Income Tax Act, 2025
Section 7: Ins. by Act 32 of 2003, s. 28 (w.e.f 12004).
7. Ins. by Act 32 of 2003, s. 28 (w.e.f 12004).
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profession situated therein, and the right, property or contract in respect of which the royalties or fees for
technical services are paid is effectively connected with such permanent establishment or fixed place of
profession, as the case may be, shall be computed under the head “Profits and gains of business or
profession” in accordance with the provisions of this Act :
Provided that no deduction shall be allowed,—
(i) in respect of any expenditure or allowance which is not wholly and exclusively incurred for
the business of such permanent establishment or fixed place of profession in India; or
(ii) in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses)
by the permanent establishment to its head office or to any of its other offices :
1[Provided further that the provisions of section 44BB shall not apply in respect of the income
referred to in this section.]
(2) Every non-resident (not being a company) or a foreign company shall keep and maintain books of
account and other documents in accordance with the provisions contained in section 44AA and get his
accounts audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and
furnish along with the return of income, the report of such audit in the prescribed form duly signed and
verified by such accountant.
Explanation.—For the purposes of this section,—
(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) “royalty” shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of
section 9;
(c) “permanent establishment” shall have the same meaning as in clause (iiia) of section 92F.]
2[44DB. Special provision for computing deductions in the case of business reorganization of cooperative banks.—(1) The deduction under section 32, section 35D, section 35DD or
section 35DDA shall, in a case where business reorganisation of a co-operative bank has taken place
during the financial year, be allowed in accordance with the provisions of this section.
(2) The amount of deduction allowable to the predecessor co-operative bank under section 32,
section 35D, section 35DD or section DDA shall be determined in accordance with the formula—
B
A X
C
where A = the amount of deduction allowable to the predecessor co-operative bank if the business
reorganisation had not taken place;
B = the number of days comprised in the period beginning with the 1st day of the financial
year and ending on the day immediately preceding the date of business reorganisation; and
C = the total number of days in the financial year in which the business reorganisation has
taken place.
in respect of any expenditure or allowance which is not wholly and exclusively incurred for
the business of such permanent establishment or fixed place of profession in India; or
in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses)
by the permanent establishment to its head office or to any of its other offices :
1[Provided further that the provisions of section 44BB shall not apply in respect of the income
referred to in this section.]
Every non-resident (not being a company) or a foreign company shall keep and maintain books of
account and other documents in accordance with the provisions contained in section 44AA and get his
accounts audited by an accountant as defined in the Explanation below sub-section
of section 288 and
furnish along with the return of income, the report of such audit in the prescribed form duly signed and
verified by such accountant.
Explanation.—For the purposes of this section,—
“fees for technical services” shall have the same meaning as in Explanation 2 to clause
of
sub-section
of section 9;
“royalty” shall have the same meaning as in Explanation 2 to clause
of sub-section
of
section 9;
“permanent establishment” shall have the same meaning as in clause
of section 92F.]
2[44DB. Special provision for computing deductions in the case of business reorganization of cooperative banks.—
The deduction under section 32, section 35D, section 35DD or
section 35DDA shall, in a case where business reorganisation of a co-operative bank has taken place
during the financial year, be allowed in accordance with the provisions of this section.
The amount of deduction allowable to the predecessor co-operative bank under section 32,
section 35D, section 35DD or section DDA shall be determined in accordance with the formula—
B
A X
C
where A = the amount of deduction allowable to the predecessor co-operative bank if the business
reorganisation had not taken place;
B = the number of days comprised in the period beginning with the 1st day of the financial
year and ending on the day immediately preceding the date of business reorganisation; and
C = the total number of days in the financial year in which the business reorganisation has
taken place.