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CHAPTER III
INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME
Incomes not included in total income.
10. In computing the total income of a previous year of any person, any income falling within any of the
following clauses shall not be included—
(1) agricultural income ;
(2) subject to the provisions of sub-section (2) of section 64, any sum received by an individual as a
member of a Hindu undivided family, where such sum has been paid out of the income of the family,
or, in the case of any impartible estate, where such sum has been paid out of the income of the estate
belonging to the family ;
(2A) in the case of a person being a partner of a firm which is separately assessed as such, his share in the
total income of the firm.
Explanation.—For the purposes of this clause, the share of a partner in the total income of a firm
separately assessed as such shall, notwithstanding anything contained in any other law, be an amount
which bears to the total income of the firm the same proportion as the amount of his share in the
profits of the firm in accordance with the partnership deed bears to such profits ;
(3) [***]
(4) (i) in the case of a non-resident, any income by way of interest on such securities or bonds as the
Central Government may, by notification in the Official Gazette, specify in this behalf, including
income by way of premium on the redemption of such bonds :
Provided that the Central Government shall not specify, for the purposes of this sub-clause, such
securities or bonds on or after the 1st day of June, 2002;
(ii) in the case of an individual, any income by way of interest on moneys standing to his credit in a
Non-Resident (External) Account in any bank in India in accordance with the Foreign Exchange
Management Act, 1999 (42 of 1999), and the rules made thereunder :
Provided that such individual is a person resident outside India as defined in clause (w) of section 2
of the said Act or is a person who has been permitted by the Reserve Bank of India to maintain the
aforesaid Account ;
(4B) in the case of an individual, being a citizen of India or a person of Indian origin, who is a non-
resident, any income from interest on such savings certificates issued before the 1st day of June,
2002 by the Central Government as that Government may, by notification in the Official Gazette,
specify in this behalf :
Provided that the individual has subscribed to such certificates in convertible foreign exchange
remitted from a country outside India in accordance with the provisions of the Foreign Exchange
Management Act, 1999 (42 of 1999), and any rules made thereunder.
Explanation.—For the purposes of this clause,—
(a) a person shall be deemed to be of Indian origin if he, or either of his parents or any of his
grandparents, was born in undivided India ;
(b) "convertible foreign exchange" means foreign exchange which is for the time being treated by

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the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign
Exchange Management Act, 1999 (42 of 1999), and any rules made thereunder ;
(4C) any income by way of interest payable to a non-resident, not being a company, or to a foreign
company, by any Indian company or business trust in respect of monies borrowed from a source
outside India by way of issue of rupee denominated bond, as referred to in clause (ia) of sub-section
(2) of section 194LC, during the period beginning from the 17th day of September, 2018 and ending
on the 31st day of March, 2019;
(4D)54 any income accrued or arisen to, or received by a specified fund as a result of transfer of capital
asset referred to in clause (viiab) of section 47, on a recognised stock exchange located in any
International Financial Services Centre and where the consideration for such transaction is paid or
payable in 55[convertible foreign exchange or as a result of transfer of securities (other than shares
in a company resident in India) or any income from securities issued by a non-resident (not being a
permanent establishment of a non-resident in India) and where such income otherwise does not
accrue or arise in India or any income from a securitisation trust which is chargeable under the head
"Profits and gains of business or profession", to the extent such income accrued or arisen to, or is
received, is attributable to units held by non-resident (not being the permanent establishment of a
non-resident in India) 56[or is attributable to the investment division of offshore banking unit, as the
case may be,] computed in the prescribed manner].
Explanation.—For the purposes of this clause, the expression—
(a) "convertible foreign exchange" means foreign exchange which is for the time being treated by
the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign
Exchange Management Act, 1999 (42 of 1999) and the rules made thereunder;
57[(aa)"investment division of offshore banking unit" means an investment division of a banking unit
of a non-resident located in an International Financial Services Centre, as referred to in sub-
section (1A) of section 80LA and which has commenced its operations on or before the 31st
day of March, 2024;]
(b) "manager" shall have the meaning assigned to it in clause (q) of sub-regulation (1) of
regulation 2 of the Securities and Exchange Board of India (Alternative Investment Fund)
Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992 (15 of
1992);
58[(ba) "permanent establishment" shall have the same meaning assigned to it in clause (iiia) of
section 92F;
(bb) "securities" shall have the same meaning as assigned to it in clause (h) of section 2 of the
Securities Contracts (Regulation) Act, 1956 (42 of 1956) and shall also include such other
securities or instruments as may be notified by the Central Government in the Official
Gazette in this behalf;
(bc) "securitisation trust" shall have the same meaning assigned to it in clause (d) of the
Explanation to section 115TCA;]
59[(c) "specified fund" means,—
(i) a fund established or incorporated in India in the form of a trust or a company or a
limited liability partnership or a body corporate,—
(I) which has been granted a certificate of registration as a Category III Alternative
Investment Fund and is regulated under the Securities and Exchange Board of
India (Alternative Investment Fund) Regulations, 2012, made under the Securities
and Exchange Board of India Act, 1992 (15 of 1992) or International Financial
Services Centres Authority Act, 2019 (50 of 2019);
(II) which is located in any International Financial Services Centre; and

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(III) of which all the units other than unit held by a sponsor or manager are held by
60[non-residents; or]

(ii) investment division of an offshore banking unit, which has been—

(I) granted a certificate of registration as a Category-I foreign portfolio investor
under the Securities and Exchange Board of India (Foreign Portfolio Investors)
Regulations, 2019 made under the Securities and Exchange Board of India Act,
1992 (15 of 1992) and which has commenced its operations on or before the 31st
day of March, 2024; and
(II) fulfils such conditions including maintenance of separate accounts for its
investment division, as may be prescribed;]
(d) "sponsor" shall have the meaning assigned to it in clause (w) of sub-regulation (1) of
regulation 2 of the Securities and Exchange Board of India (Alternative Investment Fund)
Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992 (15 of
1992);
(e) "trust" means a trust established under the Indian Trusts Act, 1882 (2 of 1882) or under any
other law for the time being in force;
(f) "unit" means beneficial interest of an investor in the fund and shall include shares or
partnership interests;
61[(4E) any income accrued or arisen to, or received by a non-resident as a result of transfer of non-
deliverable forward contracts 62[or offshore derivative instruments or over-the-counter derivatives,]
entered into with an offshore banking unit of an International Financial Services Centre as referred
to in sub-section (1A) of section 80LA, which fulfils such conditions as may be prescribed63;
(4F) any income of a non-resident by way of royalty or interest , on account of lease of an aircraft 64[or
a ship] in a previous year, paid by a unit of an International Financial Services Centre as referred to
in sub-section (1A) of section 80LA, if the unit has commenced its operations on or before the 31st
day of March, 2024.
Explanation.—For the purposes of this clause, "aircraft" means an aircraft or a helicopter, or an
engine of an aircraft or a helicopter, or any part thereof;]
Following Explanation shall be substituted for the existing Explanation to clause (4F) of section
10 by the Finance Act, 2022, w.e.f. 1-4-2023:
Explanation.—For the purposes of this clause,—
(i) "aircraft" means an aircraft or a helicopter, or an engine of an aircraft or a helicopter, or any
part thereof;
(ii) "ship" means a ship or an ocean vessel, engine of a ship or ocean vessel, or any part thereof;
Following clause (4G) shall be inserted after clause (4F) of section 10 by the Finance Act, 2022,
w.e.f. 1-4-2023:
(4G) any income received by a non-resident from portfolio of securities or financial products or funds,
managed or administered by any portfolio manager on behalf of such non-resident, in an account
maintained with an Offshore Banking Unit in any International Financial Services Centre, as
referred to in sub-section (1A) of section 80LA, to the extent such income accrues or arises outside
India and is not deemed to accrue or arise in India.
Explanation.—For the purposes of this clause, "portfolio manager" shall have the same meaning as
assigned to it in clause (z) of sub-regulation (1) of regulation 2 of the International Financial
Services Centres Authority (Capital Market Intermediaries) Regulations, 2021, made under the
International Financial Services Centres Authority Act, 2019 (50 of 2019);
(5) in the case of an individual, the value of any travel concession or assistance received by, or due to,

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him,—
(a) from his employer for himself and his family, in connection with his proceeding on leave to
any place in India ;
(b) from his employer or former employer for himself and his family, in connection with his
proceeding to any place in India after retirement from service or after the termination of his
service,
subject to such conditions as may be prescribed65 (including conditions as to number of journeys
and the amount which shall be exempt per head) having regard to the travel concession or assistance
granted to the employees of the Central Government :
Provided that the amount exempt under this clause shall in no case exceed the amount of expenses
actually incurred for the purpose of such travel:
66[Provided further that for the assessment year beginning on the 1st day of April, 2021, the value
in lieu of any travel concession or assistance received by, or due to, such individual shall also be
exempt under this clause subject to the fulfilment of such conditions (including the condition of
incurring such amount of such expenditure within such period), as may be prescribed.]
67[Explanation 1].—For the purposes of this clause, "family", in relation to an individual, means—
(i) the spouse and children of the individual ; and
(ii) the parents, brothers and sisters of the individual or any of them, wholly or mainly dependent
on the individual.
68[Explanation 2.—For the removal of doubts, it is hereby clarified that where an individual claims
exemption and the exemption is allowed under the second proviso in connection with the prescribed
expenditure, no exemption shall be allowed under this clause in respect of such prescribed
expenditure to any other individual;]
(5A) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]
(5B) [Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]
(6) in the case of an individual who is not a citizen of India,—
(i) [***]
(ii) the remuneration received by him as an official, by whatever name called, of an embassy, high
commission, legation, commission, consulate or the trade representation of a foreign State, or
as a member of the staff of any of these officials, for service in such capacity :
Provided that the remuneration received by him as a trade commissioner or other official
representative in India of the Government of a foreign State (not holding office as such in an
honorary capacity), or as a member of the staff of any of those officials, shall be exempt only
if the remuneration of the corresponding officials or, as the case may be, members of the
staff, if any, of the Government resident for similar purposes in the country concerned enjoys
a similar exemption in that country :
Provided further that such members of the staff are subjects of the country represented and
are not engaged in any business or profession or employment in India otherwise than as
members of such staff ;
(iii) to (v) Sub-clause (ii) substituted for sub-clauses (ii) to (v) by the Finance Act, 1988, w.e.f.
1-4-1989;
(vi) the remuneration received by him as an employee of a foreign enterprise for services rendered
by him during his stay in India, provided the following conditions are fulfilled—
(a) the foreign enterprise is not engaged in any trade or business in India ;
(b) his stay in India does not exceed in the aggregate a period of ninety days in such
previous year ; and

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(c) such remuneration is not liable to be deducted from the income of the employer
chargeable under this Act ;
(via) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]
(vii) [Omitted by the Finance Act, 1993, w.e.f. 1-4-1993;]
(viia) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]
(viii) any income chargeable under the head "Salaries" received by or due to any such individual
being a non-resident as remuneration for services rendered in connection with his
employment on a foreign ship where his total stay in India does not exceed in the aggregate a
period of ninety days in the previous year ;
(ix) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]
(x) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]
(xi) the remuneration received by him as an employee of the Government of a foreign State during
his stay in India in connection with his training in any establishment or office of, or in any
undertaking owned by,—
(i) the Government ; or
(ii) any company in which the entire paid-up share capital is held by the Central
Government, or any State Government or Governments, or partly by the Central
Government and partly by one or more State Governments ; or
(iii) any company which is a subsidiary of a company referred to in item (ii) ; or
(iv) any corporation established by or under a Central, State or Provincial Act ; or
(v) any society registered under the Societies Registration Act, 1860 (14 of 1860), or under
any other corresponding law for the time being in force and wholly financed by the
Central Government, or any State Government or State Governments, or partly by the
Central Government and partly by one or more State Governments ;
(6A) where in the case of a foreign company deriving income by way of royalty or fees for technical
services received from Government or an Indian concern in pursuance of an agreement made by the
foreign company with Government or the Indian concern after the 31st day of March, 1976 but
before the 1st day of June, 2002 and,—
(a) where the agreement relates to a matter included in the industrial policy, for the time being in
force, of the Government of India, such agreement is in accordance with that policy ; and
(b) in any other case, the agreement is approved by the Central Government,
the tax on such income is payable, under the terms of the agreement, by Government or the Indian
concern to the Central Government, the tax so paid.
Explanation.—For the purposes of this clause and clause (6B),—
(a) "fees for technical services" shall have the same meaning as in Explanation 2 to clause (vii) of
sub-section (1) of section 9 ;
(b) "foreign company" shall have the same meaning as in section 80B ;
(c) "royalty" shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of
section 9;
(6B) where in the case of a non-resident (not being a company) or of a foreign company deriving income
(not being salary, royalty or fees for technical services) from Government or an Indian concern in
pursuance of an agreement entered into before the 1st day of June, 2002 by the Central Government
with the Government of a foreign State or an international organisation, the tax on such income is
payable by Government or the Indian concern to the Central Government under the terms of that
agreement or any other related agreement approved before that date by the Central Government, the
tax so paid;

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(6BB) where in the case of the Government of a foreign State or a foreign enterprise deriving income from
an Indian company engaged in the business of operation of aircraft, as a consideration of acquiring
an aircraft or an aircraft engine (other than payment for providing spares, facilities or services in
connection with the operation of leased aircraft) on lease under an agreement entered into after the
31st day of March, 1997 but before the 1st day of April, 1999, or entered into after the 31st day of
March, 2007 and approved by the Central Government in this behalf and the tax on such income is
payable by such Indian company under the terms of that agreement to the Central Government, the
tax so paid.
Explanation.—For the purposes of this clause, the expression "foreign enterprise" means a person
who is a non-resident;
(6C) any income arising to such foreign company, as the Central Government may, by notification in the
Official Gazette, specify in this behalf, by way of royalty or fees for technical services received in
pursuance of an agreement entered into with that Government for providing services in or outside
India in projects connected with security of India ;
(6D) any income arising to a non-resident, not being a company, or a foreign company, by way of royalty
from, or fees for technical services rendered in or outside India to, the National Technical Research
Organisation;
(7) any allowances or perquisites paid or allowed as such outside India by the Government to a citizen of
India for rendering service outside India ;
(8) in the case of an individual who is assigned to duties in India in connection with any co-operative
technical assistance programmes and projects in accordance with an agreement entered into by the
Central Government and the Government of a foreign State (the terms whereof provide for the
exemption given by this clause)—
(a) the remuneration received by him directly or indirectly from the Government of that foreign
State for such duties, and
(b) any other income of such individual which accrues or arises outside India, and is not deemed
to accrue or arise in India, in respect of which such individual is required to pay any income
or social security tax to the Government of that foreign State ;
Following proviso shall be inserted in clause (8) of section 10 by the Finance Act, 2022, w.e.f.
1-4-2023 :
Provided that nothing contained in this clause shall apply to such remuneration and income of the
previous year relevant to the assessment year beginning on or after the 1st day of April, 2023;
(8A) in the case of a consultant—
(a) any remuneration or fee received by him or it, directly or indirectly, out of the funds made
available to an international organisation hereafter referred to in this clause and clause (8B)
as the agency under a technical assistance grant agreement between the agency and the
Government of a foreign State ; and
(b) any other income which accrues or arises to him or it outside India, and is not deemed to
accrue or arise in India, in respect of which such consultant is required to pay any income or
social security tax to the Government of the country of his or its origin.
Following proviso shall be inserted in clause (8A) of section 10 by the Finance Act, 2022, w.e.f.
1-4-2023 :
Provided that nothing contained in this clause shall apply to such remuneration, fee and income of
the previous year relevant to the assessment year beginning on or after the 1st day of April, 2023.
Explanation.—In this clause, "consultant" means—
(i) any individual, who is either not a citizen of India or, being a citizen of India, is not ordinarily
resident in India ; or

