Section 6. Item 8 omitted by Act 16 of 1981, s. 24 (w.e.f. 1-4-1982). 7. Subs. by Act 26 of 1988, s. 53, for it

6. Item 8 omitted by Act 16 of 1981, s. 24 (w.e.f. 1-4-1982). 7. Subs. by Act 26 of 1988, s. 53, for item 9 (w.e.f. 1-4-1989). 8. Items 11 to 21 (both inclusive) omitted by Act 16 of 1981, s. 24 (w.e.f. 1-4-1982). 9. Subs. by Act 11 of 1987, s. 73, for "for data processing and for transmission and reception of messages" (w.e.f. 1-41988). 10. Item 26 omitted by Act 16 of 1981, s. 24 (w.e.f. 1-4-1982). 6. Subs. by Act 21 of 2006, s. 51, for "section 271C" (w.e.f. 1-4-2007). (o) an order made by a Deputy Commissioner or a Deputy Director imposing a penalty under section 272A; (p) an order made by a Deputy Commissioner imposing a penalty under section 272AA; (q) an order imposing a penalty under Chapter XXI; (r) an order made by an Assessing Officer other than a Deputy Commissioner under the provisions of this Act in the case of such person or class of persons, as the Board may, having regard to the nature of the cases, the complexities involved and other relevant considerations, direct. Explanation.— For the purposes of this sub-section, where on or after the 1st day of October, 1998, the post of Deputy Commissioner has been redesignated as Joint Commissioner and the post of Deputy Director has been redesignated as Joint Director, the references in this sub-section for "Deputy Commissioner" and "Deputy Director" shall be substituted by "Joint Commissioner" and "Joint Director" respectively. 1[(1A) Every appeal filed by an assessee in default against an order under section 201 on or after the 1st day of October, 1998 but before the 1st day of June, 2000 shall be deemed to have been filed under this section.] 1 [54E. Capital gain on transfer of capital not to be assets charged in certain cases 6. The Explanation omitted by Act 18 of 1992, s. 29 (w.e.f. 1-4-1993). 1 [54E. Capital gain on transfer of capital not to be assets charged in certain cases .—(1) Where the capital gain arises from the transfer of a[2] [long-term capital asset][3] [before the 1st day of April, 1992], (the capital asset so transferred being hereafter in this section referred to as the original asset) and the assessee has, within a period of six months after the date of such transfer, invested or deposited the 4[whole or any part of the net consideration] in any specified asset (such specified asset being hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,— (a) if the cost of the new asset is not less than the[5] [net consideration] in respect of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the new asset is less than the[5] [net consideration] in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of acquisition of the new asset bears to the[6] [net consideration] shall not be charged under section 45: 6. Explanation renumbered as Explanation 1 thereof by Act 27 of 1999, s. 47 (w.e.f. 1-6-1999). 7. Subs. by Act 32 of 1994, s. 25, for "from a tour operator or, as the case may be, a travel agent" (w.e.f. 1-4-1995). 8. Ins. by Act 27 of 1999, s. 47 (w.e.f. 1-6-1999). 9. Ins. by Act 49 of 1991, s. 29 (w.e.f. 1-4-1992). 10. Subs. by Act 27 of 1999, s. 47, for " Explanation " (w.e.f. 1-6-1999). 11. Subs. by Act 12 of 1990, s. 23, for sub-section (3) (w.e.f. 1-4-1991). 12. Ins. by Act 32 of 1994, s. 25 (w.e.f. 1-4-1995). (4) The amount credited to the reserve account under clause (b) of sub-section (1), shall be utilised by the assessee before the expiry of a period of five years next following the previous year in which the amount was credited for the following purposes, namely:— (a) construction of new hotels approved by the prescribed authority in this behalf or expansion of facilities in existing hotels already so approved; (b) purchase of new cars and new coaches by tour operators already so approved or by travel agents; (c) purchase of sports' equipment for mountaineering, trekking, golf, river-rafting and other sports in or on water; (d) construction of conference or convention centres; (e) provision of such new facilities for the growth of Indian tourism as the Central Government may, by notification in the Official Gazette, specify in this behalf; 2[(1B) Every appeal filed by an assessee in default against an order under sub-section (6A) of section 206C on or after the 1st day of April, 2007 but before the 1st day of June, 2007 shall be deemed to have been filed under this section.] (2) Notwithstanding anything contained in sub-section (1) of section 246, every appeal under this Act which is pending immediately before the appointed day, before the Deputy Commissioner (Appeals) and any matter arising out of or connected with such appeals and which is so pending shall stand transferred on that date to the Commissioner (Appeals) and the Commissioner (Appeals) may proceed with such appeal or matter from the stage at which it was on that day : Provided that the appellant may demand that before proceeding further with the appeal or matter, the previous proceeding or any part thereof be reopened or that he be re-heard. Explanation.