Income Tax Act, 1961
Section 80L- DEDUCTIONS IN RESPECT OF INTEREST ON CERTAIN SECURITIES, DIVIDENDS, ETC.
(1) Where the gross total income of an assessee, being – (a) An individual, or
(b) A Hindu undivided family, includes any income by way of – (i) Interest on any security of the Central Government or a State Government;
(ia) 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) 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 in the Official Gazette, specify in this behalf;
(iia) Interest on deposits under such National Deposit Scheme 1134 as may be framed by the Central Government and notified by it in this behalf in the Official Gazette;
(iii) Interest of deposits under any other scheme framed by the Central Government and notified by it in this behalf in the Official Gazette;
(iiia) Interest on deposits under the Post Office (Monthly Income Account) Rules, 1987;
(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);
(via) 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 1141 by the Central Government for the purposes of this clause;
(vii) Interest on deposits with a financial corporation which is engaged in providing long-term finance for industrial development in India :
Provided that the corporation is for the time being approved by the Central Government for the purposes of clause (viii) of sub-section (1) of section 36;
(viia) 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) Interest on deposits with a co-operative society, not being a co-operative society referred to in clause (vi), made by a member of the society;
(ix) Dividends from any co-operative society;
(x) Interest on deposits with 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 : 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) In a case where the amount of such income does not exceed in the aggregate twelve thousand rupees, the whole of such amount, and
(2) In any other case twelve thousand rupees.
Provided that where any income referred in clause (i) clause (v) or clause (va) remains unallowed after the deduction under the foregoing provision 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.
Explanation : For the purposes of this sub-section, the expression “security” means a Government security as defined in clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944).
(3) 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.
COMMISSIONER OF INCOME-TAX v. SMT. MANDAKINI M. JOG