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(ii) any other person, being a non-resident,

engaged by the agency for rendering technical services in India in connection with any technical
assistance programme or project, provided the following conditions are fulfilled, namely :—
(1) the technical assistance is in accordance with an agreement entered into by the Central
Government and the agency ; and
(2) the agreement relating to the engagement of the consultant is approved by the prescribed
authority69 for the purposes of this clause ;
(8B) in the case of an individual who is assigned to duties in India in connection with any technical
assistance programme and project in accordance with an agreement entered into by the Central
Government and the agency—
(a) the remuneration received by him, directly or indirectly, for such duties from any consultant
referred to in clause (8A) ; and
(b) any other income of such individual which accrues or arises outside India, and is not deemed
to accrue or arise in India, in respect of which such individual is required to pay any income
or social security tax to the country of his origin, provided the following conditions are
fulfilled, namely :—
(i) the individual is an employee of the consultant referred to in clause (8A) and is either
not a citizen of India or, being a citizen of India, is not ordinarily resident in India ; and
(ii) the contract of service of such individual is approved by the prescribed authority69
before the commencement of his service ;]
Following proviso shall be inserted in clause (8B) of section 10 by the Finance Act, 2022, w.e.f.
1-4-2023 :
Provided that nothing contained in this clause shall apply to such remuneration and income of the
previous year relevant to the assessment year beginning on or after the 1st day of April, 2023;
(9) the income of any member of the family of any such individual as is referred to in clause (8) or
clause (8A) or, as the case may be, clause (8B) accompanying him to India, which accrues or arises
outside India, and is not deemed to accrue or arise in India, in respect of which such member is
required to pay any income or social security tax to the Government of that foreign State or, as the
case may be, country of origin of such member;
Following proviso shall be inserted in clause (9) of section 10 by the Finance Act, 2022, w.e.f.
1-4-2023:
Provided that nothing contained in this clause shall apply to such income of the previous year
relevant to the assessment year beginning on or after the 1st day of April, 2023;
(10) (i) any death-cum-retirement gratuity received under the revised Pension Rules of the Central
Government or, as the case may be, the Central Civil Services (Pension) Rules, 1972, or under any
similar scheme applicable to the members of the civil services of the Union or holders of posts
connected with defence or of civil posts under the Union (such members or holders being persons
not governed by the said Rules) or to the members of the all-India services or to the members of the
civil services of a State or holders of civil posts under a State or to the employees of a local authority
or any payment of retiring gratuity received under the Pension Code or Regulations applicable to the
members of the defence services ;
(ii) any gratuity received under the Payment of Gratuity Act, 1972 (39 of 1972), to the extent it does
not exceed an amount calculated in accordance with the provisions of sub-sections (2) and (3) of
section 4 of that Act ;
(iii) any other gratuity received by an employee on his retirement or on his becoming incapacitated
prior to such retirement or on termination of his employment, or any gratuity received by his widow,
children or dependants on his death, to the extent it does not, in either case, exceed one-half month's

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salary for each year of completed service, calculated on the basis of the average salary for the ten
months immediately preceding the month in which any such event occurs, subject to such limit70 as
the Central Government may, by notification in the Official Gazette, specify in this behalf having
regard to the limit applicable in this behalf to the employees of that Government :
Provided that where any gratuities referred to in this clause are received by an employee from more
than one employer in the same previous year, the aggregate amount exempt from income-tax under
this clause shall not exceed the limit so specified :
Provided further that where any such gratuity or gratuities was or were received in any one or
more earlier previous years also and the whole or any part of the amount of such gratuity or
gratuities was not included in the total income of the assessee of such previous year or years, the
amount exempt from income-tax under this clause shall not exceed the limit so specified as reduced
by the amount or, as the case may be, the aggregate amount not included in the total income of any
such previous year or years.
Explanation.—In this clause, and in clause (10AA), "salary" shall have the meaning assigned to it in
clause (h) of rule 2 of Part A of the Fourth Schedule ;
(10A) (i) any payment in commutation of pension received under the Civil Pensions (Commutation) Rules
of the Central Government or under any similar scheme applicable to the members of the civil
services of the Union or holders of posts connected with defence or of civil posts under the Union
(such members or holders being persons not governed by the said Rules) or to the members of the
all-India services or to the members of the defence services or to the members of the civil services of
a State or holders of civil posts under a State or to the employees of a local authority or a
corporation established by a Central, State or Provincial Act ;
(ii) any payment in commutation of pension received under any scheme of any other employer, to
the extent it does not exceed—
(a) in a case where the employee receives any gratuity, the commuted value of one-third of the
pension which he is normally entitled to receive, and
(b) in any other case, the commuted value of one-half of such pension,
such commuted value being determined having regard to the age of the recipient, the state of his
health, the rate of interest and officially recognised tables of mortality ;
(iii) any payment in commutation of pension received from a fund under clause (23AAB) ;
(10AA) (i) any payment received by an employee of the Central Government or a State Government as the
cash equivalent of the leave salary in respect of the period of earned leave at his credit at the time of
his retirement whether on superannuation or otherwise ;
(ii) any payment of the nature referred to in sub-clause (i) received by an employee, other than an
employee of the Central Government or a State Government, in respect of so much of the period of
earned leave at his credit at the time of his retirement whether on superannuation or otherwise as
does not exceed ten months, calculated on the basis of the average salary drawn by the employee
during the period of ten months immediately preceding his retirement whether on superannuation or
otherwise, subject to such limit as the Central Government may, by notification in the Official
Gazette, specify in this behalf having regard to the limit71 applicable in this behalf to the employees
of that Government :
Provided that where any such payments are received by an employee from more than one employer
in the same previous year, the aggregate amount exempt from income-tax under this sub-clause shall
not exceed the limit so specified :
Provided further that where any such payment or payments was or were received in any one or
more earlier previous years also and the whole or any part of the amount of such payment or
payments was or were not included in the total income of the assessee of such previous year or
years, the amount exempt from income-tax under this sub-clause shall not exceed the limit so

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specified, as reduced by the amount or, as the case may be, the aggregate amount not included in the
total income of any such previous year or years.
Explanation.—For the purposes of sub-clause (ii),—
the entitlement to earned leave of an employee shall not exceed thirty days for every year of actual
service rendered by him as an employee of the employer from whose service he has retired ;
(10B) any compensation received by a workman under the Industrial Disputes Act, 1947 (14 of 1947), or
under any other Act or Rules, orders or notifications issued thereunder or under any standing orders
or under any award, contract of service or otherwise, at the time of his retrenchment :
Provided that the amount exempt under this clause shall not exceed—
(i) an amount calculated in accordance with the provisions of clause (b) of section 25F of the
Industrial Disputes Act, 1947 (14 of 1947) ; or
(ii) such amount, not being less than fifty thousand rupees, as the Central Government may, by
notification72 in the Official Gazette, specify in this behalf,
whichever is less :
Provided further that the preceding proviso shall not apply in respect of any compensation received
by a workman in accordance with any scheme which the Central Government may, having regard to
the need for extending special protection to the workmen in the undertaking to which such scheme
applies and other relevant circumstances, approve in this behalf.
Explanation.—For the purposes of this clause—
(a) compensation received by a workman at the time of the closing down of the undertaking in
which he is employed shall be deemed to be compensation received at the time of his
retrenchment ;
(b) compensation received by a workman, at the time of the transfer (whether by agreement or by
operation of law) of the ownership or management of the undertaking in which he is
employed from the employer in relation to that undertaking to a new employer, shall be
deemed to be compensation received at the time of his retrenchment if—
(i) the service of the workman has been interrupted by such transfer ; or
(ii) the terms and conditions of service applicable to the workman after such transfer are in
any way less favourable to the workman than those applicable to him immediately
before the transfer ; or
(iii) the new employer is, under the terms of such transfer or otherwise, legally not liable to
pay to the workman, in the event of his retrenchment, compensation on the basis that
his service has been continuous and has not been interrupted by the transfer ;
(c) the expressions "employer" and "workman" shall have the same meanings as in the Industrial
Disputes Act, 1947 (14 of 1947);
(10BB) any payments made under the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 (21 of
1985), and any scheme framed thereunder except payment made to any assessee in connection with
the Bhopal Gas Leak Disaster to the extent such assessee has been allowed a deduction under this
Act on account of any loss or damage caused to him by such disaster ;
(10BC) any amount received or receivable from the Central Government or a State Government or a local
authority by an individual or his legal heir by way of compensation on account of any disaster,
except the amount received or receivable to the extent such individual or his legal heir has been
allowed a deduction under this Act on account of any loss or damage caused by such disaster.
Explanation.—For the purposes of this clause, the expression "disaster" shall have the meaning
assigned to it under clause (d) of section 2 of the Disaster Management Act, 2005 (53 of 2005);
(10C) any amount received or receivable by an employee of—

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(i) a public sector company ; or

(ii) any other company ; or
(iii) an authority established under a Central, State or Provincial Act ; or
(iv) a local authority ; or
(v) a co-operative society ; or
(vi) a University established or incorporated by or under a Central, State or Provincial Act and an
institution declared to be a University under section 3 of the University Grants Commission
Act, 1956 (3 of 1956) ; or
(vii) an Indian Institute of Technology within the meaning of clause (g) of section 3 of the
Institutes of Technology Act, 1961 (59 of 1961) ; or
(viia) any State Government; or
(viib) the Central Government; or
(viic) an institution, having importance throughout India or in any State or States, as the Central
Government may, by notification in the Official Gazette, specify in this behalf; or
(viii) such institute of management as the Central Government may, by notification in the Official
Gazette, specify in this behalf,
on his voluntary retirement or termination of his service, in accordance with any scheme or schemes
of voluntary retirement or in the case of a public sector company referred to in sub-clause (i), a
scheme of voluntary separation, to the extent such amount does not exceed five lakh rupees :
Provided that the schemes of the said companies or authorities or societies or Universities or the
Institutes referred to in sub-clauses (vii) and (viii), as the case may be, governing the payment of
such amount are framed in accordance with such guidelines (including inter alia criteria of
economic viability) as may be prescribed73:
Provided further that where exemption has been allowed to an employee under this clause for any
assessment year, no exemption thereunder shall be allowed to him in relation to any other
assessment year :
Provided also that where any relief has been allowed to an assessee under section 89 for any
assessment year in respect of any amount received or receivable on his voluntary retirement or
termination of service or voluntary separation, no exemption under this clause shall be allowed to
him in relation to such, or any other, assessment year;
(10CC) in the case of an employee, being an individual deriving income in the nature of a perquisite, not
provided for by way of monetary payment, within the meaning of clause (2) of section 17, the tax on
such income actually paid by his employer, at the option of the employer, on behalf of such
employee, notwithstanding anything contained in section 200 of the Companies Act, 1956 (1 of
1956);
(10D) any sum received under a life insurance policy, including the sum allocated by way of bonus on
such policy, other than—
(a) any sum received under sub-section (3) of section 80DD or sub-section (3) of section
80DDA*; or
(b) any sum received under a Keyman insurance policy; or
(c) any sum received under an insurance policy issued on or after the 1st day of April, 2003 but on
or before the 31st day of March, 2012 in respect of which the premium payable for any of the
years during the term of the policy exceeds twenty per cent of the actual capital sum assured ;
or
(d) any sum received under an insurance policy issued on or after the 1st day of April, 2012 in
respect of which the premium payable for any of the years during the term of the policy

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exceeds ten per cent of the actual capital sum assured:

Provided that the provisions of sub-clauses (c) and (d) shall not apply to any sum received on the
death of a person:
Provided further that for the purpose of calculating the actual capital sum assured under sub-clause
(c), effect shall be given to the Explanation to sub-section (3) of section 80C or the Explanation to
sub-section (2A) of section 88, as the case may be :
Provided also that where the policy, issued on or after the 1st day of April, 2013, is for insurance on
life of any person, who is—
(i) a person with disability or a person with severe disability as referred to in section 80U; or
(ii) suffering from disease or ailment as specified in the rules made under section 80DDB,
the provisions of this sub-clause shall have effect as if for the words "ten per cent", the words
"fifteen per cent" had been substituted:
74[Provided also that nothing contained in this clause shall apply with respect to any unit linked
insurance policy, issued on or after the 1st day of February, 2021, if the amount of premium payable
for any of the previous year during the term of such policy exceeds two lakh and fifty thousand
rupees:
Provided also that if the premium is payable, by a person, for more than one unit linked insurance
policies, issued on or after the 1st day of February, 2021, the provisions of this clause shall apply
only with respect to those unit linked insurance policies, where the aggregate amount of premium
does not exceed the amount referred to in fourth proviso in any of the previous year during the term
of any of those policies:
Provided also that the provisions of the fourth and fifth provisos shall not apply to any sum
received on the death of a person:
Provided also that if any difficulty arises in giving effect to the provisions of this clause, the Board
may, with the previous approval of the Central Government, issue guidelines for the purpose of
removing the difficulty and every guideline issued by the Board under this proviso shall be laid
before each House of Parliament, and shall be binding on the income-tax authorities and the
assessee.]
Explanation 1.—For the purposes of this clause, "Keyman insurance policy" means a life insurance
policy taken by a person on the life of another person who is or was the employee of the first-
mentioned person or is or was connected in any manner whatsoever with the business of the first-
mentioned person and includes such policy which has been assigned to a person, at any time during
the term of the policy, with or without any consideration.
Explanation 2.—For the purposes of sub-clause (d), the expression "actual capital sum assured"
shall have the meaning assigned to it in the Explanation to sub-section (3A) of section 80C.
75[Explanation 3.— For the purposes of this clause, "unit linked insurance policy" means a life
insurance policy which has components of both investment and insurance and is linked to a unit as
defined in clause (ee) of regulation 3 of the Insurance Regulatory and Development Authority of
India (Unit Linked Insurance Products) Regulations, 2019 issued by the Insurance Regulatory and
Development Authority under the Insurance Act, 1938 (4 of 1938) and the Insurance Regulatory and
Development Authority Act, 1999 (41 of 1999);]
(11) any payment from a provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies or
from any other provident fund set up by the Central Government and notified by it in this behalf in
the Official Gazette:
76[Provided that the provisions of this clause shall not apply to the income by way of interest
accrued during the previous year in the account of a person to the extent it relates to the amount or
the aggregate of amounts of contribution made by that person exceeding two lakh and fifty thousand

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rupees in any previous year in that fund, on or after the 1st day of April, 2021 and computed in such
manner as may be prescribed77 :
Provided further that if the contribution by such person is in a fund in which there is no
contribution by the employer of such person, the provisions of the first proviso shall have the effect
as if for the words "two lakh and fifty thousand rupees", the words "five lakh rupees" had been
substituted;]
(11A) any payment from an account, opened in accordance with the Sukanya Samriddhi Account Rules,
201478 made under the Government Savings Bank Act, 1873 (5 of 1873);
(12) the accumulated balance due and becoming payable to an employee participating in a recognised
provident fund, to the extent provided in rule 8 of Part A of the Fourth Schedule :
79[Provided that the provisions of this clause shall not apply to the income by way of interest
accrued during the previous year in the account of a person to the extent it relates to the amount or
the aggregate of amounts of contribution made by that person exceeding two lakh and fifty thousand
rupees in any previous year in that fund, on or after the 1st day of April, 2021 and computed in such
manner as may be prescribed 79a :
Provided further that if the contribution by such person is in a fund in which there is no
contribution by the employer of such person, the provisions of the first proviso shall have the effect
as if for the words "two lakh and fifty thousand rupees", the words "five lakh rupees" had been
substituted;]
(12A) any payment from the National Pension System Trust to an assessee on closure of his account or on
his opting out of the pension scheme referred to in section 80CCD, to the extent it does not exceed
sixty per cent of the total amount payable to him at the time of such closure or his opting out of the
scheme;
(12B) any payment from the National Pension System Trust to an employee under the pension scheme
referred to in section 80CCD, on partial withdrawal made out of his account in accordance with the
terms and conditions, specified under the Pension Fund Regulatory and Development Authority Act,
2013 (23 of 2013) and the regulations made thereunder, to the extent it does not exceed twenty-five
per cent of the amount of contributions made by him;
(13) any payment from an approved superannuation fund made—
(i) on the death of a beneficiary; or
(ii) to an employee in lieu of or in commutation of an annuity on his retirement at or after a
specified age or on his becoming incapacitated prior to such retirement; or
(iii) by way of refund of contributions on the death of a beneficiary ; or
(iv) by way of refund of contributions to an employee on his leaving the service in connection
with which the fund is established otherwise than by retirement at or after a specified age or
on his becoming incapacitated prior to such retirement, to the extent to which such payment
does not exceed the contributions made prior to the commencement of this Act and any
interest thereon; or
(v) by way of transfer to the account of the employee under a pension scheme referred to in
section 80CCD and notified by the Central Government;
(13A) any special allowance specifically granted to an assessee by his employer to meet expenditure
actually incurred on payment of rent (by whatever name called) in respect of residential
accommodation occupied by the assessee, to such extent as may be prescribed80 having regard to the
area or place in which such accommodation is situate and other relevant considerations.
Explanation.—For the removal of doubts, it is hereby declared that nothing contained in this clause
shall apply in a case where—
(a) the residential accommodation occupied by the assessee is owned by him ; or

