Finance Act, 1953

Finance Act, 1953

Finance Act, 1953

[ACT NO.14 OF 1953]

[25th April 1953 ]

An Act to give effect to the financial proposals of the Central Government of the financial year 1953-54.

BE it enacted by Parliament as follows: —

2. Income-tax and super-tax.

The provisions of section 2 of, and the first Schedule to, the Finance Act, 1951 (XXIII of 1951), as originally enacted, shall apply in relation to income-tax and super-tax for the financial year 1953-54 as they apply in relation to income-tax and super-tax for the financial year 1952-53 with the modifications that -

(a)for the figures “1950”, “1951” and “1952”, wherever they occur, the figures “1951”, “1953” and “1954” shall respectively be substituted; and

(b)in the First Schedule,-

(i)in Part I, in the limits specified in the first proviso to paragraph A, for the figures “7,200” and “3,600”, the figures “8,400” and “4,200” shall respectively be substituted;

(ii)in Part II, in clause (iii)of the first proviso to paragraph D, for the words “one anna per rupee of the total income”, the following shall be substituted, namely :-

“one anna and six pies per rupee on so much of the total income as consists of dividends from a subsidiary Indian company, and a rebate at the rate of six pies per rupee on any other income included in the total income.”

3. Amendment of Act XI of 1922.

With effect from the 1st day of April, 1953, the following amendments shall be made in the Indian Income-tax Act, 1922, namely :-

(a) in sub-section (2) of section 9, after the first proviso, the following proviso shall be inserted, namely :-

“Provided further that where the property referred to in the preceding proviso consists of one residential house only and it cannot actually be occupied by the owner by reason of the fact that owing to his employment, business, profession or vocation carried on at any other place, he has to reside at that other place in a building not belonging to him and the residential house is not actually let and no other benefit therefrom is derived by the owner, the income of such property under this section shall, if the property was not occupied during the whole of the previous year be taken to be nil, and if it was occupied for a part of the previous year be computed proportionately, so however that the income in respect of such property shall in no case a loss.”;

(b)after section 12A, the following section shall be inserted namely :-

“12AA.Royalties or copyright fees for literary or artistic works.

Where the time taken by the author of a literary on artistic work in the making thereof is-

(a)more than twelve but less than twenty-four months, or

(b)more than twenty-four months, the amount received or receivable by him during any previous year on account of any lump sum consideration for the assignment or grant of any of his interests in the copyright of that work, or of royalties or copyright fees (whether receivable in lump sum or otherwise), in respect of that work, shall, if he so claims, be allocated for purposes of assessment as hereunder-

(i)in the case referred to in clause (a), one-half of the amount of such lump sum, royalties or fees as the income of the previous year in which the whole amount is received or receivable, and the other half as the income of the next succeeding previous year; and

(ii)in the case referred to in clause (b), one-third of the amount of such lump sum, royalties or fees as the income of the previous year in which the whole amounts is received or receivable, and one-third of the said amount as the income of each of the two next succeeding previous years.

Explanation.-For the purposes of this section, the expression ‘author’ includes a joint author and the expression ‘lump sum’ in regard to royalties or copyright fees includes an advance payment on account of such royalties or copyright fees which is no returnable.”; (c) for sub-sections (1) and (2) of section 15B, the following sub-sections shall be substituted, namely:-

“(1)The tax shall not be payable by an assessee in respect of any sums paid by him on or after the 1 st day of April, 1953 as donations to any institution or fund to which this sections applies :

Provided that in the case of a company this exemption shall apply only in respect of income-tax, and not in respect of super-tax payable by it :

Provided further that this exemption shall not apply-

(a) if the aggregate of the sums so paid by the assesses is less than two hundred and fifty rupees,

(b) to any sums paid in excess of one-twentieth of the assessee’s total income as reduced by any portion thereof exempt from tax under any other provisions of this Act, or one hundred thousand rupees, whichever is less.

