Section 66: interpretation (definitions for Part D of Chapter IV)

Selected definitions

Section 66 defines around 40 terms; some of the more commonly relevant ones are:

• "Banking company" - a company to which the Banking Regulation Act, 1949 applies, including any bank or banking institution referred to in Section 51 of that Act.
• "Commission or brokerage" - has the meaning assigned in Section 402(7).
• "Fees for technical services" - has the meaning assigned in Section 9(7)(b).
• "Housing finance company" - a public company formed or registered in India mainly to provide long-term finance for construction or purchase of houses in India for residential purposes.
• "Long-term finance" (for Section 32(e)) - a loan or advance repayable, with interest, over a period of not less than five years.
• "Permanent establishment" - has the meaning assigned in Section 173(c).
• "Plant" - includes ships, vehicles, books, scientific apparatus and surgical equipment used for the business or profession, but excludes tea bushes, livestock, buildings, or furniture and fittings.
• "Royalty" - has the same meaning as assigned in Section 9(6)(b).
• "Scientific research" - activity for the extension of knowledge in natural or applied science (including agriculture, animal husbandry or fisheries), covering related expenditure but excluding expenditure to acquire rights in, or arising out of, scientific research.
• "Specified Banking or Online Mode" - transaction by account payee cheque, account payee bank draft, electronic clearing system through a bank account, or other prescribed electronic mode.
• "Speculative transaction" - a transaction where a contract for purchase/sale of a commodity (including stocks and shares) is settled otherwise than by actual delivery, with specific carve-outs for hedging contracts, dealer/investor hedging in stocks and shares, jobbing/arbitrage by exchange members, and specified derivative transactions.
• "Specified derivative transaction" - trading in derivatives on a recognised stock exchange (or through SEBI-registered intermediaries, banks or mutual funds) or in commodity derivatives chargeable to commodities transaction tax, supported by a time-stamped contract note showing the client's unique identity number and PAN.

Other terms defined

Section 66 also defines: "agreement" (for Section 26(2)(h)), "commodities transaction tax" and "commodity derivative," "Indian Institute of Technology," "Keyman insurance policy," "limited liability partnership," "micro enterprise" and "small enterprise," "mineral oil," "moneys payable," "non-scheduled bank," "paid," "predecessor entity" and "successor entity" (for amalgamation/demerger/succession/conversion scenarios), "primary agricultural credit society," "primary co-operative agricultural and rural development bank," "professional services," "public company," "public financial institution," "rate of exchange," "rural branch," "securities transaction tax," "service" (for Section 26(2)(h)), "State Government undertaking," "State Industrial Investment Corporation," "State Financial Corporation," "taxable commodities transaction," "taxable securities transaction," and "University."

Frequently asked questions