Deduction u/s 80-O. - Income Tax - 1008/CBDT

INSTRUCTION NO. 1008/CBDT Dated : September 18, 1976 Section(s) Referred: 80N ,80O Statute: Income - Tax Act, 1961 Attention is invited to Board's Instruction No. 797**, dated the 23rd November, 1974 (F. No. 473/5/72-FTD),[para 2(xiii), 2(xiv) in particular] and Circular No. 187, dated 23rd December, 1975 (F. No. 473/15/73-FTD) on the above subject. The deduction u/s 80-O is admissible only with reference to the income which is received in convertible foreign exchange outside India or having been converted into convertible foreign exchange outside India, is brought into India by or on behalf of the assessee in accordance with any law for the time being in force for regulating payments and dealings in foreign exchange. 2. The expression "convertible foreign exchange" has been defined in the Explanation to Section 80-N to mean foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purpose of the law for the time being in force for regulating payments and dealings in foreign exchange. This definition also applies for the purposes of Section 80-O of the Act. 3. Recently the Board had occasion to consider whether receipt of income in non-convertible rupees from bilateral account countries (e.g. Russian Roubles) will qualify for the concession u/s 80-O of the Income-tax Act, 1961. 4. It has been decided in consultation with the Reserve Bank of India and the Department of Economic Affairs that receipt of income in non-convertible rupees from bilateral account countries (for example Russian Roubles) will be treated on par with similar incomes received in any convertible foreign exchange for the purposes of section 80-N and 80-O of the Income-tax Act, 1961.