Deductions to Be Made in Computing Total Income

Statutory text

122.		(1) In computing the total income of an assessee, the deductions specified in

						this Chapter shall be allowed from his gross total income, as per and subject

to the provisions of this Chapter.

(2) The aggregate amount of the deductions under this Chapter shall not, in any

case, exceed the gross total income of the assessee.

(3) If the deduction under section 133 or 135 or 137 or 138 or 141 or 142 or 143 is

admissible in computing the total income of an association of persons or a body of



individuals, no deduction under the same section shall be made in relation to the

share of income of a member of such association of persons or body of individuals

in computing the total income of such member.

(4) Irrespective of anything to the contrary contained in any of the provisions of

Part C of this Chapter, where, in the case of an assessee, any amount of profits and

gains of an undertaking or unit or enterprise or eligible business is claimed and

allowed as a deduction under those provisions for any tax year,—

      (a) deduction in respect of, and to the extent of, such profits and gains shall

          not be allowed under any other provision of this Act for such tax year;

          and

      (b) shall in no case exceed the profits and gains of such undertaking or unit

          or enterprise or eligible business, as the case may be.

(5) Deduction under the provisions of Part C of this Chapter shall not be allowed

to an assessee, who fails to—

      (a) furnish a return of income on or before the due date specified under

          section 263(1); or

      (b) make a claim of deduction in a return furnished under section 263(1).

(6) For the purposes of any deduction under this Chapter, irrespective of anything

to the contrary contained in Part C of this Chapter, if any goods or services held

for the purposes of—

      (a) the undertaking, unit, enterprise or eligible business carried on by the

          assessee are transferred to any other business carried on by the assessee;

          or

      (b) any other business carried on by the assessee are transferred to the

          undertaking or unit or enterprise or eligible business of the assessee,

and the consideration, if any, for such transfer as recorded in the accounts of the

undertaking or unit or enterprise or eligible business does not correspond to the

market value of such goods or services as on the date of transfer, then the profits

and gains of such undertaking or unit or enterprise or eligible business carried on

by the assessee shall be computed as if the transfer, in clause (a) or (b), had been

made at the market value of such goods or services as on that date.

(7) For the purposes of sub-section (6), “market value”,—

      (a) in relation to any goods or services sold or supplied, means the price that

          such goods or services would fetch if these were sold by the undertaking

          or unit or enterprise or eligible business in the open market, subject to

          statutory or regulatory restrictions, if any;

      (b) in relation to any goods or services acquired, means the price that such

          goods or services would cost if these were acquired by the undertaking

          or unit or enterprise or eligible business from the open market, subject

          to statutory or regulatory restrictions, if any; and

      (c) in relation to any goods or services sold, supplied or acquired, means the

          arm’s length price of such goods or services as defined in section 173(a),

          if it is a specified domestic transaction referred to in section 164.



(8) Where a deduction under Part C of this Chapter, is claimed and allowed in

respect of profits of a specified business as referred to in section 46(11)(d) for any

tax year, no deduction shall be allowed for such specified business under section

46 for the same or any other tax year.

(9) Where any deduction is required to be made or allowed under Part C of this

Chapter, in respect of any income of the nature specified in that section and included

in the gross total income of the assessee, then, irrespective of anything contained

in that section, for the purpose of computing the deduction under that section,

the amount of income of that nature as computed under the provisions of this Act

(before making any deduction under this Chapter) shall alone be deemed to be the

amount of income of that nature which is derived or received by the assessee and

which is included in his gross total income.

(10) For the purposes of this Chapter, the expression “gross total income” means the

total income computed as per the provisions of this Act, before making deduction

under this Chapter.

                  B.—Deductions in respect of certain payments

Statutory text

123.		An individual or a Hindu undivided family, shall be allowed a deduction

				of the whole of the amount paid or deposited in the tax year, being the aggregate of the sums enumerated in Schedule XV, as does not exceed ₹ 150000, while

computing the total income for that year, subject to the conditions specified in that

Schedule.

Statutory text

124.		(1) Where in the case of an assessee, being an individual employed by any

					employer, if the employer makes any contribution in his account under a

pension scheme notified by the Central Government, the assessee shall be allowed

a deduction in the computation of his total income, of the whole of the amount

contributed by such employer as does not exceed—

       (a) 14%, where such contribution is made by the employer being the Central

           Government or the State Government; and

       (b) 10%, where such contribution is made by an employer other than an

           employer referred to in clause (a),

of his salary in the tax year.

(2) Where the total income of the assessee is chargeable to tax under section 202(1),

the provisions of sub-section (1) shall have effect as if for “10%” referred to in clause

(b) of that sub-section, “14%” had been substituted.

(3) An assessee referred to in sub-section (1), or any other assessee, being an individual, shall be allowed a deduction not exceeding ₹ 50000, in computation of his

total income of the whole of the amount paid or deposited in the tax year by such

individual in his account under a pension scheme notified or as may be notified by

the Central Government.

(4) The deduction under sub-section (3) shall also be allowed where any payment

or deposit is made to the account of a minor under the said pension scheme, by



the assessee, being the parent or guardian of such minor, subject to the condition

that the aggregate amount of deduction under sub-section (3) and this sub-section

shall not exceed ₹ 50000.

(5) No deduction under sub-sections (3) and (4) shall be allowed in respect of the

amount on which a deduction has been claimed and allowed under section 123.

(6) Any amount standing to the credit of the assessee or a minor, in his account or

the account of a minor, as the case may be, referred to in sub-sections (1), (3) and

(4) and paragraph 1(y) of Schedule XV, in respect of which a deduction has been

allowed together with the amount accrued thereon, received by the assessee or his

nominee, in whole or in part, in any tax year,—

       (a) on account of closure or his opting out of the pension scheme referred

           to in sub-sections (1) and (3); or

       (b) as pension received from the annuity plan purchased or taken on such

           closure or opting out,

the whole of the amount referred to in clause (a) or (b) shall be deemed to be the

income of the individual or his nominee, in the tax year in which such amount is

received, and shall accordingly be charged to tax as income of that tax year.

(7) The amount received by the nominee, on the death of the assessee, under the

circumstances referred to in sub-section (6)(a), shall not be deemed to be the

income of the nominee.

(8) The amount received by a person, being the parent or guardian or nominee of a

minor on account of closure of the pension scheme, due to the death of the minor,

referred to in sub-section (4), shall not be deemed to be the income of such person.

(9) For the purposes of this section, the assessee shall not be deemed to have received

any amount in the tax year, if such amount is used for purchasing an annuity plan

in the same tax year.

(10) Where any amount paid or deposited by the assessee has been allowed as a

deduction under sub-section (3), no deduction with reference to such amount shall

be allowed under section 123 for that tax year.

(11) Any amount standing to the credit of the assessee, being a subscriber to Unified Pension Scheme, in his account referred to in sub-sections (1) and (3), and

paragraph 1(y) of Schedule XV, in respect of which a deduction has been allowed

together with the amount accrued thereon, received by the assessee or his nominee,

in whole or in part, in any tax year on account of his superannuation or voluntary

retirement or retirement under Fundamental Rules 56(j) (which is not treated as

penalty under the Central Civil Services (Classification, Control and Appeal) Rules,

1965), the whole of the amount shall be deemed to be the income of the assessee or

his nominee, as the case may be, in the tax year in which such amount is received,

and shall accordingly be charged to tax as income of that tax year.

(12) For the purposes of sub-section (11), the assessee shall be deemed not to have

received any amount in the tax year if such amount is transferred to pool corpus

from individual corpus on account of his superannuation or voluntary retirement

or retirement under Fundamental Rules 56(j) (which is not treated as penalty under

the Central Civil Services (Classification, Control and Appeal) Rules, 1965), as may

be applicable.



(13) For the purposes of this section,—

       (a) “pool corpus” and “individual corpus” shall have the same meaning as

           in Notification F. No. FX-1/3/2024-PR of the Department of Financial

           Services, dated the 24th January, 2025.

       (b) “salary” includes dearness allowance, if the terms of employment so

           provide, but excludes all other allowances and perquisites.

Statutory text

125.		(1) An assessee, being an individual who has enrolled in the Agnipath Scheme

					 and subscribes to the Agniveer Corpus Fund on or after the 1st November,

2022, shall be allowed a deduction in the computation of his total income, of the

whole of the amount paid or deposited in his account in the said Fund during the

tax year.

(2) Where the Central Government makes any contribution to the account of an

assessee in the Fund referred to in sub-section (1), the assessee shall be allowed a

deduction in the computation of his total income of the whole of the amount so

contributed.

(3) For the purposes of this section,—

       (a) “Agnipath Scheme” means the scheme for enrolment in the Indian Armed

           Forces introduced vide letter No. 1(23)2022/D(Pay/Services), dated the

           29th December, 2022, of the Government of India in the Ministry of

           Defence;

       (b) “Agniveer Corpus Fund” means a fund in which consolidated contributions of all the Agniveers and matching contributions of the Central

           Government along with interest on both these contributions are held.

Statutory text

126.		(1) An assessee, being an individual or a Hindu undivided family, shall be

					allowed a deduction of a sum as specified in sub-sections (2) to (8), payment

of which is made by any mode as specified in sub-section (9), out of his income

chargeable to tax in the tax year.

(2) In the case of an assessee, being an individual, the sum referred to in sub-section

(1), shall be the aggregate of the whole of the amount paid—

       (a) to effect or keep in force an insurance on the health (herein referred to

           as health insurance) of the assessee or his family, or any contributions

           made to the Central Government Health Scheme or such other scheme,

           as may be notified by the Central Government in this behalf, or any payment made for preventive health check-up of the assessee or his family,

           up to ₹ 25000 in aggregate;

       (b) to effect or to keep in force the health insurance, or any payment made

           for preventive health check-up, for the parent or parents of the assessee,

           up to ₹ 25000 in aggregate;

       (c) on account of medical expenditure incurred on the health of the assessee

           or any member of his family, up to ₹ 50000 in aggregate; and

       (d) on account of medical expenditure incurred on the health of any parent

           of the assessee, up to ₹ 50000 in aggregate.



(3) The deduction in respect of amounts referred to in sub-section (2)(a) or (2)(b),

which are paid on account of preventive health check-up, shall be allowed up to

₹ 5000 in aggregate.

