The Finance Bill, 1998

to continue the existing rates of income-tax for the financial year 1998-99.

Be it enacted by Parliament in the Forty-ninth Year of the Republic of India as follows:

1. (1) This Act may be called the Finance Act, 1998.

(2) It shall come into force on the 1st day of April, 1998

2. The provisions of section 2 of, and the First Schedule to, the Finance Act, 1997, shall apply in relation to income-tax for the assessment year or, as the case may be, the financial year commencing on the 1st day of April, 1998, as they apply in relation to income-tax for the assessment year or, as the case may be, the financial year commencing on the 1st day of April, 1997, with the following modifications, namely:

 

(a) in section 2.

(i) for the figures 1997, wherever they occur, the figures 1998 shall be substituted;

(ii) in sub-section (i), the words and letter and such tax shall be increased in the cases to which Paragraph E of that Part applies, by a surcharge, calculated in the manner provided therein shall be omitted;

(iii) in sub-section (3), the first and second provisos shall be omitted;

(b) in the first Schedule,

(i) for Part I, the following Part shall be substituted, namely:

Part I

Income-tax

Paragraph A

In the case of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, , not being a case to which any other Paragraph of this Part applies,

Rates of income-tax

(1) where the total income does not e exceed Rs. 40,000 Nit,

(2) where the total income exceeds Rs. 40,000 but does 10 per cent. of the amount by which the total income

not exceed Rs. 60,000 exceeds Rs. 40,000;

(3) where the total income exceeds Rs. 60,000 but does Rs. 2,000 plus 20 per cent. of the amount by which the total

not exceed Rs. 1,50,000 income exceeds Rs. 60,000;

(4) where the total income exceeds Rs. 1,50,000 Rs. 20,000 plus 30 per cent. of the amount by which the total

income exceeds Rs. 1,50,000.

Paragraph B

In the case of every co-operative society,

Rates o income-tax

(1) where the total income does not exceed Rs. 10,000 10 per cent. of the total income;

(2) where the total income exceeds Rs. 10,000 but does Rs. 1,000 plus 20 per cent. of the amount by which the total

not exceed Rs. 20,000 income exceeds Rs. 10,000;

(3) where the total income exceeds Rs. 20,000 Rs. 2,000 plus 35 per cent. of the amount by which the total

income exceeds Rs. 20,000

Paragraph C

In the case of every firm,

Rate of income-tax

On the whole of the total income 35 per cent.

Paragraph D

In the case of every local authority,

Rate of income-tax

On the whole of the total income 30 per cent.

Paragraph E

In the case of company,

Rate of income-tax

I. In the case of a domestic company 35 per cent. of the total income;

II. In the case of a company, other than a domestic company,

(i) on so much of the total income as consists of

(a) royalties received from Government or an Indian

concern in pursuance of an agreement made by it

it with the Government or the Indian concern after

the 31st day of March, 1961 but before the 1st day

of April, 1976, or

(b) fees for rendering technical services received

from Government or an Indian concern in pursuance

of an agreement made by it with the Government or

the Indian concern after the 29th day of February,

1964 but before the 1st day of April, 1976,

and where such agreement has, in either case, been 50 per cent.;

approved by the Central Government

(ii) on the balance, if any, of the total income 48 per cent.;

(ii) in part IV, in Rule 8,

(A) for sub-rules (1) and (2), the following sub-rules shall be substituted, namely:

(1) Where the assessee has, in the previous year relevant to the assessment year commencing on the 1st day of April, 1998, any agricultural income and the net result of the computation of the agricultural income of the assessee for any one or more of the previous years relevant to the assessment years commencing on the 1st day of April, 1990 or the 1st day of April, 1991 or the 1st day of April, 1992 or the 1st day of April, 1993 or the 1st day of April, 1994 or the 1st day of April, 1995 or the 1st day of April, 1996 or the 1st day of April, 1997, is a loss, then, for the purposes of sub-section (2) of section 2 of this act,

(i) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1990, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1991 or the 1st day of April, 1992 or the 1st day of April, 1993 or the 1st day of April, 1994 or the 1st day of April, 1995 or the 1st day of April, 1996 or the 1st day of April, 1997.

(ii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1991, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1992 or the 1st day of April, 1993 or the 1st day of April, 1994 or the 1st day of April, 1995 or the 1st day of April, 1996 or the 1st day of April, 1997.

(iii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1992, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1993 or the 1st day of April, 1994 or the 1st day of April, 1995 or the 1st day of April, 1996 or the 1st day of April, 1997.

(iv) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1993, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1994 or the 1st day of April, 1995 or the 1st day of April, 1996 or the 1st day of April, 1997.

(v) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1994, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1995 or the 1st day of April, 1996 or the 1st day of April, 1997.

