Income Tax Act, 1961
Section 7: Ins. by s. 10, ibid. (w.e.f. 11983).
7. Ins. by s. 10, ibid. (w.e.f. 11983).
214
1[(ii) “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) 2***;]
3[(iii) “public financial institution” shall have the meaning assigned to it in section 4A of the
Companies Act, 1956 (1 of 1956);
(iv) “State financial corporation” means a financial corporation established under section 3 or
section 3A or an institution notified under section 46 of the State Financial Corporations
Act, 1951 (63 of 1951);
(v) “State industrial investment corporation” means a Government company within the
meaning of section 617 of the Companies Act, 1956 (1 of 1956), engaged in the business of
providing long-term finance for industrial projects and 4[eligible for deduction under clause (viii)
of this sub-section];]
5[(vi) “co-operative bank”, “primary agricultural credit society” and “primary co-operative
agricultural and rural development bank” shall have the meanings respectively assigned to them
in the Explanation to sub-section (4) of section 80P;]
6[(vii) “non-banking financial company” shall have the meaning assigned to it in clause (f) of
section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934);]
7[(viii) in respect of any special reserve created and maintained by a specified entity, an
amount not exceeding twenty per cent of the profits derived from eligible business computed
under the head “Profits and gains of business or profession” (before making any deduction under
this clause) carried to such reserve account:
Provided that where the aggregate of the amounts carried to such reserve account from time
to time exceeds twice the amount of the paid up share capital and of the general reserves of the
specified entity, no allowance under this clause shall be made in respect of such excess.
Explanation.—In this clause,—
(a) “specified entity” means,—
(i) a financial corporation specified in section 4A of the Companies
Act, 1956 (1 of 1956);
(ii) a financial corporation which is a public sector company;
“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) 2***;]
3[
“public financial institution” shall have the meaning assigned to it in section 4A of the
Companies Act, 1956 (1 of 1956);
“State financial corporation” means a financial corporation established under section 3 or
section 3A or an institution notified under section 46 of the State Financial Corporations
Act, 1951 (63 of 1951);
“State industrial investment corporation” means a Government company within the
meaning of section 617 of the Companies Act, 1956 (1 of 1956), engaged in the business of
providing long-term finance for industrial projects and 4[eligible for deduction under clause
of this sub-section];]
5[
“co-operative bank”, “primary agricultural credit society” and “primary co-operative
agricultural and rural development bank” shall have the meanings respectively assigned to them
in the Explanation to sub-section
of section 80P;]
6[
“non-banking financial company” shall have the meaning assigned to it in clause
of
section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934);]
7[
in respect of any special reserve created and maintained by a specified entity, an
amount not exceeding twenty per cent of the profits derived from eligible business computed
under the head “Profits and gains of business or profession” (before making any deduction under
this clause) carried to such reserve account:
Provided that where the aggregate of the amounts carried to such reserve account from time
to time exceeds twice the amount of the paid up share capital and of the general reserves of the
specified entity, no allowance under this clause shall be made in respect of such excess.
Explanation.—In this clause,—
“specified entity” means,—
a financial corporation specified in section 4A of the Companies
Act, 1956 (1 of 1956);
a financial corporation which is a public sector company;