(4) The amount of sum referred to in sub-section (2) shall not exceed ₹ 50000 in

aggregate of the sum specified under sub-section (2)(a) and (c) or aggregate of the

sum specified under sub-section (2)(b) and (d).

(5) In the case of an assessee, being a Hindu undivided family, the sum referred to

in sub-section (1), shall be the aggregate of the whole of the amount paid—

       (a) to effect or keep in force an insurance on the health of any member of

           such Hindu undivided family, up to ₹ 25000 in the aggregate; and

       (b) on account of medical expenditure incurred on the health of any member

           of such Hindu undivided family, up to ₹ 50000 in the aggregate.

(6) The amount of sum under sub-section (5) shall not exceed ₹ 50000 in the aggregate of the sum specified under sub-section (5)(a) and (b).

(7) For the purposes of this section, where the amount is paid on account of medical

expenditure incurred on the health of a senior citizen under sub-section (2)(c) or

(d) or (5)(b), deduction shall be allowed, if no amount has been paid to effect or to

keep in force the health insurance of such person.

(8) Where the sum specified in sub-section (2)(a) or (b) or (5)(a) is paid to effect or

keep in force the health insurance of any person specified therein, and—

        (a) such person is a senior citizen, the amount of sum as provided in such

            clauses, shall be substituted with ₹ 50000 for ₹ 25000; and

        (b) such sum is paid in lump sum in the tax year for more than a year, a

            deduction shall be allowed for each of the relevant tax year equal to the

            appropriate fraction of such amount.

(9) For the purposes of deduction under sub-section (1), the payment shall be made

by any mode,—

        (a) including cash, in respect of any sum paid on account of preventive

            health check-up; or

        (b) other than cash in all other cases not falling under clause (a).

(10) For the purposes of this section,—

        (a) “appropriate fraction” means the fraction where the numerator is one,

            and the denominator is the total number of relevant tax years;

        (b) “family” means the spouse and dependant children of the assessee;

        (c) “relevant tax year” means the tax year beginning with the tax year in

            which such lump sum amount is paid and the subsequent tax year or

            years during which the health insurance remains in force.

(11) The health insurance referred to in this section shall be as per the scheme

made in this behalf by—

        (a) the General Insurance Corporation of India formed under section 9 of

            the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972)

            and approved by the Central Government in this behalf; or

        (b) any other insurer and approved by the Insurance Regulatory and

            Development Authority established under section 3(1) of the Insurance

            Regulatory and Development Authority Act, 1999 (41 of 1999).

Statutory text

127.		(1) An assessee being an individual or a Hindu undivided family, who is a

					resident in India, shall be allowed a deduction up to ₹ 75000 from his gross

total income of a tax year, subject to the provisions of this section, if during that

year he has—

        (a) incurred expenditure for the medical treatment (including nursing),

            training and rehabilitation of a dependant, being a person with disability;

            or

       (b) paid or deposited any amount under a scheme framed by the Life

           Insurance Corporation or any other insurer or the Administrator, or the

           specified company, for the maintenance of a dependant, being a person

           with disability, subject to the conditions specified in sub-section (2) and

           approved by the Board in this behalf.

(2) The deduction under sub-section (1)(b) shall be allowed only if the following

conditions are fulfilled:—

       (a) the scheme referred to in sub-section (1)(b) provides for payment of an

           annuity or lump sum amount for the benefit of a dependant, being a

           person with disability—

             (i) on the death of the individual or the member of the Hindu undivided

                 family, in whose name the scheme was subscribed; or

             (ii) on attaining the age of sixty years or more by such individual or

                  the member of the Hindu undivided family, and the payment or

                  deposit to such scheme has been discontinued;

       (b) the assessee nominates the dependant, being a person with disability or

           any other person or a trust to receive the payments on behalf of and for

           the benefit of such dependant.

(3) If the dependant as referred to in sub-section (1) is a person with severe disability,

the amount of deduction as referred to in sub-section (1) shall be substituted with

“₹ 125000” for “₹ 75000”.

(4) In the event of death of the dependant, being a person with disability, before the

individual or the member of the Hindu undivided family mentioned in sub-section

(2), the amount paid or deposited under sub-section (1)(b) shall be deemed to be the

income of the assessee of the tax year in which it is received and shall accordingly

be chargeable to tax.

(5) The provisions of sub-section (4) shall not apply to the amount received by the

dependant, being a person with disability, before his death, as an annuity or lump

sum by application of the condition referred to in sub-section (2)(a)(ii).

(6) The assessee claiming deduction under this section, shall furnish a copy of the

medical certificate issued by the medical authority in such form and manner as

may be prescribed, along with the return of income under section 263 for the tax

year in which the deduction is claimed.



(7) If the certificate referred to in sub-section (6), specifies that the condition of

disability requires reassessment of its extent after a period stipulated in it, the

deduction under this section shall not be allowed for any tax year succeeding the tax

year in which the said certificate expires, unless a new certificate is obtained from

the medical authority in such form and manner as may be prescribed, and a copy

thereof is submitted along with the return of income under section 263.

(8) The dependant mentioned in this section shall not include a person who has

claimed deduction under section 154 in computing his total income for the tax year.

(9) For the purposes of this section,—

       (a) “Administrator” means the Administrator as referred to in section 2(a)

           of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002

           (58 of 2002);

       (b) “dependant” means—

             (i) in the case of an individual, the spouse, children, parents, brothers

                 and sisters of the individual or any of them;

            (ii) in the case of a Hindu undivided family, a member of the Hindu

                 undivided family,

		 dependant wholly or mainly on such individual or Hindu undivided

   family for his support and maintenance;

       (c) “disability” shall have the same meaning as assigned to it in section

           2(i) of the Persons with Disabilities (Equal Opportunities, Protection

           of Rights and Full Participation) Act, 1995 (1 of 1996) and includes

           “autism”, “cerebral palsy” and “multiple disability” respectively referred

           to in section 2(a), (c) and (h) of the National Trust for Welfare of Persons

           with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities

           Act, 1999 (44 of 1999);

       (d) “Life Insurance Corporation” means the Life Insurance Corporation of

           India established under the Life Insurance Corporation Act, 1956 (31 of

           1956);

       (e) “medical authority” means the medical authority as referred to in section

           2(p) of the Persons with Disabilities (Equal Opportunities, Protection of

           Rights and Full Participation) Act, 1995 (1 of 1996) or such other medical

           authority as may, by notification, be specified by the Central Government

           for certifying “autism”, “cerebral palsy”, “multiple disabilities”, “person

           with disability” and “severe disability” respectively referred to in section

           2(a), (c), (h), (j) and (o) of the National Trust for Welfare of Persons with

           Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act,

           1999 (44 of 1999);

       (f) “person with disability” means a person as referred to in section 2(t)

           of the Persons with Disabilities (Equal Opportunities, Protection of

           Rights and Full Participation) Act, 1995 (1 of 1996) or section 2(j) of the

           National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental

           Retardation and Multiple Disabilities Act, 1999 (44 of 1999);



       (g) “person with severe disability” means—

             (i) a person with 80% or more of one or more disabilities, as referred

                 to in section 56(4) of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995

                 (1 of 1996); or

            (ii) a person with severe disability referred to in section 2(o) of the

                 National Trust for Welfare of Persons with Autism, Cerebral

                 Palsy, Mental Retardation and Multiple Disabilities Act, 1999

                 (44 of 1999);

      (h) “specified company” means a company as referred to section 2(h) of the

          Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58

          of 2002).

Statutory text

128.		(1) An assessee who is resident in India, shall be allowed a deduction of the

						amount actually paid during the tax year or a sum of ₹ 40000, whichever is

less, from income chargeable to tax of that tax year, for the medical treatment of

such disease or ailment as may be prescribed—

      (a) for himself or a dependant, in case the assessee is an individual; or

      (b) for any member of a Hindu undivided family, in case the assessee is a

          Hindu undivided family.

(2) A deduction shall be allowed under this section only if the assessee obtains the

prescription for the medical treatment from a neurologist, oncologist, urologist,

haematologist, immunologist, or any other specialist, as may be prescribed.

(3) The deduction under this section shall be reduced by any amount received under an insurance from an insurer, or reimbursed by an employer, for the medical

treatment of the person as referred to in sub-section (1)(a) or (b).

(4) If the amount actually paid is in respect of the assessee or his dependant or

any member of a Hindu undivided family of the assessee and who is senior citizen,

the amount of deduction as referred to in sub-section (1) shall be substituted with

“₹ 100000” for “₹ 40000”.

(5) For the purposes of this section,—

      (a) “dependant” shall have the meaning as assigned to it in section 127(9);

      (b) “insurer” shall have the meaning assigned to it in section 2(9) of the

          Insurance Act, 1938 (4 of 1938).

Statutory text

129.		(1) An assessee, being an individual, shall be allowed a deduction of amount

					paid as interest during a tax year, subject to the provisions of this section,

on a loan taken by him from any financial institution or any approved charitable

institution, if the—

      (a) loan taken is for the purpose of pursuing higher education of himself or

          his relative; and

      (b) payment is made out of his income chargeable to tax.



(2) The deduction referred to in sub-section (1) shall be allowed in computing the

total income in respect of the initial tax year and seven tax years immediately succeeding the initial tax year, or until the interest referred to in sub-section (1) is fully

paid by the assessee, whichever is earlier.

(3) For the purposes of this section,—

       (a) “approved charitable institution” means a registered non-profit organisation where it was approved earlier under the provisions of section

           10(23C) of the Income-tax Act, 1961 (43 of 1961), or an institution

           referred to in section 80G(2)(a) of the said Act;

       (b) “financial institution” means 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 any other financial

           institution which the Central Government may, by notification, specify;

       (c) “higher education” means any course of study pursued after passing the

           Senior Secondary Examination or its equivalent from a school, board, or

           University recognised by the Central Government or State Government,

           local authority, or by any authority authorised by the Central Government

           or State Government or local authority to do so;

       (d) “initial tax year” means the tax year in which the assessee starts paying

           the interest on the loan;

       (e) “relative”, in relation to an individual, means the spouse and children

           of that individual, or the student for whom the individual is the legal

           guardian.

Statutory text

130.		(1) An assessee, being an individual, shall be allowed a deduction of

					interest payable on loan taken by him from any financial institution for the

purpose of acquisition of a residential house property as per the provisions of this

section.

