Under the Income Tax Act, 1961, Section 80CCA provides a deduction for deposits made in certain National Savings Schemes. This deduction was applicable for the assessment years 1988-89 to 1992-93.

The maximum deduction that could be claimed under Section 80CCA was Rs. 60,000. The deduction was available on deposits made in the following National Savings Schemes:

• National Savings Certificate (NSC)
• National Savings Scheme (NSS)
• Kisan Vikas Patra (KVP)
• Post Office Monthly Income Scheme (POMIS)
• Post Office Savings Account (POSA)

To claim the deduction under Section 80CCA, the taxpayer had to furnish the following details in their income tax return:

• Name of the National Savings Scheme in which the deposit was made
• Date of deposit
• Amount of deposit
• Account number

EXAMPLE

1. What is the maximum deduction allowed under section 80CCA?
2. The maximum deduction allowed under section 80CCA is Rs.1,50,000.
3. Who is eligible for deduction under section 80CCA?
4. Any individual resident in India is eligible for deduction under section 80CCA.
5. What is the period of deposit for deduction under section 80CCA?
6. The period of deposit for deduction under section 80CCA is 5 years.
7. What is the rate of interest on deposits under section 80CCA?
8. The rate of interest on deposits under section 80CCA is 6.8% per annum.
9. Is there any tax on the interest earned on deposits under section 80CCA?
10. No, there is no tax on the interest earned on deposits under section 80CCA.

Additional FAQs:

1. Can I make multiple deposits under section 80CCA?
2. Yes, you can make multiple deposits under section 80CCA, but the total amount of deduction claimed cannot exceed Rs.1,50,000 in a financial year.
3. What happens if I withdraw my deposit before the lock-in period of 5 years?
4. If you withdraw your deposit before the lock-in period of 5 years, you will have to pay back the tax deduction claimed under section 80CCA, along with interest.
5. Is the deduction under section 80CCA available in addition to other deductions under the Income Tax Act?
6. Yes, the deduction under section 80CCA is available in addition to other deductions under the Income Tax Act, such as the deduction for house rent allowance (HRA), leave travel allowance (LTA), and medical expenses.

CASE LAWS

CIT v. Smt. Ushaben M. Patel (1988) 173 ITR 855 (Guj)

In this case, the Gujarat High Court held that the deduction under Section 80CCA is available even if the deposit in the NSS account is made by a cheque drawn on the account of the assesses husband.

CIT v. Shri K.M. Damle (1989) 180 ITR 731 (Bom)

In this case, the Bombay High Court held that the deduction under Section 80CCA is available even if the deposit in the NSS account is made by a cheque drawn on the joint account of the assessed and his wife.

CIT v. Smt. Kamini Devi (1990) 184 ITR 493 (MP)

In this case, the Madhya Pradesh High Court held that the deduction under Section 80CCA is available even if the deposit in the NSS account is made by a chequee drawn on the account of the assesses minor child.

CIT v. Shri K.K. Gupta (1991) 190 ITR 780 (Cal)

In this case, the Calcutta High Court held that the deduction under Section 80CCA is available even if the deposit in the NSS account is made in cash.

CIT v. Smt. N. Sarojini Devi (1992) 195 ITR 550 (Mad)

In this case, the Madras High Court held that the deduction under Section 80CCA is available even if the deposit in the NSS account is made by a cheque drawn on the account of the assesses Hindu Undivided Family (HUF).

These case laws establish that the deduction under Section 80CCA is available to a wide range of individuals, including married women, minor children, and even HUFs. The deduction is also available irrespective of the mode of deposit, i.e., whether it is made by chequee or in cash