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Exempted income can ber used for 80c

Saurabh Tiwari (practising ca) (26 Points)

28 October 2007

Whether exempted income can be used for investment under section 80c.Example -100000-agr.income --used to invest for availing the benefit of 80 C

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8 Replies

Ramakrishna (Financial Executive) (438 Points)
Replied 29 October 2007

Dear sir, Any investments to be eligible for deduction u/s. 80C should be made out of the income chargeable to tax. Agricultural income is also chargeable to tax, but at nil rates in view of the special concession given to it. It is also considered for rate purposes. Such being the case, the income being earned out of agriculture for the year in question, if invested in the listed items, would also fetch the benefits of Section 80C. Am i correct?

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CA.Saibaburao Nanduri (Chartered Accountant) (3847 Points)
Replied 29 October 2007

Dear Saurabh Tiwari ! Earlier, as pointed out by Mr.Ramakrishna , investment must be made out of income chargeable to tax. At present, investment may be made out of 'past savings', agr.income etc.,

Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 29 October 2007

Now a days there is no precodition of out of income chargeble to tax .The words are no longer there in section 80C. I agree with Saibaburao.

Nirmal1986 (articles) (149 Points)
Replied 29 October 2007

what are the listed item under which the agricultural item can be claimed as exmpted

Vijay K. Agrawal (Service) (608 Points)
Replied 29 October 2007

no precondition that inv should be from taxable income it was removed lfour five year back

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(Guest)

Know the condition has been withdrawn that income should be chargeable to tax.80 C will be available.

(Guest)

Dear ,you are saying that agriculture income is also taken in calculating the rate .WHAT ABOUT IF IT WOULD BE DIVIDEND INCOME ?

Ramakrishna (Financial Executive) (438 Points)
Replied 04 November 2007

Dear Saurabh tiwari, It is immaterial that the agri income is taken for rate purposes while the dividend income is not considered for rate purposes. The situation would be the same in both the cases. The person investing in eligible investments out of both the incomes, would be eligible to avail 80C benefit. I hope you would now be clear on this issue.