Section 2 — Definitions

In this Act, unless the context otherwise requires,—
( 1) “accountant” shall have the meaning assigned to it in section 515(3)(b);
( 2) “Additional Commissioner” means a person appointed to be an Additional
Commissioner of Income-tax under section 237(1);
( 3) “Additional Director” means a person appointed to be an Additional
Director of Income-tax under section 237(1);
( 4) “advance tax” means the advance tax payable as per Chapter XIX-C;
( 5) “agricultural income” means—
( a) any rent or revenue derived from a land which is situated in
India and is used for agricultural purposes;
( b) any income derived from such land by—
( i) agriculture; or
( ii) the performance by a cultivator or receiver of rent-in-kind of
any process ordinarily employed by a cultivator or receiver of
rent-in-kind to render the produce raised or received by him
fit to be taken to market; or
( iii) the sale by a cultivator or receiver of rent-in-kind of the produce
raised or received by him, in respect of which no process has
been performed other than a process of the nature described
in item (ii);
*Assented by the President of India on 21-8-2025.
( c) any income derived from any building owned and occupied by the
receiver of the rent or revenue of any such land, or occupied by
the cultivator or the receiver of rent-in-kind, of any such land with
respect to which, or the produce of which, any process mentioned
in sub-clause (b)(ii) and (iii) is carried on, where such building—
( i) is on or in the immediate vicinity of such land and that land
is assessed to land revenue in India, or is subject to a local
rate assessed and collected by officers of the Government as
such, or where the land is not so assessed to land revenue or
subject to a local rate it is not situated in any area as specified
in clause (22)(iii)(A) or (B); and
( ii) is required as a dwelling house, or as a store-house, or other
out-building, by the receiver of the rent or revenue or the
cultivator, or the receiver of rent-in-kind, by reason of his
connection with the land;
( d) any income derived from saplings or seedlings grown in a nursery,
but shall not include—
( i) the income derived from any building or land referred to in sub-
clause (c) arising from the use of such building or land for any
purpose (including letting for residential purpose or for the purpose
of any business or profession) other than agriculture falling under
sub-clause (a) or (b); or
( ii) any income arising from the transfer of any land referred to in
clause (22)(iii)(A) or (B);
( 6) “amalgamation”, in relation to companies, means the merger of one or
more companies with another company or the merger of two or more
companies to form one company (the company or companies which so
merge being referred to as the amalgamating company or companies
and the company with which they merge or which is formed as a result
of such merger being referred to as the amalgamated company) in such
a manner that—
( a) all the property of the amalgamating company or companies
immediately before the amalgamation become the property of the
amalgamated company by virtue of the amalgamation;
( b) all the liabilities of the amalgamating company or companies
immediately before the amalgamation become the liabilities of the
amalgamated company by virtue of the amalgamation;
( c) the shareholders holding not less than three-fourths in value of the
shares in the amalgamating company or companies (other than
shares already held therein immediately before the amalgamation
by, or by a nominee for, the amalgamated company or its subsi-
diary) become shareholders of the amalgamated company by virtue
of the amalgamation,
otherwise than as a result of the acquisition of the property of one com-
pany by another company pursuant to the purchase of such property by
the other company or as a result of the distribution of such property to
the other company after the winding up of the first-mentioned company;
( 7) “annual value”, in relation to any property, means its annual value as
determined under section 21;
( 8) “Appellate Tribunal” means the Appellate Tribunal constituted under
section 361;
( 9) “approved gratuity fund” means a gratuity fund, which is approved and
continues to be approved by the approving authority as per Part B of
Schedule XI;
( 10) “approved superannuation fund” means a superannuation fund or any
part of a superannuation fund, which is approved and continues to be
approved by the approving authority as per Part B of Schedule XI;
( 11) “assessee” means a person by whom any tax or any other sum of money
is payable under this Act, and includes—
( a) every person in respect of whom any proceeding under this Act has
been taken—
( i) for the assessment of his income or of the loss sustained by
him or refund due to him; or
( ii) for the assessment of the income of any other person in
