Deduction in respect of interest income on bonds
74. (1) A person shall be allowed a deduction of the amount specified in sub-section (2), if the amount is included in the 'gross total income from ordinary sources'.
(2) The amount referred to in sub-section (1) shall be the income by way of interest on bonds -
(a) issued by a local authority or a State Pooled Finance Entity; and
(b) notified by the Central Government.
(3) The income referred to in sub-section (2) shall be the gross interest on the bonds as reduced by the expenses incurred for earning the interest.
(4) The expenses referred to in sub-section (3) shall be determined in accordance with the method prescribed under clause (a) of sub-section (1) of section 17.
