Thursday, 27 June 2013

aggregation of income

G. Aggregation of Income under a head of income

60. Aggregation of income under the class 'Income from Ordinary Sources'

  • (1) Subject to other provisions of this section, the income from each source falling under a head of income for a financial year shall be aggregated and the income so aggregated shall be the income from that head for the financial year.
  • (2) The income from the transfer of each investment asset during the financial year, as computed under section 49, shall be aggregated and the net result of such aggregation shall be the income from the capital gains, for the financial year.
  • (3) The income from capital gains shall be aggregated with the unabsorbed preceding year capital loss, if any, and the net result of such aggregation shall be the current income under the head "Capital gains".
  • (4) The income under the head "Capital gains" shall be treated as "nil" if the net result of aggregation under sub-section (3) is negative and the absolute value of the net result shall be the amount of "unabsorbed current capital loss", for the financial year.
  • (5) The income from each business other than speculative business referred to in sub-section (3) of section 31 shall be aggregated and the income so aggregated shall be the income from the non-speculative business.
  • (6) The income from each speculative business shall be aggregated and the income so aggregated shall be the gross income from the speculative business.
  • (7) The gross income from the speculative business shall be aggregated with unabsorbed preceding year speculative loss, if any, and the net result of such aggregation shall be the income from the speculative business.
  • (8) The aggregate of from the speculative business shall be treated as nil, if the "nil" result of aggregation in sub-section (7) is negative and the absolute value of the net result of aggregation shall be the amount of unabsorbed current speculative loss for the financial year.
  • (9) The aggregate of income from the speculative business and income from the nonspeculative business shall be the income under the head "income from business".
  • (10) The income from the activity of owning and maintaining horses for the purpose of horse race shall be aggregated with unabsorbed preceding year horse race loss, and the net result of such aggregation shall be the income from activity of owning and maintaining horse race and it shall be taken to be "nil", if the net result of such aggregation is negative and the absolute value of net result shall be the amount of unabsorbed current horse race loss for the financial year.
  • (11) The income of every kind referred to in section 58, other than income from the activity of owning and maintaining horses for the purpose of horse race, shall be aggregated with income from the activity of owning and maintaining horse race and the income so aggregated shall be the income under the head " income from residuary sources".

61. Aggregation of income from Ordinary Sources

  • (1) The current income from ordinary sources shall be the aggregate of
    • (a) income under the head "income from employment";
    • (b) income under the head "income from house property";
    • (c) income under the head "income from bussiness";
    • (d) income under the head "capital gains", and;
    • (e) income under the head "income from residuary sources".
  • (2) The current income from ordinary sources shall be aggregated with the unabsorbed preceding year loss from the ordinary sources, if any; and the net result of the aggregation shall be the gross total income from ordinary sources, for the financial year.
  • (3) The gross total income from ordinary sources, for the financial year, shall be treated as "nil" if the net result of the aggregation under sub-section (2) is negative; and the absolute value of the net result shall be the amount of unabsorbed current loss from ordinary sources, for the financial year.

62. Aggregation of income from special sources.

  • (1) The income from a special source referred to in Part III of the First Schedule shall be the current income from the special source for the financial year.
  • (2) The current income from the special source referred to in sub-section (1) shall be aggregated with the unabsorbed preceding year loss from the special source, if any; and the income so aggregated shall be the gross total income from the special source, for the financial year.
  • (3) Where the gross total income from the special source referred to in sub-section (2) is negative, such income shall be treated as "nil"and the absolute value of the net result shall be the amount of unabsorbed current loss from the special sourcefor the financial year.
  • (4) The gross total income from special source in respect of each special source computed under sub-sections (2) and (3) shall be aggregated and the net result of the aggregation shall be the total income from special sources for the financial year. Aggregation of income from Special Sources.

63. Determination of total income.

  • The total income of a person for any financial year shall be computed in accordance with the formula-
    • (A B) + C
    • Where
    • A = the gross total income from ordinary sources for the financial year;
    • B = the aggregate amount of deductions allowed under sub-chapter IV; and
    • C = the total income from special sources for the financial year.

64. Special provisions relating to business reorganisation or conversion of a company into a Limited liability partnership.

