Section 80C deduction can be claimed despite late Return Filing: Do not fall for rumours

CA. Devendra Kumar Somani

Article deal with recent Rumors in Social Media that  If Income Tax Return not filed within due date, the entire Chapter VI-A deductions will not be allowed which includes some of the Popular deduction i.e. Section 80C, Section 80D, etc.  Some have even called it as hidden Bomb of Union Budget 2018. By this article I would like to clarify that Finance Budget 2018 has not made any changes in relation to claim of such deductions and whatever circulating in social media is a mere rumor and we should not fall for such rumors.

Such Rumors ignited from the Proposed amendment to Section 80AC of the Income Tax Act, 1961 so lets analyse the proposed amendment in Section 80AC and see if it impacts deduction U/S. 80C , 80D etc.

Budget 2018: Analysis of proposed amendment in Section 80AC of the Act

In the finance budget 2018 one important amendment has been took place in section 80 AC of the Act.

Existing Provision:

Provision contained in the Section 80AC of the Act provides that No deduction would be admissible under section 80-IA or 80-IAB or 80-IB or 80-IC or 80-ID or 80-IE, unless the return of income by assessee is furnished on or before the due date specified under section 139(1) of the Act.

Proposed amendment in Budget 2018

It is proposed to extend the scope of the section 80AC to provide that the benefit of deduction under the entire class of deductions under the heading “C- Deduction in respect of certain incomes” In chapter VIA shall not be allowed unless the return of income is filed by the due date.

And this amendment will take effect, from 1^st April, 2018 and will accordingly apply in relation to the assessment year 2018-19 and subsequent assessment years.

Why the need arises to write this article on this particular Section

It has been misunderstood by many professionals and I received so many messages on whatsapp groups regarding No Deduction will be allowed under entire Chapter VI A… .including Section 80C, 80D etc….

My Analysis:

Firstly we have to look Chapter VI of the Income Tax Act and it is divided into five parts- PART A, PART B, PART C, PART CA and PART D.

Part A: General

It consists of Section 80A, 80AA,80AB,80AC and 80B

Part B- Deductions in respect of Certain Payments

It Consists of Section 80 C to 80 80GC

Part C- Deductions in respect of Certain Incomes

It Consists of Section 80H to 80 80RRB

Part CA- Deductions in respect of other incomes

It Consists of Section 80TTA

Part D- Other Deductions

It Consists of Section 80 U to 80VV

So this proposed amendments is relates to extend the coverage from section 80-IA or 80-IAB or 80-IB or 80-IC or 80-ID or 80-IE to entire Part C –Deduction in respect of Certain Incomes ( Section 80H to 80RRB). But this amendment does not cover the PART B (Section 80 C to 80 GC) or PART CA (Section 80TTA) or  PART D (Section 80U to 80VV) as suggested in Whatsapp messages received in various group.

So there is no change in relation to claim of deduction under Section 80C, 80D, 80G or other deductions mentioned PART B, PART CA or Part D of Chapter VIA of the Income Tax Act and you can very well claim such deduction, even if you file Your Income Tax Returns after the due dates as prescribed U/s. 139(1)

Foe the ready reference of Readers List of Deductions falling under Part A, Part B, Part C, Part CA and Part D of Chapter VIA of Income Tax Act, 1961 is given below:-

Chapter: VI-A OF INCOME TAX ACT, 1961

DEDUCTIONS TO BE MADE IN COMPUTING TOTAL INCOME

Part A . – General

Section 80A	Deductions to be made in computing total income
Section 80AA	Computation of deduction under section 80M
Section 80AB	Deductions to be made with reference to the income included in the gross total income
Section 80AC	Deduction not to be allowed unless return furnished
Section 80B	Definitions
Section 80C	Deduction in respect of life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc.

