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V. Narayanswamy vs Income-Tax Officer on 31 March, 1996
M.C. Muthanna vs Commissioner Of Income-Tax on 24 January, 1989
Fifth Income-Tax Officer vs D.M.C.C. Employees Medical Aid ... on 21 April, 1987
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Income-Tax Officer vs Kuldeep Jain on 2 January, 2002

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[Complete Act]
Central Government Act
Section 80L in The Income- Tax Act, 1995
80L. 1 Deductions In respect of interest on certain securities, dividends, etc. 2
(1) 3 Where the gross total income of an assessee, being-
(a) an individual, or
(b) a Hindu undivided family, 4 ]
(c) 5 omitted by the Finance Act, 1994 , w. re. f. 1- 4- 1968 .] includes any income by way of-]
(i) interest on any security of the Central Government or a State Government 6 ]; -- read as under:" 80K. Deduction in respect of dividends attributable to profits and gains from new industrial undertakings or ships or hotel business.- Where the gross total income of an assessee, being-
(a) the owner of any share or shares in a company, or
(b) a person who is chargeable to tax under this Act on the income byway dividends on any share or shares in a company owned by any other per- son, includes any income by way of dividends paid or deemed to have been paid by the company in respect of such share or shares, there shall, subject to any rules that may be made by the Board in this behalf, be allowed, in computing his total income, a deduction from such income by way of dividends of an amount equal to such part thereof as is attributable to the profits and gains derived by the company from an industrial undertaking or ship or the business of a hotel, on which no tax is payable by the company under this Act for any assessment year commencing prior to the 1st day of April, 1968 , or in respect of which the company is entitled to a deduction under section 80J for the assessment year commencing on the 1st day of April, 1968 , or for any subsequent assessment year: Provided that no deduction under this section shall be allowed in respect of any income by way of dividends which is attributable to the profits and gains derived by the company from an industrial undertaking which begins to manufacture or produce articles or to operate its cold storage plant or plants after the 31st day of March, 1976 , or from a ship which is first brought into use after that date or from the business of a hotel which starts functioning after that date." 1 Substituted by the Finance Act, 1970 , w. e. f. 1- 4- 1971 Earlier, section 80L was inserted by the Finance (No. 2) Act, 1967 , w. e. f. 1- 4- 1968 and substituted by the Finance Act, 1968 , w. e. f. 1- 4 3 Substituted for" Where the gross total income of an assessee includes any income by way of"- by the Finance (No. 2) Act, 1971 , w. e. f. 1- 4- 1972 . 4 The word" or" omitted by the Finance Act, 1994 , w. r. e. f. 1- 4- 1968 . 5 Prior to the omission, clause (c) read as under:" (c) an association of persons or a body of individuals consisting in either case only of husband and wife governed by the system of community of property in force in the Union territories of Dadra and Nagar Haveli and Goa, Daman and Diu," The italicised words were inserted by the Taxation Laws (Amendment) Act, 1984 , w. r. e. f. 1- 4- 1972 . 6 The words" (not being interest payable under section 280D in respect of any annuity deposit made under Chapter XXII- A)" omitted by the Finance Act, 1988 . w. e. f. 1- 4- 1988 .
(ia) 1 interest on National Savings Certificates (VI Issue) or National Savings Certificates (VII Issue) or National Savings Certificates (VIII Issue) issued under the Government Savings Certificates Act, 1959 (46 of 1959 );]
(ii) 2 interest on such debentures, issued by any institution or authority or any public sector company, or any co- operative society (including a co- operative land mortgage bank or a co- operative land development bank), as the Central Government may, by notification 3 in the Official Gazette, specify in this behalf; 4 Explanation.- Omitted by the Finance Act, 1987 , w. e. f. 1- 4- 1987 .]]
(iia) 5 6interest on deposits under such National Deposits Scheme as may be framed by the Central Government and notified by it in this behalf in the Official Gazette;]
(iii) 7 interest on deposits under any 8 other] scheme framed by the Central Government and notified by it in this behalf in the Official Gazette;
(iiia) 9 interest on deposits under the Post Office (Monthly Income Account) Rules, 1987 ;]
(iv) dividends from any Indian company;
(v) income received in respect of units from the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963 );
(va) 10 income received in respect of units of a Mutual Fund specified under clause (23D) of section 10;]
1. Substituted by the Finance (No. 2) Act, 1991, w. e. f. 1- 4- 1992. Prior to the substitution, clause (ia), as inserted by the Direct Tax Laws (Second Amendment) Act, 1989, w. r. e. f. 1- 4- 1988, read as under:" (ia) interest on National Savings Certificates (VI Issue) and National Savings Certificates (VII Issue) issued under the Government Savings Certificates Act, 1959 (46 of 1959 );"
