Section 66 — Interpretation

For the purposes of Part D of this Chapter,—
( 1) “agreement”, for the purposes of section 26(2)( h), includes any
arrangement or understanding or action in concert,—
( A) whether or not such arrangement, understanding or action is formal
or in writing; or
( B) whether or not such arrangement, understanding or action is
intended to be enforceable by legal proceedings;
( 2) “banking company” means a company to which the Banking Regulation
Act, 1949 (10 of 1949) applies and includes any bank or banking institu-
tion referred to in section 51 of that Act;
( 3) “commission or brokerage” shall have the meaning assigned to it in
section 402(7);
9[(4) “commodities transactions tax” and “commodity derivative” shall have
the same meanings as respectively assigned to them in Chapter VII of the
Finance Act, 2013 (17 of 2013);]
( 5) “fees for technical services” shall have the meaning assigned to it in
section 9(7)(b);
( 6) “housing finance company” means a public company formed or registered
in India with the main object of carrying on the business of providing
long-term finance for construction or purchase of houses in India for
residential purposes;
( 7) “Indian Institute of Technology” shall have the same meaning as that
of “Institute” defined in section 3(g) of the Institutes of Technology Act,
1961 (59 of 1961);
9. Substituted by the Finance Act, 2026, w.e.f. 1-4-2026. Prior to its substitution, clause ( 4)
read as under :
‘( 4) “commodities transaction tax” shall have the same meaning as assigned to it under
Chapter VII of the Finance Act, 2013 (17 of 2013);’
( 8) “Keyman insurance policy” shall have the meaning assigned to it in
Schedule II (Note 1);
( 9) “limited liability partnership” shall have the same meaning as assigned
to it in section 2(1)( n) of the Limited Liability Partnership Act, 2008
(6 of 2009);
( 10) “long-term finance”, for the purposes of section 32(e), means any loan or
advance where the terms under which moneys are loaned or advanced
provide for repayment along with interest thereof during a period of not
less than five years;
( 11) “micro enterprise” shall be an enterprise classified as such under the
notification in this behalf by the Central Government under the Micro,
Small and Medium Enterprises Development Act, 2006 (27 of 2006);
( 12) “mineral oil” includes petroleum and natural gas;
( 13) “moneys payable” in respect of any tangible asset [as referred to in section
33(12)(a)(i)] includes—
( a) any insurance, salvage or compensation moneys payable in respect
thereof;
( b) where the asset is sold, the price for which it is sold;
( 14) “non-scheduled bank” means a banking company as defined in section
5(c) of the Banking Regulation Act, 1949 (10 of 1949), which is not a
scheduled bank;
( 15) “paid” means, except for section 37, actually paid or incurred according
to the method of accounting upon the basis of which the profits or gains
are computed under the head “Profits and gains of business or profession”;
( 16) “permanent establishment” shall have the meaning assigned to it in
section 173(c);
( 17) “plant” includes ships, vehicles, books, scientific apparatus and
surgical equipment used for the business or profession but does not
include tea bushes or livestock or buildings or furniture and fittings;
( 18) “predecessor entity” means—
( a) the amalgamating Indian company in the case of amalgamation;
( b) the demerged Indian company, in the case of demerger;
( c) a firm, in the case of a succession of a firm by a company as referred
to in section 70(1)(zd);
( d) a private company or unlisted public company, in case of conversion
as referred to in section 70(1)(ze);
( 19) “primary agricultural credit society” shall have the same meaning as
assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949);
( 20) “primary co-operative agricultural and rural development bank” means a
society having its area of operation confined to a taluk and the principal
object of which is to provide for long-term credit for agricultural and
rural development activities;
( 21) “professional services” shall have the meaning assigned to it in section
402(28);
( 22) “public company” shall have the same meaning as assigned to it in section
2(71) of the Companies Act, 2013 (18 of 2013);
( 23) “public financial institution” shall have the same meaning as assigned
to it in section 2(72) of the Companies Act, 2013 (18 of 2013);
( 24) “rate of exchange” means the rate of exchange determined or recognised
by the Central Government for the conversion of Indian currency into
foreign currency or foreign currency into Indian currency;
( 25) “royalty” shall have the same meaning as assigned to it in section
9(6)(b);
( 26) “rural branch” means a branch of a scheduled bank or a non-scheduled
bank situated in a place which has a population of not more than ten
thousand according to the last preceding census, of which the relevant
figures have been published before the first day of the tax year;
( 27) “scientific research” means—
( a) any activity for the extension of knowledge in the fields of natural
or applied science including agriculture, animal husbandry or
fisheries; and
( b) the references to expenditure incurred on scientific research shall
include all expenditure incurred for the prosecution, or the provision
of facilities for the prosecution, of scientific research, but does not
include any expenditure incurred in the acquisition of rights in, or
arising out of, scientific research,
and the references to scientific research related to a business or class of
business shall include any scientific research—
( i) which may lead to or facilitate an extension of that business or, all
businesses of that class;
( ii) of a medical nature which has a special relation to the welfare of
