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DEDUCTIONS TO BE MADE IN COMPUTING TOTAL INCOME CHANGES IN FINANCIAL BILL 2016

Budget - By: - Mr.M. GOVINDARAJAN - Dated:- 11-3-2016 - Chapter VI of the Income Tax Act, 1961 ( Act for short) provides for deductions to be made in computing total income. The Finance Bill, 2016 has brought many amendments for this Chapter which may be discussed in this article in detail. Section 80 CCD Section 80 CCD of the Act provides for deduction in respect of contribution to pension scheme of Central Government. Section 80CCD (3) of the Act provides that where any amount standing to the .....

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on such closure or opting out, the whole of the amount referred to in clause (a) or clause (b) shall be deemed to be the income of the assessee or his nominee, as the case may be, in the previous year in which such amount is received, and shall accordingly be charged to tax as income of that previous year. Clause 36 of the Bill inserted the proviso to this section which provides that the amount received by the nominee on the death of the assessee, under the circumstances referred to in clause (a .....

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by him from any financial institution for the purpose of acquisition of a residential property. Section 80EE (2) provides that the deduction shall not exceed ₹ 50,000/- and shall be allowed in computing the total income of the individual for the assessment year beginning on 01.04.2016 and subsequent assessment years. Section 80EE(3) provides that the said deduction shall be subject to the following: the loan has been sanctioned by the Financial institution during the period beginning on 0 .....

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on of this Act for the same or any other assessment year. Section 80GG Section 80GG of the Act provides deductions in respect of rents paid. Section 80 GG provides that In computing the total income of an assessee, not being an assessee having any income falling within clause (13A) of section 10, there shall be deducted any expenditure incurred by him in excess of ten per cent of his total income towards payment of rent (by whatever name called) in respect of any furnished or unfurnished accommo .....

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rds two thousand rupees . This amendment will be effective from 01.04.2017. Section 80-IA Section 80 IA of the Act provides for deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure etc., Clause 39 of the Bill proposes to insert a proviso to Section 80-IA (4)(i) and before the Explanation. The proviso to be inserted provides that nothing contained in this section shall apply to any enterprise which starts the development or operation and .....

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l, 2005 under the Special Economic Zones Act, 2005, 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 of an amount equal to one hundred per cent of the profits and gains derived from such business for ten consecutive assessment years. Clause 40 of the Bill seeks to insert a new proviso to Section 80-IAB (1) from 01.04.2017. The new proviso provides that the provisions of this section shall not app .....

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ction, be allowed, in computing the total income of the assessee, a deduction of an amount equal to 100% of the profits and gains derived from such business for three consecutive assessment years. Sub -clause (2) provides that such deduction at the option of the assessee may be claimed by him for any three consecutive assessment years out of five years beginning from the year in which the eligible start-up is incorporated. The said deduction is subject to the following conditions: It is not form .....

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at this deduction shall not apply to any undertaking which executes the housing project as a works contract awarded by any person, including the Central Government or the State Government. Sub-clause (4) provides that where the housing project is not completed within the period and in respect of which a deduction has been claimed and allowed under this section, the total amount of deduction so claimed and allowed in one or more previous years, shall be deemed to be the income of the assessee cha .....

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eks to amend Section 80-IB of the Act relating to deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings. Sub-section (9) provides deduction at the rate of 100% of the profits of an undertaking located in specified areas subject to fulfillment of certain conditions. It is proposed to amend clauses (ii), (iv) and (v) of the said sub-section so as to provide that such clauses of the said section shall not apply to any enter .....

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subject to the following conditions: The project is approved by the competent authority after 01.06.2016 but on before 31.03.2019 in accordance with such guidelines as may be prescribed; The project is completed within a period of 3 years from the date of approval by the competent authority. Where the approval is obtained more than once the project shall be deemed to have been approved on the date on which the project was first approved by the competent authority. The project shall be deemed to .....

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s of these cities or 2000 square meters within the jurisdiction of any other municipality or cantonment board; The residential units does not exceed 30 square meters where such project is located within the cities of Chennai, Delhi, Kolkata or Mumbai or within the area of 25 kilometers from the municipal limits of these cities or 60 square meters where such project is located within the jurisdiction of any other municipality or cantonment board; Where a residential unit in the housing project is .....

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s of these cities or not less than 80% of such floor area ratio where the project is located in any area other than the areas of Chennai, Delhi, Kolkata or Mumbai; The assessee maintains separate books of account in respect of housing project. This shall not apply to any undertaking which executes the housing project as a works contract awarded by any person including Central Government or State Government. If the housing project is not completed with the specified period the deduction so claime .....

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