— For the purposes of this section, "appointed day" means the day appointed by the Central Government by notification in the Official Gazette.] 247. [ Appeal by partner]. — Omitted by the Finance Act, 1992 (18 of 1992) , s. 84 ( w.e.f. 1-4-1993). 6. The Explanation omitted by Act 18 of 1992, s. 68 (w.e.f. 1-4-1993). Earlier the Explanation reintroduced by Act 3 of 1989, s. 95 (w.e.f. 1-4-1989) and omitted by Act 4 of 1989, s. 71 (w.e.f. 1-4-1989) which was earlier inserted by Act 41 of 1975, s. 52 (w.e.f. 1-10-1975) (4) Where such discontinuance or dissolution takes place after any proceedings in respect of an assessment year have commenced, the proceedings may be continued against the person referred to in sub-section (3) from the stage at which the proceedings stood at the time of such discontinuance or dissolution, and all the provisions of this Act shall, so far as may be, apply accordingly. (5) Nothing in this section shall affect the provisions of sub-section (6) of section 159. 1 [54E. Capital gain on transfer of capital not to be assets charged in certain cases 7[Provided that in a case where the original asset is transferred after the 28th day of February, 1983, the provisions of this sub-section shall not apply unless the assessee has invested or deposited the whole or, as the case may be, any part of the net consideration in the new asset by initially subscribing to such new asset:] 8[Provided further that in a case where the transfer of the original asset is by way of compulsory acquisition under any law and the full amount of compensation awarded for such acquisition is not received by the assessee on the date of such transfer, the period of six months referred to in this sub-section shall, in relation to so much of such compensation as is not received on the date of the transfer, be reckoned from the date immediately following the date on which such compensation is received by the assessee[9] [or the 31st day of March, 1992, whichever is earlier].] Explanation 1 .—[10] [For the purposes of this sub-section, "specified asset" means,— (a) in a case where the original asset is transferred before the 1st day of March, 1979, any of the following assets, namely:—] (i) securities of the Central Government or a State Government; (ii) savings certificates as defined in clause (c) of section 2 of the Government Savings Certificates Act, 1959 (46 of 1959); (iii) units in the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963); 1[(f) subscription to equity shares forming part of any eligible issue of capital made by a public company:] Provided that where any of the activities referred to in[2] [clauses (a) to (f)] would result in creation of any asset owned by the assessee outside India, such asset should be created only after obtaining prior approval of the prescribed authority. (5) Where any amount credited to the reserve account under clause (b) of sub-section (1),— (a) has been utilised for any purpose other than those referred to in sub-section (4), the amount so utilised; or (b) has not been utilised in the manner specified in sub-section (4), the amount not so utilised, shall be deemed to be the profits,— (i) in a case referred to in clause (a), in the year in which the amount was so utilised; or (ii) in a case referred to in clause (b), in the year immediately following the period of five years specified in sub-section (4), and shall be charged to tax accordingly. 4. Subs. by Act 32 of 1994, s. 46, for "an order specified in sub-section (1) where such order" (w.e.f. 1-6-1994). 5. Ins. by Act 3 of 1989, s. 43 (w.e.f. 1-4-1989). 6. Ins. by Act 14 of 1997, s. 8 (w.e.f. 1-1-1997). (e) an order imposing a penalty under section 271B[1] [or section 271BB]; 2 [(ee) an order made by a Deputy Commissioner imposing a penalty under section 271C, section 271D or section 271E;] (f) an order made by a Deputy Commissioner or a Deputy Director imposing a penalty under section 272A; 3[(ff) an order made by a Deputy Commissioner imposing a penalty under section 272AA;] 4[(g) an order imposing a penalty under Chapter XXI by the Income-tax Officer or the Assistant Commissioner where such penalty has been imposed with the previous approval of the Deputy Commissioner under sub-section (2) of section 274;] (h) an order made by an Assessing Officer (other than Deputy Commissioner) under the provisions of this Act in the case of such person or classes of persons as the Board may, having regard to the nature of the cases, the complexities involved and other relevant considerations, direct. _B 6. The Explanation substituted by Act 18 of 2008, s. 41 (w.e.f. 1-6-2003). Earlier inserted by 32 of 2003, s. 71 (w.e.f. 1-62003). B.