Income Tax Act, 2025
Section 5: Ins. by Act 21 of 2006, s. 10 (w.e.f. 12006).
5. Ins. by Act 21 of 2006, s. 10 (w.e.f. 12006).
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1[Explanation 2.—For the removal of doubts, it is hereby declared that for the purposes of
this sub-clause, any sum paid on account of any rate or tax levied includes any sum eligible for
relief of tax under section 90A;]
2[(iia) any sum paid on account of wealth-tax.
Explanation.—For the purposes of this sub-clause, “wealth-tax” means wealth-tax chargeable
under the Wealth-tax Act, 1957 (27 of 1957), or any tax of a similar character chargeable under
any law in force in any country outside India or any tax chargeable under such law with reference
to the value of the assets of, or the capital employed in, a business or profession carried on by the
assessee, whether or not the debts of the business or profession are allowed as a deduction in
computing the amount with reference to which such tax is charged, but does not include any tax
chargeable with reference to the value of any particular asset of the business or profession;]
3[(iib) any amount—
(A) paid by way of royalty, licence fee, service fee, privilege fee, service charge or any
other fee or charge, by whatever name called, which is levied exclusively on; or
(B) which is appropriated, directly or indirectly, from, a State Government undertaking
by the State Government.
Explanation.—For the purposes of this sub-clause, a State Government undertaking
includes—
(i) a corporation established by or under any Act of the State Government;
(ii) a company in which more than fifty per cent of the paid-up equity share capital is
held by the State Government;
(iii) a company in which more than fifty per cent of the paid-up equity share capital is
held by the entity referred to in clause (i) or clause (ii) (whether singly or taken together);
(iv) a company or corporation in which the State Government has the right to appoint the
majority of the directors or to control the management or policy decisions, directly or
indirectly, including by virtue of its shareholding or management rights or shareholders
agreements or voting agreements or in any other manner;
(v) an authority, a board or an institution or a body established or constituted by or under
any Act of the State Government or owned or controlled by the State Government;]
4[(iii) any payment which is chargeable under the head “Salaries”, if it is payable—
(A) outside India; or
(B) to a non-resident,
and if the tax has not been paid thereon nor deducted therefrom under Chapter XVII-B;]
any sum paid on account of wealth-tax.
Explanation.—For the purposes of this sub-clause, “wealth-tax” means wealth-tax chargeable
under the Wealth-tax Act, 1957 (27 of 1957), or any tax of a similar character chargeable under
any law in force in any country outside India or any tax chargeable under such law with reference
to the value of the assets of, or the capital employed in, a business or profession carried on by the
assessee, whether or not the debts of the business or profession are allowed as a deduction in
computing the amount with reference to which such tax is charged, but does not include any tax
chargeable with reference to the value of any particular asset of the business or profession;]
3[
any amount—
paid by way of royalty, licence fee, service fee, privilege fee, service charge or any
other fee or charge, by whatever name called, which is levied exclusively on; or
which is appropriated, directly or indirectly, from, a State Government undertaking
by the State Government.
Explanation.—For the purposes of this sub-clause, a State Government undertaking
includes—
a corporation established by or under any Act of the State Government;
a company in which more than fifty per cent of the paid-up equity share capital is
held by the State Government;
a company in which more than fifty per cent of the paid-up equity share capital is
held by the entity referred to in clause
or clause
(whether singly or taken together);
a company or corporation in which the State Government has the right to appoint the
majority of the directors or to control the management or policy decisions, directly or
indirectly, including by virtue of its shareholding or management rights or shareholders
agreements or voting agreements or in any other manner;
an authority, a board or an institution or a body established or constituted by or under
any Act of the State Government or owned or controlled by the State Government;]
4[
any payment which is chargeable under the head “Salaries”, if it is payable—
outside India; or
to a non-resident,
and if the tax has not been paid thereon nor deducted therefrom under Chapter XVII-B;]