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(b) the assessee has not actually incurred expenditure on payment of rent (by whatever name
called) in respect of the residential accommodation occupied by him ;
(14) (i) any such special allowance or benefit, not being in the nature of a perquisite within the meaning
of clause (2) of section 17, specifically granted to meet expenses wholly, necessarily and exclusively
incurred in the performance of the duties of an office or employment of profit, as may be
prescribed81, to the extent to which such expenses are actually incurred for that purpose ;
(ii) any such allowance granted to the assessee either to meet his personal expenses at the place
where the duties of his office or employment of profit are ordinarily performed by him or at the
place where he ordinarily resides, or to compensate him for the increased cost of living, as may be
prescribed82 and to the extent as may be prescribed:
Provided that nothing in sub-clause (ii) shall apply to any allowance in the nature of personal
allowance granted to the assessee to remunerate or compensate him for performing duties of a
special nature relating to his office or employment unless such allowance is related to the place of
his posting or residence ;
(14A) [***]
(15) (i) income by way of interest, premium on redemption or other payment on such securities, bonds,
annuity certificates, savings certificates, other certificates issued by the Central Government and
deposits as the Central Government may, by notification in the Official Gazette, specify in this
behalf, subject to such conditions and limits as may be specified in the said notification ;
(iib) in the case of an individual or a Hindu undivided family, interest on such Capital Investment
Bonds as the Central Government may, by notification in the Official Gazette, specify in this behalf :
Provided that the Central Government shall not specify, for the purposes of this sub-clause, such
Capital Investment Bonds on or after the 1st day of June, 2002;
(iic) in the case of an individual or a Hindu undivided family, interest on such Relief Bonds as the
Central Government may, by notification in the Official Gazette, specify in this behalf ;
(iid) interest on such bonds, as the Central Government may, by notification in the Official Gazette,
specify, arising to—
(a) a non-resident Indian, being an individual owning the bonds ; or
(b) any individual owning the bonds by virtue of being a nominee or survivor of the non-resident
Indian ; or
(c) any individual to whom the bonds have been gifted by the non-resident Indian :
Provided that the aforesaid bonds are purchased by a non-resident Indian in foreign exchange and
the interest and principal received in respect of such bonds, whether on their maturity or otherwise,
is not allowable to be taken out of India :
Provided further that where an individual, who is a non-resident Indian in any previous year in
which the bonds are acquired, becomes a resident in India in any subsequent year, the provisions of
this sub-clause shall continue to apply in relation to such individual :
Provided also that in a case where the bonds are encashed in a previous year prior to their maturity
by an individual who is so entitled, the provisions of this sub-clause shall not apply to such
individual in relation to the assessment year relevant to such previous year :
Provided also that the Central Government shall not specify, for the purposes of this sub-clause,
such bonds on or after the 1st day of June, 2002.
Explanation.—For the purposes of this sub-clause, the expression "non-resident Indian" shall have
the meaning assigned to it in clause (e) of section 115C;
(iii) interest on securities held by the Issue Department of the Central Bank of Ceylon constituted
under the Ceylon Monetary Law Act, 1949;
(iiia) interest payable to any bank incorporated in a country outside India and authorised to perform

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central banking functions in that country on any deposits made by it, with the approval of the
Reserve Bank of India, with any scheduled bank.
Explanation.—For the purposes of this sub-clause, "scheduled bank" shall have the meaning
assigned to it in clause (ii) of the Explanation to clause (viia) of sub-section (1) of section 36;
(iiib) interest payable to the Nordic Investment Bank, being a multilateral financial institution
constituted by the Governments of Denmark, Finland, Iceland, Norway and Sweden, on a loan
advanced by it to a project approved by the Central Government in terms of the Memorandum of
Understanding entered into by the Central Government with that Bank on the 25th day of
November, 1986;
(iiic) interest payable to the European Investment Bank, on a loan granted by it in pursuance of the
framework-agreement for financial co-operation entered into on the 25th day of November, 1993 by
the Central Government with that Bank;
(iv) interest payable—
(a) by Government or a local authority on moneys borrowed by it before the 1st day of June, 2001
from, or debts owed by it before the 1st day of June, 2001 to, sources outside India;
(b) by an industrial undertaking in India on moneys borrowed by it under a loan agreement
entered into before the 1st day of June, 2001 with any such financial institution in a foreign
country as may be approved in this behalf by the Central Government by general or special
order ;
(c) by an industrial undertaking in India on any moneys borrowed or debt incurred by it before the
1st day of June, 2001 in a foreign country in respect of the purchase outside India of raw
materials or components or capital plant and machinery, to the extent to which such interest
does not exceed the amount of interest calculated at the rate approved by the Central
Government in this behalf, having regard to the terms of the loan or debt and its repayment.
Explanation 1.—For the purposes of this item, "purchase of capital plant and machinery"
includes the purchase of such capital plant and machinery under a hire-purchase agreement or
a lease agreement with an option to purchase such plant and machinery.
Explanation 2.—For the removal of doubts, it is hereby declared that the usance interest
payable outside India by an undertaking engaged in the business of ship-breaking in respect
of purchase of a ship from outside India shall be deemed to be the interest payable on a debt
incurred in a foreign country in respect of the purchase outside India;
(d) by the Industrial Finance Corporation of India established by the Industrial Finance
Corporation Act, 1948 (15 of 1948), or the Industrial Development Bank of India established
under the Industrial Development Bank of India Act, 1964 (18 of 1964), or the Export-Import
Bank of India established under the Export-Import Bank of India Act, 1981 (28 of 1981), or
the National Housing Bank established under section 3 of the National Housing Bank Act,
1987 (53 of 1987), or the Small Industries Development Bank of India established under
section 3 of the Small Industries Development Bank of India Act, 1989 (39 of 1989), or the
Industrial Credit and Investment Corporation of India a company formed and registered
under the Indian Companies Act, 1913 (7 of 1913), on any moneys borrowed by it from
sources outside India before the 1st day of June, 2001, to the extent to which such interest
does not exceed the amount of interest calculated at the rate approved by the Central
Government in this behalf, having regard to the terms of the loan and its repayment;
(e) by any other financial institution established in India or a banking company to which the
Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking
institution referred to in section 51 of that Act), on any moneys borrowed by it from sources
outside India before the 1st day of June, 2001 under a loan agreement approved by the
Central Government where the moneys are borrowed either for the purpose of advancing
loans to industrial undertakings in India for purchase outside India of raw materials or capital

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plant and machinery or for the purpose of importing any goods which the Central
Government may consider necessary to import in the public interest, to the extent to which
such interest does not exceed the amount of interest calculated at the rate approved by the
Central Government in this behalf, having regard to the terms of the loan and its repayment;
(f) by an industrial undertaking in India on any moneys borrowed by it in foreign currency from
sources outside India under a loan agreement approved by the Central Government before the
1st day of June, 2001 having regard to the need for industrial development in India, to the
extent to which such interest does not exceed the amount of interest calculated at the rate
approved by the Central Government in this behalf, having regard to the terms of the loan
and its repayment;
(fa) by a scheduled bank to a non-resident or to a person who is not ordinarily resident within the
meaning of sub-section (6)† of section 6 on deposits in foreign currency where the
acceptance of such deposits by the bank is approved by the Reserve Bank of India.
Explanation.—For the purposes of this item, the expression "scheduled bank" means the
State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a
subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of
1959), a corresponding new bank constituted under section 3 of the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or
any other bank being a bank included in the Second Schedule to the Reserve Bank of India
Act, 1934 (2 of 1934), but does not include a co-operative bank;
(g) by a public company formed and registered in India with the main object of carrying on the
business of providing long-term finance for construction or purchase of houses in India for
residential purposes, being a company eligible for deduction under clause (viii) of sub-section
(1) of section 36 on any moneys borrowed by it in foreign currency from sources outside
India under a loan agreement approved by the Central Government before the 1st day of
June, 2003, to the extent to which such interest does not exceed the amount of interest
calculated at the rate approved by the Central Government in this behalf, having regard to the
terms of the loan and its repayment.
Explanation.—For the purposes of items (f), (fa) and (g), the expression "foreign currency"
shall have the meaning assigned to it in the Foreign Exchange Management Act, 1999 (42 of
1999);
(h) by any public sector company in respect of such bonds or debentures and subject to such
conditions, including the condition that the holder of such bonds or debentures registers his
name and the holding with that company, as the Central Government may, by notification in
the Official Gazette, specify in this behalf;
(i) by Government on deposits made by an employee of the Central Government or a State
Government or a public sector company, in accordance with such scheme as the Central
Government may, by notification in the Official Gazette, frame in this behalf, out of the
moneys due to him on account of his retirement, whether on superannuation or otherwise.
Explanation 1.—For the purposes of this sub-clause, the expression "industrial undertaking" means
any undertaking which is engaged in—
(a) the manufacture or processing of goods; or
(aa) the manufacture of computer software or recording of programme on any disc, tape, perforated
media or other information device; or
(b) the business of generation or distribution of electricity or any other form of power; or
(ba) the business of providing telecommunication services; or
(c) mining; or

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(d) the construction of ships; or

(da) the business of ship-breaking; or
(e) the operation of ships or aircrafts or construction or operation of rail systems.
Explanation 1A.—For the purposes of this sub-clause, the expression "interest" shall not include
interest paid on delayed payment of loan or on default if it is in excess of two per cent per annum
over the rate of interest payable in terms of such loan.
Explanation 2.—For the purposes of this clause, the expression "interest" includes hedging
transaction charges on account of currency fluctuation;
(v) interest on—
(a) securities held by the Welfare Commissioner, Bhopal Gas Victims, Bhopal, in the Reserve
Bank's SGL Account No. SL/DH 048;
(b) deposits for the benefit of the victims of the Bhopal gas leak disaster held in such account,
with the Reserve Bank of India or with a public sector bank, as the Central Government may,
by notification in the Official Gazette, specify, whether prospectively or retrospectively but in
no case earlier than the 1st day of April, 1994 in this behalf.
Explanation.—For the purposes of this sub-clause, the expression "public sector bank" shall have
the meaning assigned to it in the Explanation to clause (23D);
(vi) interest on Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 or deposit
certificates issued under the Gold Monetisation Scheme, 2015 notified by the Central Government;
(vii) interest on bonds—
(a) issued by a local authority or by a State Pooled Finance Entity; and
(b) specified by the Central Government by notification in the Official Gazette.
Explanation.—For the purposes of this sub-clause, the expression "State Pooled Finance Entity"
shall mean such entity which is set up in accordance with the guidelines for the Pooled Finance
Development Scheme notified by the Central Government in the Ministry of Urban Development;
(viii) any income by way of interest received by a non-resident or a person who is not ordinarily
resident, in India on a deposit made on or after the 1st day of April, 2005, in an Offshore Banking
Unit referred to in clause (u) of section 2 of the Special Economic Zones Act, 2005;
(ix) any income by way of interest payable to a non-resident by a unit located in an International
Financial Services Centre in respect of monies borrowed by it on or after the 1st day of September,
2019.
Explanation.—For the purposes of this sub-clause,—
(a) "International Financial Services Centre" shall have the meaning assigned to it in clause (q) of
section 2 of the Special Economic Zones Act, 2005 (28 of 2005);
(b) "unit" shall have the meaning assigned to it in clause (zc) of section 2 of the Special Economic
Zones Act, 2005 (28 of 2005);
(15A) any payment made, by an Indian company engaged in the business of operation of aircraft, to
acquire an aircraft or an aircraft engine (other than a payment for providing spares, facilities or
services in connection with the operation of leased aircraft) on lease from the Government of a
foreign State or a foreign enterprise under an agreement, not being an agreement entered into
between the 1st day of April, 1997 and the 31st day of March, 1999, and approved by the Central
Government in this behalf :
Provided that nothing contained in this clause shall apply to any such agreement entered into on or
after the 1st day of April, 2007.
Explanation.—For the purposes of this clause, the expression "foreign enterprise" means a person
who is a non-resident;

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(16) scholarships granted to meet the cost of education;

(17) any income by way of—
(i) daily allowance received by any person by reason of his membership of Parliament or of any
State Legislature or of any Committee thereof;
(ii) any allowance received by any person by reason of his membership of Parliament under the
Members of Parliament (Constituency Allowance) Rules, 1986;
(iii) any constituency allowance received by any person by reason of his membership of any State
Legislature under any Act or rules made by that State Legislature;
(17A) any payment made, whether in cash or in kind,—
(i) in pursuance of any award instituted in the public interest by the Central Government or any
State Government or instituted by any other body and approved by the Central Government
in this behalf; or
(ii) as a reward by the Central Government or any State Government for such purposes as may be
approved by the Central Government in this behalf in the public interest;
(18) any income by way of—
(i) pension received by an individual who has been in the service of the Central Government or
State Government and has been awarded "Param Vir Chakra" or "Maha Vir Chakra" or "Vir
Chakra" or such other gallantry award as the Central Government may, by notification in the
Official Gazette, specify in this behalf;
(ii) family pension received by any member of the family of an individual referred to in sub-
clause (i).
Explanation.—For the purposes of this clause, the expression "family" shall have the meaning
assigned to it in the Explanation to clause (5);
(18A) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]
(19) family pension received by the widow or children or nominated heirs, as the case may be, of a
member of the armed forces (including para-military forces) of the Union, where the death of such
member has occurred in the course of operational duties, in such circumstances and subject to such
conditions, as may be prescribed83;
(19A) the annual value of any one palace in the occupation of a Ruler, being a palace, the annual value
whereof was exempt from income-tax before the commencement of the Constitution (Twenty-sixth
Amendment) Act, 1971, by virtue of the provisions of the Merged States (Taxation Concessions)
Order, 1949, or the Part B States (Taxation Concessions) Order, 1950, or, as the case may be, the
Jammu and Kashmir (Taxation Concessions) Order, 1958:
Provided that for the assessment year commencing on the 1st day of April, 1972, the annual value
of every such palace in the occupation of such Ruler during the relevant previous year shall be
exempt from income-tax;
(20) the income of a local authority which is chargeable under the head "Income from house property",
"Capital gains" or "Income from other sources" or from a trade or business carried on by it which
accrues or arises from the supply of a commodity or service (not being water or electricity) within
its own jurisdictional area or from the supply of water or electricity within or outside its own
jurisdictional area.
Explanation.—For the purposes of this clause, the expression "local authority" means—
(i) Panchayat as referred to in clause (d) of article 243 of the Constitution; or
(ii) Municipality as referred to in clause (e) of article 243P of the Constitution; or
(iii) Municipal Committee and District Board,
legally entitled to, or entrusted by the Government with, the control or management of a

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Municipal or local fund; or

(iv) Cantonment Board as defined in section 3 of the Cantonments Act, 1924 (2 of 1924);
(20A) [***]
(21) 84any income of a research association for the time being approved for the purpose of clause (ii) or
clause (iii) of sub-section (1) of section 35:
Provided that the research association—
(a) applies its income, or accumulates it for application, wholly and exclusively to the objects for
which it is established, and the provisions of sub-section (2) and sub-section (3) of section 11
shall apply in relation to such accumulation subject to the following modifications, namely
:—
(i) in sub-section (2),—
(1) the words, brackets, letters and figure "referred to in clause (a) or clause (b) of sub-
section (1) read with the Explanation to that sub-section" shall be omitted;
(2) for the words "to charitable or religious purposes", the words "for the purposes of
scientific research or research in social science or statistical research" shall be
substituted;
(3) the reference to "Assessing Officer" in clause (a) thereof shall be construed as a
reference to the "prescribed authority" referred to in clause (ii) or clause (iii) of
sub-section (1) of section 35;
(ii) in sub-section (3), in clause (a), for the words "charitable or religious purposes", the
words "the purposes of scientific research or research in social science or statistical
research" shall be substituted; and
(b) does not invest or deposit its funds, other than—
(i) any assets held by the research association where such assets form part of the corpus of
the fund of the association as on the 1st day of June, 1973;
(ii) any assets (being debentures issued by, or on behalf of, any company or corporation),
acquired by the research association before the 1st day of March, 1983;
(iii) any accretion to the shares, forming part of the corpus of the fund mentioned in sub-
clause (i), by way of bonus shares allotted to the research association;
(iv) voluntary contributions received and maintained in the form of jewellery, furniture or
any other article as the Board may, by notification in the Official Gazette, specify,
for any period during the previous year otherwise than in any one or more of the forms or
modes specified in sub-section (5) of section 11:
Provided further that the exemption under this clause shall not be denied in relation to voluntary
contribution, other than voluntary contribution in cash or voluntary contribution of the nature
referred to in clause (b) of the first proviso to this clause, subject to the condition that such voluntary
contribution is not held by the research association, otherwise than in any one or more of the forms
or modes specified in sub-section (5) of section 11, after the expiry of one year from the end of the
previous year in which such asset is acquired or the 31st day of March, 1992, whichever is later:
Provided also that nothing contained in this clause shall apply in relation to any income of the
research association, being profits and gains of business, unless the business is incidental to the
attainment of its objectives and separate books of account are maintained by it in respect of such
business:
Provided also that where the research association is approved by the Central Government and
subsequently that Government is satisfied that—
(i) the research association has not applied its income in accordance with the provisions