—Deduction at source 1 [54E. Capital gain on transfer of capital not to be assets charged in certain cases 1. Ins. by Act 29 of 1977, s. 13 (w.e.f. 1-4-1978). 2. Subs. by Act 11 of 1987, s. 22, for "capital asset, not being a short-term capital asset" (w.e.f. 1-4-1988). 3. Ins. by Act 18 of 1992, s. 30 (w.e.f. 1-4-1992). 4. Subs. by Act 21 of 1979, s. 8, for "full value of the consideration or any part thereof received or accruing as a result of such transfer" (w.e.f. 1-4-1979). 5. Subs. by s. 8, ibid ., for "full value of consideration received or accruing" (w.e.f. 1-4-1979). 6. Subs. by s. 8, ibid ., for "full value of such consideration" (w.e.f. 1-4-1979). 7. Ins. by Act 11 of 1983, s. 20 (w.e.f. 1-4-1983). 8. Ins. by Act 67 of 1984, s. 16 (w.e.f. 1-4-1984). 9. Ins. by Act 18 of 1992, s. 30 (w.e.f. 1-4-1992). 10. Subs. by Act 21 of 1979, s. 8, for 'For the purposes of this sub-section and sub-section (3), "specified asset" means any of the following assets, namely:—'(w.e.f. 1-4-1979). (iv) debentures specified by the Central Government for the purposes of clause (ii) of sub-section (1) of section 80L; (v) shares in any Indian company which are issued to the public or are listed in a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956), and any rules made thereunder, where the investment in such shares is made before the 1st day of March, 1978; 3[(5A) Where any amount credited to the reserve account under clause (b) of sub-section (1) has been utilised for subscription to any equity shares referred to in clause (f) of sub-section (4) and either whole or any part of such equity shares are transferred or converted into money by the assessee at any time within a period of three years from the date of their acquisition, the aggregate amount so utilised in respect of such equity shares shall be deemed to be the profits of the previous year in which the equity shares are transferred or converted into money. 1. Ins. by Act 27 of 1999, s. 47 (w.e.f. 1-4-2000). 2. Subs. by s. 47, ibid ., for "clauses (a) to (e)" (w.e.f. 1-4-2000). 3. Ins. by Act 27 of 1999, s. 47 (w.e.f. 1-4-2000). Explanation .—A person shall be treated as having acquired any shares on the date on which his name is entered in relation to those shares in the register of members of the public company.] (3) Notwithstanding anything contained in sub-section (1), the Board or the[5] [Principal Director General or Director General], or the[6] [Principal Chief Commissioner or Chief Commissioner] or 7[Principal Commissioner or Commissioner] if so authorised by the Board, may, by order in writing, transfer any appeal which is pending before a Deputy Commissioner (Appeals) and any matter arising out of or connected with such appeal and which is so pending, to the Commissioner (Appeals) if the Board or, as the case may be, the[5] [Principal Director General or Director General] or[6] [Principal Chief Commissioner or Chief Commissioner] or[7] [Principal Commissioner or Commissioner] (at the request of the appellant or otherwise) is satisfied that it is necessary or expedient so to do having regard to the nature of the case, the complexities involved and other relevant considerations and the Commissioner (Appeals) may proceed with such appeal or matter, from the stage at which it was before it was so transferred: Provided that the appellant may demand that before proceeding further with the appeal or matter, the previous proceeding or any part thereof be re-opened or that he be reheard. Explanation .—For the purposes of this section,— (a) "appointed day" means the 10th day of July, 1978, being the day appointed under section 39 of the Finance (No. 2) Act, 1977 (29 of 1977); 6. The Explanation omitted by s. 44, ibid (w.e.f. 1-4-1965). 