Important General conditions for claiming deductions under chapter VIA of The Income Tax Act, 1961

Chapter VIA of the Income Tax Act, 1961 contain the sections under which assessee can get deductions from his income to compute total income for income tax liability purpose. Though each sections has stated or provided its separate conditions for claiming deductions, there are some provisions which has to apply to all sections or group sections of Chapter VIA. Here I have tried to summarise it for general information  purpose.

1] the aggregate amount of the deductions under this Chapter shall not , in any case, exceed the gross total income of the assessee.  [ Sec 80A [2] ]

So there is general maximum limit specified in this subsection. So in simple word, maximum deductions amount  is limited to your Gross Total Income.

2] In case of deductions of following sections,

Sec 80 G, Sec 80 GGA, Sec 80 GGC, Sec 80 HH, Sec 80 HHC, Sec 80 HHB, Sec 80 HHC, Sec 80 HHD, Sec 80 I, Sec 80 IA, Sec 80 IB, Sec 80 IC, Sec 80 ID, Sec 80 IE, Sec j  Sec 80 JJ.

In computing the total income of as Association of persons or Body of Individual, any deductions is admissible under abovementioned subsections, then no deductions under same section shall be made in computing the total income of a member of the Associations of Persons or Body of Individuals in relation to the share of such member in the income of the Associations of persons or Body of Individuals. [ Ssec 80 A [3] ]

It states that Deductions under of above sections,if available to AOP or BOI, then member of such AOP or BOI shall not claim same deductions against his share in income of AOP or BOI while computing his total income. It means double deductions will not be allowed.

3] Assessee can get deductions of profit and gains under any one section of the following sections:

Sec 10 A, Sec 10AA, Sec 10 B Sec 10 BA or any provisions of Chapter under heading  C” – Deductions in respect of certain incomes “.  [ Sec 80 A [4] ]

So though notwithstanding anything to the contrary contained in above sections, the Deductions of profit and gains, if allowed under any above section for any assessment year., deductions in respect of , and to the extent of such profit and gains shall not be allowed under any other provisions of the Income Tax Act 1960 for such assessment year and shall not exceed the profit and gains of such undertaking or unit or enterprise  etc.

4] In case of deductions under sections 10 A or Section 10 AA , or Section 10 B or Section 10 BA or under any provisions of Chapter VIA under Heading  “C- Deductions in respect of certain incomes “, asseessee has to claim such deductions in the return of the income. If he fails to make claim in his return of income for above deductions, then no deduction shall be allowed to him thereunder. [ Sec 80 A [5] ].

So it is most important for the assesses who is eligible for claiming deductions under these sections, should without fail, claim these deductions in the return of income otherwise , he will not get benefit of these deductions. So return of income should be filled and prepared carefully.

5] Deductions under any sections included in this Chapter under the heading “ C- Deductions in respect of certain incomes “ in respect of any income of the nature specified in that section, which is included in the gross total income of the assessee , notwithstanding anything contained in that section, for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of this Act [ before making any deduction under that chapter ] shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income.[ Sec 80 AB ]

This section lay two parameters regarding Deductions under any sections included in this Chapter under the heading “ C- Deductions in respect of certain incomes “ . they are as below:

1] First,  income which can be claimed as deductions under abovementioned sections, shall be computed in accordance with the provisions of the Act. So the amount of income can be decide or arrived applying the provisions of the Act and not other method is allowable.

2] Second, The income which is included in the Gross Total Income of the assessee is only eligible for deductions under these sections or Part C of the Chapter VIA.

It means ,Assessee”s  Income which is included in the Gross Total Income of the assessee . Income of the other assessee’s is not eligible for deductions.

6] Deductions not to be allowed unless return furnished. [Sec 80 AC ]

Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after –

1] the 1 st day of April 2018 , any deduction is admissible under any provision of this chapter under the heading “C- Deductions in respect of certain income “

No such deduction shall be allowed to him unless he furnishes a return a return of his income for such assessment year on or before the due date specified under sub section [1] of section 139.] wef 01/04/2018 ]

This is very important provisions as for as deductions in respect of certain income which are mentioned in the Heading C of Chapter VIA of the Income Tax Act, 1961.The important condition is assessee has to furnishes  his return of income for such assessment  year on or before the due date specified u/s 139[1] of the Income Tax Act, 1961.

There are following sections or deductions available in Heading C “ of the Chapter VI A of the Income Tax Act, 1961 : [ which are applicable to AY 2019/20 onwards. ]

Sr No Section No Deductions particulars
1 80 IAC Special Provision in respect of specified business
2 80IBA Deductions  in respect of profits and gains from housing projects.
3 80JJA Deductions in respect of profits and gains from business of collecting and processing of bio degradable waste.
4 80JJAA Deduction in respect of employment of new employees.
5 80LA Deductions in respect of certain incomes of offshore Banking Units and International Financial Services Centre
6 80P Deduction in respect of income of co-operative societies.
7 80PA Deduction in respect of certain income of Producer Companies.
8 80Q Deduction in  respect of profits and gains from the business of publication of books. `
9 80QQA Deduction in respect of professional income of authors of text books in Indian languages.
10 80QQB Deduction in respect of royalty income, etc., of authors of certain books other than text-books
11 80RRB Deduction in respect of royalty on patents.

So after going through all these general but important conditions laid down in Part A of Chapter VIA of the Income Tax Act, 1961 [ Sec 80 A to 80 B ], It is very necessary to keep in mind these conditions mentioned in these sections by which one may not loose these very important deductions .

Disclaimer: Above discussion is made for general information purpose. I tried to state correct legal position . Please go through and let me know , if there is any error or omissions. Thanks.

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