year under sub-section (1) of section 115JA and the amount of tax payable by the assessee on his total income computed in accordance with the other provisions of this Act: Provided that no interest shall be payable on the tax credit allowed under sub-section (1). (2A) The tax credit to be allowed under sub-section (1A) shall be the difference of the tax paid for any assessment year under sub-section (1) of section 115JB and the amount of tax payable by the assessee on his total income computed in accordance with the other provisions of this Act: Provided that no interest shall be payable on the tax credit allowed under sub-section (1A): 2[Provided further that where the amount of tax credit in respect of any income-tax paid in any country or specified territory outside India, under section 90 or section 90A or section 91, allowed against the tax payable under the provisions of sub-section (1) of section 115JB exceeds the amount of such tax credit admissible against the tax payable by the assessee on its income in accordance with the other provisions of this Act, then, while computing the amount of credit under this sub-section, such excess amount shall be ignored.] (3) The amount of tax credit determined under sub-section (2) shall be carried forward and set off in accordance with the provisions of sub-sections (4) and (5) but such carry forward shall not be allowed beyond the fifth assessment year immediately succeeding the assessment year in which tax credit becomes allowable under sub-section (1). (3A) The amount of tax credit determined under sub-section (2A) shall be carried forward and set off in accordance with the provisions of sub-sections (4) and (5) but such carry forward shall not be allowed beyond the[3] [fifteenth assessment year] immediately succeeding the assessment year in which tax credit becomes allowable under sub-section (1A).] (4) The tax credit shall be allowed set-off in a year when tax becomes payable on the total income computed in accordance with the provisions of this Act other than section 115JA[4] [or section 115JB, as the case may be]. (5) Set off in respect of brought forward tax credit shall be allowed for any assessment year to the extent of the difference between the tax on his total income and the tax which would have been payable under the provisions of sub-section (1) of section 115JA[4] [or section 115JB, as the case may be] for that assessment year. (6) Where as a result of an order under sub-section (1) or sub-section (3) of section 143, section 144, section 147, section 154, section 155, sub-section (4) of section 245D, section 250, section 254, section 260, section 262, section 263 or section 264, the amount of tax payable under this Act is reduced or increased, as the case may be, the amount of tax credit allowed under this section shall also be increased or reduced accordingly. 5[(7) In case of conversion of a private company or unlisted public company into a limited liability partnership under the Limited Liability Partnership Act, 2008 (6 of 2009), the provisions of this section shall not apply to the successor limited liability partnership. Explanation .—For the purposes of this section, the expressions "private company" and "unlisted public company" shall have the meanings respectively assigned to them in the Limited Liability Partnership Act, 2008 (6 of 2009).]] 1. Subs. by Act 21 of 2006, s. 23, for sub-sections (2) and (3) (w.e.f. 1-4-2007). 2. Ins. by Act 7 of 2017, s. 46 (w.e.f. 1-4-2018). 3. Subs. by, s. 46, ibid ., for "tenth assessment year" (w.e.f. 1-4-2018). 4. Ins. by Act 10 of 2000, s. 51 (w.e.f. 1-4-2001). 5. Ins. by Act 14 of 2010, s. 29 (w.e.f. 1-4-2011). 1 [115JB. Special provision for payment of tax by certain companies. —(1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee, being a company, the income-tax, payable on the total income as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after[2] [the 1st day of April, 2012], is less than 3[eighteen and one-half per cent.] of its book profit, 4[such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate of[3] [eighteen and one-half per cent.]]