An Act for Imposing a tax on income derived from sources other than agriculture. WHEREAS it is expedient to impose a tax on income derived from sources other than agriculture; It is hereby enacted as follows: RXT1 1919201 CHAPTER I. 1. (1) This Act extends to the whole of British India, and applies also, within the dominions of Princes and States in India in alliance with Her Majesty, Extent and commencement. to British subjects in those dominions who are in the service of the Government of India or of a local authority established in the exercise of the powers of the Governor General in Council in that behalf; and (2) It shall come into force on the first day of April, 1886. (3) Any power conferred by this Act to make rules or to issue orders may be exercised at any time after the passing of this Act; but a rule or 'order so made or issued shall not take effect until the Act comes into force. 2. On and from the day on which this Act comes into force the enactments specified in the first schedule to this Act shall be repealed, except as to fees payable and other sums due under those enactments and the mode of recovering the same. Repeal. Definitions. 3. In this Act, unless there is something repugnant in the subject or context, (1) "local authority" means any municipal committee, district board, body of port commissioners or other authority legally entitled to, or entrusted by the Government with, the control or management of any municipal or local fund : (2) "company" means an association carrying on business in British India, whose stock or funds is or are divided into shares and transferable, whether the company is incorporated or not, and whether its principal place of business is situate in British India or not: (3) "prescribed" means prescribed by the Governor General in Council by notification in the Gazette of India, or by the Governor General in Council or a Local Government by rules made under this Act: (4)" salary" includes allowances, fees, commissions, perquisites or profits received, in lieu of or in addition to a fixed salary, in respect of an office or employment of profit; but, subject to any rules which may be prescribed in this behalf, it does not include travelling, tentage, horse or sumptuary allowance, or any other allowance granted to meet specific expenditure: (5) "income" means income and profits accruing and arising or received in British India, and includes, in the case of a British subject within the dominions of a Prince or State in India in alliance with Her Majesty, any salary, annuity, pension or gratuity payable to that subject by the Government or by a local authority established in the exercise of the powers of the Governor General in Council in that behalf: (6) "Magistrate" means a Presidency Magistrate or a Magistrate of the first or second class : (7) "person" includes a firm and a Hindu undivided family : (8) "defaulter" includes a company or firm making default under this Act: (9) "Collector" means the chief officer in charge of the revenue-administration of a district, and, in a presidency-town, any officer whom the Local Government, by notification in the official Gazette, may, by name or by virtue of his office, appoint to be a Collector for the purposes of this Act; in the case of a company or firm, it means the Collector, as here defined, of the district or presidency-town in which its principal place of business in British India is situate; and, in the case of any other person chargeable under this Act, it means the Collector, defined as aforesaid, of the district or presidency-town in which the person has his residence: (10) "principal officer," used with reference to a local authority or a company or any other public body or association not being a local authority. or company, means— (a) the secretary, treasurer, manager or agent of the authority, company, body or association; or (b) any person connected with the authority, company, body or association upon whom the Collector has caused a notice to be served of his intention of treating him as the principal officer thereof; and (11) "Part" means a Part of the second schedule to this Act. Incomes liable to the tax. CHAPTER II. LIABILITY TO TAX. 4. Subject to the exceptions mentioned in the next following section, there shall be paid, in the year beginning with the first day of April, 1886, and in each subsequent year, to the credit of the Government of India, or as the Governor General in Council directs, in respect of the sources of income specified in the first column of the second schedule to this Act, a tax at the rate specified in that behalf in the second column of that schedule. Exceptions. 5. (1) Nothing in section 4 shall render liable to the tax (a) any rent or revenue derived from land which is used for agricultural purposes and is either assessed to land-revenue or subject to a local rate assessed and collected by officials of the Government, as such; or (b) any income derived from- (i) agriculture, or (ii) the performance by a cultivator or receiver of rent-in-kind of any process ordinarily employed by a cultivator or receiver of rent-in-kind to render the produce raised or received by him fit to be taken to market, or (iii) the sale by a cultivator or receiver of rent-in-kind of the produce raised or received by him when he does not keep a shop or stall for the sale of such produce; or (c) any building owned and occupied by the receiver of the rent or revenue of any such land as is referred to in clause (a), or by the cultivator, or the receiver of rent-in-kind, of any land with respect to which or the produce whereof any operation mentioned in clause (b) is carried on: Provided that the building is on or in the immediate vicinity of the land, and is a building which the receiver of the rent or revenue, or the cultivator or the receiver of the rent-in-kind, by reason of his connection with the land, requires as a dwelling-house, or as a store-house, factory or other out-building; or (d) any profits of a shipping company incorporated or registered out of British India and having its principal place of business out of India and its ships ordinarily engaged in sea-going traffic out of Indian waters; or (e) any income derived from property