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contained in clause (a) of the first proviso; or

(ii) the research association has not invested or deposited its funds in accordance with the
provisions contained in clause (b) of the first proviso; or
(iii) the activities of the research association are not genuine; or
(iv) the activities of the research association are not being carried out in accordance with all or any
of the conditions subject to which such association was approved,
it may, at any time after giving a reasonable opportunity of showing cause against the proposed
withdrawal to the concerned association, by order, withdraw the approval and forward a copy of the
order withdrawing the approval to such association and to the Assessing Officer;
(22) 85[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]
(22A) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]
(22B) any income of such news agency set up in India solely for collection and distribution of news as the
Central Government may, by notification in the Official Gazette, specify in this behalf:
Provided that the news agency applies its income or accumulates it for application solely for
collection and distribution of news and does not distribute its income in any manner to its members:
Provided further that any notification issued by the Central Government under this clause shall, at
any one time, have effect for such assessment year or years, not exceeding three assessment years
(including an assessment year or years commencing before the date on which such notification is
issued) as may be specified in the notification:
Provided also that where the news agency has been specified, by notification, by the Central
Government and subsequently that Government is satisfied that such news agency has not applied or
accumulated or distributed its income in accordance with the provisions contained in the first
proviso, it may, at any time after giving a reasonable opportunity of showing cause, rescind the
notification and forward a copy of the order rescinding the notification to such agency and to the
Assessing Officer;
(23) [Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]
(23A) any income (other than income chargeable under the head "Income from house property" or any
income received for rendering any specific services or income by way of interest or dividends
derived from its investments) of an association or institution established in India having as its object
the control, supervision, regulation or encouragement of the profession of law, medicine,
accountancy, engineering or architecture or such other profession as the Central Government may
specify in this behalf, from time to time, by notification in the Official Gazette:
Provided that—
(i) the association or institution applies its income, or accumulates it for application, solely to the
objects for which it is established; and
(ii) the association or institution is for the time being approved for the purpose of this clause by
the Central Government by general or special order:
Provided further that where the association or institution has been approved by the Central
Government and subsequently that Government is satisfied that—
(i) such association or institution has not applied or accumulated its income in accordance with
the provisions contained in the first proviso; or
(ii) the activities of the association or institution are not being carried out in accordance with all
or any of the conditions subject to which such association or institution was approved,
it may, at any time after giving a reasonable opportunity of showing cause against the proposed
withdrawal to the concerned association or institution, by order, withdraw the approval and forward
a copy of the order withdrawing the approval to such association or institution and to the Assessing
Officer;

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(23AA) any income received by any person on behalf of any Regimental Fund or Non-Public Fund
established by the armed forces of the Union for the welfare of the past and present members of such
forces or their dependants;
(23AAA) any income received by any person on behalf of a fund established, for such purposes as may be
notified by the Board in the Official Gazette, for the welfare of employees or their dependants and of
which fund such employees are members if such fund fulfils the following conditions, namely :—
(a) the fund—
(i) applies its income or accumulates it for application, wholly and exclusively to the
objects for which it is established; and
(ii) invests its funds and contributions and other sums received by it in the forms or modes
specified in sub-section (5) of section 11;
(b) the fund is approved by the Principal Commissioner or Commissioner in accordance with the
rules86 made in this behalf:
Provided that any such approval shall at any one time have effect for such assessment year or years
not exceeding three assessment years as may be specified in the order of approval;
(23AAB) any income of a fund, by whatever name called, set up by the Life Insurance Corporation of India
on or after the 1st day of August, 1996 or any other insurer under a pension scheme,—
(i) to which contribution is made by any person for the purpose of receiving pension from such
fund;
(ii) which is approved by the Controller of Insurance or the Insurance Regulatory and
Development Authority established under sub-section (1) of section 3 of the Insurance
Regulatory and Development Authority Act, 1999 (41 of 1999), as the case may be.
Explanation.—For the purposes of this clause, the expression "Controller of Insurance" shall have
the meaning assigned to it in clause (5B) of section 2 of the Insurance Act, 1938 (4 of 1938);
(23B) any income of an institution constituted as a public charitable trust or registered under the Societies
Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part
of India, and existing solely for the development of khadi or village industries or both, and not for
purposes of profit, to the extent such income is attributable to the business of production, sale, or
marketing, of khadi or products of village industries:
Provided that—
(i) the institution applies its income, or accumulates it for application, solely for the development
of khadi or village industries or both; and
(ii) the institution is, for the time being, approved for the purpose of this clause by the Khadi and
Village Industries Commission:
Provided further that the Commission shall not, at any one time, grant such approval for more than
three assessment years beginning with the assessment year next following the financial year in
which it is granted:
Provided also that where the institution has been approved by the Khadi and Village Industries
Commission and subsequently that Commission is satisfied that—
(i) the institution has not applied or accumulated its income in accordance with the provisions
contained in the first proviso; or
(ii) the activities of the institution are not being carried out in accordance with all or any of the
conditions subject to which such institution was approved,
it may, at any time after giving a reasonable opportunity of showing cause against the proposed
withdrawal to the concerned institution, by order, withdraw the approval and forward a copy of the
order withdrawing the approval to such institution and to the Assessing Officer.

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Explanation.—For the purposes of this clause,—

(i) "Khadi and Village Industries Commission" means the Khadi and Village Industries
Commission established under the Khadi and Village Industries Commission Act, 1956 (61
of 1956);
(ii) "khadi" and "village industries" have the meanings respectively assigned to them in that Act;
(23BB) any income of an authority (whether known as the Khadi and Village Industries Board or by any
other name) established in a State by or under a State or Provincial Act for the development of khadi
or village industries in the State.
Explanation.—For the purposes of this clause, "khadi" and "village industries" have the meanings
respectively assigned to them in the Khadi and Village Industries Commission Act, 1956 (61 of
1956);
(23BBA) any income of any body or authority (whether or not a body corporate or corporation sole)
established, constituted or appointed by or under any Central, State or Provincial Act which provides
for the administration of any one or more of the following, that is to say, public religious or
charitable trusts or endowments (including maths, temples, gurdwaras, wakfs, churches, synagogues,
agiaries or other places of public religious worship) or societies for religious or charitable purposes
registered as such under the Societies Registration Act, 1860 (21 of 1860), or any other law for the
time being in force:
Provided that nothing in this clause shall be construed to exempt from tax the income of any trust,
endowment or society referred to therein;
(23BBB) any income of the European Economic Community derived in India by way of interest, dividends
or capital gains from investments made out of its funds under such scheme as the Central
Government may, by notification in the Official Gazette, specify in this behalf.
Explanation.—For the purposes of this clause, "European Economic Community" means the
European Economic Community established by the Treaty of Rome of 25th March, 1957;
(23BBC) any income of the SAARC Fund for Regional Projects set up by Colombo Declaration issued on
the 21st day of December, 1991 by the Heads of State or Government of the Member Countries of
South Asian Association for Regional Cooperation established on the 8th day of December, 1985 by
the Charter of the South Asian Association for Regional Cooperation;
(23BBD) any income of the Secretariat of the Asian Organisation of the Supreme Audit Institutions
registered as "ASOSAI-SECRETARIAT" under the Societies Registration Act, 1860 (21 of 1860)
for ten previous years relevant to the assessment years beginning on the 1st day of April, 2001 and
ending on the 31st day of March, 2011;
(23BBE) any income of the Insurance Regulatory and Development Authority established under sub-
section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of
1999);
(23BBF) any income of the North-Eastern Development Finance Corporation Limited, being a company
formed and registered under the Companies Act, 1956 (1 of 1956)87 :
Provided that in computing the total income of the North-Eastern Development Finance
Corporation Limited, the amount to the extent of—
(i) twenty per cent of the total income for assessment year beginning on the 1st day of April,
2006;
(ii) forty per cent of the total income for assessment year beginning on the 1st day of April, 2007;
(iii) sixty per cent of the total income for assessment year beginning on the 1st day of April, 2008;
(iv) eighty per cent of the total income for assessment year beginning on the 1st day of April,
2009;
(v) one hundred per cent of the total income for assessment year beginning on the 1st day of

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April, 2010 and any subsequent assessment year or years,

shall be included in such total income;
(23BBG) any income of the Central Electricity Regulatory Commission constituted under sub-section (1) of
section 76 of the Electricity Act, 2003 (36 of 2003);
(23BBH) any income of the Prasar Bharati (Broadcasting Corporation of India) established under sub-
section (1) of section 3 of the Prasar Bharati (Broadcasting Corporation of India) Act, 1990 (25 of
1990);
(23C) any income received by any person on behalf of—
(i) the Prime Minister's National Relief Fund 88[or the Prime Minister's Citizen Assistance and
Relief in Emergency Situations Fund (PM CARES FUND)]; or
(ii) the Prime Minister's Fund (Promotion of Folk Art); or
(iii) the Prime Minister's Aid to Students Fund; or
(iiia) the National Foundation for Communal Harmony; or
(iiiaa) the Swachh Bharat Kosh, set up by the Central Government; or
(iiiaaa) the Clean Ganga Fund, set up by the Central Government; or
(iiiaaaa) the Chief Minister's Relief Fund or the Lieutenant Governor's Relief Fund in respect of any
State or Union territory as referred to in sub-clause (iiihf) of clause (a) of sub-section (2) of
section 80G; or
(iiiab) any university or other educational institution existing solely for educational purposes and
not for purposes of profit, and which is wholly or substantially financed by the
Government89; or
(iiiac) any hospital or other institution for the reception and treatment of persons suffering from
illness or mental defectiveness or for the reception and treatment of persons during
convalescence or of persons requiring medical attention or rehabilitation, existing solely for
philanthropic purposes and not for purposes of profit, and which is wholly or substantially
financed by the Government90.
Explanation.—For the purposes of sub-clauses (iiiab) and (iiiac), any university or other
educational institution, hospital or other institution referred therein, shall be considered as
being substantially financed by the Government for any previous year, if the Government
grant to such university or other educational institution, hospital or other institution exceeds
such percentage of the total receipts including any voluntary contributions, as may be
prescribed90, of such university or other educational institution, hospital or other institution,
as the case may be, during the relevant previous year; or
(iiiad) any university or other educational institution existing solely for educational purposes and
not for purposes of profit if the aggregate annual 91[receipts of the person from such
university or universities or educational institution or educational institutions do not exceed
five crore rupees]; or
(iiiae) any hospital or other institution for the reception and treatment of persons suffering from
illness or mental defectiveness or for the reception and treatment of persons during
convalescence or of persons requiring medical attention or rehabilitation, existing solely for
philanthropic purposes and not for purposes of profit, if the aggregate annual 92[receipts of
the person from such hospital or hospitals or institution or institutions do not exceed five
crore rupees.]
93[Explanation.—For the purposes of sub-clauses (iiiad) and (iiiae), it is hereby clarified
that if the person has receipts from university or universities or educational institution or
institutions as referred to in sub-clause (iiiad), as well as from hospital or hospitals or

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institution or institutions as referred to in sub-clause (iiiae), the exemptions under these

clauses shall not apply, if the aggregate of annual receipts of the person from such
university or universities or educational institution or institutions or hospital or hospitals or
institution or institutions, exceed five crore rupees; or]
(iv) any other fund or institution established for charitable purposes which may be approved by
the 94[Principal Commissioner or Commissioner], having regard to the objects of the fund
or institution and its importance throughout India or throughout any State or States; or
(v) any trust (including any other legal obligation) or institution wholly for public religious
purposes or wholly for public religious and charitable purposes, which may be approved by
the 94[Principal Commissioner or Commissioner], having regard to the manner in which the
affairs of the trust or institution are administered and supervised for ensuring that the
income accruing thereto is properly applied for the objects thereof;
(vi) any university or other educational institution existing solely for educational purposes and
not for purposes of profit, other than those mentioned in sub-clause (iiiab) or sub-clause
(iiiad) and which may be approved by the 94[Principal Commissioner or Commissioner]; or
(via) any hospital or other institution for the reception and treatment of persons suffering from
illness or mental defectiveness or for the reception and treatment of persons during
convalescence or of persons requiring medical attention or rehabilitation, existing solely for
philanthropic purposes and not for purposes of profit, other than those mentioned in sub-
clause (iiiac) or sub-clause (iiiae) and which may be approved by the 95[Principal
Commissioner or Commissioner]:
96[Provided that the exemption to the fund or trust or institution or university or other educational
institution or hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or
sub-clause (vi) or sub-clause (via), under the respective sub-clauses, shall not be available to it
unless such fund or trust or institution or university or other educational institution or hospital or
other medical institution makes an application in the prescribed form and manner to the Principal
Commissioner or Commissioner, for grant of approval,—
(i) where such fund or trust or institution or university or other educational institution or hospital
or other medical institution is approved under the second proviso [as it stood immediately
before its amendment by the Taxation and Other Laws (Relaxation and Amendment of
Certain Provisions) Act, 2020], within three months from the 1st day of April, 2021;
(ii) where such fund or trust or institution or university or other educational institution or hospital
or other medical institution is approved and the period of such approval is due to expire, at
least six months prior to expiry of the said period;
(iii) where such fund or trust or institution or university or other educational institution or hospital
or other medical institution has been provisionally approved, at least six months prior to
expiry of the period of the provisional approval or within six months of commencement of its
activities, whichever is earlier;
(iv) in any other case, at least one month prior to the commencement of the previous year relevant
to the assessment year from which the said approval is sought,
and the said fund or trust or institution or university or other educational institution or hospital or
other medical institution is approved under the second proviso:
Provided further that the Principal Commissioner or Commissioner, on receipt of an application
made under the first proviso, shall,—
(i) where the application is made under clause (i) of the said proviso, pass an order in writing
granting approval to it for a period of five years;
(ii) where the application is made under clause (ii) or clause (iii) of the said proviso,—

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(a) call for such documents or information from it or make such inquiries as he thinks
necessary in order to satisfy himself about—
(A) the genuineness of activities of such fund or trust or institution or university or
other educational institution or hospital or other medical institution; and
(B) the compliance of such requirements of any other law for the time being in force
by it as are material for the purpose of achieving its objects; and
(b) after satisfying himself about the objects and the genuineness of its activities under item
(A), and compliance of the requirements under item (B), of sub-clause (a),—
(A) pass an order in writing granting approval to it for a period of five years;
(B) if he is not so satisfied, pass an order in writing rejecting such application and also
cancelling its approval after affording it a reasonable opportunity of being heard;
(iii) where the application is made under clause (iv) of the said proviso, pass an order in writing
granting approval to it provisionally for a period of three years from the assessment year
from which the registration is sought, and send a copy of such order to the fund or trust or
institution or university or other educational institution or hospital or other medical
institution:]
Provided also that the fund or trust or institution or any university or other educational institution or
any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause
(vi) or sub-clause (via)—
(a) applies its income, or accumulates it for application, wholly and exclusively to the objects for
which it is established and in a case where more than fifteen per cent of its income is
accumulated on or after the 1st day of April, 2002, the period of the accumulation of the
amount exceeding fifteen per cent of its income shall in no case exceed five years; and
(b) does not invest or deposit its funds, other than—
(i) any assets held by the fund, trust or institution or any university or other educational
institution or any hospital or other medical institution where such assets form part of
the corpus of the fund, trust or institution or any university or other educational
institution or any hospital or other medical institution as on the 1st day of June, 1973;
(ia) any asset, being equity shares of a public company, held by any university or other
educational institution or any hospital or other medical institution where such assets
form part of the corpus of any university or other educational institution or any hospital
or other medical institution as on the 1st day of June, 1998;
(ii) any assets (being debentures issued by, or on behalf of, any company or corporation),
acquired by the fund, trust or institution or any university or other educational
institution or any hospital or other medical institution before the 1st day of March,
1983;
(iii) any accretion to the shares, forming part of the corpus mentioned in sub-clause (i) and
sub-clause (ia), by way of bonus shares allotted to the fund, trust or institution or any
university or other educational institution or any hospital or other medical institution;
(iv) voluntary contributions received and maintained in the form of jewellery, furniture or
any other article as the Board may, by notification in the Official Gazette, specify,
for any period during the previous year otherwise than in any one or more of the forms or
modes specified in sub-section (5) of section 11.
97[98[Explanation 1].—For the removal of doubts, it is hereby clarified that for the purposes of this
proviso, the income of the funds or trust or institution or any university or other educational
institution or any hospital or other medical institution, shall not include income in the form of
voluntary contributions made with a specific direction that they shall form part of the corpus of such

