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Report No. 12

120. "Statutory percentage".-

For the purposes of sections 113 and 114 [23A(1), substantive part and 23A (2)] "statutory percentage" means,-

(i) in the case of an investment company 100%.

(ii) in the case of an Indian company whose business consists wholly in the manufacture or processing of goods or in mining or in the generation or distribution of electricity or any other form of power 45%.

(iii) in the case of an Indian company, a part only of whose business consists in any of the activities specified in clause (ii)-

(a) in relation to the said part of the company's business 45%.

(b) in relation to the remaining part of the company's business-

(1) if it is a company which satisfies the conditions specified in sub-clause (a) of clause (iv) 90%.

(2) in any other case 60% the said percentages being applied separately with reference to the amounts of profits and gains attributable to the two parts of the company's business aforesaid as if the said amounts were respectively the total income of the company in relation to each of its parts, the amount of dividends and taxes also being similarly apportioned, for the purposes of sections 113 and 118 [section 23A (1)-part regarding "Distributable Income"];

(iv) in the case of any other company not referred to in the preceding clauses,-

(a) where the accumulated profits and reserves (including the amounts capitalised from the earlier reserves) representing accumulations of past profits which have not been the subject of an order under section 113 [section 23A(1), operative part] exceed the greater of the following, that is to say,-


I. the aggregate of-

(i) the paid-up capital of the company exclusive of the capital, if any, created out of its profits and gains which have not been the subject of an order under section 113 [section 23A(1), operative part];

(ii) any loan capital which is the property of the shareholders; or

II. the actual cost of the fixed assets of the company......90%,

(b) where sub-clause (a) does not apply......60%.

[Section 23A, Expl. 2]

Income-Tax Act, 1922 Back

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