solely employed for religious or public charitable purposes; or (f) any income which a person enjoys as a member of a company or of a firm or of a Hindu undivided family when the company or the firm or the family is liable to the tax; or, (g) subject to any conditions and restrictions which may be prescribed in this behalf, such portion, not exceeding one-sixth, of the income in respect whereof a person would, but for this exception, be chargeable under this Act, as is deducted from the salary of the person under the authority or with the permission of the Government for the purpose of securing a deferred annuity to him or a provision to his wife or children after his death or is paid by the person to a insurance company in respect of an insurance or deferred annuity on his own life or on the life of his wife; or (h) any interest on stock-notes; or (i) the salary of any officer, warrant-officer, non-commissioned officer or private of Her Majesty's Forces or of Her Majesty's Indian Forces who is not in an employment which, according to the ordinary practice, is held indifferently by military persons and civilians, and whose salary does not exceed five hundred rupees per mensem ; or are thousand (j) any person whose income from all sources is less than ve hundred 3.20). rupees per annum. (2) An officer or servant is not exempt from taxation under this Act by reason only of the income of his employer being exempt therefrom under this section. Power to make exemptions. 6. The Governor General in Council may, by notification in the Gazette of India, exempt from liability to the tax the whole or any part of the income of any class or tribe, or of any persons residing in any specified area, and may, by a like notification, revoke the exemption. CHAPTER III. ASSESSMENT AND COLLECTION. A.-Salaries and Pensions. Government officials and pensioners. 7. In the case of a person receiving any salary, annuity, pension or Mode of payment in case of gratuity from the Government, any sum payable to him by the Government in respect of the salary, annuity, pension or gratuity shall be reduced by the amount of the tax to which he is liable under Part I. in respect thereof. 8. (1) In the case of a person receiving any salary, annuity, pension or gratuity from a local authority, the tax to which he is liable under Part I. shall, at the time of the payment to him of any of the salary, annuity, pension or gratuity, be deduct Mode of payment in case of servants and pensioners of local authorities. ed therefrom by the officer whose duty it is to make the payment, and be paid by that officer within the prescribed time to the credit of the Government of India or as the Governor General in Council directs. (2) If that officer does not deduct and pay the tax as required by sub-section (1), he shall, without prejudice to any other consequences which he may incur, be deemed to be personally in default in respect of the tax. (3) If, when any payment is made, the tax is from any cause not deducted, it may, and on the requisition of the Collector shall, be deducted when any salary, annuity, pension or gratuity is subsequently paid to the person liable to the tax. (4) The power to deduct under this section shall be without prejudice to any other mode of recovery. S. 6. For the exemption of Universities and other educational bodies, see G. G. 1888, p. 135; and of payments to Service and other Funds, G. G. 1888, p. 323. Mode of payment in case of servants and pensioners of companies and private employers. 9. (1) The tax to which a person receiving any salary, annuity, pension or gratuity from a company, or from any other public body or association not being a local authority or company, or from a private employer, is liable under Part I. shall be payable by him at the time when any portion of the salary, annuity, pension or gratuity is paid to him. (2) The Collector may, subject to such conditions as may be prescribed, enter into an arrangement(a) with any company, or any such body or association as aforesaid, or any private employer, with respect to the recovery on behalf of the Government by the company, body, association or employer of the tax to which any person receiving any salary, annuity, pension or gratuity from the company, body, association or employer is liable under Part I. 10. The principal officer of every local authority, and of every company, and of every other public body or association not being a local authority or company, shall prepare, and, on or before the fifteenth day of April in each year, deliver or cause to be delivered to the Collector, in the prescribed form, a return in writing showing Annual return by principal officer of company or association. (a) the name of every person who is receiving at the date of the return any salary, annuity or pension, or has received during the year ending on that date any gratuity, from the authority, company, body or association, as the case may be, and the address of every such person so far as it is known; and (b) the amount of the salary, annuity, pension, or gratuity so received by each such person, and the time at which the same becomes payable or, in the case of a gratuity, was paid. B-Profits of Companies. Annual statement of nett profits. 11. The principal officer in British India of every company shall prepare, and on or before the fifteenth day of April in each year, deliver or cause to be delivered to the Collector, a statement in writing. signed by him of the nett profits made in British India by the company during the year ending on the day on which the company's accounts have been last made up, or, if the company's accounts have not been made up within the year ending on the thirty-first day of March in the year immediately preceding that for which the assessment is to be made, then of the nett profits so made during the year ending on the said thirty-first day of March. 12. (1) If the Collector has reason to believe that a statement delivered under section 11 is incorrect or incomplete, he may cause to be served on the principal officer of the company a notice requiring him, Power to require officers of companies to produce accounts. S. 9 (2) (a).-The agreements are exempted from stamp duty. G. G. 1886, p. 371. |