Computation of net income

(1) For the purposes of preparing Compensation Assessment-roll, the net income of an intermediary shall be computed by deducting from the gross asset of such intermediary, as the case may be, the following, namely. - (a) any sum which was payable as land-revenue or rent including cesses to the State Government or to the immediately superior land-lord, as the case may be, in respect of the State or tenure of such intermediary for the previous agricultural year: Provided that where rent of a holding comprised in such estate or tenure has been commuted into cash rent and there has been no revaluation of the cess payable in respect of that estate or tenure, the cess payable under this clause shall be determined on the basis of the commuted rent: Provided further that if any land comprised in such estate or tenure is lost by diluvion or is covered with water so as to make such land uncultivable, the cess payable under this clause shall be reduced by an amount which bears to the cess of the entire estate or tenure the same proportion as the area lost or covered bears to the area of the entire estate or tenure; (b) any sum which was payable by such intermediary as agricultural income-tax in respect of any agricultural income derived from such estate or tenure for the previous agricultural year; (c) any sum which was payable by such intermediary as income tax in respect of any income derived from such estate or tenure, other than royalties, for the previous agricultural year: Provided that the income-tax payable under this clause shall be determined in accordance with the rate of assessment which would have been applicable if the intermediary had no income other than the income derived from such estate or tenure; (d) any sum which was payable as chaukidari tax or municipal tax in respect of any building or part of building used primarily as office or cutchery for the management of such estate or tenure; (e) cost of management of such estate or tenure at the following rates namely :- Amount of gross asset. Rate (i) Where the gross asset does not exceed Rs. 2,000 5 per centum of such gross asset; (ii) where the gross asset exceeds Rs. 2,000 but does net exceed Rs. 5,000. 7 ½ per centum of such gross asset; (iii)where the gross asset exceeds Rs. 5,000 but does not exceed Rs. 10,000. 10 per centum of such gross asset; (iv) where the gross asset exceeds Rs. 10,000 but does not exceed Rs. 15,000. 12 ½ per centum of such gross asset; (v) where the gross asset exceeds Rs. 15,000. Not less than 15 and not more than 20 per centum of such gross asset: Provided that the deduction on account of the cost of management referred to in this clause, shall not in any case have the effect of reducing the net income of the intermediary, specified in any entry in sub-clauses (ii) to (iv) thereof, to an amount below the net income of the intermediary specified in the entry mentioned in sub-clauses (i) to (iv), respectively: Explanation. - For the purposes of this clause the term, "net income" means the gross asset minus the deduction on account of the cost of management. Illustration. - An intermediary has a gross asset of Rs. 5,000. After deducting the cost of management at the rate of seven and a half per cenum, his net income comes to Rs. 4,625. Another intermediary has a gross asset of Rs. 5,100. After deducting the cost of management at the rate of ten per centum, his net income comes to Rs. 4,590, but under the terms of the proviso, his net income shall be deemed to be Rs. 4,625. (f) any other tax or legal imposition payable in respect of such estate or tenure not expressly mentioned in clauses (a) to (e) or the value, to be commuted in the prescribed manner, of any services or obligations of any other form to be rendered or discharged as a condition precedent to his enjoyment of such estate or tenure. (2) The State Government may make Rules providing for the manner of calculation of sums under the different clauses of sub-section (1), when the estate or tenure vested in the State under Section 3 or Section 3-A is a share in an estate or tenure or when the previous agricultural year does not exactly coincide with the year according to which any sum referred to in any of the said clauses was payable.