584. Admissibility of deduction in respect of income from units of the Unit Trust of India
1. The second proviso to sub-section (1) of section 80L of the Income-tax Act, 1961 was amended by the Finance Act, 1988, to provide that in computing the total income, any income by way of interest on deposits under the notified National Deposit Scheme or dividend received from any Indian company, in the aggregate and to the extent such income has not been allowed as a deduction under sub-section (1) or under the first proviso to sub-section (1), shall be further allowed as a deduction, subject to overall ceiling of Rs. 3,000.
2. References have been received from the public seeking clarification as to whether the income received in respect of units of the Unit Trust of India is dividend received from an Indian company, for the purposes of the second proviso to sub-section (1) of section 80L of the Income-tax Act, 1961, or not.
3. The income received in respect of the units of the Unit Trust of India is dividend received from an Indian company by virtue of the provisions of sub-section (3) of section 32 of the Unit Trust of India Act, 1963. Accordingly, the Board have decided that the deduction under the second proviso to sub-section (1) of section 80L of the Income-tax Act, 1961 in respect of dividend received from an Indian company will also be admissible in respect of income received from units of the Unit Trust of India, referred to in clause (v) of sub-section (1) of section 80L of the Income-tax Act, 1961.
Circular : No. 567, dated 19-7-1990.