(2) The deduction under sub-section (1) shall not exceed ₹ 50000 and shall be allowed

in computing the total income of the individual for the tax year beginning on the

1st April, 2016 and subsequent tax years.

(3) The deduction under sub-section (1) shall be subject to the following conditions:—

       (a) the loan has been sanctioned by the financial institution during the period

           beginning on the 1st April, 2016 and ending on the 31st March, 2017;

       (b) the amount of loan sanctioned for acquisition of the residential house

           property does not exceed thirty-five lakh rupees;

       (c) the value of residential house property does not exceed fifty lakh rupees;

           and

       (d) the assessee does not own any residential house property on the date of

           sanction of loan.

(4) Where a deduction under this section is allowed for any interest referred to in

sub-section (1), deduction shall not be allowed in respect of such interest under any

other provision of this Act for the same or any other tax year.



(5) For the purposes of this section,—

       (a) “financial institution” means a banking company to which the Banking

           Regulation Act, 1949 (10 of 1949) applies, or any bank or banking institution referred to in section 51 of that Act or a housing finance company;

       (b) “housing finance company” means a public company formed or 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.

Statutory text

131.		(1) An assessee, being an individual not eligible to claim deduction under

					section 130, shall be allowed a deduction of interest payable on loan taken by

him from any financial institution for the purpose of acquisition of a residential

house property, subject to a maximum limit of ₹ 150000 in a tax year and on fulfilment of conditions specified in sub-section (2), for the tax year beginning on the

1st April, 2019 and subsequent tax years.

(2) The conditions referred in sub-section (1) shall be the following:—

       (a) the loan has been sanctioned by the financial institution during the period

           beginning on the 1st April, 2019 and ending on the 31st March, 2022;

       (b) the stamp duty value of residential house property does not exceed

           forty-five lakh rupees; and

       (c) the assessee does not own any residential house property on the date of

           sanction of loan.

(3) Where a deduction under this section is allowed for any interest referred to in

sub-section (1), deduction shall not be allowed in respect of such interest under any

other provision of this Act for the same or any other tax year.

(4) For the purposes of this section, the expression “financial institution” shall have

the meaning assigned to it in section 130(5)(a).

Statutory text

132.		(1) An assessee, being an individual, shall be allowed a deduction of interest

					payable on loan taken by him from any financial institution for the purpose

of purchase of an electric vehicle, as per the provisions of this section.

(2) The deduction under sub-section (1) shall be subject to the condition that the

loan has been sanctioned by the financial institution during the period beginning

on the 1st April, 2019 and ending on the 31st March, 2023.

(3) The deduction under sub-section (1) shall not exceed ₹ 150000 and shall be

allowed in computing the total income of the individual for the tax year beginning

on the 1st April, 2019 and subsequent tax years.

(4) Where a deduction under this section is allowed for any interest referred to in

sub-section (1), deduction shall not be allowed in respect of such interest under any

other provision of this Act for the same or any other tax year.

(5) For the purposes of this section,—



      (a) “electric vehicle” means a vehicle powered exclusively by an electric motor,

          whose traction energy is supplied exclusively by traction battery installed

          in the vehicle and has such electric regenerative braking system, which

          during braking provides for the conversion of vehicle kinetic energy into

          electrical energy;

      (b) “financial institution” means a banking company to which the Banking

          Regulation Act, 1949 (10 of 1949) applies, or any bank or banking institution referred to in section 51 of that Act and includes a non-banking

          financial company.

Statutory text

133.			(1) In computing the total income of an assessee, there shall be deducted,

						as per and subject to the provisions of this section,—

      (a) the whole of the aggregate of the sum or the sums paid by the assessee,

          in the tax year as donations to—

            (i) the National Defence Fund set up by the Central Government; or

           (ii) the Prime Minister’s National Relief Fund or the Prime Minister’s

                Citizen Assistance and Relief in Emergency Situations Fund (PM

                CARES FUND); or

           (iii) the Prime Minister’s Armenia Earthquake Relief Fund; or

           (iv) the Africa (Public Contributions-India) Fund; or

            (v) the National Children’s Fund; or

           (vi) the National Foundation for Communal Harmony; or

          (vii) a University or any educational institution of national eminence as

                may be approved by the prescribed authority in this behalf; or

          (viii) any fund set up by the State Government of Gujarat exclusively for

                 providing relief to the victims of earthquake in Gujarat; or

           (ix) any Zila Saksharta Samiti constituted in any district under the

                chairmanship of the Collector of that district for improving primary

                education in villages and towns having a population up to one lakh

                according to the last census of which figures are published before

                the first day of the relevant tax year, in such district and for literacy

                and post-literacy activities; or

            (x) the National Blood Transfusion Council or any State Blood Transfusion Council which has its sole object the control, supervision,

                regulation or encouragement in India of the services related to

                operation and requirements of blood banks; or

           (xi) any fund set up by a State Government to provide medical relief to

                the poor; or

          (xii) the Army Central Welfare Fund or the Indian Naval Benevolent

                Fund or the Air Force Central Welfare Fund established by the

                armed forces of the Union for the welfare of the past and present

                members of such forces or their dependants; or



   (xiii) the Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996; or

   (xiv) the National Illness Assistance Fund; or

    (xv) the Chief Minister’s Relief Fund or the Lieutenant Governor’s Relief

         Fund, if the fund meets all the following conditions:—

          (A) it is the only fund of its kind established in the State or the

              Union territory;

          (B) it is under the overall control of the Chief Secretary or the

              Department of Finance of the respective State or the Union

              territory;

          (C) it is administered in a manner specified by the State Government or the Lieutenant Governor; or

   (xvi) the National Sports Development Fund set up by the Central Government; or

  (xvii) the National Cultural Fund set up by the Central Government; or

  (xviii) the Fund for Technology Development and Application set up by

          the Central Government; or

   (xix) the National Trust for Welfare of Persons with Autism, Cerebral

         Palsy, Mental Retardation and Multiple Disabilities constituted

         under section 3(1) of the National Trust for Welfare of Persons with

         Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities

         Act, 1999 (44 of 1999); or

    (xx) the Swachh Bharat Kosh, set up by the Central Government, other

         than the sum spent by the assessee in pursuance of Corporate Social

         Responsibility under section 135(5) of the Companies Act, 2013

         (18 of 2013); or

   (xxi) the Clean Ganga Fund, set up by the Central Government, where

         such assessee is a resident and such sum is other than the sum spent

         by the assessee in pursuance of Corporate Social Responsibility

         under section 135(5) of the Companies Act, 2013 (18 of 2013); or

  (xxii) the National Fund for Control of Drug Abuse constituted under

         section 7A of the Narcotic Drugs and Psychotropic Substances Act,

         1985 (61 of 1985); or

  (xxiii) the Government or to any such local authority, institution or association as may be approved in this behalf by the Central Government,

          to be utilised for the purpose of promoting family planning; or

  (xxiv) the Indian Olympic Association or any other association or institution established in India, as the Central Government may, having regard to the guidelines issued in this behalf, by notification,

         specify for the development of infrastructure for sports and games

         in India or the sponsorship of sports and games in India, by an

         assessee being a company;

(b) an amount equal to 50% of the aggregate of the sums paid as donation

    by an assessee during the tax year to—



             (i) the Prime Minister’s Drought Relief Fund;

            (ii) any fund or any institution to which this section applies, if:—

                  (A) it is established in India for a charitable purpose; and

                  (B) it is a registered non-profit organisation or an institution or

                      fund mentioned in Schedule VII (Table: Sl. No. 1) and approved

                      under section 354;

            (iii) the Government or any local authority, to be utilised for any charitable purpose other than the purpose of promoting family planning;

            (iv) an 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;

             (v) a corporation established by the Central Government or any State

                 Government for promoting the interests of the members of such

                 minority community, as may be notified by the Central Government;

            (vi) any entity, for the renovation or repair of any temple, mosque,

                 gurudwara, church or other place which is notified by the Central

                 Government to be of historic, archaeological or artistic importance

                 or to be a place of public worship of renown throughout any State

                 or States.

(2) Where the aggregate of the sums referred to in sub-section (1)(a)(xxiii) and (xxiv),

and sub-section (1)(b)(ii) to (vi) exceeds 10% of the adjusted gross total income, then

the amount in excess of 10% of the adjusted gross total income shall be ignored for

the purpose of computing the aggregate of the sums in respect of which deduction

is to be allowed under sub-section (1).

(3) Where deduction under this section is claimed and allowed for any tax year in

respect of any sum specified in sub-section (1), the sum in respect of which deduction is so allowed shall not qualify for deduction under any other provision of this

Act for the same or any other tax year.

(4) The deduction under this section shall be allowed only for donation made as a

sum of money.

(5) Any deduction for a donation over ₹ 2000 shall be allowed only if the payment

is made by a mode other than cash.

(6) Any claim of deduction by the assessee in his return of income filed for any tax

year in case of a donation made to an institution or fund referred in sub-section

(1)(b)(ii), shall be allowed—

       (a) only on the basis of the information relating to such donation furnished

           by such institution or fund to the prescribed authority or person authorised by such authority; and

       (b) subject to verification as per the risk management strategy formulated

           by the Board from time to time.



(7) For the purposes of this section,—

      (a) “adjusted gross total income” means gross total income as reduced by any

          portion thereof on which income-tax is not payable under any provision

          of this Act and by any amount in respect of which the assessee is entitled

          to a deduction under any other provision of this Chapter;

      (b) “charitable purpose” does not include any purpose the whole or substantially the whole of which is of a religious nature;

       (c) “National Blood Transfusion Council” means a society registered under

           the Societies Registration Act, 1860 (21 of 1860) and has an officer of the

           rank of an Additional Secretary to the Government of India or higher to

           deal with the AIDS Control Project as its Chairman;

      (d) “State Blood Transfusion Council” means a society registered, in consultation with the National Blood Transfusion Council, under the Societies

          Registration Act, 1860 (21 of 1860) or under any law corresponding to that

          Act in force in any part of India and has a Secretary to the Government

          of that State dealing with the Department of Health, as its Chairman;

       (e) an association or institution having as its object the control, supervision,

           regulation or encouragement in India of such games or sports as may be

           notified by the Central Government, shall be deemed to be an institution

           established in India for a charitable purpose.