7. Ins. by Act 20 of 2015, s. 42 (w.e.f. 1-6-2015). person authorised under the scheme to make payment of accumulated balance due to employees, shall, in a case where the accumulated balance due to an employee participating in a recognised provident fund is includible in his total income owing to the provisions of rule 8 of Part A of the Fourth Schedule not being applicable, at the time of payment of the accumulated balance due to the employee, deduct income-tax thereon at the rate of ten per cent: Provided that no deduction under this section shall be made where the amount of such payment or, as the case may be, the aggregate amount of such payment to the payee is less than[1] [fifty thousand rupees]: Provided further that any person entitled to receive any amount on which tax is deductible under this section shall furnish his Permanent Account Number to the person responsible for deducting such tax, failing which tax shall be deducted at the maximum marginal rate.] 1 [54E. Capital gain on transfer of capital not to be assets charged in certain cases 1 [(va) equity shares forming part of any eligible issue of capital, where the investment in such shares is made after the 28th day of February, 1978;] (vi) deposits for a period of not less than three years with the State Bank of India established under the State Bank of India Act, 1955 (23 of 1955), or any subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959) or any nationalised bank, that is to say, any corresponding new bank, constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or any co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank); 2[(b) in a case where the original asset is transferred after the 28th day of February, 1979 3[but before the 1st day of March, 1983], such National Rural Development Bonds as the Central Government may notify in this behalf in the Official Gazette;] 3 4 [(c) in a case where the original asset is transferred after the 28th day of February, 1983 [but before the 1st day of April, 1986], any of the following assets, namely:— (i) securities of the Central Government which that Government may, by notification in the Official Gazette, specify in this behalf; (6) The deduction under sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed on the basis of the[1] [[2] * amount of convertible foreign exchange received by the assessee for services provided by him to foreign tourists[3] [, payments made by him to any assessee referred to in subsection (2A)] and the payments received by him in Indian currency as referred to in the[4] [ Explanation 1 to sub-section (2)].] 5[(7) Where a deduction under sub-section (1) is claimed and allowed in respect of profits derived from the business of a hotel, such part of profits shall not qualify to that extent for deduction for any assessment year under any other provisions of this Chapter under the heading "C.—Deductions in respect of certain incomes", and shall in no case exceed the profits and gains of such hotel.] Explanation .—For the purposes of this section,— (a) "travel agent" means a travel agent or other person (not being an airline or a shipping company) who holds a valid licence granted by the Reserve Bank of India under section 32 of[6] [the Foreign Exchange Management Act, 1999 (42 of 1999)]; (b) "status" means the category under which the assessee is assessed as "individual", "Hindu undivided family" and so on.] 1. Ins. by Act 12 of 1990, s. 50 (w.e.f. 1-4-1990). 2. Ins. by s. 41, ibid. (w.e.f. 1-4-1990). 3. Ins. by Act 3 of 1989, s. 43 (w.e.f. 1-4-1989). 4. Subs. by s. 43, ibid., for clause (g) (w.e.f. 1-4-1989). 5. Subs. by Act 25 of 2014, s. 4, for "Director General" (w.e.f. 1-6-2013). 6. Subs. by s. 4, ibid ., for "Chief Commissioner" (w.e.f. 1-6-2013). 7. Subs. by s. 4, ibid ., for "Commissioner" (w.e.f. 1-6-2013). 6. The second proviso omitted by s. 15, ibid. (w.e.f. 10-9-1986). 7. Ins. by Act 11 of 1987, s. 59 (w.e.f. 1-6-1987). Provided that if at any stage of the hearing of any such case or matter, it appears to the Presiding Officer that the case or matter is of such a nature that it ought to be heard of by a Bench consisting of three Members, the case or matter may be referred by the Presiding Officer of such Bench to the Chairman for transfer to such Bench as the Chairman may deem fit. 1[(5A) Notwithstanding anything contained in the foregoing provisions of this section, the Chairman may, for the disposal of any particular case, constitute a Special Bench consisting of more than three Members.] (6) Subject to the other provisions of this Chapter, the places at which the principal Bench and the additional Benches shall ordinarily sit shall be such as the Central Government may, by notification in the Official Gazette, specify[1] [and the Special Bench shall sit at a place to be fixed by the Chairman].] 