2. Substituted by the Finance Act, 1986, w. e. f. 1- 4- 1987.
4. Prior to the omission, the Explanation, substituted by the Finance Act, 1986, w. e. f. 1- 4- 1987, read as under:" Explanation.- For the purposes of this clause," public sector company" means any corporation established by or under any Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956 );"
5. Inserted by the Finance Act, 1984, w. e. f. 1- 4- 1985.
7. The Scheme of Post Office (Time Deposits) governed by the Post Office (Time Deposits) Rules, 1970 and The Scheme of Post Office (Recurring Deposits) governed by the Post Office (Recurring Deposits) Rules, 1970 vide Notification No. 2879, dated 1- 9- 1970 ] and the National Savings Scheme, 1992 vide GSR 820 (E), dated 21- 10- 1992 ] have been notified.
8. Inserted by the Finance Act, 1984, w. e. f. 1- 4- 1985.
9. Inserted by the Finance Act, 1988, w. e. f. 1- 4- 1989.
10. Inserted by the Direct Tax Laws (Amendment) Act, 1987, w. e. f. 1- 4- 1988.
(vi) interest on deposits with a banking company to which the Banking Regulation Act, 1949 (10 of 1949 ), applies (including any bank or banking institution referred to in section 51 of that Act) or a co- operative society engaged in carrying on the business of banking (including a co- operative land mortgage bank or a co- operative land development bank); 1 ]
(via) 2 interest on deposits with any such bank, not being a banking company or a co- operative society referred to in clause (vi) but being a bank established by or under any law made by Parliament, as may be approved 3 by the Central Government for the purposes of this clause;]
(Vii) 4 interest on deposits with a financial corporation which is engaged in providing long- term finance for industrial development in India 5 ]: Provided that the corporation 6 ] is for the time being approved by the Central Government for the purposes of clause (viii) of sub- section (1) of section 36;]
(viia) 7 interest on deposits with any authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning development or improvement of cities, towns and villages, or for both;]
(viii) 8 interest on deposits with a co- operative society, not being a cooperative society referred to in clause (vi), made by a member of the society;] 9 or]
(ix) 10 dividends from any co- operative society;]
(x) 11 interest on deposits with, or dividend received from, any public company formed and registered in India with the main object of carrying on the business of providing long- term finance for construction or purchase of houses in India for residential purposes: Provided that the company is for the time being approved by the Central Government for the purpose of clause (viii) of subsection (1) of section 36,]
1. The word" or" omitted by the Finance (No. 2) Act, 1971, w. e. f. 1- 4- 1972.
2. Inserted by the Finance Act, 1983, w. e. f. 1- 4- 1984.
4. Substituted by the Finance (No. 2) Act, 1980, w. e. f. 1- 4- 1981
5. The words" or with a public company formed and registered in India with the main object of carrying on the business of providing long- term finance for construction or purchase of houses in India for residential purposes" omitted by the Finance Act, 1988, w. e. f. 1- 4- 1989.
6. The words" or, as the case may be, the company" omitted, ibid.
7. Inserted by the Taxation Laws (Amendment) Act, 1975, w. e. f. 1- 4- 1976.
8. Inserted by the Finance (No. 2) Act, 1971, w. e. f. 1- 4- 1972.
9. Inserted by the Finance Act, 1972, w. e. f. 1- 4- 1973.
10. Ibid. 11 Inserted by the Finance Act, 1988, w. e. f. 1- 4- 1989.
there shall, in accordance with and subject to the provisions of this section be allowed, in computing the total income of the assessee, a deduction as specified hereunder, namely:-
(1) 1 ] in a case where the amount of such income does not exceed in the aggregate 2 ten] thousand rupees, the whole of such amount; and
(2) 3 ] in any other case, 4 ten] thousand rupees: 5 Omitted by the Finance Act, 1983 , w. e. f 1- 4- 1984 .] 6 Omitted by the Finance Act, 1992 , w. e. f 1- 4- 1993 .]
1. Substituted for" (a)" by the Finance Act, 1982, w. e. f. 1- 4- 1983.
2. Being substituted by" thirteen" by the Finance Act, 1995, w. e. f. 1- 4- 1996. Earlier" ten" was substituted for" seven" by the Finance Act, 1993, w. e. f. 1- 4- 1994 ;" seven" was substituted for" four" by the Finance Act, 1983, w. e. f. 1- 4- 1984 which was substituted for" three" by the Finance Act, 1982, w. e. f. 1- 4- 1983.
