Finance Act, 1990

Chapter II

Change in Basis of Assessment and Consequential Provisions

Basis of assessment: Cases I and II of Schedule D.

14.—(1) As respects the year 1990-91 and subsequent years of assessment, section 58 of the Income Tax Act, 1967 , is hereby amended—

(a) by the deletion, in subsection (1), of “the year preceding”, and

(b) by the substitution of the following subsections for subsections (3) and (4):

“(3) Any person chargeable with income tax in respect of the profits or gains of any trade or profession which has been set up and commenced within the year preceding the year of assessment shall be charged on the full amount of the profits or gains for one year from the time of such setting up and commencement.

(4) Any person chargeable with income tax in respect of the profits or gains of any trade or profession which has been set up and commenced within the year next before the year preceding the year of assessment shall be entitled, on giving notice in writing to the inspector with the return required under section 10 of the Finance Act, 1988 , for the year of assessment, to have the assessment reduced by the amount (if any) by which the amount of the assessment for the year preceding the year of assessment exceeds the full amount of the profits or gains of that preceding year:

Provided that, where the said excess is greater than the amount of the assessment, the difference between the excess and the amount of the assessment shall be treated, for the purposes of section 309 of the Income Tax Act, 1967 , as if it were a loss sustained in a trade in that year of assessment.”,

and the said subsection (1), as so amended, is set out in the Table to this subsection.

TABLE

(1) Subject to the provisions of this section and sections 59 and 60, tax shall be charged under Case I or Case II of Schedule D on the full amount of the profits or gains of the year of assessment.

(2) In relation to a trade or profession which is permanently discontinued on or after the 6th day of April, 1991, section 3 of the Finance Act, 1971 , shall cease to have effect.