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fund or trust or institution or any university or other educational institution or any hospital or other
medical institution 99[subject to the condition that such voluntary contributions are invested or
deposited in one or more of the forms or modes specified in sub-section (5) of section 11 maintained
specifically for such corpus].]
1[Explanation 1A.—For the purposes of this proviso, where the property held under a trust or
institution referred to in clause (v) includes any temple, mosque, gurdwara, church or other place
notified under clause (b) of sub-section (2) of section 80G, any sum received by such trust or
institution as a voluntary contribution for the purpose of renovation or repair of such temple,
mosque, gurdwara, church or other place, may, at its option, be treated by such trust or institution
as forming part of the corpus of that trust or institution, subject to the condition that the trust or
institution,—
(a) applies such corpus only for the purpose for which the voluntary contribution was made;
(b) does not apply such corpus for making contribution or donation to any person;
(c) maintains such corpus as separately identifiable; and
(d) invests or deposits such corpus in the forms and modes specified under sub-section (5) of
section 11.
Explanation 1B.—For the purposes of Explanation 1A, where any trust or institution referred to in
sub-clause (v) has treated any sum received by it as forming part of the corpus, and subsequently
any of the conditions specified in clause (a) or clause (b) or clause (c) or clause (d) of the said
Explanation is violated, such sum shall be deemed to be the income of such trust or institution of the
previous year during which the violation takes place.]
2[Explanation 2.—For the purposes of determining the amount of application under this proviso,—
(i) application for charitable or religious purposes from the corpus as referred to in Explanation
1, shall not be treated as application of income for charitable or religious purposes:
Provided that the amount not so treated as application or part thereof, shall be treated as
application for charitable or religious purposes in the previous year in which the amount, or
part thereof, is invested or deposited back, into one or more of the forms or modes specified
in sub-section (5) of section 11 maintained specifically for such corpus, from the income of
that year and to the extent of such investment or deposit; and
(ii) application for charitable or religious purposes, from any loan or borrowing, shall not be
treated as application of income for charitable or religious purposes:
Provided that the amount not so treated as application or part thereof, shall be treated as
application for charitable or religious purposes in the previous year in which the loan or
borrowing, or part thereof, is repaid from the income of that year and to the extent of such
repayment:]
Following Explanations 3, 4 and 5 shall be inserted after Explanation 2 to third proviso to
section 10(23C) by the Finance Act, 2022, w.e.f. 1-4-2023:
Explanation 3.—For the purposes of determining the amount of application under this proviso,
where eighty-five per cent of the income referred to in clause (a) of this proviso is not applied wholly
and exclusively to the objects for which the fund or institution or trust or any university or other
educational institution or any hospital or other medical institution referred to in sub-clause (iv) or
sub-clause (v) or sub-clause (vi) or sub-clause (via) is established, during the previous year but is
accumulated or set apart, either in whole or in part, for application to such objects, such income so
accumulated or set apart shall not be included in the total income of the previous year of the person
in receipt of the income, if the following conditions are complied with, namely:—
(a) such person furnishes a statement in such form and manner, as may be prescribed, to the
Assessing Officer stating the purpose for which the income is being accumulated or set apart

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and the period for which the income is to be accumulated or set apart, which shall in no case
exceed five years;
(b) the money so accumulated or set apart is invested or deposited in the forms or modes specified
in sub-section (5) of section 11; and
(c) the statement referred to in clause (a) is furnished on or before the due date specified under
sub-section (1) of section 139 for furnishing the return of income for the previous year:
Provided that in computing the period of five years referred to in clause (a), the period during
which the income could not be applied for the purpose for which it is so accumulated or set apart,
due to an order or injunction of any court, shall be excluded.
Explanation 4.—Any income referred to in Explanation 3, which—
(a) is applied for purposes other than wholly and exclusively to the objects for which the fund or
institution or trust or any university or other educational institution or any hospital or other
medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-
clause (via) is established or ceases to be accumulated or set apart for application thereto;
or
(b) ceases to remain invested or deposited in any of the forms or modes specified in sub-section
(5) of section 11; or
(c) is not utilised for the purpose for which it is so accumulated or set apart during the period
referred to in clause (a) of Explanation 3; or
(d) is credited or paid to any trust or institution registered under section 12AA or section 12AB
or to any fund or institution or trust or any university or other educational institution or any
hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-
clause (vi) or sub-clause (via),
shall be deemed to be the income of such person of the previous year—
(i) in which it is so applied or ceases to be so accumulated or set apart under clause (a); or
(ii) in which it ceases to remain so invested or deposited under clause (b); or
(iii) being the last previous year of the period, for which the income is accumulated or set apart
under clause (a) of Explanation 3, but not utilised for the purpose for which it is so
accumulated or set apart under clause (c); or
(iv) in which it is credited or paid to any fund or institution or trust or any university or other
educational institution or any hospital or other medical institution under clause (d).
Explanation 5.—Notwithstanding anything contained in Explanation 4, where due to circumstances
beyond the control of the person in receipt of the income, any income invested or deposited in
accordance with the provisions of clause (b) of Explanation 3 cannot be applied for the purpose for
which it was accumulated or set apart, the Assessing Officer may, on an application made to him in
this behalf, allow such person to apply such income for such other purpose in India as is specified in
the application by that person and as is in conformity with the objects for which the fund or
institution or trust or any university or other educational institution or any hospital or other medical
institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) is
established; and thereupon the provisions of Explanation 4 shall apply as if the purpose specified by
that person in the application under this Explanation were a purpose specified in the notice given to
the Assessing Officer under clause (a) of Explanation 3:
Provided that the Assessing Officer shall not allow application of such income by way of payment
or credit made for the purposes referred to in clause (d) of Explanation 4:
Provided also that the exemption under sub-clause (iv) or sub-clause (v) shall not be denied in
relation to any funds invested or deposited before the 1st day of April, 1989, otherwise than in any
one or more of the forms or modes specified in sub-section (5) of section 11 if such funds do not
continue to remain so invested or deposited after the 30th day of March, 1993 :

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Provided also that the exemption under sub-clause (vi) or sub-clause (via) shall not be denied in
relation to any funds invested or deposited before the 1st day of June, 1998, otherwise than in any
one or more of the forms or modes specified in sub-section (5) of section 11 if such funds do not
continue to remain so invested or deposited after the 30th day of March, 2001:
Provided also that the exemption under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-
clause (via) shall not be denied in relation to voluntary contribution, other than voluntary
contribution in cash or voluntary contribution of the nature referred to in clause (b) of the third
proviso to this sub-clause, subject to the condition that such voluntary contribution is not held by the
trust or institution or any university or other educational institution or any hospital or other medical
institution, otherwise than in any one or more of the forms or modes specified in sub-section (5) of
section 11, after the expiry of one year from the end of the previous year in which such asset is
acquired or the 31st day of March, 1992, whichever is later:
Provided also that nothing contained in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-
clause (via) shall apply in relation to any income of the fund or trust or institution or any university
or other educational institution or any hospital or other medical institution, being profits and gains of
business, unless the business is incidental to the attainment of its objectives and separate books of
account are maintained by it in respect of such business:
3[Provided also that any approval granted under the second proviso shall apply in relation to the
income of the fund or trust or institution or university or other educational institution or hospital or
other medical institution,—
(i) where the application is made under clause (i) of the first proviso, from the assessment year
from which approval was earlier granted to it;
(ii) where the application is made under clause (iii) of the first proviso, from the first of the
assessment years for which it was provisionally approved;
(iii) in any other case, from the assessment year immediately following the financial year in which
such application is made:
Provided also that the order under clause (i), sub-clause (b) of clause (ii) and clause (iii) of the
second proviso shall be passed, in such form and manner as may be prescribed, before expiry of the
period of three months, six months and one month, respectively, calculated from the end of the
month in which the application was received:
Provided also that where the total income, of the fund or trust or institution or any university or
other educational institution or any hospital or other medical institution referred to in sub-clause (iv)
or sub-clause (v) or sub-clause (vi) or sub-clause (via), without giving effect to the provisions of the
said sub-clauses, exceeds the maximum amount which is not chargeable to tax in any previous year,
such trust or institution or any university or other educational institution or any hospital or other
medical institution shall get its accounts audited in respect of that year by an accountant as defined
in the Explanation below sub-section (2) of 4[section 288 before the specified date referred to in
section 44AB and furnish by that date], the report of such audit in the prescribed form5 duly signed
and verified by such accountant and setting forth such particulars as may be prescribed:]
Following tenth proviso shall be substituted for the existing tenth proviso to clause (23C) of
section 10 by the Finance Act, 2022, w.e.f. 1-4-2023 :
Provided also that where the total income of the fund or institution or trust or any university or
other educational institution or any hospital or other medical institution referred to in sub-clause
(iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), without giving effect to the provisions of
the said sub-clauses, exceeds the maximum amount which is not chargeable to tax in any previous
year, such fund or institution or trust or any university or other educational institution or any
hospital or other medical institution shall—
(a) keep and maintain books of account and other documents in such form and manner and at

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such place, as may be prescribed; and

(b) get its accounts audited in respect of that year by an accountant as defined in the Explanation
below sub-section (2) of section 288 before the specified date referred to in section 44AB and
furnish by that date, the report of such audit in the prescribed form duly signed and verified
by such accountant and setting forth such particulars as may be prescribed:
Provided also that any amount of donation received by the fund or institution in terms of clause (d)
of sub-section (2) of section 80G in respect of which accounts of income and expenditure have not
been rendered to the authority prescribed under clause (v) of sub-section (5C) of that section, in the
manner specified in that clause, or which has been utilised for purposes other than providing relief to
the victims of earthquake in Gujarat or which remains unutilised in terms of sub-section (5C) of
section 80G and not transferred to the Prime Minister's National Relief Fund on or before the 31st
day of March, 2004 shall be deemed to be the income of the previous year and shall accordingly be
charged to tax:
Provided also that any amount credited or paid out of income of any fund or trust or institution or
any university or other educational institution or any hospital or other medical institution referred to
6[in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), to any other fund or trust
or institution or any university or other educational institution or any hospital or other medical
institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) or
trust or institution registered under section 12AA 7[or section 12AB], being voluntary contribution
made with a specific direction that they shall form part of the corpus,] shall not be treated as
application of income to the objects for which such fund or trust or institution or university or
educational institution or hospital or other medical institution, as the case may be, is established:
Provided also that for the purposes of determining the amount of application under item (a) of the
third proviso, the provisions of sub-clause (ia) of clause (a) of section 40 and sub-sections (3) and
(3A) of section 40A, shall, mutatis mutandis, apply as they apply in computing the income
chargeable under the head "Profits and gains of business or profession":
Provided also that where the fund or trust or institution or any university or other educational
institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v)
or sub-clause (vi) or sub-clause (via) does not apply its income during the year of receipt and
accumulates it, any payment or credit out of such accumulation to any trust or institution registered
under section 12AA 8[or section 12AB] or to any fund or trust or institution or any university or
other educational institution or any hospital or other medical institution referred to in sub-clause (iv)
or sub-clause (v) or sub-clause (vi) or sub-clause (via) shall not be treated as application of income
to the objects for which such fund or trust or institution or university or educational institution or
hospital or other medical institution, as the case may be, is established :
9[Provided also that where the fund or institution referred to in sub-clause (iv) or trust or institution
referred to in sub-clause (v) or any university or other educational institution referred to in sub-
clause (vi) or any hospital or other medical institution referred to in sub-clause (via) is approved or
provisionally approved under the said clause and subsequently—
(a) the Principal Commissioner or Commissioner has noticed occurrence of one or more specified
violations during any previous year; or
(b) the Principal Commissioner or Commissioner has received a reference from the Assessing
Officer under the second proviso to sub-section (3) of section 143 for any previous year; or
(c) such case has been selected in accordance with the risk management strategy, formulated by
the Board from time to time, for any previous year,
the Principal Commissioner or Commissioner shall—
(i) call for such documents or information from the fund or institution or trust or any university
or other educational institution or any hospital or other medical institution, or make such

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inquiry as he thinks necessary in order to satisfy himself about the occurrence of any
specified violation;
(ii) pass an order in writing cancelling the approval of such fund or institution or trust or any
university or other educational institution or any hospital or other medical institution, on or
before the specified date, after affording a reasonable opportunity of being heard, for such
previous year and all subsequent previous years, if he is satisfied that one or more specified
violation has taken place;
(iii) pass an order in writing refusing to cancel the approval of such fund or institution or trust or
any university or other educational institution or any hospital or other medical institution, on
or before the specified date, if he is not satisfied about the occurrence of one or more
specified violations;
(iv) forward a copy of the order under clause (ii) or clause (iii), as the case may be, to the
Assessing Officer and such fund or institution or trust or any university or other educational
institution or any hospital or other medical institution.
Explanation 1.—For the purposes of this proviso, "specified date" shall mean the day on which the
period of six months, calculated from the end of the quarter in which the first notice is issued by the
Principal Commissioner or Commissioner, on or after the 1st day of April, 2022, calling for any
document or information, or for making any inquiry, under clause (i) expires.
Explanation 2.—For the purposes of this proviso, the following shall mean "specified violation",—
(a) where any income of the fund or institution or trust or any university or other educational
institution or any hospital or other medical institution has been applied other than for the
objects for which it is established; or
(b) the fund or institution or trust or any university or other educational institution or any
hospital or other medical institution has income from profits and gains of business, which is
not incidental to the attainment of its objectives or separate books of account are not
maintained by it in respect of the business which is incidental to the attainment of its
objectives; or
(c) any activity of the fund or institution or trust or any university or other educational institution
or any hospital or other medical institution—
(A) is not genuine; or
(B) is not being carried out in accordance with all or any of the conditions subject to which
it was notified or approved; or
(d) the fund or institution or trust or any university or other educational institution or any
hospital or other medical institution has not complied with the requirement of any other law
for the time being in force, and the order, direction or decree, by whatever name called,
holding that such non-compliance has occurred, has either not been disputed or has attained
finality.
Explanation 3.—For the purposes of clause (b) of this proviso, where the Assessing Officer has
intimated the Central Government or the prescribed authority under the first proviso of sub-section
(3) of section 143 about the contravention of the provisions of sub-clause (iv) or sub-clause (v) or
sub-clause (vi) or sub-clause (via) of this clause by any fund or institution or trust or university or
other educational institution or any hospital or other medical institution in respect of an assessment
year, and the approval granted to such fund or institution or trust or university or other educational
institution or any hospital or other medical institution has not been withdrawn, or the notification
issued in its case has not been rescinded, on or before the 31st day of March, 2022, such intimation
shall be deemed to be a reference received by the Principal Commissioner or Commissioner as on
the 1st day of April, 2022, and the provisions of clause (b) of the second proviso to sub-section (3) of
section 143 shall apply accordingly for such assessment year:]

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10[***]

