TaxTMI 
TaxTMI 
Deduction in respect of earnings in convertible foreign exchange
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....b) for an assessment year beginning on the 1st day of April, 2002, a deduction of a sum equal to the aggregate of- (i) thirty per cent of the profits derived by him from services provided to foreign tourists; and (ii) so much of the amount not exceeding thirty per cent of the profits referred to in sub-clause (i) as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account to be utilised for the purposes of the business of the assessee in the manner laid down in sub-section (4); (c) for an assessment year beginning on the 1st day of April, 2003, a deduction of a sum equal to the aggregate of- (i) 3[twenty-five] per cent of the profits derived by him from services provided to foreign tourists; and (ii) so much of the amount not exceeding 4[twenty-five] per cent of the profits referred to in sub-clause (i) as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account to be utilised for the purposes of the business of the assessee in the manner laid down in sub-section (4); (d) for an assessment y....
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....dia or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.] (2A) Every person making payment to an assessee referred to in the Explanation 14[1] to sub-section (2) out of Indian currency obtained by conversion of foreign exchange received from or on behalf of a foreign tourist or a group of foreign tourists shall furnish to that assessee a certificate in the prescribed form indicating the amount received in foreign exchange, its conversion into Indian currency and such other particulars as may be prescribed.] 15[(3) For the purposes of sub-section (1), profits derived from services provided to foreign tourists shall be the amount which bears to the profits of the business (as computed under the head "Profits and gains of business or profession") the same proportion as the receipts specified in sub-section (2) 16[as reduced by any payment, referred to in sub-section (2A), made by the assessee] bear to the total receipts of the business carried on by the assessee.] (4) The amount credited to the reserve account under clause (b) of sub-section (1), shall be utilised by the assessee before the expi....
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....tered in relation to those shares in the register of members of the public company.] (6) The deduction under sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed on the basis of the 20[21[****] amount of convertible foreign exchange received by the assessee for services provided by him to foreign tourists 22[,payments made by him to any assessee referred to in sub-section (2A)] and the payments received by him in Indian currency as referred to in the Explanation 23[1] to sub-section (2).] 24[(7) Where a deduction under sub-section (1) is claimed and allowed in respect of profits derived from the business of a hotel, such part of profits shall not qualify to that extent for deduction for any assessment year under any other provisions of this Chapter under the heading "C.-Deductions in respect of certain incomes", and shall in no case exceed the profits and gains of such hotel.] Explanation.-For the purposes of this section,- (a) "travel agent" means a tr....
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....p; 6. Substituted vide Section 32 of the Finance Act, 2002 w.e.f. 01-04-2003 before it was read as, "ten" 7. Inserted vide Section 29 of the Finance (No. 2) Act, 1991 w.e.f. 01-10-1991 8. Substituted vide Section 23 of the Finance Act, 1990 w.e.f. 01-04-1991 before it was read as, "by the assessee in convertible foreign exchange" 9. Substituted vide Section 47 of the Finance Act, 1999 w.e.f. 01-06-1999 before it was read as, "where the Chief Commissioner or Commissioner is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control, unable to do so within the said period of six months, within such further period as the Chief Commissioner or Commissioner may allow in this behalf." Earlier, Amended vide Section 23 of the Finance Act, 1990 w.e.f. 01-04-1991 10. Inserted vide Section 29 of the Finance (No. 2) Act, 1991 w.e.f. 01-04-1992 11. Substituted vide Section 47 of the Finance Act, 1999 w.e.f. 01-06-1999 before it was read as, "Explanation" 12. Substituted vide Section 25 of the Finance Act, 1994 w.e.f. 01-04-1995 before it was read as, "from a ....