Determination of tax

The tax payable by any person under this Act shall be determined with reference to his total gross income during the previous year; provided that the tax payable by any person shall not exceed two hundred and fifty rupees for any financial year. Explanation.—In computing the total gross income of any person under this section—. (a) the following expenses incurred by him in respect of a manufacturing concern shall be excluded,— (1) productive wages, that is to say, expenses on direct labour which can be measured and directly charged to a job, order or product; (2) materials consumed, that is to say, expenses on direct materials, with all charges thereon, including carriage inwards, freight, dock dues; (3) direct expenses of production, that is to say, expenses consisting of: (i) rent, rates, taxes, insurance of factory, (ii) gas, fuel, lighting and heating, (iii) patent fees and royalties; (iv) non-productive wages of store-keepers, firemen, enginemen, time-keepers, factory clerks, superintendents and managers; and (v) repairs, renewals and depreciation of machinery, tools, lands and buildings; (b) the following expenses incurred by him in respect of a trading concern shall be excluded :— (i) purchases; (ii) carriage inwards; (iii) wages; and (iv) other direct expenses not being selling and office expenses; and (c) an amount equal to five per centum of the aggregate gross income derived by a person from the profession of calling, if he maintains an office or establishment in connection therewith in the ordinary course of such profession or calling, shall be excluded.