X

Circular No. 511-Income Tax dated 10-5-1988

Circular : No. 511-Income Tax The Finance Act, 1987 introduced a new section 80CCA to pro­vide for deduction in respect of investments made under the National Savings Scheme, 1987. Corresponding amendment was made in the Wealth-tax Act to provide for exemption from wealth-tax in respect of deposits made under this Scheme.

1373. Whether exemption of the deposits made under the National Savings Scheme, 1987, from wealth-tax, as per clause (xxvb) of sub-section (1) is not subject to the limit of Rs. 5 lakhs speci­fied in sub-section (1A)

1. The Finance Act, 1987 introduced a new section 80CCA to pro­vide for deduction in respect of investments made under the National Savings Scheme, 1987. Corresponding amendment was made in the Wealth-tax Act to provide for exemption from wealth-tax in respect of deposits made under this Scheme.

2. References have been received from some quarters enquiring whether the investments made under the Scheme are exempt from wealth-tax without limit or whether the exemption is limited up to Rs. 5 lakhs together with other specified assets provided in section 5(1A).

3. It is hereby clarified that the exemption of the deposits made under the National Savings Scheme, 1987, from wealth-tax, con­tained in clause ( xxvb) of sub-section (1) of section 5 of the Wealth-tax Act is not subject to the limit of Rs. 5 lakhs speci­fied in sub-section (1A) of section 5 of that Act. The deposits under the Scheme are exempt from wealth-tax without any limits. Accordingly, the last sentence of paragraph 31.1 of the Board’s Circular No. 495 dated 22-9-1987, containing the Explanatory Notes on the provisions of the Finance Act, 1987, relating to direct taxes stands modified.

Circular : No. 511 [F. No. 134/8/88-TPL], dated 10-5-1988.

Categories: Income Tax
X

Headline

Privacy Settings