Item No.

Category of employer

Further sums to be deducted

1.

Company, other than a banking company.

( i ) The dividends payable on its preference share capital for the accounting year calculated at the actual rate at which such dividends are payable;

(ii) 8.5 percent of its paid up equity share capital as at the commencement of the accounting year;

(iii) 6 percent of its reserves shown in its balance sheet as at the commencement of the accounting year, including any profits carried forward from the previous accounting year :

PROVIDED that where the employer is a foreign company within the meaning of section 591 of the Companies Act ,1956 (1of 1956) , the total amount to be deducted under this item shall be 8.5 percent on the aggregate of the value of the net fixed assets and the current assets of the company in India after deducting the amount of its current liabilities (other than any amount shown as payable by the company to its Head Office whether towards any advance made by the Head Office or otherwise or any interest paid by the company to its Head Office ) in India.

2.

Banking company

( i ) The dividends payable on its preference share capital for the accounting year calculated at the rate at which such dividends are payable ;

(ii) 7.5 per cent of its paid up equity share capital as at the commencement of the accounting year ;

(iii) 5 percent of its reserves shown in its balance sheet as at the commencement of the accounting year, including any profits carried forward from the previous accounting year;

(iv) any sum which, in respect of the accounting year, is transferred by it-

(a) to a reserve fund under sub-section (1) of section 17 of the Banking Regulation Act, 1949 (10 of 1949 ); or

(b) to any reserves in India in pursuance of any direction or advice given by the Reserve Bank of India,

whichever is higher:

PROVIDED that where the banking company is a foreign company within the meaning of section 591 of the Companies Act , 1956 (1of 1956), the amount to be deducted under this item shall be the aggregate of-

( i ) the dividends payable to its preference shareholders for the accounting year at the rate at which such dividends are payable on such amount as bears the same proportion to its total preference share capital as its total working funds in India bear to its total world working funds;

(ii) 7.5 per cent of such amount as bears the same proportion to its total paid up equity share capital as its total working funds in India bear to its total working funds.

(iii) 5 per cent of such amount as bears the same proportion to its total disclosed reserves as its total working funds in India bear to its total world working funds;

(iv) any sum which, in respect of the accounting year, is deposited by it with the Reserve Bank of India under sub-clause (ii) of clause (b) of sub-section (2) of section 11 of the Banking Regulation Act, 1949 (10 of 1949) , not exceeding the amount required under the aforesaid provision to be so deposited.]

3.

Corporation

( i ) 8.5 per cent of its paid up capital as at the commencement of the accounting year;

(ii) 6 per cent of its reserves, if any, shown in its balance sheet as at the commencement of the accounting year, including any profits carried forward from the previous accounting year.

4.

Co-operative society

( i ) 8.5 per cent of the capital invested by such society in its establishment as evidenced from its books of accounts at the commencement of the accounting year;

(ii) such sums as has been carried forward in respect of the accounting year to a reserve fund under any law relating to co-operative societies for the time being in force.

5.

Any other employer not falling under any of the aforesaid categories

8.5 per cent of the capital invested by him in his establishment as evidenced from his books of accounts at the commencement of the accounting year:

( i ) an amount equal to 25 per cent of the gross profits derived by such employer from the establishment in respect of the accounting year after deducting depreciation in accordance with the provisions of clause (a) of section 6; or

(ii) forty-eight thousand rupees,

whichever is less by way of remuneration to such employer, shall also be deducted.

6.

Any employer falling under Item No.1 or Item No. 3 or Item No. 4 or Item No. 5 and being a licensee within the meaning of the Electricity (Supply) Act, 1948 (54 of 1948 ) .

In addition to the sums deductible under any of the aforesaid Items, Such sums as are required to be appropriated by licensee in respect of the accounting year to a reserve under the Sixth Schedule to that Act shall also be deducted.