. (2)[5] [Every assessee,— (a) being a company, other than a company referred to in clause (b), shall, for the purposes of this section, prepare its[6] [statement of profit and loss] for the relevant previous year in accordance with the provisions of[7] [Schedule III] to[8] [the Companies Act, 2013 (18 of 2013)]; or (b) being a company, to which the[9] [second proviso to sub-section (1) of section 129] of[8] [the Companies Act, 2013 (18 of 2013)] is applicable, shall, for the purposes of this section, prepare its 6[statement of profit and loss] for the relevant previous year in accordance with the provisions of the Act governing such company:] Provided that while preparing the annual accounts including[6] [statement of profit and loss],— (i) the accounting policies; (ii) the accounting standards adopted for preparing such accounts including[6] [statement of profit and loss; (iii) the method and rates adopted for calculating the depreciation, shall be the same as have been adopted for the purpose of preparing such accounts including 6[statement of profit and loss] and laid before the company at its annual general meeting in accordance with the provisions of[10] [section 210] of[8] [the Companies Act, 2013 (18 of 2013)]: Provided further that where the company has adopted or adopts the financial year under[8] [the Companies Act, 2013 (18 of 2013)], which is different from the previous year under this Act,— (i) the accounting policies; (ii) the accounting standards adopted for preparing such accounts including[6] [statement of profit and loss]; (iii) the method and rates adopted for calculating the depreciation, 1. Ins. by Act 10 of 2000, s. 52 (w.e.f. 1-4-2001). 2. Subs. by Act 8 of 2011, s. 18, for "the 1st day of April, 2011" (w.e.f. 1-4-2012). 3. Subs. by s. 18, ibid ., for "eighteen per cent." (w.e.f. 1-4-2012). 4. Subs. by Act 20 of 2002, s. 52, for "the tax payable for the relevant previous year shall be deemed to be seven and onehalf per cent. of such book profit" (w.e.f. 1-4-2001). 5. Subs. by Act 23 of 2012, s. 48, for the portion beginning with the words "Every assessee," and ending with the words and figures "the Companies Act, 1956 (1 of 1956):" (w.e.f. 1-4-2013). 6. Subs. by Act 7 of 2017, s. 47, for "profit and loss account" (w.e.f. 1-4-2017). 7. Subs. by s. 47, ibid ., for "Part II of Schedule VI" (w.e.f. 1-4-2017). 8. Subs. by s. 47, ibid ., for "the Companies Act, 1956 (1 of 1956)" (w.e.f. 1-4-2017). 9. Subs. by s. 47, ibid ., for "proviso to sub-section (2) of section 211" (w.e.f. 1-4-2017). 10. Subs. by s. 47, ibid ., for "section 210" (w.e.f. 1-4-2017). shall correspond to the accounting policies, accounting standards and the method and rates for calculating the depreciation which have been adopted for preparing such accounts including 1[statement of profit and loss] for such financial year or part of such financial year falling within the relevant previous year. Explanation[2] [ 1 ].—For the purposes of this section, "book profit" means the[3] [profit] as shown in the 1[statement of profit and loss] for the relevant previous year prepared under sub-section (2), as increased by— (a) the amount of income-tax paid or payable, and the provision therefor; or (b) the amounts carried to any reserves, by whatever name called[4] [, other than a reserve specified under section 33AC]; or (c) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; or (d) the amount by way of provision for losses of subsidiary companies; or (e) the amount or amounts of dividends paid or proposed; or (f) the amount or amounts of expenditure relatable to any income to which[5] [section 10 (other than the provisions contained in clause (38) thereof) or[6] * section 11 or section 12 apply; or] 7[(fa) the amount or amounts of expenditure relatable to income, being share of the assessee in the income of an association of persons or body of individuals, on which no income-tax is payable in accordance with the provisions of section 86; or (fb) the amount or amounts of expenditure relatable to income accruing or arising to an assessee, being a foreign company, from,— (A) the capital gains arising on transactions in securities; or (B) the interest, royalty or fees for technical services chargeable to tax at the rate or rates specified in Chapter XII, if the income-tax payable thereon in accordance with the provisions of this Act, other than the provisions of this Chapter, is at a rate less than the rate specified in sub-section (1); or (fc) the amount representing notional loss on transfer of a capital asset, being share of a special purpose vehicle, to a business trust in exchange of units allotted by the trust referred to in clause (xvii) of section 47 or the amount representing notional loss resulting from any change in carrying amount of said units or the amount of loss on transfer of units referred to in clause (xvii) of section 47; or] [8] [(fd) the amount or amounts of expenditure relatable to income by way of royalty in respect of patent chargeable to tax under section 115BBF; or] 9[(g) the amount of depreciation,] 1. Subs. by Act 7 of 2017, s. 47, for "profit and loss account" (w.e.f. 1-4-2017).