3. Substituted for" (b)" by the Finance Act, 1982, w. e. f. 1- 4- 1983.
4. Being substituted by" thirteen" by the Finance Act, 1995, w. e. f. 1- 4- 1996. Earlier," ten" was substituted for" seven" by the Finance Act, 1993, w. e. f. 1- 4- 1994 ;" seven" was substituted for" four" by the Finance Act, 1983, w. e. f. 1- 4- 1984 which was substituted for" three" by the Finance Act, 1982, w. e. f. 1- 4- 1983.
5. Prior to the omission, the proviso, as inserted by the Finance Act, 1982, w. e. f. 1- 4- 1983, read as under:" Provided that where the gross total income of the assessee includes any income by way of interest on any security referred to in clause (i) or interest on any deposits referred to in clause (vi) (being deposits for a period of one year or more), there shall be allowed in computing the total income of the assessee a further deduction of an amount equal to so much of the income by way of such interest as has not been allowed by way of deduction under the foregoing provisions of this sub- section; so, however, that the amount of such further deduction shall not exceed two thousand rupees:"
6. Prior to the omission, the first and second provisos, as substituted by the Finance Act, 1988, w. e. f. 1- 4- 1989, read as under:" Provided that where the gross total income of the assessee includes any income by way of interest on any deposits referred to in clause (iia), or income in respect of units referred to in clause (v) or clause (va), or income by way of interest or dividend referred to in clause (x), there shall be allowed in computing the total income of the assessee, a further deduction of an amount equal to so much of such income as has not been allowed by way of deduction under the foregoing provisions of this sub- section; so, however, that the amount of such further deduction shall not exceed three thousand rupees: Provided further that where any income by way of interest on any deposits referred to in clause (iia) or any dividends referred to in clause (iv) remains unallowed after the deduction under the foregoing provisions of this section, there shall be allowed in computing the total income of the assessee, an additional deduction of an amount equal to so much of such income as has remained unallowed; so, however, that the amount of such additional deduction shall not exceed three thousand rupees." Prior to the substitution, the provisos, as inserted by the Finance Act, 1984, w. e. f. 1- 4- 1985, read as under:" Provided that where the gross total income of the assessee includes any income by way of interest on any deposits referred to in clause (iia), or income in respect of units referred to in clause (v), there shall be allowed in computing the total income of the assessee a further deduction of an amount equal to so much of such income as has not been allowed by way of deduction under the foregoing provisions of this sub- section; so, however, that the amount of such further deduction shall not exceed three thousand rupees:
1 Explanation.- For the purposes of this sub- section, the expression" security" means a Government security as defined in clause (2) of section 22 of the Public Debt Act, 1944 3 (18 of 1944 ).]
(2) 4 Omitted by the Finance Act, 1986 , w. e. f 1- 4- 1987 .]
(3) 5 For the removal of doubts, it is hereby declared that where the income referred to in sub- section (1) is derived from any asset held by, or on behalf of, a firm, an association of persons or a body of individuals, no deduction shall be allowed under the said sub- section in respect of such income in computing the total income of any partner of the firm or any member of the association or body.]
999999. -- Provided further that where any income by way of interest on any deposits referred to in clause (iia) remains unallowed after the deduction under the foregoing provisions of this section, there shall be allowed in computing the total income of the assessee, an additional deduction of an amount equal to so much of such income as has remained unallowed; so, however, that the amount of such additional deduction shall not exceed two thousand rupees."
1. Inserted by the Finance Act, 1990, w. e. f. 1- 4- 1990.
2. Section 2 (2) of the Public Debt Act, 1944 defines government security as under:" (2)" Government security" means- (a) a security, created and issued, by the Government for the purpose of raising a public loan, and having one of the following forms, namely:- (i) stock transferable by registration in the books of the Bank; or (ii) a promissory note payable to order; or (iii) a bearer bond payable to bearer, or (iv) a form prescribed in this behalf; (b) any other security created and issued by the Government in such form and for such of the purposes of this Act as may be prescribed."
4. Prior to the omission, sub- section (2) read as under:" (2) In a case where the assessee is entitled also to the deduction under section 80K in relation to the whole or any part of the income by way of dividends referred to in clause (iv) of sub- section (1), only so much of such income by way of dividends as may remain after the deduction under section 80K shall be taken into account for the purpose of allowing the deduction under sub- section (1)."
5. Inserted by the Taxation Laws (Amendment) Act, 1984, w. r. e. f. 1- 4- 1976.