Sec 35AC

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Querist : Anonymous

Querist : Anonymous (Querist)

01 April 2010 how a non company assesse avail deduction under sec 35AC if he is a individual earing salary income and contributed some amount as per sEC 35 AC.

Thanks.
Anil

Aditya Maheshwari

Aditya Maheshwari (Expert)
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01 April 2010 Then he can avail deduction u/s 80GGA
Section reproduced for your ready reference.

Deduction in respect of certain donations for scientific research or rural development.

80GGA. (1) In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2).

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

(a) any sum paid by the assessee in the previous year to a scientific research association which has as its object the undertaking of scientific research or to a University, college or other institution to be used for scientific research :

Provided that such association, University, college or institution is for the time being approved for the purposes of clause (ii) of sub-section (1) of section 35;

96[(aa) any sum paid by the assessee in the previous year to a University, college or other institution to be used for research in social science or statistical research :

Provided that such University, college or institution is for the time being approved for the purposes of clause (iii) of sub-section (1) of section 35.]

97[Explanation.—The deduction, to which the assessee is entitled in respect of any sum paid to a scientific research association, University, college or other institution to which clause (a) or clause (aa) applies, shall not be denied merely on the ground that, subsequent to the payment of such sum by the assessee, the approval to such association, University, college or other institution referred to in clause (a) or clause (aa), as the case may be, has been withdrawn;]

(b) any sum paid by the assessee in the previous year—

(i) to an association or institution, which has as its object the undertaking of any programme of rural development, to be used for carrying out any programme of rural development approved for the purposes of section 35CCA; or

(ii) to an association or institution which has as its object the training of persons for implementing programmes of rural development :

98[Provided that the assessee furnishes the certificate referred to in sub-section (2) or, as the case may be, sub-section (2A) of section 35CCA from such association or institution.]

97[Explanation.—The deduction, to which the assessee is entitled in respect of any sum paid to an association or institution for carrying out the programme of rural development to which this clause applies, shall not be denied merely on the ground that subsequent to the payment of such sum by the assessee, the approval granted to such programme, or as the case may be, to the association or institution has been withdrawn;]

99[(bb) any sum paid by the assessee in the previous year to a public sector company or a local authority or to an association or institution approved by the National Committee, for carrying out any eligible project or scheme :

Provided that the assessee furnishes the certificate referred to in clause (a) of sub-section (2) of section 35AC from such public sector company or local authority or, as the case may be, association or institution.

1[Explanation 1.— The deduction, to which the assessee is entitled in respect of any sum paid to a public sector company, or to a local authority or to an association or institution for carrying out the eligible project or scheme referred to in section 35AC, shall not be denied merely on the ground that subsequent to the payment of such sum by the assessee,—

(a) the approval granted to such association or institution has been withdrawn; or

(b) the notification notifying the eligible project or scheme referred to in section 35AC carried out by the public sector company, or local authority or association or institution has been withdrawn.]

Explanation 2[2].—For the purposes of this clause, the expressions “National Committee” and “eligible project or scheme” shall have the meanings respectively assigned to them in the Explanation to section 35AC;]

3[(c) 4[any sum paid by the assessee in any previous year ending on or before the 31st day of March, 2002] to an association or institution, which has as its object the undertaking of any programme of conservation of natural resources 5[or of afforestation], to be used for carrying out any programme of conservation of natural resources 5[or of afforestation] approved for the purposes of section 35CCB :

Provided that the association or institution is for the time being approved for the purposes of sub-section (2) of section 35CCB;]

5[(cc) 4[any sum paid by the assessee in any previous year ending on or before the 31st day of March, 2002] to such fund for afforestation as is notified by the Central Government under clause (b) of sub-section (1) of section 35CCB;]

6[(d) any sum paid by the assessee in the previous year to a rural development fund set up and notified by the Central Government for the purposes of clause (c) of sub-section (1) of section 35CCA;]

7[(e) any sum paid by the assessee in the previous year to the National Urban Poverty Eradication Fund set up and notified by the Central Government for the purposes of clause (d) of sub-section (1) of section 35CCA.]