1 [54E. Capital gain on transfer of capital not to be assets charged in certain cases (ii) special series of units of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963), which the Central Government may, by notification in the Official Gazette, specify in this behalf; (iii) such National Rural Development Bonds as have been notified under clause (b) of Explanation 1 or as may be notified in this behalf under this clause by the Central Government; (iv) such debentures issued by the Housing and Urban Development Corporation Limited [a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956)], as the Central Government may, by notification in the Official Gazette, specify in this behalf;] 4[(d) in a case where the original asset is transferred after the 31st day of March, 1986, any of the assets specified in clause (c) and such bonds issued by any public sector company, as the Central Government may, by notification in the Official Gazette, specify in this behalf;] 1. Ins. by Act 19 of 1978, s. 13 (w.e.f. 1-4-1978). 2. Ins. by Act 21 of 1979, s. 8 (w.e.f. 1-4-1979). 3. Ins. by Act 11 of 1983, s. 20 (w.e.f. 1-4-1983). 4. Ins. by Act 23 of 1986, s. 12 (w.e.f. 1-4-1987). 1* * * * *] (b) "convertible foreign exchange" shall have the meaning assigned to it in clause (a) of the Explanation to section 80HHC; (c) "services provided to foreign tourists" shall not include services by way of sale in any shop owned or managed by the person who carries on the business of a hotel or of a tour operator or of a travel agent; 7[ d ) "authorised dealer", "foreign exchange" and "Indian currency" shall have the meanings respectively assigned to them in clauses (b), (h) and (k) of section 2 of the[7] [Foreign Exchange Management Act, 1999 (42 of 1999)];] 8 [(e) "eligible issue of capital" means an issue made by a public company formed and registered in India and the entire proceeds of the issue is utilised wholly and exclusively for the purpose of carrying on the business of— (i) setting up and running of new hotels approved by the prescribed authority; or (ii) providing such new facility for the growth of tourism in India, as the Central Government may, by notification in the Official Gazette, specify.] 1. Subs. by Act 49 of 1991, s. 29, for "amount of convertible foreign exchange received by the assessee for services provided by him to the foreign tourist" (w.e.f. 1-4-1992). 2. The words "aggregate of the" omitted by Act 32 of 1994, s. 25 (w.e.f. 1-4-1995). 3. Ins. by Act 32 of 1994, s. 25 (w.e.f. 1-4-1995). 4. Subs. by Act 27 of 1999, s. 47, for " Explanation to sub-section (2)" (w.e.f. 1-6-1999). 5. Ins. by Act 21 of 1998, s. 32 (w.e.f. 1-4-1999). 6. Subs. by Act 17 of 2013, s. 4, for "the Foreign Exchange Regulation Act, 1973" (w.e.f. 1-4-2013). 7. Ins. by Act 49 of 1991, s. 29 (w.e.f. 1-4-1992). 8. Ins. by Act 27 of 1999, s. 47 (w.e.f. 1-4-2000). 1 [80HHE.Deduction in respect of profits form export of computer software, etc. —(1) Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of,— (i) export out of India of computer software or its transmission from India to a place outside India by any means; (ii) providing technical services outside India in connection with the development or production of computer software, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee,[2] [a deduction to the extent of the profits, referred to in sub-section (1B),] derived by the assessee from such business: 3* * * * * 6. Profits and gains of non-resident person. — (1) The profits and gains of the branches in India of a person not resident in India and carrying on any business of insurance, may, in the absence of more reliable data, be deemed to be that proportion of the world income of such person which corresponds to the proportion which his premium income derived from India bears to his total premium income. (2) For the purposes of this rule, the world income in relation to life insurance business of a person not resident in India shall be computed in the manner laid down in this Act for the computation of the profits and gains of life insurance business carried on in India. 1 [54E. Capital gain on transfer of capital not to be assets charged in certain cases 2 [(e) in a case where the original asset is transferred after the 31st day of March, 1989, any of the assets specified in clauses (c) and (d) and such debentures or bonds issued by the National Housing Bank established under section 3 of the National Housing Bank Act, 1987 (53 of 1987), as the Central Government may, by notification in the Official Gazette, specify in this behalf.] 3[ Explanation 2.—"Eligible issue of capital" shall have the meaning assigned to it in sub-section (3) of section 80CC. Explanation 3.