Mr.Dintakurthi Tirumala
After reading your message I have thoroughly read section 80C. For your easy and ready reference I am hereunder reproducing the relevant portion of section 80C.
"Deduction in respect of life insurance premia, deferred annuity, contributions to provident fund, subscripttion to certain equity shares or debentures, etc.,
80C.(1) In computing the total income of an assessee, being an individual or a Hindu Undivided Family, there shall be deducted, in accordance with and subject to the provisions of this section, the whole of the amount paid or deposited i the previous year, being the aggregate of the sums referred to in subsection (2), as does not exceed one lakh rupees"
A plain reading of sub-setion (1) of sectin 80C reveals that the deductions are admissible in computing the total income.
Now let's see what is total income. I am hereunder reproducing relevant porion of section 5 for your easy and ready reference.
"Scope of total income.
5(1) Subject to the provisions of this Act, the total income of any previous year of a person who is a resident includes all income from whatever source derived which-
(a) is received or is deemed to be received in India is such year by or on behalf of such person; or
(b) accrues or arises or is deemed to accrue or arise to him in India during such year; or
(c) accrues or arises to him out side India during such year;
Provided----
(2)---
Expln 1. ---
Explanation 2___For removal of doubts, it is hereby declared that income which has been included in the total income of a person on the basis that it has accrued or arisen or is deemed to have accrued or arisen to him shall not again be so included o the basis that it is received or deemed to be received by him in India.
Here the question raised by Mr.Vijay Bhaker Kondapally is that the income considered in the case of the assessee is for the period from the month of March of earlier year to the month of February of current year. But the investment made by the assessee which is eligible for deduction u/s 80C is on 15-03-2012. The assessee is not offering the incme of March 2012 for the assessment year 2012-13. As per the method of accounting being followed by him he is offering the income of March 2012 in the next assesment year.
Now read the opening portion of section 80C-
80C.(1) In computing the total income of an assessee, being an individual or a Hindu Undivided Family---
Here the assessee has not considered the income for the month of March, 2012 for the assessment year 2012-13.
Now read the relevant portin of section 5-
5(1) Subject to the provisions of this Act, the total income of any previous year of a person who is a resident includes all income from whatever source derived which-
(a) is received or is deemed to be received in India is such year by or on behalf of such person; or
(b) accrues or arises or is deemed to accrue or arise to him in India during such year; or
(c) accrues or arises to him out side India during such year;
The total income of the assessee regarding whom we are discussing does not include the income of March 2012 earned by him.
Hence the investment made on 15-03-2012, is not eligible for deduction u/s 80C for the assessement year 2012-13 as per the method of accounting followed by the assessee.
Pleae provide me the relevant portions of the statute, circulars and case laws if any.
Mr.Dintakurthi Tirumala please correct me if I am wrong. My education qualification is only B.Com whereas you are a prospective chartered accountant.
Best Wishes
Sathikonda