Section 2 — Definitions (clauses 51 to 101)

Old Act equivalent: Section 2 of IT Act 1961 Sub-part: Chapter I—Preliminary

Note: This file contains clauses (51) to (101) of the definitions section. See Section 2 — Definitions (clauses 1 to 50) for the first part.

Statutory Text

(continued) (51) “Income-tax Officer” means a person appointed to be an Income-tax Officer under section 237(1);

(52) “India” means the territory of India as referred to in article 1 of the Constitution, its territorial waters, seabed and sub-soil underlying such waters, continental shelf, exclusive economic zone or any other maritime zone as referred to in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976 (80 of 1976), and the air space above its territory and territorial waters;

(53) “Indian company” means a company formed and registered under the Companies Act, 2013 (18 of 2013) and includes—

(a) company formed and registered under any law relating to companies formerly or currently in force in any part of India; or

(b) corporation established by or under a Central Act or State Act or Provincial Act; or

 the registered or principal office of which is in India;

(54) “Indian currency” shall have the same meaning as assigned to it in section 2(q) of the Foreign Exchange Management Act, 1999 (42 of 1999);

(55) “infrastructure capital company” means a company which makes invest ments by acquiring shares or providing long-term finance to—

(a) any enterprise or undertaking wholly engaged in the business referred to in section 80-IA(4) or 80-IAB(1) of the Income-tax Act, 1961 (43 of 1961); or

(b) an undertaking developing and building—

(i) a housing project referred to in section 80-IB(10) of the Income-tax Act, 1961 (43 of 1961); or

(ii) a project for constructing a hotel of not less than three star category as classified by the Central Government; or

(iii) a project for constructing a hospital with at least one hundred beds for patients;

(56) “infrastructure capital fund” means a fund operating under a trust deed registered under the Registration Act, 1908 (16 of 1908) established to raise moneys by the trustees for investment by acquiring shares or pro viding long-term finance to enterprises or undertakings referred to in clause (55);

(57) “Inspector of Income-tax” means a person appointed to be an Inspector of Income-tax under section 237(1);

(58) “insurer” means an insurer, being an Indian insurance company, as defined under section 2(7A) of the Insurance Act, 1938 (4 of 1938), which has been granted a certificate of registration under section 3 of that Act;

(59) “interest” means interest payable in any manner for moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes service fee or any other charges for the moneys borrowed or debt incurred or for any credit facility that has not been utilised;

(60) “interest on securities” means—

(a) interest on any security of the Central Government or a State Gov ernment;

(b) interest on debentures or other securities for money issued by or on behalf of a local authority or a company or a corporation estab lished by a Central Act or State Act or Provincial Act;

(61) “International Financial Services Centre” shall have the same meaning as assigned to it in section 2(q) of the Special Economic Zones Act, 2005 (28 of 2005);

(62) “Joint Commissioner” means a person appointed to be a Joint Com missioner of Income-tax or an Additional Commissioner of Income-tax under section 237(1);

(63) “Joint Commissioner (Appeals)” means a person appointed to be a Joint Commissioner of Income-tax (Appeals) or an Additional Commissioner of Income-tax (Appeals) under section 237(1);

(64) “Joint Director” means a person appointed to be a Joint Director of Income-tax or an Additional Director of Income-tax under section 237(1);

(65) “legal representative” shall have the same meaning as assigned to it in section 2(11) of the Code of Civil Procedure, 1908 (5 of 1908);

(66) “liable to tax”, in relation to a person and with reference to a country, means that there is an income-tax liability on such person under the law of that country for the time being in force and shall include a person who has subsequently been exempted from such liability under the law of that country;

(67) “long-term capital asset” means a capital asset which is not a short-term capital asset;

(68) “long-term capital gain” means capital gains arising from the transfer of a long-term capital asset;

(69) “manufacture”, with its grammatical variations and cognate expressions, means a change in a non-living physical object or article or thing—

(a) resulting in transformation of the object or article or thing into a new and distinct object or article or thing having a different name, character and use; or

(b) bringing into existence of a new and distinct object or article or thing with a different chemical composition or integral structure;