—An assessee shall not be deemed to have invested[4] [the whole or any part of the net consideration in any equity shares referred to in sub-clause (va) of clause (a)] of Explanation 1, unless the assessee has subscribed to or purchased the shares in the manner specified in sub-section (4) of section 80CC. ] 5[ Explanation 4].—"Cost", in relation to any new asset, being a deposit referred to in 6[sub-clause (vi) of clause (a)] of Explanation 1, means the amount of such deposit. 7[ Explanation 5.—"Net consideration", in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer.] 4[Provided that if the assessee, being a company, engaged in the export out of India of computer software, issues a certificate referred to in clause (b) of sub-section (4A), that in respect of the amount of the export specified therein, the deduction under this sub-section is to be allowed to a supporting software developer, then the amount of deduction in the case of an assessee shall be reduced by such amount which bears to the total profits derived by the assessee from the export, the same proportion as the amount of the export turnover specified in such certificate bears to the total export turnover of the assessee. 5[ Explanation .—For the removal of doubts, it is hereby declared that the profits and gains derived from on site development of computer software (including services for development of software) outside India shall be deemed to be the profits and gains derived from the export of computer software outside India.] 6. Purchaser's title. —(1) Where property is sold in execution of a certificate, there shall vest in the purchaser merely the right, title and interest of the defaulter at the time of the sale, even though the property itself be specified. (2) Where immovable property is sold in execution of a certificate, and such sale has become absolute, the purchaser's right, title and interest shall be deemed to have vested in him from the time when the property is sold, and not from the time when the sale becomes absolute. 1 [54E. Capital gain on transfer of capital not to be assets charged in certain cases 8[(1A) Where the assessee deposits after the 27th day of April, 1978, the 9[whole or any part of the net consideration in respect] of the original asset in any new asset, being a deposit[10] [referred to in sub-clause (vi) of clause (a)] of Explanation 1 below sub-section (1), the cost of such new asset shall not be taken into account for the purposes of that sub-section unless the following conditions are fulfilled, namely:— (a) the assessee furnishes, along with the deposit, a declaration in writing, to the bank or the co-operative society referred to in the[11] [said sub-clause (vi)] with which such deposit is made, to the effect that the assessee will not take any loan or advance on the security of such deposit during a period of three years from the date on which the deposit is made; (b) the assessee furnishes, along with the return of income for the assessment year relevant to the previous year in which the transfer of the original asset was effected or within such further time as may be allowed by the[12] [Assessing Officer], a copy of the declaration referred to in clause (a) duly attested by an officer not below the rank of sub-agent, agent or manager of such bank or an officer of corresponding rank of such co-operative society. (1A) Where the assessee, being a supporting software developer, has during the previous year, developed and sold computer software to an exporting company in respect of which the said company has issued a certificate under the proviso to sub-section (1), there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of the assessee a deduction of the profits derived by the assessee from the developing and selling of computer software to the exporting company in respect of which the certificate has been issued by the said company[6] [to such extent and for such years as specified in sub-section (1B)].] 6[(1B) For the purposes of sub-sections (1) and (1A), the extent of deduction of profits shall be an amount equal to— (i) eighty per cent. of such profits for an assessment year beginning on the 1st day of April, 2001; 7[(ii) seventy per cent. thereof for an assessment year beginning on the 1st day of April, 2002; (iii) fifty per cent. thereof for an assessment year beginning on the 1st day of April, 2003; (iv) thirty per cent. thereof for an assessment year beginning on the 1st day of April, 2004,] 1. Ins. by Act 49 of 1991, s. 30 (w.e.f. 1-4-1991). 2. Subs. by Act 10 of 2000, s. 36, for "a deduction of the profits" (w.e.f. 1-4-2001). 3. The proviso omitted by 22 of 1995, s. 18 (w.e.f. 1-4-1996). 4. Ins. by Act 21 of 1998, s.33 (w.e.f. 1-4-1999). 