Statutory text

134.			(1) In computing the total income of an assessee, subject to other provisions

						of this section, there shall be deducted any expenditure incurred by him

towards payment of rent (by whatever name called) in respect of any furnished or

unfurnished accommodation occupied by him for the purposes of his own residence.

(2) The deduction under sub-section (1) shall be allowable on payment of such rent

exceeding 10% of his total income, subject to a maximum of ₹ 5000 per month, or

25% of total income for tax year, whichever is less.

(3) For the purposes of deduction under sub-section (1), such other conditions

or limitations having regard to the area or place in which such accommodation

is situated and other relevant consideration, as may be prescribed, shall be taken

into account.

(4) No deduction under this section shall be allowed to an assessee in any case,

where—

      (a) any residential accommodation is—

             (i) owned by the assessee or by his spouse or minor child or, where

                 such assessee is a member of a Hindu undivided family, by such

                 family at the place where he ordinarily resides or performs duties

                 of his office or employment or carries on his business or profession;

                 or

            (ii) owned by the assessee at any other place, being accommodation

                 in the occupation of the assessee, the value of which is to be determined under section 21(6) or (7)(a); or



       (b) the assessee has any income falling in Schedule III (Table: Sl. No. 11).

(5) For the purposes of this section, the expressions “10% of his total income” and

“25% of his total income” shall mean 10% or 25%, as the case may be, of the total

income of the assessee before allowing deduction for any expenditure under this

section.

Statutory text

135.		(1) In computing the total income of an assessee, there shall be deducted,

					as per the provisions of this section, any sum paid by the assessee in the tax

year to,—

       (a) a research association which has as its object the undertaking of scientific

           research, or a University, college or other institution approved for the

           purposes of section 45(3)(a)(i) to be used for scientific research;

       (b) a research association which has as its object the undertaking of research

           in social science or statistical research, or a University, college or other

           institution approved for the purposes of section 45(3)(a)(ii) to be used

           for research in social science or statistical research.

(2) Deduction for contributions made as per sub-section (1) shall not be allowed, if—

       (a) the gross total income of the assessee includes income which is chargeable under the head “Profits and gains of business or profession”; or

       (b) the contribution is made in cash exceeding ₹ 2000.

(3) Deduction under sub-section (1)(a) and (b) shall not be denied merely on the

ground that subsequent to the payment of such sum by the assessee, approval to

such association, University, college, other institution referred therein has been

withdrawn.

(4) The claim of the assessee for a deduction in respect of any sum referred to

in sub-section (1) in the return of income for any tax year filed by him, shall be

allowed on the basis of information relating to such sum furnished by the payee

to the prescribed income-tax authority or the person authorised by such authority, subject to verification as per the risk management strategy formulated by the

Board from time to time.

(5) Where a deduction for any tax year has been claimed and allowed in respect of

any payment of the nature referred to in this section, no deduction in respect of

such payment shall be allowed under any other provision of this Act in any tax year.

Statutory text

136.		(1) An assessee, being an Indian company, shall be allowed a deduction for

					the amount contributed by it, other than by way of cash, during a tax year to

a political party registered under section 29A of the Representation of the People

Act, 1951 (43 of 1951) or an electoral trust.

(2) For the purposes of this section, the term “contribute”, with its grammatical

variations and cognate expressions shall have the same meaning as assigned to it

in section 182 of the Companies Act, 2013 (18 of 2013).

Statutory text

137. An assessee, (other than a local authority and an artificial juridical person

			 wholly or partly funded by the Government), shall be allowed a deduction for

the amount contributed by him, other than by way of cash, during a tax year to a

political party registered under section 29A of the Representation of the People Act,

1951 (43 of 1951), or an electoral trust.



                    C.—Deductions in respect of certain incomes

Statutory text

138.		In respect of any tax year, where—

       (a) the gross total income of an assessee includes any profits and gains

           derived by an undertaking or an enterprise from any business referred

           to in section 80-IA of the Income-tax Act, 1961 (43 of 1961); and

       (b) such assessee is eligible to claim a deduction from the profits and gains

           derived from such business for such tax year under the provisions of the

           said section, as if the said Act had not been repealed,

there shall be allowed, in computing the total income of the assessee, a deduction

from the profits and gains derived from such business, subject to the conditions that—

       (i) the amount of deduction is calculated as per the provisions of section

           80-IA of the Income-tax Act, 1961 (43 of 1961); and

      (ii) the deduction under this Act shall be allowed only for such tax years,

           as would have been allowed under section 80-IA of the Income-tax Act,

           1961 (43 of 1961), as if the said Act had not been repealed.

Statutory text

139.		In respect of any tax year, where—

       (a) the gross total income of an assessee, being a Developer, includes any

           profits and gains derived by an undertaking or an enterprise from any

           business of developing a Special Economic Zone, notified on or after the

           1st April, 2005 under the Special Economic Zones Act, 2005 (28 of 2005)

           referred to in section 80-IAB of the Income-tax Act, 1961 (43 of 1961);

           and

       (b) such assessee is eligible to claim a deduction from the profits and gains

           derived from such business for such tax year under the provisions of the

           said section, as if the said Act had not been repealed,

there shall be allowed, in computing the total income of the assessee, a deduction

from the profits and gains derived from such business, subject to the conditions

that—

       (i) the amount of deduction is calculated as per the provisions of section

           80-IAB of the Income-tax Act, 1961 (43 of 1961); and

      (ii) the deduction under this Act shall be allowed only for such tax years, as

           would have been allowed under section 80-IAB of the Income-tax Act,

           1961 (43 of 1961), as if the said Act had not been repealed.

Statutory text

140.		(1) Where the gross total income of an assessee, being an eligible start-up,

					includes any profits and gains derived from eligible business, there shall, as

per 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 100% of the profits and

gains derived from such business for three consecutive tax years.

(2) The deduction specified in sub-section (1) may, at the option of the assessee, be

claimed by him for any three consecutive tax years out of ten years beginning from

the year in which the eligible start-up is incorporated.

(3) This section applies to a start-up which fulfils the following conditions:—

       (a) it is not formed by splitting up, or the reconstruction, of a business

           already in existence;

       (b) it is not formed by the transfer to a new business of machinery or plant

           previously used for any purpose.

(4) Where the business of any undertaking carried on in India is discontinued in

any tax year by reason of extensive damage to, or destruction of, any building,

machinery, plant or furniture owned by the assessee and used for the purposes of

such business as a direct result of—

       (a) flood, typhoon, hurricane, cyclone, earthquake or other convulsion of

           nature; or

       (b) riot or civil disturbance; or

       (c) accidental fire or explosion; or

       (d) action by an enemy or action taken in combating an enemy (whether

           with or without a declaration of war),

and thereafter, at any time before the expiry of three years from the end of such tax

year, the business of such undertaking is re-established, reconstructed or revived by

the assessee, the condition referred to in sub-section (3)(a) shall not apply to such

undertaking which is so re-established, reconstructed or revived.

(5) For the purposes of sub-section (3)(b), any machinery or plant which was

used outside India by any person other than the assessee shall not be regarded as

machinery or plant previously used for any purpose, if all the following conditions

are fulfilled:—

       (a) such machinery or plant was not, at any time previous to the date of the

           installation by the assessee, used in India;

       (b) such machinery or plant is imported into India; and

       (c) no deduction on account of depreciation in respect of such machinery

           or plant has been allowed or is allowable under the provisions of this

           Act in computing the total income of any person for any period prior to

           the date of the installation of the machinery or plant by the assessee.

(6) Where in the case of a start-up, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of

the machinery or plant or part so transferred does not exceed 20% of the total value



of the machinery or plant used in the business, then, for the purposes of sub-section

(3)(b), the condition specified therein shall be deemed to have been complied with.

(7) Irrespective of anything contained in any other provision of this Act, the profits

and gains of an eligible business to which the provisions of sub-section (1) apply

shall, for the purposes of determining the quantum of deduction under that sub-section for the tax year immediately succeeding the initial tax year or any subsequent

tax year, be computed as if such eligible business was the only source of income of

the assessee during the initial tax year and to every subsequent tax year up to and

including the tax year for which the determination is to be made.

(8) The deduction under sub-section (1) from profits and gains derived from an

eligible business shall not be admissible unless the accounts of the eligible business for the tax year for which the deduction is claimed have been audited by an

accountant, before the specified date referred to in section 63 and the assessee

furnishes by that date the report of such audit in the prescribed form duly signed

and verified by such accountant.

(9) In a case where, any goods or services held—

       (i) for the purposes of the eligible business are transferred to any other

           business carried on by the assessee; or

      (ii) for the purposes of any other business carried on by the assessee are

           transferred to the eligible business,

and, in either case, the consideration, if any, for such transfer as recorded in

the accounts of the eligible business does not correspond to the market value of

such goods or services as on the date of the transfer, then, for the purposes of the

deduction under this section, the profits and gains of such eligible business shall

be computed as if the transfer, in either case, had been made at the market value

of such goods or services as on that date.

(10) For the purposes of sub-section (9), where, in the opinion of the Assessing Officer, the computation of the profits and gains of the eligible business in the manner

hereinbefore specified presents exceptional difficulties, the Assessing Officer may

compute such profits and gains on such reasonable basis as he may deem fit.

(11) For the purposes of sub-section (9), “market value”, in relation to any goods

or services, means—

       (i) the price that such goods or services would ordinarily fetch in the open

           market; or

      (ii) the arm’s length price as defined in section 173(a), where the transfer of

           such goods or services is a specified domestic transaction referred to in

           section 164.

(12) Where any amount of profits and gains of an undertaking or of an enterprise

in the case of an assessee is claimed and allowed under this section for any tax year,

deduction to the extent of such profits and gains shall not be allowed under any

other provisions of Part C of this Chapter and shall in no case exceed the profits

and gains of such eligible business of undertaking or enterprise, as the case may be.

(13) Where it appears to the Assessing Officer that owing to the close connection

between the assessee carrying on the eligible business to which this section applies



and any other person, or for any other reason, the course of business between them

is so arranged that the business transacted between them produces to the assessee

more than the ordinary profits which might be expected to arise in such eligible

business, the Assessing Officer shall, in computing the profits and gains of such

eligible business for the purposes of the deduction under this section, take the

amount of profits as may be reasonably deemed to have been derived therefrom.