(2) This section applies to any institution or found established in the taxable territories for a charitable purpose-

(i) the income whereof is exempt under clause (i) of sub-section (3) of section 4,

(ii) which is not expressed to be for the benefit of any particular religious community,

(iii) which maintains regular accounts of its receipts and expenditure, and

(iv) which is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860 (XXI of 1860), or under section 26 of the Indian Companies Act, 1913 (VII of 1913), or is a university established by law or is any other educational institution recognised by Government or by a university or affiliated to any university, or

(v) which is an institution financed wholly or in part by the Government or a local authority.

Explanation.- An institution or fund established for the benefit of scheduled castes, backward classes, scheduled tribes or of women and children shall not be deemed to be an institution or fund expressed to be for the benefit of a religious community within the meaning of clause (ii).

(2A) For the removal of doubts, it is hereby declared that in respect of sums paid as donations on or after the 1st day of April, 1948, and before the 1st day of April, 1953, the provisions of sub-section (1) and (2) shall apply as if the amendments made by clause (c)of section 3 of the Finance Act, 1953, had not been made.”;

(d) in sub-section (1) of section 24,-

(i) after the first proviso, the following proviso shall be inserted, namely :-

“Provided further that in computing the profits and gains chargeable under the hear “Profits and gains of business, profession or vocation’, any loss sustained in speculative transactions which are in the nature of a business shall not be taken into account except to the extent of the amount of profits and gains, if any, in any other business consisting of speculative transactions.”,

(ii) after the last proviso, the following Explanations shall be inserted, namely :-

“Explanation 1.- Where the speculative transactions carried on are of such a nature as to constitute a business, the business shall be deemed to be distinct and separate from any other business.

Explanation 2.- A speculative transaction means a transaction in which a contract for purchase and sale of any commodity including stocks and shares is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips :

Provided that for the purposes of this section.-

(a) a contract in respect of raw materials or merchandise entered into by a person in the course of his manufacturing or merchanting business to guard against loss through future price fluctuations in respect of his contracts for actual delivery of goods manufactured by him or merchandise sold by him; or

(b) a contract in respect of stocks and share entered into by a dealer or investor therein to guard against loss in his holdings of stocks and shares through price fluctuations; or

(c) a contract entered into by a member of a forward market or a stock exchange in the course of any transaction in the nature of jobbing or arbitrage to guard against loss which may arise in the ordinary course of his business as such member; shall not be deemed to be a speculative transaction.”;

(e) for sections 49A and 49AA, the following section shall be substituted, namely:-

“49A. Agreement for granting relief in respect of double taxation or for avoidance thereof.

The Central Government may enter into an agreement-

(a) with the Government of the State of Jammu and Kashmir or with the Government of any country outside India for the granting of relief in respect of income on which have been paid both income-tax (including super-tax) under this Act and income-tax in that State or in that country, as the case may be, or

(b) with the Government of any country outside India for the avoidance of double taxation of income, profits and gains under this Act and under the corresponding law in force in that country;

and may, by notification in the Official Gazette, make such provisions as may be necessary of implementing the agreement.”

(f) after section 56, the following section shall be inserted. Namely :-

“56A. Exemption from super-tax of certain dividends.

(1) No super-tax shall be payable by a company on such part of its total income as consists of dividends received from an Indian company formed and registered after the 31st day of March, 1952, where-

(i) the Central Government is satisfied that the Indian company is wholly or mainly engaged in an industry for the manufacture or production of any one or more of the following, namely :-

(1) Coal, including coke and other derivatives;

(2) Iron and Steel;

(3) Motor and aviation fuel, kerosene, crude oils and synthetic oils (not being oil exploration);

(4) Heavy chemicals including fertilizers;

(5) Heavy machinery used in industry including ball and roller bearing and gear wheels and parts thereof, boilers and steam generating equipment;

(6) Machinery and equipment for the generation, transmission and distribution of electric energy;

(7) Non-ferrous metals including alloys;

(8) Paper including newsprint and paper board;

(9) Internal combustion engines;

(10) Power-driven pumps;

as specified in the Fist Schedule to the Industries (Development and Regulation) Act, 1951 (No. LXV of 1951), and

(ii) the income of the Indian company would have been exempt under the operation of section 15-C if the provisions of that section had been applicable thereto.

