Deductions Deduction Under Chapter VIA VisaVis Finance Bill, 2025

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The Tax Publishers Finance Bill, 2025--Deductions Deduction Under Chapter VIA Vis-a-Vis Finance Bill, 2025 CA. Nisha Bhandari The present write-up highlights all the amendments proposed by the Finance Bill, 2025 relating to deduction under Chapter VI-A of the Income Tax Act. 1. Withdrawal by individuals from NSS on or after 29-8-2024 made exempt [Amendment of section 80CCA w.e.f. 29-8-2024] Section 80CCA, inter alia, provides for a deduction to an individual, or a Hindu undivided family, for any amount deposited in the National Savings Scheme (NSS). It is also provided that no deduction would be allowed in relation to such amount on or after the 1st day of April, 1992. Sub-section (2) of section 80CCA, inter alia, provides that where such amount, together with the interest accrued on such amount standing to the credit of the assessee under the scheme is withdrawn, it shall be deemed to be the income of the assessee and shall be chargeable to tax. Since this provision has been sunset from 1-4-1992, the amounts taxable on withdrawal are those which were deposited in financial year 1991-92 and earlier, and on which deduction had been claimed. Further, Circular No 532 issued on 17-3-1989 provided that the withdrawal on closure of account due to death of the depositor was not chargeable to tax in the hands of the legal heirs. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Finance Bill, 2025--Deductions

Deduction Under Chapter VIA Vis-a-Vis Finance Bill, 2025

CA. Nisha Bhandari

The present write-up highlights all the amendments proposed by the Finance Bill, 2025 relating to deduction under Chapter VI-A of the Income Tax Act.

1. Withdrawal by individuals from NSS on or after 29-8-2024 made exempt [Amendment of section 80CCA w.e.f. 29-8-2024]

Section 80CCA, inter alia, provides for a deduction to an individual, or a Hindu undivided family, for any amount deposited in the National Savings Scheme (NSS). It is also provided that no deduction would be allowed in relation to such amount on or after the 1st day of April, 1992.

Sub-section (2) of section 80CCA, inter alia, provides that where such amount, together with the interest accrued on such amount standing to the credit of the assessee under the scheme is withdrawn, it shall be deemed to be the income of the assessee and shall be chargeable to tax. Since this provision has been sunset from 1-4-1992, the amounts taxable on withdrawal are those which were deposited in financial year 1991-92 and earlier, and on which deduction had been claimed. Further, Circular No 532 issued on 17-3-1989 provided that the withdrawal on closure of account due to death of the depositor was not chargeable to tax in the hands of the legal heirs.