(14) Where the arrangement as mentioned in sub-section (13) involves a specified

domestic transaction referred to in section 164, the amount of profits from such

transaction shall be determined having regard to arm’s length price as defined in

section 173(a).

(15) The Central Government may, after making such inquiry as it may think fit,

direct, by notification, that the exemption conferred by this section shall not apply

to any class of industrial undertaking or enterprise with effect from such date as it

may specify in the notification.

(16) For the purposes of this section,—

       (a) “eligible business” means a business carried out by an eligible start-up

           engaged in innovation, development or improvement of products or

           processes or services or a scalable business model with a high potential

           of employment generation or wealth creation;

       (b) “eligible start-up” means a company or a limited liability partnership

           engaged in eligible business which fulfils the following conditions:—

              (i) it is incorporated on or after the 1st April, 2016 but before the 1st

                  April, 2030;

             (ii) the total turnover of its business does not exceed 12[three] hundred

                  crore rupees in the tax year relevant to the tax year for which deduction under sub-section (1) is claimed; and

            (iii) it holds a certificate of eligible business from the Inter-Ministerial

                  Board of Certification as may be notified by the Central Government;

       (c) “limited liability partnership” means a partnership referred to in

           section 2(1)(n) of the Limited Liability Partnership Act, 2008 (6 of 2009).

Deduction in respect of profits and gains from certain industrial under-takings.

Statutory text

141.		In respect of any tax year, where—

       (a) the gross total income of an assessee, includes any profits and gains

           derived from any business referred to in section 80-IB of the Incometax Act, 1961 (43 of 1961); and

       (b) such assessee is eligible to claim a deduction from the profits and gains

           derived from such business for such tax year under the provisions of the

           said section, as if the said Act had not been repealed,

there shall be allowed, in computing the total income of the assessee, a deduction

from the profits and gains derived from such business, subject to the conditions that—



 12. Substituted for “one” by the Finance Act, 2026, w.e.f. 1-4-2026.



       (i) the amount of deduction is calculated as per the provisions of section

           80-IB of the Income-tax Act, 1961 (43 of 1961); and

       (ii) the deduction under this Act shall be allowed only for such tax years,

            as would have been allowed under section 80-IB of the Income-tax Act,

            1961 (43 of 1961), as if the said Act had not been repealed.

Statutory text

142.		In respect of any tax year, where—

       (a) the gross total income of an assessee, includes any profits and gains

           derived from the business of developing and building housing projects or

           rental housing projects referred to in section 80-IBA of the Income-tax

           Act, 1961 (43 of 1961); and

       (b) such assessee is eligible to claim a deduction from the profits and gains

           derived from such business for such tax year under the provisions of the

           said section, as if the said Act had not been repealed,

there shall be allowed, in computing the total income of the assessee, a deduction

from the profits and gains derived from such business, subject to the conditions that—

       (i) the amount of deduction is calculated as per the provisions of section

           80-IBA of the Income-tax Act, 1961 (43 of 1961); and

       (ii) the deduction under this Act shall be allowed only for such tax years, as

            would have been allowed under section 80-IBA of the Income-tax Act,

            1961 (43 of 1961), as if the said Act had not been repealed.

Statutory text

143.		(1) Where the gross total income of an assessee includes any profits and gains

					derived by an undertaking, to which this section applies, from any business referred to in sub-section (2), there shall 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 ten consecutive tax years commencing with

the initial tax year.

(2) This section applies to any undertaking which during the period beginning on

the 1st April, 2007 and ending before the 1st April, 2017, has begun or begins, in

any of the North-Eastern States,—

       (a) to manufacture or produce any eligible article or thing; or

       (b) to undertake substantial expansion to manufacture or produce any eligible article or thing; or

       (c) to carry on any eligible business.

(3) This section applies to any undertaking which fulfils all the following conditions:—

       (a) it is not formed by splitting up, or the reconstruction, of a business

           already in existence (other than an undertaking which is formed as a

           result of the re-establishment, reconstruction or revival by the assessee of

           the business of any such undertaking as is referred to in section 140(4),

           in the circumstances and within the period specified therein);

       (b) it is not formed by the transfer to a new business of machinery or plant

           previously used for any purpose.



(4) For the purposes of sub-section (3)(b), the provisions of section 140(5) and (6)

shall apply.

(5) Irrespective of anything contained in any other provision of this Act, in computing the total income of the assessee, no deduction shall be allowed under any

other section contained in this Chapter in relation to the profits and gains of the

undertaking.

(6) Irrespective of anything contained in this Act, no deduction shall be allowed to

any undertaking under this section, where the total period of deduction inclusive

of the period of deduction under this section or under second proviso to section

80-IB(4) of the Income-tax Act, 1961 (43 of 1961) exceeds ten tax years.

(7) The provisions contained in section 140(7) to (15) shall, so far as may be, apply

to the eligible undertaking under this section.

(8) For the purposes of this section,—

       (a) “eligible article or thing” means the article or thing other than the

           following:—

             (i) goods falling under Chapter 24 of the First Schedule to the Central

                 Excise Tariff Act, 1985 (5 of 1986), which pertains to tobacco and

                 manufactured tobacco substitutes;

            (ii) pan masala as covered under Chapter 21 of the First Schedule to

                 the Central Excise Tariff Act, 1985 (5 of 1986);

           (iii) plastic carry bags of less than twenty microns as specified by the

                 Ministry of Environment and Forests vide notification numbers

                 S.O. 705(E), dated the 2nd September, 1999 and S.O. 698(E), dated

                 the 17th June, 2003; and

            (iv) goods falling under Chapter 27 of the First Schedule to the Central

                 Excise Tariff Act, 1985 (5 of 1986), produced by petroleum oil or

                 gas refineries;

       (b) “eligible business” means the business of—

             (i) hotel (not below two star category);

            (ii) adventure and leisure sports including ropeways;

           (iii) providing medical and health services in the nature of nursing home

                 with a minimum capacity of twenty-five beds;

            (iv) running an old-age home;

            (v) operating vocational training institute for hotel management,

                catering and food craft, entrepreneurship development, nursing

                and para-medical, civil aviation related training, fashion designing

                and industrial training;

            (vi) running information technology related training centre;

           (vii) manufacturing of information technology hardware; and

          (viii) bio-technology;



       (c) “initial tax year” means the tax year in which the undertaking begins

           to manufacture or produce articles or things, or completes substantial

           expansion;

       (d) “North-Eastern States” means the States of Arunachal Pradesh, Assam,

           Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura;

       (e) “substantial expansion” means increase in the investment in the plant

           and machinery by at least 25% of the book value of plant and machinery

           (before taking depreciation in any year), as on the first day of the tax

           year in which the substantial expansion is undertaken.

Statutory text

144.		In respect of any tax year, where—

       (a) in computing the total income of an assessee, being an entrepreneur

           as referred to in section 2(j) of the Special Economic Zones Act, 2005

           (28 of 2005), who begins to manufacture or produce articles or things

           or provide any services, as referred to in section 10AA of the Income-tax

           Act, 1961 (43 of 1961); and

       (b) such assessee is eligible to claim a deduction from the profits and gains

           derived from the export, of such articles or things or from services for

           such tax year under the provisions of the said section, if the said Act had

           not been repealed,

there shall be allowed, in computing the total income of the assessee, a deduction

from the profits and gains derived from such business, subject to the conditions that—

       (i) the amount of deduction is calculated as per the provisions of section

           10AA of the Income-tax Act, 1961 (43 of 1961); and

       (ii) the deduction under this Act shall be allowed only for such tax years,

            as would have been allowed under section 10AA of the Income-tax Act,

            1961 (43 of 1961), as if the said Act had not been repealed.

Statutory text

145.		If the gross total income of an assessee includes any profits and gains

						derived from the business of collecting and processing or treating of biodegradable waste for,—

       (a) generating power; or

       (b) producing bio-fertilizers, bio-pesticides or other biological agents; or

       (c) producing bio-gas; or

       (d) making pellets or briquettes for fuel or organic manure,

there shall be allowed a deduction equal to the whole amount of such profits and

gains for five consecutive tax years, beginning with the tax year in which such

business commences.

Statutory text

146.		(1) Subject to the conditions specified in sub-sections (2) and (3), if the gross

							total income of an assessee, to whom section 63 applies, includes any



profits and gains derived from business, a deduction of an amount equal to 30%

of additional employee cost incurred in the course of such business in the tax year

shall be allowed.

(2) The deduction referred to in sub-section (1) shall be allowed for three consecutive tax years, beginning from the tax year in which the employment is provided.

(3) The deduction under sub-section (1) shall not be allowed, if—

       (a) the business is formed by splitting up, or the reconstruction, of an existing

           business; or

       (b) the business is acquired by the assessee through transfer from any other

           person or as a result of any business reorganisation; or

       (c) the assessee does not furnish the report of an accountant, before the

           specified date as referred to in section 63, giving the particulars in the

           report, as may be prescribed.

(4) The condition referred to in sub-section (3)(a) shall not apply in respect of an

undertaking which is formed as a result of the re-establishment, reconstruction or

revival by the assessee of the business of any such undertaking as is referred to in

section 140(4), in the circumstances and within the period specified in said section.

(5) For the purposes of this section,—

       (a) “additional employee cost” means—

             (i) the total emoluments paid or payable to additional employees

                 employed during the tax year; or

            (ii) emoluments paid or payable to employees employed during the tax

                 year, where that year is the first year of a new business,

		 and it shall be nil in the case of an existing business, if—

            (A) there is no increase in the number of employees from the total

                number employed as on the last day of the preceding tax year; or

            (B) emoluments are paid otherwise than by an account payee cheque

                or account payee bank draft or by use of electronic clearing system

                through a bank account or through such other electronic mode, as

                may be prescribed;

       (b) “additional employee” means an employee who has been employed during the tax year and whose employment increases the total number of

           employees employed by the employer as on the last day of the preceding

           tax year, but does not include any employee—

             (i) whose total emoluments exceed ₹ 25000 per month;

            (ii) for whom the Government pays the entire contribution under the

                 Employees’ Pension Scheme notified as per the provisions of the

                 Employees’ Provident Funds and Miscellaneous Provisions Act,

                 1952 (19 of 1952);

           (iii) employed for less than one hundred and fifty days in case of an

                 assessee who is engaged in the business of manufacturing of

                 apparel or footwear or leather products, except where such

                 employee is employed for said number of days in the immediately



                   succeeding tax year, he shall be deemed as an additional employee

                   of the succeeding tax year and the provisions of this section shall

                   apply accordingly;

             (iv) employed for less than two hundred and forty days during the tax

                  year in case of any other assessee, except where such employee is

                  employed for said number of days in the immediately succeeding

                  tax year, he shall be deemed as an additional employee of the

                  succeeding tax year and the provisions of this section shall apply

                  accordingly; and

             (v) who does not participate in a recognised provident fund;

        (c) “emoluments” means any sum paid or payable to an employee in lieu of

            his employment, by whatever name called, but does not include—

              (i) employer contributions paid or payable to any pension or provident

                  fund or any other fund for the benefit of the employee as mandated

                  by any law; and

              (ii) lump sum payments paid or payable to an employee at the time

                   of termination of his service, superannuation, or voluntary retirement, such as gratuity, severance pay, leave encashment, voluntary

                   retrenchment benefits, commutation of pension and the like.

