Section 80C

Section 80C — the law in short

What the courts have decided on section 80C, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Sumit Maloo v ITO, Kishangarh ITATHelps taxpayerNo later treatment found
  The Assessing Officer has disallowed my whole Chapter VI-A block — 80C, 80D, 80G — and my HRA, saying I filed no documentary evidence. I did file it. What do I do?
  The Jaipur Tribunal restored almost all of it, holding that where the assessee has actually placed the evidence on record the Assessing Officer and the CIT(A) cannot disallow "arbitrarily" without discussing those documents. On s.80D in particular the Tribunal allowed Rs 50,000 of medical expenditure incurred on a dependent father who was a senior citizen suffering from Parkinson's, on the strength of a doctor's prescription, the father's Aadhaar showing his age, and bank entries evidencing the spend — with no insurance policy at all.
• Manmohan Singh v ITO ITATHelps taxpayerNo later treatment found
  I filed my return under the new regime by default, then filed a revised return within time switching to the old regime and claiming my exemptions and Chapter VI-A deductions. The CPC has processed it under the new regime saying the regime cannot be changed in a revised return. Can it?
  On this order, yes, for a salaried assessee with no business or professional income. The Tribunal held that a revised return filed in time under s.139(5) supersedes the original, that the proviso to s.115BAC(6) restricting the number of times the option may be exercised does not apply where there is no business or professional income, and that the filing of Form 10-IEA is procedural — the delay in filing it was condoned and the fact of filing it satisfied the requirement. The Assessing Officer was directed to process the revised return under the old regime with the exemptions and deductions claimed.
• Hirabhai Karshanbhai Solanki v ITO, Rajkot ITATHelps taxpayerNo later treatment found
  In a s.147 reassessment the Assessing Officer has thrown out my s.80U disability deduction along with 80C and 80TTA because I produced nothing during the assessment. Can I still prove it in appeal?
  Yes, on this order. The Rajkot Tribunal deleted the whole Chapter VI-A disallowance where the assessee produced LIC premium receipts and notified mutual fund receipts for s.80C, and for s.80U produced a disability certificate issued by the competent medical authority — the assessee also appearing personally before the Tribunal — holding that "such evidence cannot be ignored".
• Abhishek Rajeshbhai Karia v ITO, Ahmedabad ITATCuts both waysNo later treatment found
  My s.148 reassessment started over a political donation but the Assessing Officer has disallowed my 80D and 80DDB for my parents' medical expenses as well. Are those safe?
  On this order the s.80D claim of Rs 75,000 for health insurance premium and medical expenditure incurred for the assessee's parents was allowed outright, the Tribunal holding the disallowance unjustified because the expenditure was incurred for his parents and is deductible under s.80D. The s.80DDB claim of Rs 87,000 for a father diagnosed with cancer was NOT allowed: it went back to the Assessing Officer because eleven documents called for had never been produced either before him or before the CIT(A).
• Dr. Rangasamy Sudha v ITO, Erode ITATHelps taxpayerNo later treatment found
  I meant to stay in the new regime but a wrong Form 10-IE put me back in the old one, and CPC has taxed me under the old regime with no Chapter VI-A deductions because I claimed none in the return. Can I claim them now?
  Yes. The Chennai Tribunal held that a fresh claim of deduction made for the first time before the first appellate authority has to be entertained, and directed the Assessing Officer to recompute the income allowing Rs 2,00,000 of Chapter VI-A deductions — Rs 1,50,000 under s.80C and Rs 50,000 under s.80TTB — that had never been claimed in the return. If CPC has processed the return on the old regime, the assessee is entitled to the old regime's deductions.
• Statutory position — s.115D: no expenditure or allowance against investment income, no Chapter VI-A deduction, and the disapplication of the SECOND proviso to s.48 only CBDT Circulars & InstructionsCuts both ways
  My NRI client has interest income from debentures of an Indian public company acquired in foreign exchange, taxed under section 115E. The assessing officer has disallowed his collection charges, his section 80C deduction and his indexation. Is all of that correct, and what exactly is he allowed to lose?
  Broadly yes, but the third disallowance needs care. Section 115D(1) denies any deduction for expenditure or allowance under any provision of the Act in computing investment income; s.115D(2)(a) denies Chapter VI-A deductions altogether where the gross total income consists ONLY of investment income or long-term capital gains or both, and in that case also disapplies the second proviso to s.48, which is the indexation proviso. The section does NOT disapply the FIRST proviso to s.48, and it has not referred to that proviso since 1 April 1993.
• Statutory position — s.115-I: the non-resident Indian's annual election OUT of Chapter XII-A, made in the return itself CBDT Circulars & InstructionsCuts both ways
  Chapter XII-A gives my NRI client a flat twenty per cent with no deductions, but on his numbers the ordinary slab rates with Chapter VI-A relief come out cheaper. Can he simply not use the chapter, and does he have to commit for good?
  He can, and the election is for one assessment year at a time. Section 115-I lets a non-resident Indian elect not to be governed by Chapter XII-A for any assessment year by furnishing his return for that year under section 139 and DECLARING THEREIN that the chapter shall not apply to him for that year; if he does so, his total income for that year is computed and taxed in accordance with the other provisions of the Act.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.