6. Employer's annual contributions, when deemed to be income received by employee. —That portion of the annual accretion in any previous year to the balance at the credit of an employee participating in a recognised provident fund as consists of— (a) contributions made by the employer in excess of[5] [twelve] per cent. of the salary of the employee, and (b) interest credited on the balance to the credit of the employee in so far as it[6] * is allowed at a rate exceeding such rate as may be fixed by the Central Government in this behalf by notification in the Official Gazette, shall be deemed to have been received by the employee in that previous year and shall be included in his total income for that previous year, and shall be liable to income-tax[7] *. 5. Ins. by Act 14 of 2001, s. 42 (w.e.f. 1-4-2001). 6. Ins. by Act 10 of 2000, s. 36 (w.e.f. 1-4-2001). 7. Subs. by Act 14 of 2001, s. 42, for sub-clauses (ii), (iii) and (iv) (w.e.f. 1-4-2002). and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005 and any subsequent assessment year.] (2) The deduction specified in sub-section (1) shall be allowed only if the consideration in respect of the computer software referred to in that sub-section is received in, or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, 1[within such further period as the competent authority may allow in this behalf.] Explanation[2] [1].—The said consideration shall be deemed to have been received in India where it is credited to a separate account maintained for the purpose by the assessee with any bank outside India with the approval of the Reserve Bank of India. 3[Explanation 2.—For the purposes of this sub-section, the expression "competent authority" means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.] 6. Deduction of tax on contributions paid to an employee. — Where any contributions made by an employer, including interest on contributions, if any, are paid to an employee during his lifetime[7] [in circumstances other than those referred to in clause (13) of section 10],[8] [tax] on the amounts so paid shall be deducted at the average rate of[8] [tax] at which the employee was liable to[8] [tax] during the preceding three years or during the period, if less than three years, when he was a member of the fund, and shall be paid by the trustees to the credit of the Central Government within the prescribed time and in such manner as the Board may direct. (3) For the purposes of sub-section (1), profits derived from the business referred to in that subsection shall be the amount which bears to the profits of the business, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee. 4[(3A) For the purposes of sub-section (1A), profits derived by a supporting software developer shall be,— (i) in a case where the business carried on by the supporting software developer consists exclusively of developing and selling of computer software to one or more exporting companies solely engaged in exports, the profits of such business; (ii) in a case where the business carried on by a supporting software developer does not consist exclusively of developing and selling of computer software to one or more exporting companies, the amount which bears to the profits of the business, the same proportion as the turnover in respect of sale to the respective exporting company bears to the total turnover of the business carried on by the assessee.] (4) The deduction under sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section. 6. Liability of trustees on cessation of approval. —If a gratuity fund for any reason ceases to be an approved gratuity fund, the trustees of the fund shall nevertheless remain liable to tax on any gratuity paid to any employee. 4[(4A) The deduction under sub-section (1A) shall not be admissible unless the supporting software developer furnishes in the prescribed form along with his return of income,— (i) the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed on the basis of the profits of the supporting software developer in respect of sale of computer software to the exporting company; and (ii) a certificate from the exporting company containing such particulars as may be prescribed and verified in the manner prescribed that in respect of the export turnover mentioned in the certificate, the exporting company has not claimed deduction under this section: 1. Subs. by Act 27 of 1999, s.48, for certain words (w.e.f. 1-6-1999). 6. Confectionery and chocolates. 7. Gramophones, including record-players and gramophone records. 6* * * * * 7[9. Projectors.] 10. Photographic apparatus and goods. 8* * * * *