respect of which he is assessable, or of the loss sustained by
such other person or refund due to such other person;
( b) every person who is deemed to be an assessee under this Act;
( c) every person who is deemed to be an assessee in default under this
Act;
( 12) “Assessing Officer” means—
( a) the Assistant Commissioner or Deputy Commissioner or Assistant
Director or Deputy Director or the Income-tax Officer, who is vest-
ed with the relevant jurisdiction by virtue of directions or orders
issued under section 241(1) or (2) or (3), or any other provision of
this Act; and
( b) the Additional Commissioner or Additional Director or Joint
Commissioner or Joint Director, who is directed under section
241(5)(b) to exercise or perform all or any of the powers and functions
conferred on, or assigned to, an Assessing Officer under this Act;
( 13) “assessment” includes reassessment and recomputation;
( 14) “Assistant Commissioner” means a person appointed to be an Assistant
Commissioner of Income-tax or a Deputy Commissioner of Income-tax
under section 237(1);
( 15) “Assistant Director” means a person appointed to be an Assistant
Director of Income-tax or a Deputy Director of Income-tax under section
237(1);
( 16) “average rate of income-tax” means the rate arrived at by dividing the
amount of income-tax calculated on the total income, by such total
income;
( 17) “block of assets” means a group of assets falling within a class of assets
comprising of—
( a) tangible assets, being buildings, machinery, plant or furniture;
( b) intangible assets, being know-how, patents, copyrights, trade-
marks, licences, franchises or any other business or commercial
rights of similar nature, not being goodwill of a business or pro -
fession,
in respect of which the same percentage of depreciation is prescribed;
( 18) “Board” means the Central Board of Direct Taxes constituted under the
Central Boards of Revenue Act, 1963 (54 of 1963);
( 19) “books or books of account” includes ledgers, day-books, cash books,
account-books and other books, whether kept—
( a) in written form; or
( b) in electronic or any digital form, or on cloud based storage, or on
any electromagnetic data storage device, such as floppy, disc, tape,
portable data storage device, external hard drives, or memory cards;
or
( c) as print-outs of data stored in electronic or digital form or on storage
devices mentioned in sub-clause (b);
( 20) “business” includes any trade, commerce or manufacture or any
adventure or concern in the nature of trade, commerce or manufacture;
( 21) “business trust” means a trust registered as—
( a) an Infrastructure Investment Trust under the Securities and
Exchange Board of India (Infrastructure Investment Trusts)
Regulations, 2014 made under the Securities and Exchange Board
of India Act, 1992 (15 of 1992) ; or
( b) a Real Estate Investment Trust under the Securities and Exchange
Board of India (Real Estate Investment Trusts) Regulations, 2014,
made under the Securities and Exchange Board of India Act, 1992
(15 of 1992);
( 22) “capital asset” means—
( a) property of any kind held by an assessee, whether or not connected
with his business or profession;
( b) any securities held by—
( i) a Foreign Institutional Investor which has invested in such
securities in accordance with the regulations made under
the Securities and Exchange Board of India Act, 1992 (15 of
1992); or
( ii) an investment fund specified in section 224(10)(a) which has
invested such securities in accordance with the provisions
of the regulations made under the Securities and Exchange
Board of India Act, 1992 (15 of 1992) or under the Interna -
tional Financial Services Centres Authority Act, 2019 (50 of
2019);
( c) any unit linked insurance policy to which exemption under
Schedule II (Table: Sl. No. 2) does not apply,
but does not include—
( i) any stock-in-trade, other than the securities referred to in sub-
clause (b), consumable stores or raw materials held for business
or profession;
( ii) personal effects;
( iii) agricultural land in India, not being a land situated—
( A) in any area comprised within the jurisdiction of a municipality
(whether known as a municipality, municipal corporation, no-
tified area committee, town area committee, town committee,
or by any other name) or a cantonment board and which has
a population of not less than ten thousand; or
( B) in any area within the distance as specified in column C of
the following Table, measured aerially from the local limits
of any municipality or cantonment board referred to in item
(A) and having population as referred to in column B of the
said Table:—
TABLE
Sl.
No.
Population of
municipality or
cantonment board
Within distance, measured
aerially, from local limits
of any municipality or
cantonment board not being
more than
A B C
1. More than 10000
and upto 100000.
Two kilometres.
2. More than 100000
and upto 1000000.