  • (1) In a business reorganisation, or on conversion of a company into a limited liability partnership as referred to in clause (j) of sub-section (1) of section 47
    • (a) the unabsorbed current loss from ordinary sources of the predecessor in respect of the financial year in which business reorganisation or such conversion has taken place shall be deemed to be the unabsorbed preceding year loss from ordinary sources of the successor in respect of the financial year and the provisions of section 61 shall apply accordingly; and
    • (b) the unabsorbed current loss from special source of the predecessor in respect of the financial year in which business reorganisation or such conversion has taken place, shall be deemed to be the unabsorbed preceding year loss from that special source of the successor in respect of the financial year, and the provisions of section 62 shall apply accordingly.
  • (2) The provisions of sub-section (1) shall not apply in case of a business reorganisation if the successor in a business reorganisation does not satisfy the test of continuity of business, and-
    • (a) Where the predecessor is a sole proprietary concern or unincorporated body, and
    • (b) the shareholding of the sole proprietor or the participant, as the case may be, ceases to be less than fifty per cent. of the total value of the shares of the successor company at any time during the period of five years immediately succeeding the financial year in which the business reorganisation takes place.
  • (3) In case of the conversion, the provisions of sub-section (1) shall not apply if any of the conditions, specified in clause (j) of sub-section (1) of section 47 are not fulfilled.
  • (4) The total income of the financial year in which, the business reorganisation or the conversion referred to in sub-section (1) took place, and of all the subsequent financial years shall, notwithstanding anything in this Code, be rectified as if the provisions of this section had never been given effect to in those financial years, if conditions specified in sub-section (2) of this section or clause (j) of sub-section (1) of section 47 are not fulfilled at any time during five financial years immediately succeeding the financial year in which re-organisation or conversion took place.

65. Aggregation of losses in case of change in constitution of unincorporated body.

  • (1) The amount of unabsorbed current loss from ordinary sources calculated under sub-section (3) of section 61, for the financial year ending on the date of the retirement, or death, of a participant, shall be reduced by the amount in proportion of the share of the retired, or deceased, participant.
  • (2) The amount so reduced under sub-section (1) shall be the unabsorbed preceding year loss from ordinary sources, for the financial year beginning on the date immediately following the date of retirement, or death, of a participant for the purposes of sub-section (2) of section 61.
  • (3) The amount of unabsorbed current loss from the special source calculated under sub-section (3) of section 62, for the financial year ending on the date of the retirement, or death, of a participant, shall be reduced by the amount in proportion of the share of the retired, or deceased, participant.
  • (4) The amount so reduced under sub-section (3) shall be the "unabsorbed preceding year loss from the special source", for the financial year beginning on the date immediately following the date of retirement, or death, of a participant for the purposes of sub-section (2) of section 62.
  • (5) The provisions of this section shall apply notwithstanding anything in any other provision of this Code.
  • (6) In this Code, any reference to the unabsorbed preceding year loss from ordinary sources and unabsorbed preceding year loss from the special source in respect of an unincorporated body where a change has occurred in its constitution due to death, or retirement, of its participant, shall be construed as a reference to the amount so reduced under subsection (1) and sub-section (3) respectively.

66. Aggregation of losses in the case of certain companies

  • (1) Notwithstanding anything in this Chapter a closely-held company shall not be allowed to aggregate any unabsorbed preceding year loss from ordinary sources or unabsorbed preceding year loss from the special source with the income of the financial year unless it satisfies the test of continuity of ownership.
  • (2) The closely held company shall satisfy the test of continuity of ownership referred to in sub-section (1), if the shares of the company beneficially held by persons, carrying not less than fifty-one per cent. of the voting power on the last day of the financial year immediately preceding the relevant financial year, are held by the same persons on the last day of the relevant financial year.
  • (3) For the purposes of calculating the percentage of voting power under sub-section (2),-
    • (a) any change in the voting power in the relevant financial year due to the death of a shareholder or on account of transfer of shares by way of gift to any relative of the donor shareholder shall be ignored;
    • (b) any change in the shareholding of an Indian company, which is a subsidiary of a foreign company, as a result of amalgamation or demerger of a foreign company, shall be ignored, if fifty-one per cent. shareholders of the amalgamating or demerged foreign company continue to be the shareholders of the amalgamated or the resulting foreign compan

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