Section 80A of Income Tax Act 1961: Deductions in Computing Total Income

Sub-section (1): Chapter VI-A deductions

In computing total income, deductions specified in sections 80C to 80U are allowed from gross total income only in accordance with, and subject to, the provisions of Chapter VI-A.

Sub-section (2): Overall deduction ceiling

The aggregate deductions under Chapter VI-A cannot exceed the assessee's gross total income. The provision therefore prevents Chapter VI-A deductions, by themselves, from producing a negative total income.

Sub-section (3): No repeat deduction to members of an AOP or BOI

Where specified deductions are admissible while computing the income of an association of persons or body of individuals, the same deduction is not again available to a member in relation to that member's share in the income of the association or body.

Sub-section (4): Restriction against double deduction of the same profits

Where profits and gains of an undertaking, unit, enterprise or eligible business are claimed and allowed under the specified profit-linked deduction provisions, the same profits cannot also be deducted under another provision for the same assessment year beyond the statutory limits.

Sub-section (5): Claim must be made in the return

For the deductions covered by this sub-section, failure to make the claim in the return of income prevents allowance of the deduction under the specified provisions. This requirement should be read with the return-filing and deduction provisions applicable to the relevant assessment year.

Sub-section (6): Transfers involving an eligible business

Where goods or services are transferred between an eligible undertaking or business and another business of the assessee at a recorded consideration that does not correspond with market value, profits for the relevant deduction are computed as if the transfer had taken place at market value.

For this purpose, market value broadly refers to the open-market price or cost, subject to statutory or regulatory restrictions; where the transaction is a specified domestic transaction, the arm's length price under section 92F may apply.

Sub-section (7): Interaction with Section 35AD

Where a deduction under the specified Chapter VI-A profit-linked provisions is claimed and allowed for profits of a specified business referred to in section 35AD, deduction under section 35AD is restricted in relation to that specified business in accordance with the statutory rule.