Inclusion of surcharge and cess within 'tax' clarifies nondeductibility under section 40(a)(ii) for business income, effective retrospectively.

The amendment inserts an Explanation treating the term tax as including any surcharge or cess on such tax for the provision that disallows deduction of amounts paid as a rate or tax on profits or gains of business or profession, and deems that inclusion to have always applied, with retrospective effect to the relevant fiscal period commencing in 2005 and subsequent assessment years.

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