Section 80MM of the Income-tax Act, 1961--Amount of deduction--Regarding - Income Tax - 341/1982

Section 80MM of the Income-tax Act, 1961--Amount of deduction--Regarding Circular No. 341 Dated 10/5/1982 Reference is invited to the judgment of the Supreme Court in the case of Cloth Traders [1979] 118 ITR 243, where it was observed that the amount of deduction under section 80MM should be worked out with reference to gross income. Section 80AB, inserted by the Finance (No. 2) Act, 1980, provides that the deduction under section 80MM should be worked out with reference to net income. Section 80AB has been made effective from 1st April, 1981, and not retrospectively. It is, therefore, clarified that the judgement of the Supreme Court applies to assessments up to and inclusive of assessment year 1980-81. (Sd.) S.N.L. Aggarwala Officer on Special Duty, Central Board of Direct Taxes.