(vi) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1995, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1996 or the 1st day of April, 1997,

(vii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1996, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1997,

(viii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1997,

shall be set off against the agricultural income of the assessee for the previous year relevant to the assessment year commencing on the 1st day of April, 1998.

(2) Where the assessee has, in the previous year relevant to the assessment year commencing on the 1st day of April, 1999 or, if by virtue of any provision of the Income-tax Act, income-tax is to be charged in respect of the income of a period other than that previous year, in such other period, any agricultural income and the net result of the computation of the agricultural income of the assessee for any one of more of the previous years relevant to the assessment years commencing on the 1st day of April, 1991 or the 1st day of April, 1992 or the 1st day of April, 1993 or the 1st day of April, 1994 or the 1st day of April, 1995 or the 1st day of April, 1996 or the 1st day of April, 1997 or the 1st day of April, 1998, is a loss, then, for the purposes of sub-section (9) of section 2 of this Act,

(i) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1991, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1992 or the 1st day of April, 1993 or the 1st day of April, 1994 or the 1st day of April, 1995 or the 1st day of April, 1996 or the 1st day of April, 1997 or the 1st day of April, 1998,

(ii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1992, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1993 or the 1st day of April, 1994 or the 1st day of April, 1995 or the 1st day of April, 1996 or the 1st day of April, 1997 or the 1st day of April, 1998,

(iii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1993, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1994 or the 1st day of April, 1995 or the 1st day of April, 1996 or the 1st day of April, 1997 or the 1st day of April, 1998,

(iv) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1994, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1995 or the 1st day of April, 1996 or the 1st day of April, 1997 or the 1st day of April, 1998,

(v) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1995, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1996 or the 1st day of April, 1997 or the 1st day of April, 1998,

(vi) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1996, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1997 or the 1st day of April, 1998,

(vii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1997, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1998,

(viii) the loss so computed for the previous year relevant to the assessment year-commencing on the 1st day of April, 1998,

shall be set off against the agricultural income of the assessee for the previous year relevant to the assessment year commencing on the 1st day of April, 1999;

(B) for sub-rule (4), the following sub-rule shall be substituted, namely:

(4) Notwithstanding anything contained in this rule, no loss which has not been determined by the Assessing Officer under the provisions of these rules or the rules contained in Part IV of the First Schedule to the Finance-Act, 1990 (12 of 1990), or of the First Schedule to the Finance (No. 2) Act, 1991 (49 of 1991), or of the First Schedule to the Finance Act, 1992 (18 of 1992), or of the First Schedule to the Finance Act, 1993 (38 of 1993), or of the First Schedule to the Finance Act, 1994 (32 of 1994), or of the First Schedule to the Finance Act, 1995 (22 of 1995), or of the First Schedule to the Finance (No. 2) Act, 1996 (33 of 1996) or of the First Schedule to the Finance Act, 1997 (26 of 1997), shall be set off under sub-rule (1) or, as the case may be, sub-rule (2)..

Statement of objects and reasons

The object of this short Bill is to continue for the financial year 1998-99 the existing rates of Income-tax with certain modifications.

2. Clause 2 of the Bill deals with the rates of income-tax. The rates of income-tax which were specified in Part III of the First Schedule to the Finance Act, 1997, for the purpose of deduction of tax at source from salaries during the financial year 1997-98, for computing the advance tax payable during that financial year in relation to current incomes and for certain special purposes, are proposed to be continued for the purpose of assessments for the assessment year 1998-99. Further, the same rates are proposed to be continued also for the purpose of deduction of tax at source from salaries during the financial year 1998-99, for computing the advance tax payable during that financial year on current incomes, and also for the said special purposes.

3. The rates for deduction of tax at source during the financial year 1998-99 from incomes other than salaries, specified in Part II of the First Schedule to the Finance Act, 1997, are also proposed to be continued for deduction of tax at source from such incomes during the financial year 1998-99.

4. Clause 2 of the Bill according proposes to apply to the financial year 1998-99 the provisions of section 2 of, and the First Schedule to, the Finance Act, 1997, with consequential and other necessary modifications.

New Delhi; YASHWANT SINHA.

The 25TH March, 1998.

Presidents recommendation under articles 117 and 274 of the

Constitution of India

[Copy of letter No. F. 3(1)-B(D)/98, dated the 25th March, 1998 from Shri Yashwant Sinha, Minister of Finance, to the Secretary-General, Lok Sabha.]

The President, having been informed of the subject matter of the proposed Bill, recommends under clause (1) of article 117, read with clause (1) of Article 274, of the Constitution of India, the introduction of the Finance Bill, 1998, to the Lok Sabha.

2. The Bill will be introduced in the Lok Sabha immediately after the presentation of the Budget on the 25th March, 1998.

Lok Sabha

A BILL

to continue the existing rates of income-tax for the financial year 1998-99.

(Shri Yashwant Sinha,

Minister of Finance.)