(70) “maximum marginal rate” means the rate of income-tax (including surcharge on income-tax) applicable in relation to the highest slab of income for an individual, association of persons or, as the case may be, body of individuals, as specified in the Finance Act of the relevant year;

(71) “non-banking financial company” shall have the same meaning as assigned to it in section 45-I(f) of the Reserve Bank of India Act, 1934 (2 of 1934);

(72) “non-resident” means a person who is not a “resident”, and for the purpos es of sections 161, 174 and 312, includes a person who is not ordinarily resident as per section 6(13);

(73) “notification” means a notification published in the Official Gazette and the expression “notify” with its grammatical variations and cognate expressions shall be construed accordingly;

(74) “partner” shall have the same meaning as assigned to it in section 4 of the Indian Partnership Act, 1932 (9 of 1932), and shall include—

(a) any person who, being a minor, has been admitted to the benefits of partnership; and

(b) a partner of a limited liability partnership as defined in section 2(1)(q) of the Limited Liability Partnership Act, 2008 (6 of 2009);

(75) “partnership” shall have the same meaning as assigned to it in section 4 of the Indian Partnership Act, 1932 (9 of 1932), and shall include a “limited liability partnership” as defined in section 2(1)(n) of the Limited Liability Partnership Act, 2008 (6 of 2009);

(76) “Permanent Account Number (PAN)” means a unique number consisting of ten alphanumeric characters, allotted by the Assessing Officer to a person for the purpose of identification under this Act, and includes a Permanent Account Number allotted under the new series;

(77) “person” includes—

(a) an individual;

(b) a Hindu undivided family;

(d) a firm;

(e) an association of persons or a body of individuals, whether incor porated or not;

(f) a local authority; and

(g) every artificial juridical person, not falling within any of the preceding sub-clauses,

 whether or not such an association of persons or a body of individuals or

a local authority or an artificial juridical person was formed or established or incorporated with the object of deriving income, profits, or gains;

(78) “person of Indian origin” means an individual who or either of his parents or any of his grand-parents, was born in undivided India;

(79) “person who has a substantial interest in the company”, in relation to a company means a person who is the beneficial owner of shares, not being shares entitled to a fixed rate of dividend, whether with or without a right to participate in profits, carrying not less than 20% of the voting power;

(80) “prescribed” means prescribed by rules made under this Act;

(81) “Principal Chief Commissioner” means a person appointed to be a Prin cipal Chief Commissioner of Income-tax under section 237(1);

(82) “Principal Commissioner” means a person appointed to be a Principal Commissioner of Income-tax under section 237(1);

(83) “Principal Director” means a person appointed to be a Principal Director of Income-tax under section 237(1);

(84) “Principal Director General” means a person appointed to be a Principal Director General of Income-tax under section 237(1);

(85) “principal officer”, with reference to a local authority or a company or any other public body or any association of persons or any body of individuals, means—

(a) the secretary, treasurer, manager or agent of the authority, company, association or body; or

(b) any person connected with the management or administration of the local authority, company, association or body upon whom the Assessing Officer has served a notice of his intention of treating him as the principal officer thereof;

(86) “profession” includes vocation;

(87) “public sector bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980) and a bank included in the category “other public sector banks” by the Reserve Bank of India;

(88) “public sector company” means any corporation established by or under any Central Act or State Act or Provincial Act or a Government company as defined in section 2(45) of the Companies Act, 2013 (18 of 2013);

(89) “public servant” shall have the same meaning as assigned to it in section 2(28) of the Bharatiya Nyaya Sanhita, 2023 (45 of 2023);

(90) “rate or rates in force” or “rates in force”, in relation to a tax year, for the purposes of—

(a) (i) computing the income-tax chargeable under section 316(5) or 317(2) or 319 or 320(2); or

(ii) deducting income-tax under section 392(1) to (6) from income chargeable under the head “Salaries”; or

 (iii)	 computing the advance tax payable under Chapter XIX-C

in a case not falling under section 207 or 194(1) (Table: Sl. No. 1) or 194(1)(Table: Sl. No. 6) or 214 or 307 or 308 or 311; or

 (iv)	 deducting tax under section 393(1) [Table: Sl. No. 1(i)], [Table:

Sl. No. 5(i)], [Table: Sl. No. 5(ii)], [Table: Sl. No. 5(iii)] and (Table: Sl. No. 7) or in section 393(3)(Table: Sl. No. 1), (Table: Sl. No. 2) and (Table: Sl. No. 3),

 means the rate or rates of income-tax specified in this behalf in the

Finance Act of the relevant year;

(b) computing the advance tax payable under Chapter XIX-C in a case falling under section 207 or 194(1) (Table: Sl. No. 1) or 194(1) (Table: Sl. No. 6) or 214 or 307 or 308 or 311 the rate or rates specified in the said respective section, or the rate or rates of income-tax specified in this behalf in the Finance Act of the relevant tax year, whichever is applicable;

(c) deducting tax under section 393(2) (Table: Sl. No. 6), (Table: Sl. No. 7), (Table: Sl. No. 8), (Table: Sl. No. 9) and (Table: Sl. No. 17), the rate or rates of income-tax specified in this behalf in the Finance Act of the relevant tax year or the rate or rates of income-tax specified in an agreement entered into by the Central Government under section 159(1), or an agreement notified by the Central Gov ernment under section 159(2), whichever is applicable;

(91) “recognised provident fund” means a provident fund which has been and continues to be recognised by the approving authority as per Part A of the Schedule XI, and includes a provident fund established under a scheme framed under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952);

(92) “recognised stock exchange” means a recognised stock exchange as referred to in section 2(f) of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and which fulfils such conditions, as may be prescribed, and notified by the Central Government for this purpose;

(93) “regular assessment” means the assessment made under section 270(10) or 271;

(94) “relative”, in relation to an individual, means the husband, wife, brother, sister or any lineal ascendant (maternal as well as paternal) or descendant of that individual;

(95) “Reserve Bank of India” means the Bank constituted under section 3(1) of the Reserve Bank of India Act, 1934 (2 of 1934);

(96) “resident” means a person who is resident in India as per section 6;

(97) “resulting company” means one or more companies (including a wholly owned subsidiary thereof) to which the undertaking of the demerged company is transferred in a demerger and, the resulting company in consideration of such transfer of undertaking, issues shares to the share holders of the demerged company and includes any authority or body or local authority or public sector company or a company established, constituted or formed as a result of demerger;

(98) “scheduled bank” shall have the same meaning as assigned to it in section 2(e) of the Reserve Bank of India Act, 1934 (2 of 1934);

(99) “Securities and Exchange Board of India” shall have the same meaning as assigned to it in section 2(1)(a) of the Securities and Exchange Board of India Act, 1992 (15 of 1992);

(100) “senior citizen” means an individual resident in India who is of the age of sixty years or more at any time during the relevant tax year;

(101) (a) “short-term capital asset” means a capital asset held by an assessee for not more than twenty-four months immediately preceding the date of its transfer; and

(b) where the capital asset is a—

(i) security listed in a recognised stock exchange in India; or

(ii) unit of the Unit Trust of India; or

(iii) unit of an equity-oriented fund; or

(iv) zero-coupon bond,

 the provisions of sub-clause (a) shall have effect, as if for the words

“twenty-four months”, the words “twelve months” had been substi tuted; and

(A) in the case of a share held in a company in liquidation, there
shall be excluded the period subsequent to the date on which the company goes into liquidation;

(B) there shall be included the period for which—

(I) the asset was held by the previous owner referred to in section 73(1)(Table: Sl. No. 1), for a capital asset which becomes the property of the assessee in the circum- stances mentioned in the said section;

(II) the share or shares in the amalgamating company were held by the assessee, for a capital asset being a share or shares in an Indian company, which becomes the property of the assessee in consideration of a transfer referred to in section 70(1)(f);

(III) the share or shares held in the demerged company were held by the assessee, for a capital asset being a share or shares in an Indian company, which becomes the property of the assessee in consideration of a demerger;

(IV) the person was a member of a recognised stock exchange in India immediately before its demutualisation or cor poratisation, for a capital asset, being trading or clearing rights of that recognised stock exchange, acquired by a person pursuant to such demutualisation or corporati sation of that recognised stock exchange;

