Amendment of section 80CCG
11. In section 80CCG of the Income-tax Act, with effect from the 1st day of April, 2014,—
(a) in sub-section (1),—
(i) after the words “acquired listed equity shares”, the words “or listed units of an equity oriented fund” shall be inserted;
(ii) after the words “in such equity shares”, the words “or units” shall be inserted;
(b) for sub-section (2), the following sub-section shall be substituted, namely:—
“(2) The deduction under sub-section (1) shall be allowed in accordance with, and subject to, the provisions of this section for three consecutive assessment years, beginning with the assessment year relevant to the previous year in which the listed equity shares or listed units of equity oriented fund were first acquired.”;
(c) in sub-section (3),—
(A) in clause (i), for the words “ten lakh rupees”, the words “twelve lakh rupees” shall be substituted;
(B) in clause (iii), after the words “listed equity shares”, the words “or listed units of equity oriented fund” shall be inserted;
(d) after sub-section (4), the following Explanation shall be inserted, namely:—
Explanation.—For the purposes of this section, “equity oriented fund” shall have the meaning assigned to it in the Explanation to clause (38) of section 10.’.
Notes on Clauses:
Clause 11 of the Bill seeks to amend section 80CCG of the Income-tax Act relating to deduction in respect of investment made under an equity savings scheme.
The existing provisions of sub-section (1) of the aforesaid section, inter alia, provide that a resident individual who has acquired listed equity shares, in accordance with the scheme notified by the Central Government, shall be allowed a deduction of fifty per cent. of the amount invested in such equity shares to the extent that the said deduction does not exceed twenty-five thousand rupees. Sub-section (2) provides that the deduction is a onetime deduction and is available only in one assessment year in respect of the amount so invested. Sub-section (3), inter alia, provides that the gross total income of the assessee claiming such deduction shall not exceed ten lakh rupees.
It is proposed to amend sub-section (1) of the said section so as to provide that investment in listed units of an equity oriented fund shall also be eligible for deduction in accordance with the provisions of section 80CCG.
It is further proposed to substitute sub-section (2) so as to provide that the deduction under sub-section (1), shall be allowed in accordance with and subject to the provisions of the said section, for three consecutive assessment years, beginning with the assessment year relevant to the previous year in which the listed equity shares or listed units of equity oriented fund were first acquired.
It is also proposed to amend sub-section (3) of the said section so as to enhance the limit of gross total income to twelve lakh rupees from the existing limit of ten lakh rupees.
It is also proposed to insert an Explanation in the said section so as to provide that “equity oriented fund” shall have the meaning assigned to it in Explanation to clause (38) of section 10.
These amendments will take effect from 1st April, 2014 and will, accordingly, apply in relation to the assessment year 2014-15 and subsequent assessment years.
