10 April 2012
There is more bad news for taxpayers disappointed by the budget. Not only has the finance minister kept the tax-saving limit under Section 80C unchanged, but the deduction under Section 80CCF for infrastructure bonds has been removed. This will reduce the total tax saving from the current Rs 1.2 lakh to Rs 1 lakh and push up the payable tax for individuals.
10 April 2012
Investments made in infrastructure will no longer be allowed as deduction from the Total income u/s 80CCF i.e. over and the above the deduction u/s 80C, the additional deduction of Rs. 20,000 is discontinued from next fiscal.
Though there was no direct reference to this by the Hon’ble finance minister in the budget speech. However, the discontinuance of the section lies in the section itself as well budget speech for previous speech, extracts of which you can find below:-
Budget speech 2010 – “To promote savings as well as to ensure their utilisation for the thrust area of infrastructure, I propose to allow a deduction of an additional amount of Rs.20,000 for investment in long-term infrastructure bonds as notified by the Central Government. This would be over and above the existing limit of Rs.1 lakh on tax savings. I am sure that these reliefs will put more money in the hands of individual taxpayers for both consumption as well as saving.”
Budget speech 2011 – “In order to promote savings and raise funds for infrastructure, an additional deduction of 20,000 for investment in long-term infrastructure bonds was notified by the Central Government in 2010-11. I propose to extend this window for one more year.”
Section 80 CCF reads as follows :- “ In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, the whole of the amount, to the extent such amount does not exceed twenty thousand rupees, paid or deposited, during the previous year relevant to the assessment year beginning on the 1st day of April, 2011 18a[or to the assessment year beginning on the 1st day of April, 2012], as subscription to long-term infrastructure bonds as may, for the purposes of this section, be notified18b by the Central Government.]”
The section has not been amended this year to provide for deduction with respect to previous year commencing on 1st day April 2012 i.e. AY 2013-14.
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