(V) the person was a member of a recognised stock exchange in India immediately before its demutualisation or corpo ratisation, for a capital asset being equity share or shares in a company allotted pursuant to such demutualisation or corporatisation of that recognised stock exchange;

(VI) the share or shares were held by the assessee, for a capital asset being a unit of a business trust, allotted pursuant to transfer of share or shares as referred to in section 70(1)(zi);

(VII) the unit or units in the consolidating scheme of a mutual fund were held by the assessee, for a capital asset being a unit or units, which becomes the property of the assessee in consideration of a transfer referred to in section 70(1)(zj);

(VIII) the preference shares were held by the assessee, for a capital asset being equity shares in a company, which becomes the property of the assessee in consideration of a transfer referred to in section 70(1)(zb);

(IX) the unit or units in the consolidating plan of a mutual fund scheme were held by the assessee, for a capital asset being a unit or units, which becomes the property of the assessee in consideration of a transfer referred to in section 70(1)(zk);

(X) the original unit or units in the main portfolio were held by the assessee, for a capital asset being a unit or units in a segregated portfolio referred to in section 73(1) (Table: Sl. No. 11);

(XI) gold was held by the assessee before conversion into the Electronic Gold Receipt, for a capital asset being Electronic Gold Receipt issued in respect of such gold deposited as referred to in section 70(1)(y);

(XII) Electronic Gold Receipt was held by the assessee before its conversion into gold for a capital asset being gold released in respect of such Electronic Gold Receipt as referred to in section 70(1)(y);

(I) the date of its conversion or treatment, for a capital asset referred to in section 26(2)(j);

(II) the date of allotment of a share or any other security (herein referred to as the financial asset), for a capital asset being such financial asset subscribed to by the assessee on the basis of his right to subscribe to such financial asset or subscribed to by the person in whose favour the assessee has renounced his right to subscribe to such financial asset;

(III) the date of the offer of the right to subscribe to any financial asset which is renounced in favour of any other person by the company or institution, as the case may be, making such offer, for a capital asset, being such right;

(IV) the date of the allotment of a financial asset allotted without any payment and on the basis of holding of any other financial asset, for a capital asset being such financial asset;

(V) the date of allotment or transfer of any specified security or sweat equity shares allotted or transferred, directly or indirectly, by the employer free of cost or at conces sional rate to his employees (including former employee or employees), for a capital asset being such specified security or sweat equity shares;

(VI) the date on which a request for the redemption was made, for a capital asset, being share or shares of a company, which is acquired by the non-resident assessee on redemption of Global Depository Receipts referred to in section 209(1)(Table: Sl. No. 2) held by such assessee;

(D) for capital assets other than those mentioned in items (A) to (C), the said period shall be determined in such manner, as may be prescribed,

 where,—

(A) “equity oriented fund” shall have the meaning assigned to it in section 198(8);

(B) “security” shall have the same meaning as assigned to it in section 2(h) of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);

(C) “specified security” means the securities as defined in section 2(h) of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and, where employees’ stock option has been granted under any plan or scheme therefor, includes the securities offered under such plan or scheme;

(D) “sweat equity shares” means equity shares issued by a company to its employees or directors at a discount or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called;

(102) “short-term capital gain” means capital gains arising from the transfer of a short-term capital asset;

(103) (a) “slump sale” means the transfer of one or more undertaking, by any means, for a lump sum consideration without values being assigned to the individual assets and liabilities in such transfer;

(b) for the purpose of sub-clause (a)—

(i) “undertaking” shall have the meaning assigned to it in clause (35)(i); and

(ii) the determination of the value of an asset or liability for the sole purpose of payment of stamp duty, registration fees or other similar taxes or fees shall not be regarded as assignment of values to individual assets or liabilities;

(104) “Special Economic Zone” shall have the same meaning as assigned to it in section 2(za) of the Special Economic Zones Act, 2005 (28 of 2005);

(105) “stamp duty value” means the value adopted or assessed or assessable by any authority of the Central Government or State Government for the payment of stamp duty in respect of an immovable property, where the expression “assessable” shall mean the value which any authority of that Government would have adopted or assessed as if it were referred to such authority for the purposes of payment of stamp duty, irrespective of anything to the contrary contained in any other law in force;