(2) The exemption specified in sub-section (1) shall apply also to dividends payable to a company in respect of any fresh capital raised by an Indian Company after the 28th day of February, 1953, by public subscription for the purpose of increasing the production of, or starting a separate unit of, any one or more of the items specified in clause (i) of sub-section (1).”

4. Amendments to Act XXXII of 1934.

With effect from the 28 ht day of February, 1953, the Indian Tariff Act, 1934 (XXXII of 1934), shall be amended in the manner specified in the First Schedule.

5. Additional duties of Customs.

When any goods chargeable with a duty of Customs under the First Schedule to the Indian Tariff Act, 1934 (XXXII of 1934), or under that Schedule read with any notification of the Central Government for the time being in force, are assessed to duty, there shall, up to the 31st day of March, 1954, be levied and collected as an addition to, and in the same manner as, the total amount so chargeable-

(a) a sum equal to 155 per cent. of such amount, in the case of goods comprised in Items Nos.22 (2) and 22 (4);

(b) a sum equal to 55 per cent. of such amount, in the case of goods comprised in Items Nos.48, 48(2), 48 (6) and 51 (2), and in the case of textile manufactures specified in Item No.49 when made wholly or mainly of any of the fabrics specified in Item No. 8, 48(1) 48 (4), 48 (5), 48(7) or 48 (10);

(c) a sum equal to 45 per cent. of such amount, in the case of goods comprised in Item No.47 (2);

(d) a sum equal to 25 per cent. of such amount, in the case of goods comprised in any of the Items of the said Schedule other than those specified in clauses (a), (b) and (c) of this section or in the Second or the Third Schedule to this Act; and

(e) a sum equal to 5 per cent. of such amount, in the case of goods comprised in any of the Items of the said Schedule specified in the Third Schedule of this Act.

6. Alteration of certain duties of central excise.

With effect from the 28th day of February, 1953, the following amendments shall be made in the First Schedule to the Central Excises and Salt Act, 1944 (I of 1944):-

In Item No.12, for the entries “Twenty per cent. Ad valorem” and “Five per cent. ad valorem” in the last column against sub-items (1) and (2), the entries “Three annas and three pies per yard” and “One anna and three pies per yard” shall respectively be substituted.

7. Additional duties of excise.

The provisions of section 8 of the Finance Act, 1951 (XXIII of 1951) shall continue in force up to the 31 st day of March, 1954, and accordingly that section for the figures “1953”as substituted therein by section 3 of the Finance Act, 1952 (XXIX of 1952), the figures “1954” shall be substituted.

8. Discontinuance of salt duty.

For the year beginning on the 1st day of April 1953, no duty shall be levied on salt manufactured in, or imported by sea or land into, the territory of India excluding the State of Jammu and Kashmir.

9. Inland postage rates.

The First Schedule to the Indian Post Office Act, 1898 (VI of 1898), as inserted therein by section 10 of the Finance Act, 1950 (XXV of 1950), shall be amended as follows :-

“(i) in column 2 of the entries under the heading “Book, Pattern and Sample Packets”, for the words “Nine pies” and “Three pies”, the words ‘One anna” and “Six pies” shall respectively be substituted; and

(ii) in column 2 of the entries under the heading “Parcels”, for the words “Six annas”, in both the places where they occur, the words “Eight annas” shall be substituted.”