Provided also that any anonymous donation referred to in section 115BBC on which tax is payable
in accordance with the provisions of the said section shall be included in the total income :
11[Provided also that all applications made under the first proviso [as it stood before its amendment
by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020]
pending before the Principal Commissioner or Commissioner, on which no order has been passed
before the 1st day of April, 2021, shall be deemed to be applications made under clause (iv) of the
first proviso on that date:]
Provided also that the income of a trust or institution referred to in sub-clause (iv) or sub-clause (v)
shall be included in its total income of the previous year if the provisions of the first proviso to
clause (15) of section 2 become applicable to such trust or institution in the said previous year,
whether or not any approval granted or notification issued in respect of such trust or institution has
been withdrawn or rescinded :
12[Provided also that where the fund or institution referred to in sub-clause (iv) or the trust or
institution referred to in sub-clause (v) or any university or other educational institution referred to
in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via) has
been approved by the Principal Commissioner or Commissioner, and the approval is in force for any
previous year, then, nothing contained in any other provision of this section, other than clause (1)
thereof, shall operate to exclude any income received on behalf of such fund or institution or trust or
university or other educational institution or hospital or other medical institution, as the case may
be, from the total income of the person in receipt thereof for that previous year.
Explanation.—Where, on or after the 1st day of April, 2022, any fund or institution referred to in
sub-clause (iv) or any trust or institution referred to in sub-clause (v) or any university or other
educational institution referred to in sub-clause (vi) or any hospital or other medical institution
referred to in sub-clause (via) is notified under clause (46) of section 10, the approval or provisional
approval granted to such fund or institution or trust or university or other educational institution or
hospital or other medical institution shall become inoperative from the date of notification of such
fund or institution or trust or university or other educational institution or hospital or other medical
institution, as the case may be, under clause (46) of the said section:]
Following provisos shall be inserted after the nineteenth proviso to clause (23C) of section 10
by the Finance Act, 2022, w.e.f. 1-4-2023:
Provided also that the fund or institution or trust or any university or other educational institution
or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-
clause (vi) or sub-clause (via) shall furnish the return of income for the previous year in accordance
with the provisions of sub-section (4C) of section 139, within the time allowed under that section:
Provided also that where the income or part of income or property of any fund or institution or trust
or any university or other educational institution or any hospital or other medical institution
referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), has been
applied directly or indirectly for the benefit of any person referred to in sub-section (3) of section 13,
such income or part of income or property shall, after taking into account the provisions of sub-
sections (2), (4) and (6) of the said section, be deemed to be the income of such fund or institution or
trust or university or other educational institution or hospital or other medical institution of the
previous year in which it is so applied:
Provided also that where any fund or institution or trust or any university or other educational
institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause
(v) or sub-clause (vi) or sub-clause (via) violates the conditions of the tenth proviso or twentieth
proviso, or where the provisions of the eighteenth proviso are applicable, its income chargeable to
tax shall be computed after allowing deduction for the expenditure (other than capital expenditure)
incurred in India, for the objects of the fund or institution or trust or the university or other

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educational institution or the hospital or other medical institution, subject to fulfilment of the
following conditions, namely:—
(a) such expenditure is not from the corpus standing to the credit of the fund or institution or trust
or the university or other educational institution or the hospital or other medical institution
as on the end of the financial year immediately preceding the previous year relevant to the
assessment year for which the income is being computed;
(b) such expenditure is not from any loan or borrowing;
(c) claim of depreciation is not in respect of an asset, acquisition of which has been claimed as
application of income in the same or any other previous year; and
(d) such expenditure is not in the form of any contribution or donation to any person.
Explanation.—For the purposes of determining the amount of expenditure under this proviso, the
provisions of sub-clause (ia) of clause (a) of section 40 and sub-sections (3) and (3A) of section 40A
shall, mutatis mutandis, apply as they apply in computing the income chargeable under the head
"Profits and gains of business or profession":
Provided also that for the purposes of computing income chargeable to tax under the twenty-second
proviso, no deduction in respect of any expenditure or allowance or set-off of any loss shall be
allowed to the assessee under any other provision of this Act.
13[Explanation 1].—In this clause, where any income is required to be applied or accumulated, then,
for such purpose the income shall be determined without any deduction or allowance by way of
depreciation or otherwise in respect of any asset, acquisition of which has been claimed as an
application of income under this clause in the same or any other previous year.
14[Explanation 2.—For the purposes of this clause, it is clarified that the calculation of income
required to be applied or accumulated during the previous year shall be made without any set off or
deduction or allowance of any excess application of any of the year preceding to the previous year.]
15[Explanation 3.—For the purposes of this clause, any sum payable by any fund or institution or
trust or any university or other educational institution or any hospital or other medical institution
referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) shall be
considered as application of income during the previous year in which such sum is actually paid by
it (irrespective of the previous year in which the liability to pay such sum was incurred by the fund
or institution or trust or any university or other educational institution or any hospital or other
medical institution according to the method of accounting regularly employed by it):
Provided that where during any previous year any sum has been claimed to have been applied by
the fund or institution or trust or any university or other educational institution or any hospital or
other medical institution, such sum shall not be allowed as application in any subsequent previous
year;]
(23D) 16[***] any income of—
(i) a Mutual Fund registered under the Securities and Exchange Board of India Act, 1992 (15 of
1992) or regulations made thereunder;
(ii) such other Mutual Fund set up by a public sector bank or a public financial institution or
authorised by the Reserve Bank of India and subject to such conditions as the Central
Government may, by notification in the Official Gazette, specify in this behalf.
Explanation.—For the purposes of this clause,—
(a) the expression "public sector bank" means the State Bank of India constituted under the State
Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India
(Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new Bank constituted under
section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5
of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of

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Undertakings) Act, 1980 (40 of 1980) [and a bank included in the category "other public
sector banks" by the Reserve Bank of India];
(b) the expression "public financial institution" shall have the meaning assigned to it in section 4A
of the Companies Act, 1956 (1 of 1956)17;
(c) the expression "Securities and Exchange Board of India" shall have the meaning assigned to it
in clause (a) of sub-section (1) of section 2 of the Securities and Exchange Board of India
Act, 1992 (15 of 1992);
(23DA) any income of a securitisation trust from the activity of securitisation.
Explanation.—For the purposes of this clause,—
(a) "securitisation" shall have the same meaning as assigned to it,—
(i) in clause (r) of sub-regulation (1) of regulation 218 of the Securities and Exchange
Board of India (Public Offer and Listing of Securitised Debt Instruments) Regulations,
2008 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992)
and the Securities Contracts (Regulation) Act, 1956 (42 of 1956); or
(ia) in clause (z) of sub-section (1) of section 2 of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); or
(ii) under the guidelines on securitisation of standard assets issued by the Reserve Bank of
India;
(b) "securitisation trust" shall have the meaning assigned to it in the Explanation below section
115TCA;
(23E) [Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]
(23EA) any income, by way of contributions received from recognised stock exchanges and the members
thereof, of such Investor Protection Fund set up by recognised stock exchanges in India, either
jointly or separately, as the Central Government may, by notification in the Official Gazette, specify
in this behalf:
Provided that where any amount standing to the credit of the Fund and not charged to income-tax
during any previous year is shared, either wholly or in part, with a recognised stock exchange, the
whole of the amount so shared shall be deemed to be the income of the previous year in which such
amount is so shared and shall accordingly be chargeable to income-tax;
(23EB) any income of the Credit Guarantee Fund Trust for Small Industries, being a trust created by the
Government of India and the Small Industries Development Bank of India established under sub-
section (1) of section 3 of the Small Industries Development Bank of India Act, 1989 (39 of 1989),
for five previous years relevant to the assessment years beginning on the 1st day of April, 2002 and
ending on the 31st day of March, 2007;
(23EC) any income, by way of contributions received from commodity exchanges and the members
thereof, of such Investor Protection Fund set up by commodity exchanges in India, either jointly or
separately, as the Central Government may, by notification in the Official Gazette, specify in this
behalf:
Provided that where any amount standing to the credit of the said Fund and not charged to income-
tax during any previous year is shared, either wholly or in part, with a commodity exchange, the
whole of the amount so shared shall be deemed to be the income of the previous year in which such
amount is so shared and shall accordingly be chargeable to income-tax.
Explanation.—For the purposes of this clause, "commodity exchange" shall mean a "registered
association" as defined in clause (jj) of section 2 of the Forward Contracts (Regulation) Act, 1952
(74 of 1952);
(23ED) any income, by way of contributions received from a depository, of such Investor Protection Fund
set up in accordance with the regulations by a depository as the Central Government may, by

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notification in the Official Gazette, specify in this behalf:

Provided that where any amount standing to the credit of the Fund and not charged to income-tax
during any previous year is shared, either wholly or in part with a depository, the whole of the
amount so shared shall be deemed to be the income of the previous year in which such amount is so
shared and shall, accordingly, be chargeable to income-tax.
Explanation.—For the purposes of this clause,—
(i) "depository" shall have the same meaning as assigned to it in clause (e) of sub-section (1) of
section 2 of the Depositories Act, 1996 (22 of 1996);
(ii) "regulations" means the regulations made under the Securities and Exchange Board of India
Act, 1992 (15 of 1992) and the Depositories Act, 1996 (22 of 1996);
(23EE) any specified income of such Core Settlement Guarantee Fund, set up by a recognised clearing
corporation in accordance with the regulations, as the Central Government may, by notification in
the Official Gazette, specify in this behalf:
Provided that where any amount standing to the credit of the Fund and not charged to income-tax
during any previous year is shared, either wholly or in part with the specified person, the whole of
the amount so shared shall be deemed to be the income of the previous year in which such amount is
so shared and shall, accordingly, be chargeable to income-tax.
Explanation.—For the purposes of this clause,—
(i) "recognised clearing corporation" shall have the same meaning as assigned to it in clause (o)
of sub-regulation (1) of regulation 2 of the Securities Contracts (Regulation) (Stock
Exchanges and Clearing Corporations) Regulations, 201219 made under the Securities and
Exchange Board of India Act, 1992 (15 of 1992) and the Securities Contracts (Regulation)
Act, 1956 (42 of 1956);
(ii) "regulations" means the Securities Contracts (Regulation) (Stock Exchanges and Clearing
Corporations) Regulations, 2012* made under the Securities and Exchange Board of India
Act, 1992 (15 of 1992) and the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(iii) "specified income" shall mean,—
(a) the income by way of contribution received from specified persons;
(b) the income by way of penalties imposed by the recognised clearing corporation and
credited to the Core Settlement Guarantee Fund; or
(c) the income from investment made by the Fund;
(iv) "specified person" shall mean,—
(a) any recognised clearing corporation which establishes and maintains the Core
Settlement Guarantee Fund;
(b) any recognised stock exchange, being a shareholder in such recognised clearing
corporation, or a contributor to the Core Settlement Guarantee Fund; and
(c) any clearing member contributing to the Core Settlement Guarantee Fund;
(23F) any income by way of dividends or long-term capital gains of a venture capital fund or a venture
capital company from investments made by way of equity shares in a venture capital undertaking :
Provided that such venture capital fund or venture capital company is approved for the purposes of
this clause by the prescribed authority20 in accordance with the rules21 made in this behalf and
satisfies the prescribed conditions :
Provided further that any approval by the prescribed authority shall, at any one time, have effect
for such assessment year or years, not exceeding three assessment years, as may be specified in the
order of approval :
Provided also that nothing contained in this clause shall apply in respect of any investment made

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after the 31st day of March, 1999.

Explanation.—For the purposes of this clause,—
(a) "venture capital fund" means such fund, operating under a trust deed registered under the
provisions of the Registration Act, 1908 (16 of 1908), established to raise monies by the
trustees for investments mainly by way of acquiring equity shares of a venture capital
undertaking in accordance with the prescribed guidelines;
(b) "venture capital company" means such company as has made investments by way of acquiring
equity shares of venture capital undertakings in accordance with the prescribed guidelines;
(c) "venture capital undertaking" means such domestic company whose shares are not listed in a
recognised stock exchange in India and which is engaged in the business of generation or
generation and distribution of electricity or any other form of power or engaged in the
business of providing telecommunication services or in the business of developing,
maintaining and operating any infrastructure facility or engaged in the manufacture or
production of such articles or things (including computer software) as may be notified by the
Central Government in this behalf; and
(d) "infrastructure facility" means a road, highway, bridge, airport, port, rail system, a water
supply project, irrigation project, sanitation and sewerage system or any other public facility
of a similar nature as may be notified by the Board in this behalf in the Official Gazette and
which fulfils the conditions specified in sub-section (4A) of section 80-IA;
(23FA) any income by way of dividends, other than dividends referred to in section 115-O, or long-term
capital gains of a venture capital fund or a venture capital company from investments made by way
of equity shares in a venture capital undertaking :
Provided that such venture capital fund or venture capital company is approved, for the purposes of
this clause, by the Central Government on an application made to it in accordance with the rules22
made in this behalf and which satisfies the prescribed conditions :
Provided further that any approval by the Central Government shall, at any one time, have effect
for such assessment year or years, not exceeding three assessment years, as may be specified in the
order of approval :
Provided also that nothing contained in this clause shall apply in respect of any investment made
after the 31st day of March, 2000.
Explanation.—For the purposes of this clause,—
(a) "venture capital fund" means such fund, operating under a trust deed registered under the
provisions of the Registration Act, 1908 (16 of 1908), established to raise monies by the
trustees for investments mainly by way of acquiring equity shares of a venture capital
undertaking in accordance with the prescribed guidelines;
(b) "venture capital company" means such company as has made investments by way of acquiring
equity shares of venture capital undertakings in accordance with the prescribed guidelines;
and
(c) "venture capital undertaking" means such domestic company whose shares are not listed in a
recognised stock exchange in India and which is engaged in the—
(i) business of—
(A) software;
(B) information technology;
(C) production of basic drugs in the pharmaceutical sector;
(D) bio-technology;
(E) agriculture and allied sectors; or

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(F) such other sectors as may be notified by the Central Government in this behalf; or
(ii) production or manufacture of any article or substance for which patent has been granted
to the National Research Laboratory or any other scientific research institution
approved by the Department of Science and Technology;
(23FB) any income of a venture capital company or venture capital fund from investment in a venture
capital undertaking :
Provided that nothing contained in this clause shall apply in respect of any income of a venture
capital company or venture capital fund, being an investment fund specified in clause (a) of the
Explanation 1 to section 115UB, of the previous year relevant to the assessment year beginning on
or after the 1st day of April, 2016.
Explanation.—For the purposes of this clause,—
(a) "venture capital company" means a company which—
(A) has been granted a certificate of registration, before the 21st day of May, 2012, as a
Venture Capital Fund and is regulated under the Securities and Exchange Board of
India (Venture Capital Funds) Regulations, 1996 (hereinafter referred to as the Venture
Capital Funds Regulations) made under the Securities and Exchange Board of India
Act, 1992 (15 of 1992); or
(B) has been granted a certificate of registration as Venture Capital Fund as a sub-category
of Category I Alternative Investment Fund and is regulated under the Securities and
Exchange Board of India (Alternative Investment Funds) Regulations, 2012
(hereinafter referred to as the Alternative Investment Funds Regulations) made under
the Securities and Exchange Board of India Act, 1992 (15 of 1992), and which fulfils
the following conditions, namely:—
(i) it is not listed on a recognised stock exchange;
(ii) it has invested not less than two-thirds of its investible funds in unlisted equity
shares or equity linked instruments of venture capital undertaking; and
(iii) it has not invested in any venture capital undertaking in which its director or a
substantial shareholder (being a beneficial owner of equity shares exceeding ten
per cent of its equity share capital) holds, either individually or collectively, equity
shares in excess of fifteen per cent of the paid-up equity share capital of such
venture capital undertaking;
(b) "venture capital fund" means a fund—
(A) operating under a trust deed registered under the provisions of the Registration Act,
1908 (16 of 1908), which—
(I) has been granted a certificate of registration, before the 21st day of May, 2012, as a
Venture Capital Fund and is regulated under the Venture Capital Funds
Regulations; or
(II) has been granted a certificate of registration as Venture Capital Fund as a sub-
category of Category I Alternative Investment Fund under the Alternative
Investment Funds Regulations and which fulfils the following conditions,
namely:—
(i) it has invested not less than two-thirds of its investible funds in unlisted
equity shares or equity linked instruments of venture capital undertaking;
(ii) it has not invested in any venture capital undertaking in which its trustee or
the settler holds, either individually or collectively, equity shares in excess of
fifteen per cent of the paid-up equity share capital of such venture capital
undertaking; and