(106) “tax” means income-tax chargeable under this Act;

(107) “Tax Recovery Officer” means an Income-tax Officer authorised in writing by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, to exercise—

(a) the powers of a Tax Recovery Officer; and

(b) the powers and functions conferred on, or assigned to, an Assessing Officer under this Act, and as may be prescribed;

(108) “total income” means the total amount of income referred to in section 5, computed in the manner as laid down in this Act;

(109) “transfer” in relation to a capital asset, includes—

(a) the sale, exchange or relinquishment of the asset; or

(b) the extinguishment of any rights therein; or

(d) where the asset is converted by the owner into, or is treated by him as, stock-in-trade of a business carried on by him, such conversion or treatment; or

(e) the maturity or redemption of a zero coupon bond; or

(f) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other asso ciation of persons or by way of any agreement or any arrangement or in any other manner) which has the effect of transferring, or enabling the enjoyment of, any immovable property; or

(g) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882); or

(h) disposing of, or parting with, an asset or any interest therein, or creating any interest in any asset in any manner, directly or indirect ly, absolutely or conditionally, voluntarily or involuntarily, by way of an agreement (whether entered into in India or outside India) or otherwise, irrespective of whether such transfer of rights has been characterised as being effected or dependent upon or flowing from the transfer of a share or shares of a company registered or incorporated outside India,

 where, the expression “immovable property” means—

(i) any land or any building or part of a building, and includes, where any land or any building or part of a building is to be transferred together with any machinery, plant, furniture, fittings or other things, such machinery, plant, furniture, fittings or other things also, such that the land, building, part of a building, machin ery, plant, furniture, fittings and other things include any rights therein;

(ii) any rights in or with respect to any land or any building or a part of a building (whether or not including any machinery, plant, furniture, fittings or other things therein), which has been constructed or which is to be constructed, accruing or arising from any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement of whatever nature), not being a transaction by way of sale, exchange or lease of such land, building or part of a building;

(110) “Valuation Officer” means a person appointed by the Central Government as a Valuation Officer who shall exercise powers as specified in section 269(3), and includes a Regional Valuation Officer, a District Valuation Officer and an Assistant Valuation Officer;

(111) “virtual digital asset” means—

(a) any information or code or number or token (not being Indian cur rency or foreign currency), generated through cryptographic means or otherwise, called by any name, providing a digital representation of value exchanged with or without consideration, with the promise or representation of having inherent value, or functions as a store of value or a unit of account including its use in any financial transaction or investment, but not limited to investment scheme; and can be transferred, stored or traded electronically;

(b) a non-fungible token or any other token of similar nature, by what ever name called;

(d) any crypto-asset being a digital representation of value that relies on a cryptographically secured distributed ledger or a similar tech nology to validate and secure transactions, whether or not such asset is included in sub-clause (a) or (b) or (c),

 where,—

(i) “non-fungible token” means such digital asset as the Central Gov ernment may, by notification, specify;

(ii) the Central Government may, by notification, exclude any digital asset from this definition, subject to such conditions as specified therein;

(112) “zero coupon bond” means a bond—

(a) issued by any infrastructure capital company or infrastructure capital fund or infrastructure debt fund or public sector company or scheduled bank on or after the 1st June, 2005;

(b) for which no payment and benefit is received or receivable before maturity or redemption from infrastructure capital company or infrastructure capital fund or infrastructure debt fund or public sector company or scheduled bank; and

 where, the expression “infrastructure debt fund” means the infrastruc

ture debt fund notified by the Central Government under Schedule VII (Table: Sl. No. 46).

Provisos

None.

Explanations

None.

Tables

See statutory text above.

Key Structure

Applies to: All provisions of the Income-tax Act, 2025.
Conditions: Definitions apply unless context otherwise requires.
Time limits: None.
Monetary limits: Various — see individual definitions.
Exceptions: Context-dependent overrides as stated in individual sections.

Cross-References

Amendment Notes

None noted from the extracted pages.

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Definitions (clauses 51 to 101)

Section 2 — Definitions (clauses 51 to 101)

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