Section 12 - Insertion of new sections 80AA and 80AB - Finance (No. 2) Act, 1980

12. Insertion of new sections 80AA and 80AB In the Income-tax Act, - (a) after section 80A, the following section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 1968, namely :- 80AA. Computation of deduction under section 80M. - Where any deduction is required to be allowed under section 80M in respect of any income by way of dividends from a domestic company which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, the deduction under that section shall be computed with reference to the income by way of such dividends as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) and not with reference to the gross amount of such dividends. ; (b) after section 80AA as so inserted, the following section shall be inserted with effect from the 1st day of April, 1981, namely :- '80AB. Deductions to be made with reference to the income included in the gross total income. - Where any deduction is required to be made or allowed under any section (except section 80M) included in this Chapter under the heading C - Deductions in respect of certain incomes in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income.'.