The provisions of section 80-RRA are extremely attractive because a technician or professional who rendered services outside India is eligible for exemption to the extend of75 per cent of the remuneration earned by him for services rendered abroad. This is subject to one condition that the remuneration should be brought to India in foreign exchange. If he remits to India only a part of the actual amount which he earned, the benefit of deduction of 75 per cent is restricted to the amount which he actually brings to India.

The same benefit is also available to professors, teachers and research workers who earn remuneration from a foreign university or other institutions. Section 80-R exempts 75 per cent of the income earned abroad to the extent it is remitted to India.

Similar benefit is given under section 80-RR to authors, playwrights, artists, musicians, actors and sportsmen. These professionals also get the benefit of 75 per cent tax-break to the extent that the foreign remuneration is brought to India. Hence, our cricketers who are participating in the World Cup have an added incentive to put in their best performance, as that would not only bring laurels to the countrybut also ensure that the remuneration they earn is exempt from tax to the extent of 75 per cent of what is brought to India.

Wives (and also husbands) who are employed in concerns in which their spouse has a substantial interest also stand to gain if they are professionally qualified. Under section 64(1)(ii), remuneration earned by a spouse is to be clubbed and added to the income of the individual who has 20 per cent or more equity shareholding in the company or who is entitled to 20 per cent or more of the profits of a partnership firm.

However, the provisions for clubbing would not apply and the spouse would be separately taxed if he/she possesses technical or professional qualifications.

This point was recently considered by the Gujarat High Court in Ashaben Rohitbhai vs CIT in this case, the wife who was working as a managing director in a public limited company in which her husband had substantive interest, was paid remuneration. The assessing officer as well as the Tribunal, by applying section64(1) (ii), treated her income as income in the hands of her husband and held that as she was not holding necessary technical or professional qualifications and he income was not attributable solely to the application of such knowledge and experience, she was not entitled to the benefits of the proviso thereto.

The High Court reversed the finding of the tribunal and held that the wife was working as the managing director. It was her case that before she was working as the managing director in the present company, she had experience as managing director and had received substantial sums as remuneration from another company from 1958 to 1961, as a director with yet another concern from 1961, and then she had worked as a chairperson with another firm.

It was further stated that considering the nature of duties and work put in by her, the Company Law Board had permitted increase in her salary. The present company was a public limited company which had 40 equity participation of a foreign collaborator. Shealso had a master's degree (MA); it was not even the case of the revenue that any degree or diploma was required for the post of managing director either under the Companies Act or under any other law.

Relying on the facts, the Gujarat High Court held that the wife's income was separately taxable in her hands and could not be added to the income of her husband. The court observed that professional qualification would mean qualification which is necessary for carrying on the particular profession such as medical profession or legal profession. If the job is of a technical nature requiring a degree or diploma, holding of such a degree or diploma would be essential.

The nature of professional qualifications, however, varies from profession to profession. Likewise, the nature of technical qualifications also differs depending on the nature of the technical job. It was, however, stated that it was not each and every qualification, academic or otherwise, which could bring the spouse within the scope of theproviso so as to enable him or her to take the income out of the clubbing provision.

If the spouse possesses technical or professional qualifications necessary to undertake the particular technical job or carries on a profession to which the income is attributed, the amount would be separately taxed in the hands of the spouse and would not be clubbed with the income of her husband.

To sum up, a technically or professionally qualified person is not only treated with respect, but enjoys certain benefits under the tax laws as discussed in this article. Possibly no country in the world offers this advantage of 75 per cent tax exemption in respect of remuneration earned in a foreign country by technicians, certain professionals, professors, teachers, authors, actors, sportsmen or athletes. Such professional income would, therefore, attract a rate of tax which would be as low as 8.25 per cent, taking into account the recent levy of surcharge for the current financial year 1999-2000.

The author is a SupremeCourt advocate