Statutory text

147.		(1) Where the following assessee has any income of the nature referred to

					in sub-section (3), there shall be allowed a deduction equal to 100% of such

income:—

        (a) a scheduled bank, or a bank incorporated under the laws of a country

            outside India, and having an Offshore Banking Unit in a Special Economic

            Zone; or

        (b) a unit of an International Financial Services Centre.

 [(2) Irrespective of anything contained in section 80LA of the Income-tax Act, 1961

13



(43 of 1961), the deduction shall be allowed,—

        (a) for an entity mentioned in sub-section (1)(a),—

               (i) for twenty consecutive tax years beginning from the relevant tax year;

                   and

              (ii) in a case, where the tenth year, out of the period of ten consecutive

                   years of deduction allowed under section 80LA(1) of the said Act has

                   ended on the 31st March, 2025, for further ten consecutive years from



 13. Substituted by the Finance Act, 2026, w.e.f. 1-4-2026. Prior to its substitution, sub-section

     (2) read as under :

		 “(2) The deduction shall be allowed—

         (a) for ten consecutive tax years beginning from the relevant tax year in the case of an

             entity mentioned in sub-section (1)(a);

         (b) for ten consecutive tax years out of fifteen years beginning from the relevant tax

             year, at the option of an assessee, in the case of an entity mentioned in sub-section

             (1)(b).”



                   the tax year beginning on the 1st April, 2026; and

       (b) in the case of an entity mentioned in sub-section (1)(b), for twenty consecutive tax years out of twenty-five years beginning from the relevant tax

           year, at the option of an assessee.]

(3) The income referred to in sub-section (1) shall be the income from—

        (a) an Offshore Banking Unit located in a Special Economic Zone; or

       (b) the business activities referred to in section 6(1) of the Banking Regulation Act, 1949 (10 of 1949), with undertakings in a Special Economic

           Zone or entities that develop, develop and operate, or develop, operate

           and maintain Special Economic Zone; or

        (c) the approved business activities of any Unit of an International Financial

            Services Centre set up in a Special Economic Zone; or

       (d) transfer of an asset being, an aircraft or a ship, leased by a unit referred

           to in clause (c) if such unit commenced its business operations by 31st

           March, 2030.

(4) The deduction under this section shall be allowed only if the assessee submits

along with the return of income—

        (a) a report in the form as may be prescribed, from an accountant certifying

            the correctness of claim of deduction; and

       (b) a copy of the—

               (i) permission obtained under section 23(1)(a) of the Banking Regulation Act, 1949 (10 of 1949); or

              (ii) permission or registration obtained under the International Financial Services Centres Authority Act, 2019 (50 of 2019).

14

  [(5) In respect of any Offshore Banking Unit or any other unit referred in sub-section (1), commencing operations on or after the 1st April, 2026, the deduction under



 14. Sub-sections (5) and (6) substituted for sub-section (5) by the Finance Act, 2026, w.e.f.

     1-4-2026. Prior to its substitution, sub-section (5) read as under :

		 ‘(5) For the purposes of this section,—

         (a) “relevant tax year” shall be,—

                (i) in case of an entity mentioned in sub-section (1)(a), the tax year in which

                    permission under section 23(1)(a) of the Banking Regulation Act, 1949 (10

                    of 1949), or permission or registration under the Securities and Exchange

                    Board of India Act, 1992 (15 of 1992) or any other relevant law was obtained;

                    or

               (ii) in case of an entity mentioned in sub-section (1)(b), the tax year in which

                    permission under section 23(1)(a) of the Banking Regulation Act, 1949 (10

                    of 1949), or permission or registration under the Securities and Exchange

                    Board of India Act, 1992 (15 of 1992), or permission or registration under

                    the International Financial Services Centres Authority Act, 2019 (50 of 2019)

                    was obtained;

         (b) “Unit” shall have the same meaning as assigned to it in section 2(zc) of the Special

             Economic Zones Act, 2005 (28 of 2005) ;

         (c) “aircraft” and “ship” shall have the meanings respectively assigned to them in

             Schedule VI (Note 3).’



sub-section (1) shall be available only if such unit is not formed by splitting up or

reconstruction or reorganisation or transfer of a business already in existence in India.

(6) For the purposes of this section,—

       (a) “relevant tax year” shall be,—

             (i) in case of an entity referred to in sub-section (1)(a), the tax year in

                 which permission under section 23(1)(a) of the Banking Regulation Act, 1949 (10 of 1949), or permission or registration under the

                 Securities and Exchange Board of India Act, 1992 (15 of 1992) or

                 any other relevant law in force was obtained; or

             (ii) in case of an entity referred to in sub-section (1)(b), the tax year in

                  which permission under section 23(1)(a) of the Banking Regulation Act, 1949 (10 of 1949), or permission or registration under the

                  Securities and Exchange Board of India Act, 1992 (15 of 1992), or

                  permission or registration under the International Financial Services

                  Centres Authority Act, 2019 (50 of 2019) was obtained;

       (b) “Unit” shall have the same meaning as assigned to it in section 2(zc) of the

           Special Economic Zones Act, 2005 (28 of 2005);

       (c) “aircraft” and “ship” shall have the meanings respectively assigned to them

           in Schedule VI (Note 3).]

Statutory text

148.		(1) If the gross total income of a domestic company in any tax year includes

					any income by way of dividends from—

       (a) any other domestic company; or

       (b) a foreign company; or

       (c) a business trust,

such domestic company shall be allowed a deduction of an amount equal to so much

of the income by way of dividends received from the person mentioned in clause

(a) or (b) or (c) as does not exceed the amount of dividend distributed by it at least

one month before the due date for filing the return of income under section 263(1).

(2) Where any deduction, in respect of the amount of dividend distributed by the

domestic company, has been allowed under sub-section (1) in any tax year, no

deduction shall be allowed in respect of such amount in any other tax year.

Statutory text

149.		(1) If the gross total income of an assessee, being a co-operative society,

							includes any income referred to in sub-section (2), the sums specified in

the said sub-section shall, in accordance with and subject to the provisions of this

section, be allowed as deduction in computing the total income of such assessee.

(2) The sums referred to in sub-section (1) shall be the following:—

       (a) in the case of a co-operative society engaged in—

             (i) carrying on the business of banking or providing credit facilities

                 to its members; or



              (ii) a cottage industry; or

             (iii) the marketing of agricultural produce grown by its members; or

              (iv) the purchase of agricultural implements, seeds, livestock or other

                   articles intended for agriculture for the purpose of supplying them

                   to its members; or

              (v) the processing, without the aid of power, of the agricultural produce

                  of its members; or

              (vi) the collective disposal of the labour of its members; or

             (vii) fishing or allied activities, that is to say, the catching, curing, processing, preserving, storing or marketing of fish or the purchase of

                   materials and equipment in connection therewith for the purpose

                   of supplying them to its members,

		 the whole of the amount of profits and gains of business attributable to

   any one or more of such activities;

         (b) in the case of a co-operative society, being a primary society engaged in

             supplying milk, oilseeds, 15[cotton seed, cattle feed,] fruits, or vegetables

             raised or grown by its members to—

               (i) a federal co-operative society, being a society, engaged in the business of supplying milk, oilseeds, 15[cotton seed, cattle feed,] fruits

                   or vegetables; or

              (ii) the Government or a local authority; or

             (iii) a Government company, as defined in section 2(45) of the

                   Companies Act, 2013 (18 of 2013), or a corporation established by

                   or under a Central Act or State Act or Provincial Act, engaged in

                   supplying milk, oilseeds, 15[cotton seed, cattle feed,] fruits or vegetables, as the case may be, to the public,

		 the whole of the amount of profits and gains of such business;

         (c) in the case of a co-operative society engaged in activities other than those

             specified in clause (a) or (b), (either independently of, or in addition to,

             all or any of the activities so specified), that amount of profits and gains

             attributable to such activities as does not exceed—

               (i) ₹ 100000, if the society is a consumers’ co-operative society; and

              (ii) ₹ 50000, in any other case;

     [(d) in respect of any income derived by the co-operative society from its invest-

    16



          ments with any other co-operative society by way of—



 15. Inserted by the Finance Act, 2026, w.e.f. 1-4-2026.

 16. Substituted by the Finance Act, 2026, w.e.f. 1-4-2026. Prior to its substitution, clause (d)

     read as under :

        “(d) in respect of any income by way of interest or dividends derived by the co-operative

             society from its investments with any other co-operative society, the whole of such

             income;”



              (i) interest; or

             (ii) dividends,

		 the whole of such income;]

       (e) in respect of any income derived by the co-operative society from the

           letting of godowns or warehouses for storage, processing, or facilitating

           the marketing of commodities, the whole of such income;

       (f) in the case of a co-operative society, not being—

              (i) a housing society; or

             (ii) an urban consumers’ society (being a society for the benefit of the

                  consumers within the limits of a municipal corporation, municipality, municipal committee, notified area committee, town area,

                  or cantonment); or

            (iii) a society carrying on transport business; or

            (iv) a society engaged in performing manufacturing operations with

                 the aid of power,

		 where the gross total income does not exceed ₹ 20000, the amount

   of income by way of interest on securities; any income from house

   property chargeable under section 20.

