Financial Resolutions. - Financial Resolution No. 3: Income Tax and Sur-Tax.

I move:

That provision be made to amend sections 443 and 444 of the Income Tax Act, 1967 (No. 6 of 1967), as to the circumstances in which income paid to or for the benefit of a child of a settlor is to be treated as income of the settlor and that the provision aforesaid shall apply to any payment made after the year 1970-71, except a payment made in the year 1971-72, to or for the benefit of a child born after the 6th day of April, 1971, and so made by virtue or in consequence of a settlement made before the 28th day of April, 1971.

This is tax avoidance?

Could the Minister give an example of a case that that encloses?

A father covenants to pay a sum of money to his child for a period of, say, seven years and if the covenant is not caught by the existing law then he pays no tax on the amount of money involved. The law as it stands provides that such a payment is caught if on 6th April the child is an infant and unmarried. In the first year, where the child is born after 6th April and is not therefore an infant and unmarried on 6th April, there is a loophole. It may seem a small matter but in certain parts of the country there has, apparently, been a rash of these cases and I am closing that loophole.

Is that what is known as family planning?

It is one form of it.

Question put and agreed to.