workers employed in that business or, all businesses of that class;
( 28) “securities transaction tax” shall have the meaning assigned to it under
Chapter VII of the Finance (No. 2) Act, 2004 (23 of 2004);
( 29) “service”, for the purposes of section 26(2)( h), means a service of any
description which is made available to potential users and includes the
provision of services in connection with business of any industrial or
commercial nature such as—
( a) accounting;
( b) banking;
( c) communication;
( d) conveying of news or information;
( e) advertising;
( f) entertainment;
( g) amusement;
( h) education;
( i) financing;
( j) insurance;
( k) chit funds;
( l) real estate;
( m) construction;
( n) transport;
( o) storage;
( p) processing;
( q) supply of electrical or other energy; and
( r) boarding and lodging;
( 30) “small enterprise” shall be an enterprise classified as such under the
notification in this behalf by the Central Government under the Micro,
Small and Medium Enterprises Development Act, 2006 (27 of 2006);
( 31) “speculative transaction” means a transaction in which a contract for
the purchase or sale of any commodity, including stocks and shares,
is periodically or ultimately settled otherwise than by the actual
delivery or transfer of the commodity or scrips, other than the following
transactions:—
( a) a specified derivative transaction as defined in clause (33);
( b) a contract in respect of raw materials or merchandise entered into
by a person in the course of his manufacturing or merchandising
business to guard against loss through future price fluctuations in
respect of his contracts for actual delivery of goods manufactured,
or merchandise sold by him;
( c) a contract in respect of stocks and shares entered into by a dealer
or investor therein to guard against loss in his holdings of stocks
and shares through price fluctuations;
( d) a contract entered into by a member of a forward market or a stock
exchange in the course of any transaction in the nature of jobbing
or arbitrage, to guard against loss which may arise in the ordinary
course of his business as such member;
( 32) “Specified Banking or Online Mode” shall mean transaction by an
account payee cheque or an account payee bank draft or use of electronic
clearing system through a bank account or through such other electronic
mode, as may be prescribed;
( 33) “specified derivative transaction” means any transaction in respect of
trading in derivatives referred to in section 2(ac) of the Securities Con-
tracts (Regulation) Act, 1956 (42 of 1956); or in respect of trading in
commodity derivatives (other than agricultural commodity derivatives)
which is chargeable to commodities transaction tax under Chapter VII of
the Finance Act, 2013 (17 of 2013) or in respect of trading in agricultural
commodity derivatives, if such transactions are—
( a) is carried out—
( i) through a stock broker or such other intermediary registered
under section 12 of the Securities and Exchange Board of India
Act, 1992 (15 of 1992) in accordance with the provisions of
the Securities Contracts (Regulation) Act, 1956 (42 of 1956)
or the Securities and Exchange Board of India Act, 1992
(15 of 1992) or the Depositories Act, 1996 (22 of 1996) and
the rules, regulations or bye-laws made or directions issued
under those Acts; or
( ii) by banks or mutual funds,
electronically on screen-based systems of a recognised stock
exchange; and
( b) supported by a time stamped contract note issued by the interme-
diary to every client indicating in the contract note—
( i) the unique client identity number allotted under any law in
force; and
( ii) the Permanent Account Number allotted under this Act;
( 34) “State Government undertaking” includes—
( a) a corporation established by or under any State Act;
( b) a company in which more than 50% of the paid-up equity share
capital is held by the State Government;
( c) a company in which more than 50% of the paid-up equity share
capital is held by the entity referred to in clause (a) or (b) (whether
singly or taken together);
( d) a company or corporation in which the State Government has
the right to appoint the majority of the directors or to control the
management or policy decisions, directly or indirectly, including
by virtue of its shareholding or management rights or shareholders
agreements or voting agreements or in any other manner;
( e) an authority, a board or an institution or a body established or
constituted by or under any State Act, or owned or controlled by
the State Government;
( 35) “State Industrial Investment Corporation” means a Government com -
pany within the meaning of section 2( 45) of the Companies Act, 2013
(18 of 2013), engaged in the business of providing long-term finance for
industrial projects;
( 36) “State Financial Corporation” means a Financial Corporation established
under section 3 or 3A or an institution notified under section 46 of the
State Financial Corporations Act, 1951 (63 of 1951);
( 37) “successor entity” means—
( a) the amalgamated Indian company, in the case of amalgamation;
( b) the resulting Indian company, in the case of demerger;
( c) a company, in case of a succession of a firm by a company as
referred to in section 70(1)(zd);
( d) a limited liability partnership, in case of conversion of private com-
pany or unlisted public company to a limited liability partnership,
as referred to in section 70(1)(ze);
( 38) “taxable commodities transaction” shall have the meaning assigned to
it under Chapter VII of the Finance Act, 2013 (17 of 2013);
( 39) “taxable securities transaction” shall have the meaning assigned to it
under Chapter VII of the Finance Act, 2004 (13 of 2004);
( 40) “University” shall have the meaning assigned to it in section 70(2) (Table:
Sl. No. 7).
E.—Capital gains