(3) In the case of a co-operative society as referred to in sub-section (2)(a)(vi) or

(vii), provisions of sub-section (1) shall only apply when the rules and bye-laws of

the society restrict the voting rights to the following classes of its members:—

       (i) the individuals who contribute their labour or carry on fishing or

           allied activities;

       (ii) the co-operative credit societies which provide financial assistance to

            the society;

      (iii) the State Government.

(4) The deduction under sub-section (1) in relation to the sums specified in subsection (2)(a) or (b) or (c) or sub-section (3), shall be allowed with reference to the

income referred to in those sub-sections included in the gross total income after

reducing the deduction under section 138, if the assessee is also entitled to such

deduction.

(5) The provision of this section shall not apply to any co-operative bank which is

not a primary agricultural credit society or a primary co-operative agricultural and

rural development bank.

17

  [(6) For the purposes of this section,––

        (a) “consumers’ co-operative society” means a society for the benefit of the

            consumers;

        (b) “primary agricultural credit society” has the same meaning as assigned to

            it in Part V of the Banking Regulation Act, 1949 (10 of 1949); and



 17. Inserted by the Finance Act, 2026, w.e.f. 1-4-2026.



        (c) “primary co-operative agricultural and rural development bank” means a

             society having an area of operation confined to a taluk, the principal object

             of which is to provide long-term credit for agricultural and rural development activities.]

18

  [

Statutory text

150.		(1) If the gross total income of an assessee being a federal co-operative, in any

						tax year, includes any income by way of dividends received from its investment

with any company, a deduction shall be allowed from such income, to the extent of

the amount which,—

        (a) has arisen from such investment as recorded in its books of account on or

             before the 31st January, 2026; and

        (b) has been distributed by it to its members at least one month before the due

             date for filing the return of income under section 263(1).

(2) The provisions of this section shall not apply to any tax year beginning on or after

the 1st April, 2029.

(3) For the purposes of this section, “federal co-operative” means a “federal co-operative” as defined in section 3(k) of the Multi-State Co-operative Societies Act, 2002 (39

of 2002) and notified as such by the Central Government.]

Statutory text

151.		(1) Where, in the case of an individual, being an author resident in India,

							the gross total income includes any income, derived by him in the exercise

of his profession, on account of any lump sum consideration for the assignment or

grant of any of his interests in the copyright of any book being a work of literary,

artistic or scientific nature, or of royalty or copyright fees (whether receivable in

lump sum or otherwise) in respect of such book, there shall, as per and subject to the

provisions of this section, be allowed, in computing the total income of the assessee,

a deduction from such income, computed in the manner specified in sub-section

(2).

(2) The deduction under this section shall be equal to the whole of such income

referred to in sub-section (1), or an amount of ₹ 300000, whichever is less.

(3) Where the income by way of such royalty or the copyright fee is not a lump sum

consideration in lieu of all rights of the assessee in the book, so much of the income,

before allowing expenses attributable to such income, as is in excess of 15% of the

value of such books sold during the tax year shall be ignored for the purposes of

deduction under this section.



 18. Substituted by the Finance Act, 2026, w.e.f. 1-4-2026. Prior to its substitution, section 150

     read as under :

		‘150. Interpretation for purposes of section 149.—For the purposes of section 149,—

        (a) “consumers’ co-operative society” means a society for the benefit of the consumers;

        (b) “primary agricultural credit society” has the same meaning as assigned to it in Part

             V of the Banking Regulation Act, 1949 (10 of 1949); and

         (c) “primary co-operative agricultural and rural development bank” means a society

             having an area of operation confined to a taluk, the principal object of which is to

             provide long-term credit for agricultural and rural development activities.’



(4) In respect of any income earned from any source outside India, so much of the

income shall be taken into account for the purpose of this section as is brought

into India by, or on behalf of, the assessee in convertible foreign exchange within

six months from the end of the tax year in which such income is earned or within

such further period as the competent authority may allow in this behalf.

(5) Deduction under this section shall not be allowed unless the assessee furnishes a certificate in such form and manner, as may be prescribed, duly verified by

any person responsible for making such payment to the assessee as referred to in

sub-section (1), along with the return of income, setting forth such particulars as

may be prescribed.

(6) Deduction under this section shall not be allowed in respect of any income

earned from any source outside India, unless the assessee furnishes a certificate, in

the prescribed form from the prescribed authority, along with the return of income

in the prescribed manner.

(7) Where a deduction for any tax year has been claimed and allowed in respect of

any income referred to in this section, no deduction in respect of such income shall

be allowed under any other provision of this Act in any tax year.

(8) For the purposes of this section,—

       (a) “author” includes a joint author;

       (b) “books” shall not include brochures, commentaries, diaries, guides, journals, magazines, newspapers, pamphlets, text-books for schools, tracts

           and other publications of similar nature, by whatever name called;

       (c) “competent authority” means the Reserve Bank of India or such other

           authority as is authorised under any law in force for regulating payments

           and dealings in foreign exchange;

       (d) “lump sum”, in regard to royalties or copyright fees, includes an advance

           payment on account of such royalties or copyright fees which is not

           returnable.

Statutory text

152.		(1) An assessee, being an individual, who is—

       (a) resident in India;

       (b) a patentee;

       (c) in receipt of income by way of royalty in respect of a patent registered

           on or after the 1st April, 2003 under the Patents Act, 1970 (39 of 1970);

           and

       (d) having gross total income for the tax year which includes royalty,

shall be allowed a deduction from such income computed in the manner specified

in sub-sections (2) to (7).

(2) The deduction under this section shall be equal to the whole of such income

referred to in sub-section (1) or ₹ 300000, whichever is less.



(3) Where a compulsory licence is granted in respect of any patent under the Patents

Act, 1970 (39 of 1970), the income by way of royalty for the purpose of allowing

deduction under this section shall not exceed the amount of royalty under the terms

and conditions of a licence settled by the Controller under that Act.

(4) In respect of any income earned from any source outside India, so much of the

income, shall be taken into account for the purpose of this section as is brought

into India by, or on behalf of, the assessee in convertible foreign exchange within

six months from the end of the tax year in which such income is earned or within

such further period as the competent authority referred to in section 151(8)(c)may

allow in this behalf.

(5) No deduction under this section shall be allowed unless the assessee furnishes a

certificate in the prescribed form, duly signed by the authority as may be prescribed,

along with the return of income setting forth such particulars as may be prescribed.

(6) No deduction under this section shall be allowed in respect of any income

earned from any source outside India, unless the assessee furnishes a certificate in

such form, from the authority or authorities, as may be prescribed, along with the

return of income.

(7) Where a deduction for any tax year has been claimed and allowed in respect of

any income referred to in this section, no deduction in respect of such income shall

be allowed under any other provision of this Act in any tax year.

(8) For the purposes of this section,—

       (a) “Controller” means the authority as defined in section 2(1)(b) of the

           Patents Act, 1970 (39 of 1970);

       (b) “lump sum” includes a non-returnable advance payment for royalties;

       (c) “patent” means any patent granted, including a patent of addition, under

           the Patents Act, 1970 (39 of 1970);

       (d) “patentee” means the true and first inventor recorded as the patentee

           under the Patents Act, 1970 (39 of 1970), including joint patentees

           recorded as such true and first inventors;

       (e) “patent of addition” shall have the same meaning as assigned to it in

           section 2(1)(q) of the Patents Act, 1970 (39 of 1970);

       (f) “patented article” and “patented process” shall have the same meanings

           as assigned to them in section 2(1)(o) of the Patents Act, 1970 (39 of

           1970);

       (g) “royalty” in respect of a patent, means consideration for—

             (i) the transfer of all or any rights (including the granting of a licence)

                 in respect of a patent; or

            (ii) the imparting of any information concerning the working of, or the

                 use of, a patent; or

           (iii) the use of any patent; or

            (iv) the rendering of any services in connection with the activities

                 referred to in sub-clauses (i) to (iii), but does not include any

                 consideration,—



                  (A) which would be the income of the recipient chargeable under

                      the head “Capital gains”; or

                  (B) for sale of product manufactured with the use of patented

                      process or of the patented article for commercial use;

       (h) “true and first inventor” shall have the same meaning as assigned to it

           in section 2(1)(y) of the Patents Act, 1970 (39 of 1970).



                     D.—Deductions in respect of other incomes

Statutory text

153.		(1) An assessee who is—

       (a) an individual, not being a senior citizen; or

       (b) an individual, being a senior citizen; or

       (c) a Hindu undivided family,

shall be allowed a deduction from the gross total income, subject to conditions

specified in sub-section (2), where it includes income by way of interest on deposits

with—

       (i) 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

       (ii) 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); or

      (iii) a Post Office as defined in section 2(d) of the Post Office Act, 2023

            (43 of 2023).

(2) The deduction under sub-section (1) shall be allowed for a tax year as follows:—

       (a) in case of an assessee mentioned in sub-section (1)(a) or (c), the whole of

           the interest up to a maximum amount of ₹ 10000 on deposits in a savings

           account, excluding time deposits;

       (b) in case of an assessee mentioned in sub-section (1)(b), the whole of the

           interest up to a maximum amount of ₹ 50000 on deposits in any account,

           including time deposits.

(3) Where the income referred to in sub-section (2)(a) is derived from any deposit

in a savings account held by, or on behalf of, a firm, an association of persons or

a body of individuals, no deduction shall be allowed under this section in respect

of such income in computing the total income of any partner of the firm or any

member of such association or any individual of such body of individuals.

(4) Where the income referred to in sub-section (2)(b) is derived from any deposit

held by, or on behalf of, a firm, an association of persons or a body of individuals, no

deduction shall be allowed under this section in respect of such income in computing

the total income of any partner of the firm or any member of such association or

any individual of such body of individuals.

(5) For the purposes of this section, the expression “time deposits” means the

deposits repayable on expiry of fixed periods.



                               E.—Other deductions

Statutory text

154.			(1) An individual, being resident in India, who is certified by a medical

							authority, at any time during the tax year, as a person with disability or

person with severe disability, shall be allowed a deduction of ₹ 75000 or ₹ 125000,

respectively, while computing his total income.

(2) The deduction under sub-section (1) shall be allowed only if all of the following

conditions are fulfilled:—

       (a) the individual furnishes a copy of the certificate issued by the medical

           authority;

       (b) if the certificate specifies that the disability needs reassessment of its

           extent after a period stipulated in it, the deduction shall not be allowed

           for any tax year succeeding the tax year in which the certificate expires,

           unless a new disability certificate is obtained and furnished; and

       (c) the certificate referred to in clauses (a) and (b) of this sub-section is

           furnished in the form and manner, as may be prescribed, along with the

           return of income under section 263 for the tax year in which the deduction is claimed.

