Central

Section 20 of The Rehabilitation Finance Administration Act, 1948

Notwithstanding anything contained in the Indian Income-tax Act, 1922 (11 of 1922)1 , or in any other enactment for the time being in force relating to income-tax, super-tax or business profits tax, the Administration shall not be liable to pay any income-tax, super-tax or business profits tax or any incomes, profits or gains.

Summary

The Administration is completely excused from paying several types of taxes.
It does not have to pay income-tax, super-tax, or business profits tax on its earnings.
This rule applies regardless of what the Indian Income-tax Act of 1922 says.
The exemption also overrides any other laws about income-tax, super-tax, or business profits tax that are currently active.

Practical examples

1In the financial year of 1951, the Administration makes a profit of 50,000 rupees from interest on loans. The local tax authority tries to charge an income tax on this amount, but the Administration pays nothing because it is legally exempt.

2An auditor reviews the Administration's accounts in 1953 and notes a large capital gain. The auditor confirms that no super-tax or business profits tax needs to be set aside for the government, saving the Administration thousands of rupees.

FAQ

1. Does the Administration pay income tax?

No, the Administration is not liable to pay any income-tax.

2. Which specific taxes is the Administration protected from?

It is protected from income-tax, super-tax, and business profits tax.

3. What if the Indian Income-tax Act of 1922 says the Administration should pay?

The exemption applies notwithstanding anything contained in the Indian Income-tax Act of 1922.

4. Is the exemption only for specific types of money?

No, the exemption covers any incomes, profits, or gains made by the Administration.

Test yourself

Q1.Under Section 20 of The Rehabilitation Finance Administration Act, 1948, which specific law is explicitly mentioned as being overridden by this tax exemption?

Q2.Under Section 20 of The Rehabilitation Finance Administration Act, 1948, which of the following taxes is the Administration still required to pay?

Q3.Under Section 20 of The Rehabilitation Finance Administration Act, 1948, what types of financial earnings are protected from these taxes?

Q4.Under Section 20 of The Rehabilitation Finance Administration Act, 1948, what happens if a new enactment relating to super-tax is in force?

Q5.Under Section 20 of The Rehabilitation Finance Administration Act, 1948, who enjoys this specific tax exemption?

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