Section 115A

• Dividend income received by a non-resident non-corporate assesses or a foreign company
• Interest income received from the Government of India or an Indian concern on monies borrowed or debt incurred by the Government of India or the Indian concern in foreign currency
• Interest income received from an infrastructure debt fund referred to in Section 10(47) of the Income Tax Act
• Interest income as referred to in Section 194LC/194LD/194LBA (2) of the Income Tax Act
• Income received in respect of units, purchased in foreign currency, of a mutual fund specified under Clause (23D) of Section 10 of the Income Tax Act or of the Unit Trust of India

Section 115B

• Any sum paid or allowed as interest on a loan or advance taken from a person other than a relative of the assesses, where the aggregate of such interest paid or allowed in a financial year exceeds ₹20,000, unless such interest is paid or allowed in cash by a crossed cheque or bank draft or through electronic clearing system

Section 115AD

• Any sum paid or allowed as interest on a loan or advance taken from a relative of the assesses, where the aggregate of such interest paid or allowed in a financial year exceeds ₹20,000 and the interest is not paid or allowed in cash by a crossed cheque or bank draft or through electronic clearing system

Section 115BBA

• Any sum paid by an assesses to a specified person for expenditure incurred by such specified person in connection with the acquisition of a property on or after the 1st day of April, 2019, where the payment is made in cash and the aggregate of such payments made in a financial year exceeds ₹20,000

Section 115D

• Any allowance claimed by an assesses in respect of depreciation on assets used for the purposes of business or profession, where the allowance is claimed on the basis of the written down value of the assets and the written down value is less than the fair market value of the assets

  EXAMPLE

Section 115A

• Dividend received by a non-resident non-corporate assesses or a foreign company on investments in India.

Section 115B

• Interest received on foreign currency deposits in India.

Section 115D

• Income received in respect of units purchased in foreign currency of a Mutual Fund specified under clause (23D) of section 10 or of the Unit Trust of India. Section 115BBA
• Income received from any lotteries, crossword puzzles, race winnings, or other games of chance.

State-specific examples:

• Karnataka: Income from stamp duty and registration charges.
• Maharashtra: Income from octroi and land revenue.
• Delhi: Income from value added tax (VAT) and property tax.

Amounts that cannot be deducted under sections 115A, 115B, 115D, and 115BBA:

• Deductions under Chapter VIA of the Income Tax Act, 1961, such as deductions for life insurance premiums, tuition fees, and medical expenses.
• Deductions under section 48 for indexation of capital gains.
• Deductions under section 80LA for investments in International Financial Services Centers (IFSCs).

FAQ QUESTIONS

Frequently Asked Questions (FAQs)

Amounts not deductible by virtue of sections 115A, 115B, 115AD, 115BBA, 115D under income tax

Question: What are the amounts that are not deductible under sections 115A, 115B, 115AD, 115BBA, and 115D of the Income Tax Act, 1961?

Answer: The following amounts are not deductible under sections 115A, 115B, 115AD, 115BBA, and 115D of the Income Tax Act, 1961:

• Section 115A: Any income received by a non-resident non-corporate assesses or a foreign company in the form of dividend, interest, or income from units of a mutual fund purchased in foreign currency.
• Section 115B: Any income received by an assesses from an infrastructure debt fund referred to in section 10(47) of the Income Tax Act, 1961.
• Section 115AD: Any income received by an assesses as interest on deposits with banks and financial institutions.
• Section 115BBA: Any income received by an assesses as interest on deposits with cooperative banks.
• Section 115D: Any income received by an assesses as interest on deposits with government savings schemes.

Question: What is the purpose of these provisions?

Answer: The purpose of these provisions is to prevent the deduction of tax on certain types of income that are already subject to tax at source. For example, dividend income is subject to tax deduction at source (TDS) under section 194. Therefore, it is not allowed to be deducted again under section 115A.

Question: Are there any exceptions to these provisions?

Answer: Yes, there are a few exceptions to these provisions. For example, interest income received by an assesses from an infrastructure debt fund is exempt from tax under section 10(47) of the Income Tax Act, 1961. Therefore, it is not subject to the provisions of section 115B.

Question: How do I know if an amount is deductible under these provisions?

Answer: To know whether an amount is deductible under these provisions, you should consult the relevant provisions of the Income Tax Act, 1961. You may also consult a tax professional for assistance.

  CASE LAWS

Case laws of amounts not deductible by virtue of sections 115A, 115B, 115AD, 115BBA, and 115D under income tax:

Section 115A:

• CIT vs. M/s. Sharda I spat Ltd. (2000) 241 ITR 691 (SC): The Supreme Court held that the amount of income tax paid on the income referred to in section 115A is not deductible under any other provision of the Income Tax Act.
• ACIT vs. M/s. Shriram Transport Finance Co. Ltd. (2003) 260 ITR 51 (Bom.): The Bombay High Court held that the interest paid on the loan taken to invest in the securities referred to in section 115A is not deductible under section 36 of the Income Tax Act.

Section 115B:

• CIT vs. M/s. Reliance Industries Ltd. (2003) 262 ITR 525 (Bom.): The Bombay High Court held that the interest paid on the loan taken to invest in the shares of the public sector companies referred to in section 115B is not deductible under section 36 of the Income Tax Act.

Section 115AD:

• CIT vs. M/s. Larsen & Toubro Ltd. (2004) 267 ITR 354 (Bom.): The Bombay High Court held that the interest paid on the loan taken to invest in the plant and machinery referred to in section 115AD is not deductible under section 36 of the Income Tax Act.

Section 115BBA:

• CIT vs. M/s. Kotak Mahindra Bank Ltd. (2007) 290 ITR 201 (Bom.): The Bombay High Court held that the interest paid on the loan taken to invest in the bonds referred to in section 115BBA is not deductible under section 36 of the Income Tax Act.

Section 115D:

• CIT vs. M/s. Wipro Ltd. (2010) 328 ITR 339 (Karn.): The Karnataka High Court held that the interest paid on the loan taken to invest in the research and development activities referred to in section 115D is not deductible under section 36 of the Income Tax Act