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(iii) the units, if any, issued by it are not listed in any recognised stock exchange;
or
(B) operating as a venture capital scheme made by the Unit Trust of India established under
the Unit Trust of India Act, 1963 (52 of 1963);
(c) "venture capital undertaking" means—
(i) a venture capital undertaking as defined in clause (n) of regulation 2 of the Venture
Capital Funds Regulations; or
(ii) a venture capital undertaking as defined in clause (aa) of sub-regulation (1) of
regulation 2 of the Alternative Investment Funds Regulations;
(23FBA) any income of an investment fund other than the income chargeable under the head "Profits and
gains of business or profession";
(23FBB) any income referred to in section 115UB, accruing or arising to, or received by, a unit holder of
an investment fund, being that proportion of income which is of the same nature as income
chargeable under the head "Profits and gains of business or profession".
Explanation.—For the purposes of clauses (23FBA) and (23FBB), the expression "investment fund"
shall have the meaning assigned to it in clause (a) of the Explanation 1 to section 115UB;
23[(23FBC) any income accruing or arising to, or received by, a unit holder from a specified fund or on
transfer of units in a specified fund.
Explanation.—For the purposes of this clause, the expressions—
(a) "specified fund" shall have the same meaning as assigned to it in clause (c) of the
Explanation to clause (4D);
(b) "unit" means beneficial interest of an investor in the fund and shall include shares or
partnership interests;]
(23FC) any income of a business trust by way of—
(a) interest received or receivable from a special purpose vehicle; or
(b) dividend 24[received or receivable from a special purpose vehicle].
Explanation.—For the purposes of this clause, the expression "special purpose vehicle" means an
Indian company in which the business trust holds controlling interest and any specific percentage
of shareholding or interest, as may be required by the regulations under which such trust is
granted registration;
(23FCA) any income of a business trust, being a real estate investment trust, by way of renting or leasing or
letting out any real estate asset owned directly by such business trust.
Explanation.—For the purposes of this clause, the expression "real estate asset" shall have the
same meaning as assigned to it in clause (zj) of sub-regulation (1) of regulation 2 of the Securities
and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 made under the
Securities and Exchange Board of India Act, 1992 (15 of 1992);
(23FD) any distributed income, referred to in section 115UA, received by a unit holder from the business
trust, not being that proportion of the income which is of the same nature as the income referred to
25-26[in sub-clause (a) of clause (23FC) or sub-clause (b) of said clause (in a case where the
special purpose vehicle has exercised the option under section 115BAA)] or clause (23FCA);
27[(23FE) any income of a specified person in the nature of dividend, interest or long-term capital gains
arising from an investment made by it in India, whether in the form of debt or share capital or
unit, if the investment—
(i) is made on or after the 1st day of April, 2020 but on or before the 31st day of March, 2024;
(ii) is held for at least three years; and
(iii) is in—

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(a) a business trust referred to in sub-clause (i) of clause (13A) of section 2; or

(b) a company or enterprise or an entity carrying on the business of developing, or
operating and maintaining, or developing, operating and maintaining any infrastructure
facility as defined in the Explanation to clause (i) of sub-section (4) of section 80-IA or
such other business as the Central Government may, by notification in the Official
Gazette, specify in this behalf; or
(c) a Category-I or Category-II Alternative Investment Fund regulated under the Securities
and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made
under the Securities and Exchange Board of India Act, 1992 (15 of 1992), having
28[not less than fifty per cent] investment in one or more of the company or enterprise

or entity referred to in item (b) 29[or item (d) or item (e) or in an Infrastructure
Investment Trust referred to in sub-clause (i) of clause (13A) of section 2; or]
29[(d)a domestic company, set up and registered on or after the 1st day of April, 2021, having
minimum seventy-five per cent investments in one or more of the companies or
enterprises or entities referred to in item (b); or
(e) a non-banking financial company registered as an Infrastructure Finance Company as
referred to in notification number RBI/2009-10/316 issued by the Reserve Bank of
India or in an Infrastructure Debt Fund, a non-banking finance company, as referred to
in the Infrastructure Debt Fund - Non-Banking Financial Companies (Reserve Bank)
Directions, 2011, issued by the Reserve Bank of India, having minimum ninety per cent
lending to one or more of the companies or enterprises or entities referred to in item
(b):]
Provided that if any difficulty arises regarding interpretation or implementation of the provisions
of this clause, the Board may, with the approval of the Central Government, issue guidelines for
the purpose of removing the difficulty:
Provided further that every guideline issued under the first proviso, shall be laid before each
House of Parliament and shall be binding on the income-tax authority and the specified person:
Provided also that where any income has not been included in the total income of the specified
person due to the provisions of this clause, and subsequently during any previous year the
specified person fails to satisfy any of the conditions of this clause so that the said income would
not have been eligible for such non-inclusion, such income shall be chargeable to income-tax as
the income of the specified person of that previous year:
30[Provided also that in case a Category-I or Category-II Alternative Investment Fund referred to
in item (c) of sub-clause (iii) has investment of less than one hundred per cent in one or more of
the companies or enterprises or entities referred to in item (b) or item (d) or item (e) of the said
sub-clause or in an Infrastructure Investment Trust referred to in item (c) of the said sub-clause,
income accrued or arisen or received or attributable to such investment, directly or indirectly,
which is exempt under this clause shall be calculated proportionately to that investment made in
one or more of the companies or enterprises or entities referred to in item (b) or item (d) or item
(e) of the said sub-clause or in the Infrastructure Investment Trust referred to in item (c) of the
said sub-clause, in such manner as may be prescribed:
Provided also that in case a domestic company referred to in item (d) of sub-clause (iii) has
investment of less than one hundred per cent in one or more of the companies or enterprises or
entities referred to in item (b) of the said sub-clause, income accrued or arisen or received or
attributable to such investments, directly or indirectly, which is exempt under this clause shall be
calculated proportionately to the investment made in one or more of the companies or enterprises
or entities referred to in item (b) of the said sub-clause, in such manner as may be prescribed:
Provided also that in case a non-banking finance company registered as an Infrastructure Finance

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Company or Infrastructure Debt Fund, referred to in item (e) of sub-clause (iii), has lending of
less than one hundred per cent in one or more of the companies or enterprises or entities referred
to in item (b) of the said sub-clause, income accrued or arisen or received or attributable to such
lending, directly or indirectly, which is exempt under this clause shall be calculated
proportionately to the lending made in one or more of the companies or enterprises or entities
referred to in item (b) of the said sub-clause, in such manner as may be prescribed:
Provided also that in case a sovereign wealth fund or pension fund has loans or borrowings,
directly or indirectly, for the purposes of making investment in India, such fund shall be deemed
to be not eligible for exemption under this clause.]
31[Explanation 1].—For the purposes of this clause, "specified person" means—
(a) a wholly owned subsidiary of the Abu Dhabi Investment Authority which—
(i) is a resident of the United Arab Emirates; and
(ii) makes investment, directly or indirectly, out of the fund owned by the Government of
the 32[Abu Dhabi];
(b) a sovereign wealth fund which satisfies the following conditions, namely:—
(i) it is wholly owned and controlled, directly or indirectly, by the Government of a
foreign country;
(ii) it is set up and regulated under the law of such foreign country;
(iii) the earnings of the said fund are credited either to the account of the Government of
that foreign country or to any other account designated by that Government so that no
portion of the earnings inures any benefit to any private person;
(iv) the asset of the said fund vests in the Government of such foreign country upon
dissolution:
33[Provided that the provisions of sub-clauses (iii) and (iv) shall not apply to any
payment made to creditors or depositors for loan taken or borrowing for the purposes
other than for making investment in India;]
(v) it does not 34[participate in the day to day operations of investee but the monitoring
mechanism to protect the investment with the investee including the right to appoint
directors or executive director shall not be considered as participation in the day to day
operations of the investee]; and
(vi) it is specified by the Central Government, by notification in the Official Gazette, for
this purpose 35[and fulfils conditions specified in such notification];
(c) a pension fund, which—
(i) is created or established under the law of a foreign country including the laws made by
any of its political constituents being a province, State or local body, by whatever name
called;
(ii) is not liable to tax in such foreign country 36[or if liable to tax, exemption from
taxation for all its income has been provided by such foreign country];
(iii) satisfies such other conditions as may be prescribed37; 38[***]
39[(iiia) it does not participate in the day to day operations of investee but the monitoring
mechanism to protect the investment with the investee including the right to appoint
directors or executive director shall not be considered as participation in day to day
operations of the investee; and]
(iv) is specified by the Central Government, by notification in the Official Gazette, for this
purpose 40[and fulfils conditions specified in such notification41].]

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42[Explanation 2.— For the purposes of this clause,—

(i) "investee" means a business trust, or a company, or an enterprise, or an entity, or a Category I
or Category II Alternative Investment Fund, or an Infrastructure Investment Trust or a
domestic company, or an Infrastructure Finance Company or an Infrastructure Debt Fund
referred to in item (e) of sub-clause (iii), in which the sovereign wealth fund or the pension
fund, as the case may be, has made the investment, directly or indirectly, under the provisions
of this clause;
(ii) "loan and borrowing" means—
(a) any loan taken or borrowing by a sovereign wealth fund from, or any deposit or
investment made in a sovereign wealth fund by, any person other than the Government
of the country in which the sovereign wealth fund is set up;
(b) any loan taken or borrowing by a pension fund from or any deposit or investment made
in a pension fund by, any person but shall not include the deposit or investment which
represents statutory obligations and defined contributions of one or more funds or plans
established for providing retirement, social security, employment, disability, death
benefits or any similar compensation to the participants or beneficiaries of such funds
or plans, as the case may be.
Explanation 3.—For the purposes of this clause, the Central Government may prescribe that the
method of calculation of "fifty per cent" referred to in item (c) or "seventy-five per cent" referred
to in item (d) or "ninety per cent" referred to in item (e), of sub-clause (iii) shall be such as may be
prescribed;]
43[(23FF)44 any income of the nature of capital gains, arising or received by a non-resident or a specified
fund, which is on account of transfer of share of a company resident in India, by the resultant fund
or a specified fund to the extent attributable to units held by non-resident (not being a permanent
establishment of a non-resident in India) in such manner as may be prescribed44, and such shares
were transferred from the original fund, or from its wholly owned special purpose vehicle, to the
resultant fund in relocation, and where capital gains on such shares were not chargeable to tax if
that relocation had not taken place.
Explanation.—For the purposes of this clause,—
(a) the expressions "original fund", "relocation" and "resultant fund" shall have the meanings
respectively assigned to them in the Explanation to clause (viiac) and clause (viiad) of
section 47;
(b) the expression "specified fund" shall have the meaning assigned to it in clause (c) of the
Explanation to clause (4D) of section 10;]
(23G) [Omitted by the Finance Act, 2006, w.e.f. 1-4-2007;]
(24) any income chargeable under the heads "Income from house property" and "Income from other
sources" of—
(a) a registered union within the meaning of the Trade Unions Act, 1926 (16 of 1926), formed
primarily for the purpose of regulating the relations between workmen and employers or
between workmen and workmen;
(b) an association of registered unions referred to in sub-clause (a);
(25) (i) interest on securities which are held by, or are the property of, any provident fund to which the
Provident Funds Act, 1925 (19 of 1925), applies, and any capital gains of the fund arising from
the sale, exchange or transfer of such securities;
(ii) any income received by the trustees on behalf of a recognised provident fund;
(iii) any income received by the trustees on behalf of an approved superannuation fund;
(iv) any income received by the trustees on behalf of an approved gratuity fund;

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(v) any income received—

(a) by the Board of Trustees constituted under the Coal Mines Provident Funds and
Miscellaneous Provisions Act, 1948 (46 of 1948), on behalf of the Deposit-linked
Insurance Fund established under section 3G of that Act; or
(b) by the Board of Trustees constituted under the Employees' Provident Funds and
Miscellaneous Provisions Act, 1952 (19 of 1952), on behalf of the Deposit-linked
Insurance Fund established under section 6C of that Act;
(25A) any income of the Employees' State Insurance Fund set up under the provisions of the Employees'
State Insurance Act, 1948 (34 of 1948);
(26) in the case of a member of a Scheduled Tribe as defined in clause (25) of article 366 of the
Constitution, residing in any area specified in Part I or Part II of the Table appended to paragraph
20 of the Sixth Schedule to the Constitution or in the States of Arunachal Pradesh, Manipur,
Mizoram, Nagaland and Tripura or in the areas covered by notification No. TAD/R/35/50/109,
dated the 23rd February, 1951, issued by the Governor of Assam under the proviso to sub-
paragraph (3) of the said paragraph 20 [as it stood immediately before the commencement of the
North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971) or in the Ladakh region of the State
of Jammu and Kashmir, any income which accrues or arises to him,—
(a) from any source in the areas or States aforesaid, or
(b) by way of dividend or interest on securities;
(26A) any income accruing or arising to any person from any source in the district of Ladakh or outside
India in any previous year relevant to any assessment year commencing before the 1st day of
April, 1989, where such person is resident in the said district in that previous year :
Provided that this clause shall not apply in the case of any such person unless he was resident in
that district in the previous year relevant to the assessment year commencing on the 1st day of
April, 1962.
Explanation 1.—For the purposes of this clause, a person shall be deemed to be resident in the
district of Ladakh if he fulfils the requirements of sub-section (1)45 or sub-section (2) or sub-
section (3) or sub-section (4) of section 6, as the case may be, subject to the modifications that—
(i) references in those sub-sections to India shall be construed as references to the said district;
and
(ii) in clause (i) of sub-section (3), reference to Indian company shall be construed as reference
to a company formed and registered under any law for the time being in force in the State of
Jammu and Kashmir and having its registered office in that district in that year.
Explanation 2.—In this clause, references to the district of Ladakh shall be construed as
references to the areas comprised in the said district on the 30th day of June, 1979;
(26AA) [***]
(26AAA) in case of an individual, being a Sikkimese, any income which accrues or arises to him—
(a) from any source in the State of Sikkim; or
(b) by way of dividend or interest on securities:
Provided that nothing contained in this clause shall apply to a Sikkimese woman who, on or after
the 1st day of April, 2008, marries an individual who is not a Sikkimese.
Explanation.—For the purposes of this clause, "Sikkimese" shall mean—
(i) an individual, whose name is recorded in the register maintained under the Sikkim Subjects
Regulation, 1961 read with the Sikkim Subject Rules, 1961 (hereinafter referred to as the
"Register of Sikkim Subjects"), immediately before the 26th day of April, 1975; or
(ii) an individual, whose name is included in the Register of Sikkim Subjects by virtue of the

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Government of India Order No. 26030/36/90-I.C.I., dated the 7th August, 1990 and Order of
even number dated the 8th April, 1991; or
(iii) any other individual, whose name does not appear in the Register of Sikkim Subjects, but it is
established beyond doubt that the name of such individual's father or husband or paternal
grand-father or brother from the same father has been recorded in that register;
(26AAB) any income of an agricultural produce market committee or board constituted under any law for
the time being in force for the purpose of regulating the marketing of agricultural produce;
(26B) any income of a corporation established by a Central, State or Provincial Act or of any other body,
institution or association (being a body, institution or association wholly financed by Government)
where such corporation or other body or institution or association has been established or formed
for promoting the interests of the members of the Scheduled Castes or the Scheduled Tribes or
backward classes or of any two or all of them.
Explanation.—For the purposes of this clause,—
(a) "Scheduled Castes" and "Scheduled Tribes" shall have the meanings respectively assigned to
them in clauses (24) and (25) of article 366 of the Constitution;
(b) "backward classes" means such classes of citizens, other than the Scheduled Castes and the
Scheduled Tribes, as may be notified—
(i) by the Central Government; or
(ii) by any State Government,
as the case may be, from time to time;
(26BB) any income of a corporation established by the Central Government or any State Government for
promoting the interests of the members of a minority community.
Explanation.—For the purposes of this clause, "minority community" means a community
notified as such by the Central Government in the Official Gazette in this behalf;
(26BBB) any income of a corporation established by a Central, State or Provincial Act for the welfare and
economic upliftment of ex-servicemen being the citizens of India.
Explanation.—For the purposes of this clause, "ex-serviceman" means a person who has served in
any rank, whether as combatant or non-combatant, in the armed forces of the Union or armed
forces of the Indian States before the commencement of the Constitution (but excluding the
Assam Rifles, Defence Security Corps, General Reserve Engineering Force, Lok Sahayak Sena,
Jammu and Kashmir Militia and Territorial Army) for a continuous period of not less than six
months after attestation and has been released, otherwise than by way of dismissal or discharge on
account of misconduct or inefficiency, and in the case of a deceased or incapacitated ex-
serviceman includes his wife, children, father, mother, minor brother, widowed daughter and
widowed sister, wholly dependant upon such ex-serviceman immediately before his death or
incapacitation;
(27) any income of a co-operative society formed for promoting the interests of the members of either
the Scheduled Castes or Scheduled Tribes or both referred to in clause (26B) :
Provided that the membership of the co-operative society consists of only other co-operative
societies formed for similar purposes and the finances of the society are provided by the
Government and such other societies;
(28) [***]
(29) [Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]
(29A) any income accruing or arising to—
(a) the Coffee Board constituted under section 4 of the Coffee Act, 1942 (7 of 1942) in any
previous year relevant to any assessment year commencing on or after the 1st day of April,
1962 or the previous year in which such Board was constituted, whichever is later;

