Finance Act, 1990

Basis of assessment: transitional provisions.

16.—(1) In this section—

“basis period for the year 1990-91” means the period on the profits or gains of which income tax for the year 1990-91 falls to be finally computed for the purposes of Case I and Case II of Schedule D;

“corresponding period” means the period of 12 months immediately preceding the basis period for the year 1990-91.

(2) Subject to subsections (4) and (5), the provisions of subsection (3) shall apply, in determining for the year 1990-91 the full amount of the profits or gains of a trade or profession where the trade or profession was set up and commenced before the 6th day of April, 1989.

(3) Where this subsection applies, the assessment which, by virtue of section 58 of the Income Tax Act, 1967 (as amended by section 14 ), falls to be made for the year 1990-91, shall be reduced by the excess of the amount of the profits or gains of the basis period for the year 1990-91 over one-half of the aggregate of the profits or gains of that basis period and of the profits or gains, if any, of the corresponding period:

Provided that the assessment for the year 1990-91 shall not be reduced under the provisions of this section to an amount which is less than the amount determined by the formula—

125

A

×

___

100

where A is the amount of the profits or gains of the corresponding period.

(4) Where an individual is charged to income tax for the year 1990-91 on the full amount of the profits or gains from farming determined in accordance with the provisions of subsection (2) of section 20B of the Finance Act, 1974 (as amended by section 20 ), the provisions of subsection (3) shall have effect as if—

(a) the reference to the amount of the profits or gains of the basis period for the year 1990-91 were a reference to the full amount of the profits or gains from farming of the individual determined without regard to the other provisions of this section but in accordance with the provisions of subsection (2) of the said section 20B (as so amended) for the year 1990-91,

(b) the reference to the amount of the profits or gains of the corresponding period were a reference to the full amount of the profits or gains determined upon a fair and just average of the profits or gains from farming of the individual in each of the 3 years ending on the date 12 months immediately before the end of the basis period for the year 1990-91, and

(c) the reference in subsection (3) to section 58 of the Income Tax Act, 1967 , were a reference to subsection (2) of the said section 20B (as so amended).

(5) Where, under the provisions of section 58 (5) (a) (ii) of the Income Tax Act, 1967 (as amended by section 14 ), profits or gains of the year ending on the 5th day of April, 1991, are to be computed or the assessment for the year 1990–91 is to be amended, then those profits or gains shall be computed without reference to the provisions of this section and the said assessment shall be amended accordingly.