1. Amendments at a glance
53
FINANCE (SECOND AMENDMENT)
ORDINANCE, 1990
| Section/Schedule | Particulars |
| Finance Act | |
| First Sch. | Increase in levy of surcharge for companies 1-4 |
2. Provisions explained
Explanatory Notes
FINANCE (SECOND AMENDMENT) ORDINANCE, 1990
Issue of Finance (Second Amendment) Ordinance, 1990, regarding increase in levy of surcharge for companies
1. The President has promulgated an Ordinance (No. 8 of 1990) on 15-10-1990. The Ordinance is named as the Finance (Second Amendment) Ordinance, 1990. The Ordinance has come into force at once. By this Ordinance, section 2 of the Finance Act, 1990 (No. 12 of 1990) and Parts II and III of the First Schedule to the said Act have been amended.
FINANCE (SECOND AMENDMENT) ORDINANCE, 1990
2. The Ordinance has amended sub-sections (5), (6) and (7) of section 2 of the Finance Act, 1990 in respect of the following :
(a) Where deduction of tax at source is made u/s 194C of the Income-tax Act, 1961 in the case of a domestic company, the tax deducted shall be increased by a surcharge for the purpose of the Union calculated at the rate of 15% of such tax, instead of the earlier rate of 8%.
(b) Where collection of tax is made u/s 206C of the Income-tax Act in the case of a buyer, being a domestic company, the tax so collected shall be increased by a surcharge for the purpose of the Union calculated at the rate of 15% of such tax, instead of the earlier rate of 8%.
(c) In respect of any income chargeable to tax u/s 115B of the Income-tax Act, relating to profits and gains of life insurance business, the advance tax computed under the first proviso to sub-section (7) of section 2 of the Finance Act, 1990, shall be increased by a surcharge for the purpose of the Union calculated at the rate of 15% of such advance tax instead of the earlier rate of 8%.
(d) The amount of income-tax to be deducted as per the provisions of Part II of the First Schedule to the Finance Act,1990, in the case of a domestic company, shall be increased by a surcharge calculated at the rate of 15% of such income-tax, instead of the earlier rate of 8%. It may be noted that tax is to be deducted at source in terms of Part II of the First Schedule to the Finance Act, 1990, from payments by way of
(i) Interest other than Interest on securities
(ii) Winnings from lotteries and crossword puzzles
(iii) Winning from horse races
(iv) Any other income (excluding interest payable on tax-free security) as per the provisions of the Income-tax Act, 1961.
(e) The amount of income-tax computed in accordance with the provisions of item I of paragraph E of Part III of the First Schedule to the Finance Act, 1990, in respect of a domestic company having a total income exceeding Rs. 75,000 shall be increased by a surcharge calculated at the rate of 15% of such income-tax, instead of the earlier rate of 8%. In other words, the advance tax payable by domestic companies will now be increased by a surcharge at the rate of 15%. The higher rate of surcharge will also apply for calculating/charging income-tax (in the case of domestic companies) under other provisions of Income-tax Act mentioned in Part III of the First Schedule to the Finance Act, 1990.
FINANCE (SECOND AMENDMENT) ORDINANCE, 1990
3. The Ordinance further stipulates that notwithstanding anything contained in the Income-tax Act, the enhanced surcharge payable under Part III of the First Schedule to the Finance Act, 1990, as amended by the Ordinance, in respect of the instalment of advance tax paid or payable on the 15th day of September, 1990, shall be payable before the 15th day of November, 1990.
FINANCE (SECOND AMENDMENT) ORDINANCE, 1990
4. Failure to comply with the provisions of the Ordinance, as explained above, will make a tax-payer defaulter and the consequential provisions of the Income-tax Act will automatically apply.