Part B. – Deductions in respect of certain payments

Section 80CC	Deduction in respect of investment in certain new shares
Section 80CCA	Deduction in respect of deposits under National Savings Scheme or payment to a deferred annuity plan
Section 80CCB	Deduction in respect of investment made under Equity Linked Savings Scheme
Section 80CCC	Deduction in respect of contribution to certain pension funds
Section 80CCD	Deduction in respect of contribution to pension scheme of Central Government
Section 80CCE	Limit on deductions under sections 80C, 80CCC and 80CCD
Section 80CCF	Deduction in respect of subscription to long-term infrastructure bonds.
Section 80CCG	Deduction in respect of investment made under an equity savings scheme.
Section 80D	Deduction in respect of medical insurance premia
Section 80DD	Deduction in respect of maintenance including medical treatment of a dependant who is a person with disability
Section 80DDA	****
Section 80DDB	Deduction in respect of medical treatment, etc.
Section 80E	Deduction in respect of interest on loan taken for higher education
Section 80EE	Deduction in respect of interest on loan taken for residential house property.
Section 80F	Deduction in respect of educational expenses in certain cases
Section 80FF	Deduction in respect of expenses on higher education in certain cases
Section 80G	Deduction in respect of donations to certain funds, charitable institutions, etc.
Section 80GG	Deductions in respect of rents paid
Section 80GGA	Deduction in respect of certain donations for scientific research or rural development
Section 80GGB	Deduction in respect of contributions given by companies to political parties or an electoral trust
Section 80GGC	Deduction in respect of contributions given by any person to political parties

Part C. – Deductions in respect of certain incomes

Section 80H	Deduction in case of new industrial undertakings employing displaced persons, etc.
Section 80HH	Deduction in respect of profits and gains from newly established industrial undertakings or hotel business in backward areas
Section 80HHA	Deduction in respect of profits and gains from newly established small-scale industrial undertakings in certain areas
Section 80HHB	Deduction in respect of profits and gains from projects outside India
Section 80HHBA	Deduction in respect of profits and gains from housing projects in certain cases
Section 80HHC	Deduction in respect of profits retained for export business
Section 80HHD	Deduction in respect of earnings in convertible foreign exchange
Section 80HHE	Deduction in respect of profits from export of computer software, etc.
Section 80HHF	Deduction in respect of profits and gains from export or transfer of film software, etc.
Section 80I	Deduction in respect of profits and gains from industrial undertakings after a certain date, etc.
Section 80IA	Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc.
Section 80IAB	Deductions in respect of profits and gains by an undertaking or enterprise engaged in development of Special Economic Zone
Section 80IAC	Special provision in respect of specified business.
Section 80IB	Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings
Section 80IBA	Deductions in respect of profits and gains from housing projects.
Section 80IC	Special provisions in respect of certain undertakings or enterprises in certain special category States
Section 80ID	Deduction in respect of profits and gains from business of hotels and convention centres in specified area
Section 80IE	Special provisions in respect of certain undertakings in North-Eastern States
Section 80J	Omitted
Section 80JJ	Omitted
Section 80JJA	Deduction in respect of profits and gains from business of collecting and processing of bio-degradable waste
Section 80JJAA	Deduction in respect of employment of new employees
Section 80K	Omitted
Section 80L	Omitted
Section 80LA	Deductions in respect of certain incomes of Offshore Banking Units and International Financial Services Centre
Section 80M	Omitted
Section 80MM	Omitted
Section 80N	Omitted
Section 80O	Deduction in respect of royalties, etc., from certain foreign enterprises
Section 80P	Deduction in respect of income of co-operative societies
Section 80Q	Deduction in respect of profits and gains from the business of publication of books
Section 80QQ	Omitted
Section 80QQA	Deduction in respect of professional income of authors of text books in Indian languages
Section 80QQB	Deduction in respect of royalty income, etc., of authors of certain books other than text-books
Section 80R	Deduction in respect of remuneration from certain foreign sources in the case of professors, teachers, etc.
Section 80RR	Deduction in respect of professional income from foreign sources in certain cases
Section 80RRA	Deduction in respect of remuneration received for services rendered outside India
Section 80RRB	Deduction in respect of royalty on patents
Section 80S	Omitted
Section 80T	Omitted
Section 80TT	Omitted

Part CA – Deductions in respect of other incomes

Section 80TTA

Deduction in respect of interest on deposits in savings account.

Part D. – Other deductions

Section 80U	Deduction in case of a person with disability
Section 80V	Omitted
Section 80VV	Omitted

In case of any further query relating to above you may reach the author of this article CA. Devendra Kumar Somani on somani74@rediffmail.com or Whatsapp No. 9610556057