India - Income Tax Act 2010 - Saarc

1.239 CH. IV - COMPUTATION OF BUSINESS INCOME S. 3617[Explanation.—For the purposes of this clause, any bad debt or partthereof written off as irrecoverable in the accounts of the assesseeshall not include any provision for bad and doubtful debts made in theaccounts of the assessee;]18[(viia) 19 [ 20 in respect of any provision for bad and doubtful debts made by—(a) a scheduled bank [not being 21 [* * *] a bank incorporated byor under the laws of a country outside India] or a nonscheduledbank 22 [or a co-operative bank other than a primaryagricultural credit society or a primary co-operative agriculturaland rural development bank], an amount 23 [not exceeding sevenand one-half per cent] of the total income (computed beforemaking any deduction under this clause and Chapter VIA) and anamount not exceeding 24 [ten] per cent of the aggregate averageadvances made by the rural branches of such bank computed inthe prescribed manner :25[Provided that a scheduled bank or a non-scheduled bankreferred to in this sub-clause shall, at its option, be allowed inany of the relevant assessment years, deduction in respect ofany provision made by it for any assets classified by the ReserveBank of India as doubtful assets or loss assets in accordance withthe guidelines issued by it in this behalf, for an amountnot exceeding five per cent of the amount of such assets shownin the books of account of the bank on the last day of the previousyear:]17. Inserted by the Finance Act, 2001, w.r.e.f. 1-4-1989.18. Inserted by the Finance Act, 1979, w.e.f. 1-4-1980.19. Substituted by the Income-tax (Amendment) Act, 1986, w.e.f. 1-4-1987. Earlier, aboveopening para of clause (viia) was substituted by the Finance Act, 1985, w.e.f. 1-4-1985. Itwas also amended by the Finance Act, 1982, w.e.f. 1-4-1983.20. Rule 6ABA provides that the aggregate average advances made by the rural branches ofa scheduled bank shall be computed in the following manner, namely:—(a) the amounts of advances made by each rural branch as outstanding at the end of thelast day of each month comprised in the previous year shall be aggregated separately;(b) the sum so arrived at in the case of each such branch shall be divided by the numberof months for which the outstanding advances have been taken into account for thepurposes of clause (a);(c) the aggregate of the sums so arrived at in respect of each of the rural branches shallbe the aggregate average advances made by the rural branches of the scheduledbank.21. Words “a bank approved by the Central Government for the purposes of clause (viiia) or”omitted by the Finance Act, 1994, w.e.f. 1-4-1995.22. Inserted by the Finance Act, 2007, w.e.f. 1-4-2007.23. Substituted for “not exceeding five per cent” by the Finance Act, 2002, w.e.f. 1-4-2003.24. Substituted for “four” by the Finance Act, 1994, w.e.f. 1-4-1995. Earlier “four” wassubstituted for “two” by the Finance Act, 1993, w.e.f. 1-4-1994.25. Inserted by the Finance Act, 1999, w.e.f. 1-4-2000.