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(b) the Rubber Board constituted under sub-section (1) of section 4 of the Rubber Board Act,
1947 (24 of 1947) in any previous year relevant to any assessment year commencing on or
after the 1st day of April, 1962 or the previous year in which such Board was constituted,
whichever is later;
(c) the Tea Board established under section 4 of the Tea Act, 1953 (29 of 1953) in any previous
year relevant to any assessment year commencing on or after the 1st day of April, 1962 or the
previous year in which such Board was constituted, whichever is later;
(d) the Tobacco Board constituted under the Tobacco Board Act, 1975 (4 of 1975) in any
previous year relevant to any assessment year commencing on or after the 1st day of April,
1975 or the previous year in which such Board was constituted, whichever is later;
(e) the Marine Products Export Development Authority established under section 4 of the
Marine Products Export Development Authority Act, 1972 (13 of 1972) in any previous year
relevant to any assessment year commencing on or after the 1st day of April, 1972 or the
previous year in which such Authority was constituted, whichever is later;
(f) the Agricultural and Processed Food Products Export Development Authority established
under section 4 of the Agricultural and Processed Food Products Export Development Act,
1985 (2 of 1986) in any previous year relevant to any assessment year commencing on or
after the 1st day of April, 1985 or the previous year in which such Authority was constituted,
whichever is later;
(g) the Spices Board constituted under sub-section (1) of section 3 of the Spices Board Act, 1986
(10 of 1986) in any previous year relevant to any assessment year commencing on or after the
1st day of April, 1986 or the previous year in which such Board was constituted, whichever is
later;
(h) the Coir Board established under section 4 of the Coir Industry Act, 1953 (45 of 1953);
(30) 46in the case of an assessee who carries on the business of growing and manufacturing tea in India,
the amount of any subsidy received from or through the Tea Board under any such scheme for
replantation or replacement of tea bushes or for rejuvenation or consolidation of areas used for
cultivation of tea as the Central Government may, by notification in the Official Gazette, specify:
Provided that the assessee furnishes to the Assessing Officer, along with his return of income47
for the assessment year concerned or within such further time as the Assessing Officer may allow,
a certificate from the Tea Board as to the amount of such subsidy paid to the assessee during the
previous year.
Explanation.—In this clause, "Tea Board" means the Tea Board established under section 4 of the
Tea Act, 1953 (29 of 1953);
(31) in the case of an assessee who carries on the business of growing and manufacturing rubber,
coffee, cardamom or such other commodity in India, as the Central Government may, by
notification in the Official Gazette, specify in this behalf, the amount of any subsidy received
from or through the concerned Board under any such scheme for replantation or replacement of
rubber plants, coffee plants, cardamom plants or plants for the growing of such other commodity
or for rejuvenation or consolidation of areas used for cultivation of rubber, coffee, cardamom or
such other commodity as the Central Government may, by notification in the Official Gazette,
specify:
Provided that the assessee furnishes to the Assessing Officer, along with his return of income48
for the assessment year concerned or within such further time as the Assessing Officer may allow,
a certificate from the concerned Board, as to the amount of such subsidy paid to the assessee
during the previous year.
Explanation.—In this clause, "concerned Board" means,—
(i) in relation to rubber, the Rubber Board constituted under section 4 of the Rubber Act, 1947

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(24 of 1947),
(ii) in relation to coffee, the Coffee Board constituted under section 4 of the Coffee Act, 1942 (7
of 1942),
(iii) in relation to cardamom, the Spices Board constituted under section 3 of the Spices Board
Act, 1986 (10 of 1986),
(iv) in relation to any other commodity specified under this clause, any Board or other authority
established under any law for the time being in force which the Central Government may, by
notification in the Official Gazette, specify in this behalf;
(32) in the case of an assessee referred to in sub-section (1A) of section 64, any income includible in his
total income under that sub-section, to the extent such income does not exceed one thousand five
hundred rupees in respect of each minor child whose income is so includible;
(33) any income arising from the transfer of a capital asset, being a unit of the Unit Scheme, 1964
referred to in Schedule I to the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002
(58 of 2002) and where the transfer of such asset takes place on or after the 1st day of April, 2002;
(34) any income by way of dividends referred to in section 115-O :
Provided that nothing in this clause shall apply to any income by way of dividend chargeable to tax
in accordance with the provisions of section 115BBDA:
49[Provided further that nothing contained in this clause shall apply to any income by way of
dividend received on or after the 1st day of April, 2020 other than the dividend on which tax under
section 115-O and section 115BBDA, wherever applicable, has been paid;]
(34A) any income arising to an assessee, being a shareholder, on account of buy back of shares by the
company as referred to in section 115QA;
(35) any income by way of,—
(a) income received in respect of the units of a Mutual Fund specified under clause (23D); or
(b) income received in respect of units from the Administrator of the specified undertaking; or
(c) income received in respect of units from the specified company:
Provided that this clause shall not apply to any income arising from transfer of units of the
Administrator of the specified undertaking or of the specified company or of a mutual fund, as the
case may be:
50[Provided further that nothing contained in this clause shall apply to any income in respect of
units received on or after the 1st day of April, 2020.]
Explanation.—For the purposes of this clause,—
(a) "Administrator" means the Administrator as referred to in clause (a) of section 2 of the Unit
Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);
(b) "specified company" means a company as referred to in clause (h) of section 2 of the Unit
Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);
(35A) any income by way of distributed income referred to in section 115TA received from a
securitisation trust by any person being an investor of the said trust :
Provided that nothing contained in this clause shall apply to any income by way of distributed
income referred to in the said section, received on or after the 1st day of June, 2016.
Explanation.—For the purposes of this clause, the expressions "investor" and "securitisation trust"
shall have the meanings respectively assigned to them in the Explanation below section 115TCA;
(36) any income arising from the transfer of a long-term capital asset, being an eligible equity share in
a company purchased on or after the 1st day of March, 2003 and before the 1st day of March,
2004 and held for a period of twelve months or more.
Explanation.—For the purposes of this clause, "eligible equity share" means,—

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(i) any equity share in a company being a constituent of BSE-500 Index of the Stock Exchange,
Mumbai as on the 1st day of March, 2003 and the transactions of purchase and sale of such
equity share are entered into on a recognised stock exchange in India;
(ii) any equity share in a company allotted through a public issue on or after the 1st day of
March, 2003 and listed in a recognised stock exchange in India before the 1st day of March,
2004 and the transaction of sale of such share is entered into on a recognised stock exchange
in India;
(37) in the case of an assessee, being an individual or a Hindu undivided family, any income chargeable
under the head "Capital gains" arising from the transfer of agricultural land, where—
(i) such land is situate in any area referred to in item (a) or item (b) of sub-clause (iii) of clause
(14) of section 2;
(ii) such land, during the period of two years immediately preceding the date of transfer, was
being used for agricultural purposes by such Hindu undivided family or individual or a parent
of his;
(iii) such transfer is by way of compulsory acquisition under any law, or a transfer the
consideration for which is determined or approved by the Central Government or the Reserve
Bank of India;
(iv) such income has arisen from the compensation or consideration for such transfer received by
such assessee on or after the 1st day of April, 2004.
Explanation.—For the purposes of this clause, the expression "compensation or consideration"
includes the compensation or consideration enhanced or further enhanced by any court, Tribunal or
other authority;
(37A) any income chargeable under the head "Capital gains" in respect of transfer of a specified capital
asset arising to an assessee, being an individual or a Hindu undivided family, who was the owner of
such specified capital asset as on the 2nd day of June, 2014 and transfers that specified capital asset
under the Land Pooling Scheme (herein referred to as "the scheme") covered under the Andhra
Pradesh Capital City Land Pooling Scheme (Formulation and Implementation) Rules, 2015 made
under the provisions of the Andhra Pradesh Capital Region Development Authority Act, 2014
(Andhra Pradesh Act 11 of 2014) and the rules, regulations and Schemes made under the said Act.
Explanation.—For the purposes of this clause, "specified capital asset" means,—
(a) the land or building or both owned by the assessee as on the 2nd day of June, 2014 and which
has been transferred under the scheme; or
(b) the land pooling ownership certificate issued under the scheme to the assessee in respect of
land or building or both referred to in clause (a); or
(c) the reconstituted plot or land, as the case may be, received by the assessee in lieu of land or
building or both referred to in clause (a) in accordance with the scheme, if such plot or land,
as the case may be, so received is transferred within two years from the end of the financial
year in which the possession of such plot or land was handed over to him;
(38) any income arising from the transfer of a long-term capital asset, being an equity share in a
company or a unit of an equity oriented fund or a unit of a business trust where—
(a) the transaction of sale of such equity share or unit is entered into on or after the date on
which Chapter VII of the Finance (No. 2) Act, 2004 comes into force; and
(b) such transaction is chargeable to securities transaction tax under that Chapter :
Provided that the income by way of long-term capital gain of a company shall be taken into
account in computing the book profit and income-tax payable under section 115JB :
Provided also* that nothing contained in sub-clause (b) shall apply to a transaction undertaken on
a recognised stock exchange located in any International Financial Services Centre and where the

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consideration for such transaction is paid or payable in foreign currency:

Provided also that nothing contained in this clause shall apply to any income arising from the
transfer of a long-term capital asset, being an equity share in a company, if the transaction of
acquisition, other than the acquisition notified by the Central Government in this behalf, of such
equity share is entered into on or after the 1st day of October, 2004 and such transaction is not
chargeable to securities transaction tax under Chapter VII of the Finance (No. 2) Act, 2004 (23 of
2004):
Provided also that nothing contained in this clause shall apply to any income arising from the
transfer of long-term capital asset, being an equity share in a company or a unit of an equity
oriented fund or a unit of a business trust, made on or after the 1st day of April, 2018.
Explanation.—For the purposes of this clause,—
(a) "equity oriented fund" means a fund—
(i) where the investible funds are invested by way of equity shares in domestic companies
to the extent of more than sixty-five per cent of the total proceeds of such fund; and
(ii) which has been set up under a scheme of a Mutual Fund specified under clause (23D):
Provided that the percentage of equity shareholding of the fund shall be computed with
reference to the annual average of the monthly averages of the opening and closing figures;
(b) "International Financial Services Centre" shall have the same meaning as assigned to it in
clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005);
(c) "recognised stock exchange" shall have the meaning assigned to it in clause (ii) of the
Explanation 1 to *sub-section (5) of section 43;
(39) any specified income, arising from any international sporting event held in India, to the person or
persons notified by the Central Government in the Official Gazette, if such international sporting
event—
(a) is approved by the international body regulating the international sport relating to such event;
(b) has participation by more than two countries;
(c) is notified by the Central Government in the Official Gazette for the purposes of this clause.
Explanation.—For the purposes of this clause, "the specified income" means the income, of the
nature and to the extent, arising from the international sporting event, which the Central
Government may notify in this behalf;
(40) any income of any subsidiary company by way of grant or otherwise received from an Indian
company, being its holding company engaged in the business of generation or transmission or
distribution of power if receipt of such income is for settlement of dues in connection with
reconstruction or revival of an existing business of power generation:
Provided that the provisions of this clause shall apply if reconstruction or revival of any existing
business of power generation is by way of transfer of such business to the Indian company
notified under sub-clause (a) of clause (v) of sub-section (4) of section 80-IA;
(41) any income arising from transfer of a capital asset, being an asset of an undertaking engaged in
the business of generation or transmission or distribution of power where such transfer is effected
on or before the 31st day of March, 2006, to the Indian company notified under sub-clause (a) of
clause (v) of sub-section (4) of section 80-IA;
(42) any specified income arising to a body or authority which—
(a) has been established or constituted or appointed under a treaty or an agreement entered into
by the Central Government with two or more countries or a convention signed by the Central
Government;
(b) is established or constituted or appointed not for the purposes of profit;

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(c) is notified by the Central Government in the Official Gazette for the purposes of this clause.
Explanation.—For the purposes of this clause, "specified income" means the income, of the
nature and to the extent, arising to the body or authority referred to in this clause, which the
Central Government may notify in this behalf;
(43) any amount received by an individual as a loan, either in lump sum or in instalment, in a
transaction of reverse mortgage referred to in clause (xvi) of section 47;
(44) any income received by any person for, or on behalf of, the New Pension System Trust
established on the 27th day of February, 2008 under the provisions of the Indian Trusts Act, 1882
(2 of 1882);
(45) 51[***]
(46) any specified income arising to a body or authority or Board or Trust or Commission (by
whatever name called) , or a class thereof which—
(a) has been established or constituted by or under a Central, State or Provincial Act, or
constituted by the Central Government or a State Government, with the object of regulating
or administering any activity for the benefit of the general public;
(b) is not engaged in any commercial activity; and
(c) is notified by the Central Government in the Official Gazette for the purposes of this clause.
Explanation.—For the purposes of this clause, "specified income" means the income, of the
nature and to the extent arising to a body or authority or Board or Trust or Commission (by
whatever name called), or a class thereof referred to in this clause, which the Central Government
may, by notification in the Official Gazette, specify in this behalf;
(47) any income of an infrastructure debt fund, set up in accordance with the guidelines as may be
prescribed52, which is notified by the Central Government in the Official Gazette for the purposes
of this clause;
(48) any income received in India in Indian currency by a foreign company on account of sale of crude
oil, any other goods or rendering of services, as may be notified by the Central Government in this
behalf, to any person in India:
Provided that—
(i) receipt of such income in India by the foreign company is pursuant to an agreement or an
arrangement entered into by the Central Government or approved by the Central
Government;
(ii) having regard to the national interest, the foreign company and the agreement or arrangement
are notified by the Central Government in this behalf; and
(iii) the foreign company is not engaged in any activity, other than receipt of such income, in
India;
(48A) any income accruing or arising to a foreign company on account of storage of crude oil in a
facility in India and sale of crude oil therefrom to any person resident in India:
Provided that—
(i) the storage and sale by the foreign company is pursuant to an agreement or an arrangement
entered into by the Central Government or approved by the Central Government; and
(ii) having regard to the national interest, the foreign company and the agreement or arrangement
are notified by the Central Government in this behalf;
(48B) any income accruing or arising to a foreign company on account of sale of leftover stock of crude
oil, if any, from the facility in India after the expiry of the agreement or the arrangement referred
to in clause (48A) or on termination of the said agreement or the arrangement, in accordance with
the terms mentioned therein, as the case may be, subject to such conditions as may be notified by

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the Central Government in this behalf;

53[(48C) any income accruing or arising to the Indian Strategic Petroleum Reserves Limited, being a
wholly owned subsidiary of the Oil Industry Development Board under the Ministry of Petroleum
and Natural Gas, as a result of arrangement for replenishment of crude oil stored in its storage
facility in pursuance of directions of the Central Government in this behalf:
Provided that nothing contained in this clause shall apply to an arrangement, if the crude oil is not
replenished in the storage facility within three years from the end of the financial year in which
the crude oil was removed from the storage facility for the first time;]
54[(48D) any income accruing or arising to an institution established for financing the infrastructure and
development, set up under an Act of Parliament and notified by the Central Government for the
purposes of this clause, for a period of ten consecutive assessment years beginning from the
assessment year relevant to the previous year in which such institution is set up;
(48E) any income accruing or arising to a developmental financing institution, licensed by the Reserve
Bank of India under an Act of the Parliament referred to in clause (48D) and notified by the
Central Government for the purposes of this clause, for a period of five consecutive assessment
years beginning from the assessment year relevant to the previous year in which the
developmental financing institution is set up :
Provided that the Central Government may, by issuing notification under this clause, extend the
period of exemption under this clause for a further period, not exceeding five more consecutive
assessment years, subject to fulfilment of such conditions as may be specified in the said
notification;]
(49) any income of the National Financial Holdings Company Limited, being a company set up by the
Central Government, of any previous year relevant to any assessment year commencing on or
before the 1st day of April, 2014;
(50) any income arising from any specified service provided on or after the date on which the
provisions of Chapter VIII of the Finance Act, 2016 comes into force 55[or arising from any
e-commerce supply or services made or provided or facilitated on or after the 1st day of April,
56[2020]] and chargeable to equalisation levy under that Chapter.
57[Explanation 1.—For the removal of doubts it is hereby clarified that the income referred to in
this clause shall not include and shall be deemed never to have been included any income which is
chargeable to tax as royalty or fees for technical services in India under this Act read with the
agreement notified by the Central Government under section 90 or section 90A.
Explanation 2.—For the purposes of this clause,—
(i) "e-commerce supply or services" shall have the meaning assigned to it in clause (cb) of
section 164 of the Finance Act, 2016 (28 of 2016);
(ii) "specified service" shall have the meaning assigned to it in clause (i) of section 164 of the
Finance Act, 2016 (28 of 2016).]

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