(3) Notwithstanding anything contained in sub-section (1), no deduction under this section shall be allowed in the case of an assessee whose gross total income includes income which is chargeable under the head “Profits and gains of business or profession”.

(4) Where a deduction under this section is claimed and allowed for any assessment year in respect of any payments of the nature specified in sub-section (2), deduction shall not be allowed in respect of such payments under any other provision of this Act for the same or any other assessment year.]]

M Prabhakar Menon

M Prabhakar Menon (Expert)
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01 April 2010 See Sec35AC(2) read with Rule 11-O(1) and(2) submit Form 58A or 58B as the case may be.

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Aditya Maheshwari

Aditya Maheshwari (Expert)
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01 April 2010 Section 80GGA(2)(bb) being relevant for Section 35AC

M Prabhakar Menon

M Prabhakar Menon (Expert)
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01 April 2010 No c sec 35AC (3)

Aditya Maheshwari

Aditya Maheshwari (Expert)
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01 April 2010 Dear Prabhakar
How will a salaried employee claim exmption u/s 35AC? Please do reply...

CA Ashok Kumar Sahu

CA Ashok Kumar Sahu (Expert)
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01 April 2010 ded'n u/s 35AC available for who have income from PGBP,

other wise claim ded'n u/s 80GGA,

agree with adityaji

M Prabhakar Menon

M Prabhakar Menon (Expert)
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01 April 2010 Just because the section appears under Chapter IV Sec D it doesnt mean those having salary income are out The first words of the section 35AC (1) is " Where an assessee incurs..." A salaried person is also an assessee give him/her their due.

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Aditya Maheshwari

Aditya Maheshwari (Expert)
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01 April 2010 Dear Prabhakar
Deduction u/s 35AC is allowable against income from business whereas the individual is drawing salary income. So even if deduction is allowed under business & profession there would be a loss under the head business which will not be allowable to set off against salary income. Hence there is no use of claiming deduction under Section 35AC

Aditya Maheshwari

Aditya Maheshwari (Expert)
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01 April 2010 And moreoverso I am not telling that no deduction will be allowable under provisions of income tax act. I am only stating that deduction will be allowable u/s 80GGA and not u/s 35AC since the assessee is a salaried employee.

Querist : Anonymous

Querist : Anonymous (Querist)

02 April 2010 First of all Thanks to Aditya, Prbhakar and ashok

I 100% agree with Aditya but....
In Sec - 35AC,,There is provision that sec 35AC available to both company adnd non company assesee...

My question is that what is the defination of non co. assesee undr sec 35AC.

Is salary person included in non co. assesse ?

CA Ashok Kumar Sahu

CA Ashok Kumar Sahu (Expert)
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02 April 2010 YES, salary person included in non co. assesses,

but in sec. 80GGA specify no exemption available for who have income from PGBP,

hence salaried employee claim ded'n u/s 80GGA

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Aditya Maheshwari

Aditya Maheshwari (Expert)
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02 April 2010 Repitition
Deduction u/s 35AC is allowable against income from business whereas the individual is drawing salary income. So even if deduction is allowed under business & profession there would be a loss under the head business which will not be allowable to set off against salary income. Hence there is no use of claiming deduction under Section 35AC.

So the employee can claim deduction u/s 80GGA

Querist : Anonymous

Querist : Anonymous (Querist)

03 April 2010 i go with aditya but the logic is law not that salaried get business loss if he claim exemption under SEC 35AC.....

Now i came on conclution that sec 35AC is included in PGBP charging sec 28 so that its implied that only person who have business income can claim deduction under this,,,,..

In non co. assesee issue ,,,as it is clease sec 35AC come under Sec 28 so that non company assesee doesnot include salary person under sec 35 AC

...
Please let me know if i am wrong...

Thanks
Guys...

Aditya Maheshwari

Aditya Maheshwari (Expert)
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04 April 2010 Yes ur understanding is correct

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