(3) For the purposes of this section, “disability”, “medical authority”, “person with

disability” or “person with severe disability” shall have the same meanings as provided in section 127.



                                   CHAPTER IX

                             REBATES AND RELIEFS



                              A.—Rebates and reliefs

61. Certificate of a medical authority in respect of autism, cerebral palsy and multiple disabilities for the

purposes of deduction under section 127 and section 154.– (1) For the purposes of section 127(9)(e) and 154(3),

the medical authority responsible for certifying "autism", "cerebral palsy", "multiple disabilities", "person with

disability" and "severe disability" referred to in clauses (a), (c), (h), (j) and (o) of section 2, respectively of the

National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act,

1999 (44 of 1999), shall be the following:—

          (a) a Neurologist having a degree of Doctor of Medicine (MD) in Neurology (in case of children, a

          Paediatric Neurologist having an equivalent degree); or

          (b) a Civil Surgeon or Chief Medical Officer in a Government hospital.

(2) For the purposes of sections 127(6), 127(7) and 154(2)(c), the assessee shall furnish along with the return of

income, a copy of the certificate issued by the relevant medical authority,–

           (a) if the person has a disability or severe disability such as autism, cerebral palsy, or multiple disability, in

          Form No. 30; or

          (b) in all other cases, the prescribed form mentioned in notifications No. 16-18/97-NI.1, dated the 1st June,

          submitted as per the Guidelines for the evaluation of various disabilities and certification procedures outlined

          in the Persons with Disabilities (Equal Opportunities, Protection of Rights, and Full Participation) Act, 1995

          (1 of 1996).

(3) If the disability is temporary and needs to be reevaluated after a certain period, the certificate shall be valid for the

period starting from the tax year during which the certificate was issued and ending with the tax year during which

the validity of such certificate expires.

62. Issuance of prescription in respect of certain diseases and ailments for the purpose of deduction under

section 128.– (1) For the purposes of claiming deduction under section 128, the prescription for medical treatment in

respect of eligible diseases or ailments mentioned in column B of the following table shall be obtained from the

specialists as mentioned in the corresponding column C thereof:



                                                        Table

Sl.     Eligible diseases or ailments                   Specialists for purpose of issuing prescription

No.

   A                         B                                                       C

1.      Neurological Diseases where the disability       A Neurologist having a Doctorate of Medicine (D.M.) degree

        level has been certified to be of 40% and        in Neurology.

        above—

        (i) Dementia;

        (ii) Dystonia Musculorum Deformans;

        (iii) Motor Neuron Disease;

        (iv) Ataxia;

        (v) Chorea;

        (vi) Hemiballismus;

        (vii) Aphasia; and

        (viii) Parkinsons Disease.



2.      Malignant cancers.                               An Oncologist having a Doctorate of Medicine (D.M.)

                                                         degree in Oncology.

3.      Full Blown Acquired Immuno-Deficiency            Any specialist having a post-graduate degree in General or

        Syndrome (AIDS).                                 Internal Medicine.

4.      Chronic renal failure.                           A Nephrologist having a Doctorate of Medicine (D.M.)

                                                         degree in Nephrology or a Urologist having a Master of

                                                         Chirurgiae (M.Ch.) degree in Urology.

5.      Haematological disorders:                        A specialist having a Doctorate of Medicine (D.M.) degree in

        (i) Haemophilia;                                 Haematology.

        (ii) Thalassaemia.

(2) The prescription for eligible diseases or ailments mentioned in column B of the Table in sub-rule (1) may also be

issued by a specialist holding a degree equivalent to the degree mentioned in column C thereof, if such equivalent

degree is recognised by the Medical Council of India.

(3) In cases, where a patient is receiving treatment at a government hospital for specified diseases or ailments, the

prescription may be issued by a full-time specialist with a post-graduate degree in General or Internal Medicine, or

any equivalent degree recognised by the Medical Council of India.

(4) The prescription referred to in sub-rule (1) shall be issued in the following format:–

Name of the patient

Age of the patient

Description of Disease/ Ailment



Certified by:

         Signature of Specialist:

         Name:

         Qualification:

         Address:

         Registration Number:

         Name and address of the hospital, if the specialist is working in a government hospital.

63. Prescribed authority for approval of a University or any educational institution of national eminence for

purposes of section 133.– (1) For the purpose of section 133(1)(a)(vii), the prescribed authority for granting of

approval shall be the Principal Chief Commissioner of Income-tax (Exemptions).

(2) The prescribed authority shall grant approval with the concurrence of -

          (a)      the Secretary, University Grants Commission for a University or any non-technical institution of

          national eminence; and

          (b)      the Secretary, All India Council of Technical Education for any technical institution of national

          eminence.

(3) For the purposes of sub-rule (2), —

           (a) "All India Council of Technical Education" means the All India Council of Technical Education

          established under section 3 of the All India Council for Technical Education Act, 1987 (52 of 1987); and



         (b) "University Grants Commission" means the University Grants Commission established under section 4

         of the University Grants Commission Act, 1956 (3 of 1956).

64. Procedure for specifying an association or institution for purposes of notification under section

133(1)(a)(xxiv).– (1) In specifying an association or institution for notification under section 133(1)(a)(xxiv), the

Central Government shall satisfy itself that such association or institution —

         (a) has as its object the control, supervision, regulation or encouragement in India of the games or sports

         notified under section 133(7)(e);

         (b) has a proven record of dedication to the development of infrastructure or promotion of sports or games

         for at least a period of three years;

         (c) does not distribute any part of its income in any manner to its members, except as grants to any

         association or institution affiliated to it;

         (d) applies the amount received by way of donation referred to in section 133(1)(a)(xxiv) for purposes of

         development of infrastructure for games or sports in India or for sponsoring of games or sports in India; and

         (e) maintains regular accounts of its receipt and expenditure and files its return of income regularly.

(2) The notification issued by the Central Government under section 133(1)(a)(xxiv) shall be effective for up to three

tax years, including any assessments for tax years prior to the notification date, as specified in the notification.

65. Conditions for claim for deduction under section 134. –For the purposes of claiming deduction under section

134 in respect of rent paid, the assessee shall file declaration in Form No. 31.

66. Furnishing of audit report for claiming deduction under section 46 or 138 or 139 or 140 or 141 or 142 or

143 or 144.– (1) For the purposes of claiming deduction under sections 46 or 138 or 139 or 140 or 141 or 142 or 143

or 144, the accounts of the eligible business for the tax year for which the deduction is claimed shall be audited by an

accountant as defined in section 515(3)(b), before the specified date referred to in section 63 and the assessee shall

furnish by that date the report of such audit duly signed and verified by such accountant.

(2) The report of the audit of the accounts of an assessee, which is required to be furnished under sub-rule (1), shall

be in Form No. 32.

(3) A separate report shall be furnished by each undertaking or enterprise of the assessee claiming deduction under

section 46 or 138 or 139 or 140 or 141 or 142 or 143 or 144 and shall be accompanied by the profit and loss account

and balance sheet of the undertaking or enterprise as if the undertaking or the enterprise were a distinct entity.

(4) The said Form No. 32 shall be accompanied by the relevant documents as given in column D wherever

applicable, as per the relevant sections in column B and the relevant part as mentioned in column C shall be filled, as

specified in the following table, duly certified wherever applicable:



                                                         Table

 Sl.                           Relevant Part of

              Section                                               Relevant documents to be attached

 No                                 Form

 A               B                   C                                                D

                                                     Copy of the agreement entered into with the Central Government,

1.     46                      B1

                                                     State Government, or a local authority.

                                                     Copy of Form No. 10CCB of the Income-tax Rules, 1962 made

2.     138                     B2                    under the Income-tax Act, 1961, as it existed prior to its repeal, of

                                                     developer

3.     139                     B3                    Copy of the notification of the Special Economic Zone (SEZ).

                                                     Copy of certificate issued by the Inter-Ministerial Board of

4.     140                     B4

                                                     Certification.

                                                     Copy of approval certificate and completion certificate of the

5.     141                     B5                    Housing Project, Copy of the notification of the scheme by the

                                                     Board.

                                                     Copy of approval certificate and completion certificate of the

6.     142                     B6

                                                     Housing Project

                                                     Copy of notification issued under section 80-IBA of the Income-

7.     142                     B6                    tax Act, 1961, as it existed prior to its repeal in the case of a

                                                     Rental Housing Project

                                                     Copy of the agreement entered into with the Central Government,

8.     143                     B7

                                                     State Government, or a local authority.

67. Form of particulars to be furnished along with return of income for claiming deduction under section 144.–

The particulars, which are required to be furnished by the assessee along with the return of income regarding the

amount credited to a Special Economic Zone Reinvestment Allowance Reserve Account and utilisation of the said

amount shall be in Form No. 33.

68. Furnishing of report under section 146.– Report of an accountant as defined in section 515(3)(b), which is

required to be furnished by the assessee under section 146(3)(c) along with the return of income shall be in Form No.

34.

69. Report of accountant to be furnished under section 147(4)(a).– The report of the accountant, as defined in

section 515(3)(b), which is required to be furnished by the assessee under section 147(4)(a), shall be in Form No. 35

70. Form of certificate to be furnished under section 151(5). – (1) For the purposes of claim of deduction under

section 151, the assessee shall be required to furnish a certificate in Form No. 36 along with the return of income.

(2) The person responsible for making the payment to the assessee, shall verify the certificate in Form No. 36.

71. Prescribed authority and form of certificate to be furnished under section 152(5).– For the purposes of

section 152(5),–

         (a) the prescribed authority shall be the Controller referred to in section 2(1)(b) of the Patents Act, 1970 (39

         of 1970); and

         (b) the assessee shall be required to furnish a certificate in Form No. 37 from the prescribed authority along

         with the return of income.

72. The prescribed authority and form of certificate to be furnished under sections 151(6) and section 152(6).–

For the purposes of sections 151(6) and 152(6),–

(a)      the prescribed authority shall be the Reserve Bank of India or another authorised authority under current

         laws regulating foreign exchange transactions; and

(b)      the certificate shall be furnished in Form No. 38.