10. THE FIRST SCHEDULE

THE FIRST SCHEDULE
(See section 4 ) A

In the First Schedule to the Indian Tariff Act, 1934 (XXXII of 1934), from Items Nos. I, 9(5), 19, 20, 20(1), 20(2), 20(3), 21, 28(14), 28(26), 28(27), 28(28), 31(5), 44(7), 45(4), 45(5), 48(I), 48(3), 48(4), 48(5), 48(7), 48(8), 48(9), 48(10), 49(I), 51, 52, 54, 56, 56(I), 59(2), 59(3), 59(4), 59(5), 60, 61, 75(I), 77(2), 83, 85, 86 and 86(1), the following Items shall be substituted and such substitutions shall be inserted in their appropriate places :-

Preferential rate of duty if the article is the produce or manufacture of

11. THE SECOND SCHEDULE

(See section 5 )

Goods on which additional duty of customs is not leviable

Goods comprised in the following Items of the First Schedule to the Indian Tariff Act, 1943, namely :-

1(1), 2, 4(1), 4(3), 4(4), 4(5), 7(1), 8(1), 8(4), 8(5), 9(5), 9(6), 9(7), 12(6), 13(8), 13(9), 15(5), 15(9), 15(10), 15(11), 15(12), 16, 16(1), 16(3), 19, 19(1), 19(2), 19(3), 20, 20(1), 20(2), 20(3), 20(6), 20(7), 21, 21(4), 21(5), 21(6), 21(7), 21(8), 21(9), 22(3), 22(5), 27(1), 27(3), 27(4), 27(9), 28A, 28(14), 28(21), 28(22), 28(23), 28(24), 28(25), 28(26), 28(26A), 28(27), 28(28), 28(29), 28(30), 30(1), 30(2), 30(7), 30(11), 30(12), 30(13), 31(13), 31(14), 31(5), 40(6), 40(7), 44(1), 44(7), 45(3), 45(4), 45(5), 48(1), 48(3), 48(4), 48(5), 48(7), 48(8), 48(9), 48(10), 49(c), 49(1), 49(2), 51, 52, 52(4), 53(2), 54, 55(1), 55(2), 55(3), 56, 56(1), 59(2), 59(3), 59(4), 59(5), 60, 60(4), 60(5), 61, 61(11), 70(10), 70(11), 71(9), 71(10, 72(4), 72(5), 72(26), 72(27), 72(28), 73(4), 73(8), 73(9), 73(10, 73(11), 73(12), 74(4), 75(1), 76, 77(2), 77(4), 78(1), 79, 83, 84(1), 85, 85(2), 86, and 86(1).

12. THE THIRD SCHEDULE

(See section 5 )

Goods on which additional duty of customs at 5 per cent, is leviable Goods comprised in the following Items of the First Schedule to the Indian Tariff Act, 1934, namely :-

4, 8(2), 9(3), 11(2), 11(4), 11(5), 11(6), 13(4), 15, 21(3), 24, 24(1), 24(2), 24(3), 25(1), 27(2), 27(5), 27(6), 27(7), 27(8), 28, 28(4), 28(8), 28(15), 28(16), 28(17), 28(18), 28(19), 28(20), 28(31), 29, 29(1), 30, 30(9), 30(10), 34(3), 40(4), 40(5), 43, 44, 45, 46, 46(3), 47, 55, 60(2), 60(3), 60(6), 60(7), 61(2), 61(3), 60(6), 60(7), 61(2), 61(3), 61(8), 61(9), 62(1), 62(2), 63(14), 63(30), 63(31), 63(32), 63(33), 63(34), 63(35), 64, 64(3), 64(4), 65, 66, 66(1), 67, 67(1), 67(2), 68, 68(2), 69(2), 70, 70(1), 70(2), 70(3), 70(4), 70(5), 70(6), 70(9), 71(2), 71(3), 71(7), 71(8), 71911), 72, 72(1), 72(2), 72(3), 72(11), 72(12), 72(13), 72(14), 72(15), 72(16), 72(17), 72(18), 72(19), 72(20), 72(21), 72(22), 72(23), 72(24), 72(25), 72(33), 72(34), 73(2), 73(7), 73(14), 73(15), 73(16), 74(2), 75, 75(2), 75(3), 75(5), 75(6), 75(7), 75(8), 75(9), 75(10), 75(11), 75(12), 75(13), 77(5), 78, 82(1), 82(3), 84 and 85(1).

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