35. For the purposes of this Code, any direct tax payable by the employer for any

accounting year shall, subject to the following provisions, be calculated at the rates applicable

to the income of the employer for that year, namely:—

(a) in calculating such tax no account shall be taken of,––

(i) any loss incurred by the employer in respect of any previous accounting

year and carried forward under any law for the time being in force relating to

direct taxes;

(ii) any arrears of depreciation which the employer is entitled to add to

the amount of the allowance for depreciation for any succeeding accounting

year or years under sub-section (2) of section 32 of the Income-tax Act;

(b) where the employer is a religious or a charitable institution to which the

provisions of section 41 do not apply and the whole or any part of its income is

exempt from the tax under the Income-tax Act, then, with respect to the income so

exempted, such institution shall be treated as if it were a company in which the public

are substantially interested within the meaning of that Act;

(c) where the employer is an individual or a Hindu undivided family, the tax

payable by such employer under the Income-tax Act shall be calculated on the basis

that the income derived by him from the establishment is his only income;

(d) where the income of any employer includes any profits and gains derived

from the export of any goods or merchandise out of India and any rebate on such

income is allowed under any law for the time being in force relating to direct taxes,

then, no account shall be taken of such rebate;

(e) no account shall be taken of any rebate other than development rebate or

investment allowance or development allowance or credit or relief or deduction (not

hereinbefore mentioned in this section) in the payment of any direct tax allowed

under any law for the time being in force relating to direct taxes or under the relevant

annual Finance Act, for the development of any industry.