India - Income Tax Act 2010 - Saarc

1.279 CH. IV - COMPUTATION OF BUSINESS INCOME S. 43Bthat the total amount added to, or, as the case may be, deducted from, the actualcost or expenditure or cost of acquisition, is equal to the increase or reductionin the aforesaid liability taken into account at the time of making payment.Explanation 1.—In this section, unless the context otherwise requires,—(a) “rate of exchange” means the rate of exchange determined orrecognised by the Central Government for the conversion of Indiancurrency into foreign currency or foreign currency into Indiancurrency;(b) 13 “foreign currency” and “Indian currency” have the meanings respectivelyassigned to them in section 2 of the Foreign ExchangeManagement Act, 1999 (42 of 1999).Explanation 2.—Where the whole or any part of the liability aforesaid is met, notby the assessee, but, directly or indirectly, by any other person or authority, theliability so met shall not be taken into account for the purposes of this section.Explanation 3.—Where the assessee has entered into a contract with an authoriseddealer 14 as defined in section 2 of the Foreign Exchange Management Act, 1999(42 of 1999), for providing him with a specified sum in a foreign currency on orafter a stipulated future date at the rate of exchange specified in the contract toenable him to meet the whole or any part of the liability aforesaid, the amount,if any, to be added to, or deducted from, the actual cost of the asset or the amountof expenditure of a capital nature or, as the case may be, the cost of acquisitionof the capital asset under this section shall, in respect of so much of the sumspecified in the contract as is available for discharging the liability aforesaid, becomputed with reference to the rate of exchange specified therein.]15[Certain deductions to be only on actual payment.1643B.17Notwithstanding anything contained in any other provision of this Act,a deduction otherwise allowable under this Act in respect of—18[(a) any sum payable by the assessee by way of tax 19 , duty, cess or fee, bywhatever name called, under any law for the time being in force, or]13. Clause (m) and clause (q) of section 2 of the Foreign Exchange Management Act, 1999,define “foreign currency” and “Indian currency” respectively as follows :‘(m) “foreign currency” means any currency other than Indian currency;(q) “Indian currency” means currency which is expressed or drawn in Indian rupeesbut does not include special bank notes and special one rupee notes issued undersection 28A of the Reserve Bank of India Act, 1934 (2 of 1934);’14. Clause (c) of section 2 of the Foreign Exchange Management Act, 1999, defines “authoriseddealer” as follows :‘(c) “authorised person” means an authorised dealer, money changer, off-shore bankingunit or any other person for the time being authorised under sub-section (1) ofsection 10 to deal in foreign exchange or foreign securities;’15. Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.16. See also Circular No. 496, dated 25-9-1987, Circular No. 674, dated 29-12-1993 and CircularNo. 7/2006, dated 17-7-2006. For details, see Taxmann’s Master Guide to Income-tax Act.17. For relevant case laws, see Taxmann’s Master Guide to Income-tax Act.18. Substituted by the Finance Act, 1988, w.e.f. 1-4-1989.19. For the meaning of the term “tax”, see Taxmann’s Direct Taxes Manual, Vol. 3.