Income Tax Act

Official PDF pages 211–215

SOURCE PDF PAGE 211
( i )   interest; or
( ii )   dividends,
the whole of such income; ]
( e )   in respect of any income derived by the co-operative society from the
letting of godowns or warehouses for storage, processing, or facilitating
the marketing of commodities, the whole of such income;
( f )   in the case of a co-operative society, not being—
( i )   a housing society; or
( ii )   an urban consumers’ society (being a society for the benefit of the
consumers within the limits of a municipal corporation, munici -
pality, municipal committee, notified area committee, town area,
or cantonment); or
( iii )   a society carrying on transport business; or
( iv )   a society engaged in performing manufacturing operations with
the aid of power,
where the gross total income does not exceed   `   20000, the amount
of income by way of interest on securities; any income from house
property chargeable under section 20.
(3) In the case of a co-operative society as referred to in sub-section (2)( a )( vi ) or
( vii ), provisions of sub-section (1) shall only apply when the rules and bye-laws of
the society restrict the voting rights to the following classes of its members:—
( i )   the individuals who contribute their labour or carry on fishing or
allied activities;
( ii )   the co-operative credit societies which provide financial assistance to
the society;
( iii )   the State Government.
(4) The deduction under sub-section (1) in relation to the sums specified in sub-
section (2)( a ) or ( b ) or ( c ) or sub-section (3), shall be allowed with reference to the
income referred to in those sub-sections included in the gross total income after
reducing the deduction under section 138, if the assessee is also entitled to such
deduction.
(5) The provision of this section shall not apply to any co-operative bank which is
not a primary agricultural credit society or a primary co-operative agricultural and
rural development bank.
17
[ (6) For the purposes of this section,––
( a )   “consumers’ co-operative society” means a society for the benefit of the
consumers;
( b )   “primary agricultural credit society” has the same meaning as assigned to
it in Part V of the Banking Regulation Act, 1949 (10 of 1949); and
17.   Inserted by the Finance Act, 2026, w.e.f.   1-4-2026 .

──────────

SOURCE PDF PAGE 212
( c )   “primary co-operative agricultural and rural development bank” means a
society having an area of operation confined to a taluk, the principal object
of which is to provide long-term credit for agricultural and rural develop -
ment activities. ]
18
[Deduction in respect of income of federal co-operative.
150.   (1) If the gross total income of an assessee being a federal co-operative, in any
tax year, includes any income by way of dividends received from its investment
with any company, a deduction shall be allowed from such income, to the extent of
the amount which,—
( a )   has arisen from such investment as recorded in its books of account on or
before the 31st January, 2026; and
( b )   has been distributed by it to its members at least one month before the due
date for filing the return of income under section 263(1).
(2) The provisions of this section shall not apply to any tax year beginning on or after
the 1st April, 2029.
(3) For the purposes of this section, “federal co-operative” means a “federal co-opera -
tive” as defined in section 3( k )   of the Multi-State Co-operative Societies Act, 2002 (39
of 2002) and notified as such by the Central Government. ]
Deduction in respect of royalty income, etc., of authors of certain books other
than text-books.
151.   (1) Where, in the case of an individual, being an author resident in India,
the gross total income includes any income, derived by him in the exercise
of his profession, on account of any lump sum consideration for the assignment or
grant of any of his interests in the copyright of any book being a work of literary,
artistic or scientific nature, or of royalty or copyright fees (whether receivable in
lump sum or otherwise) in respect of such book, there shall, as per and subject to the
provisions of this section, be allowed, in computing the total income of the assessee,
a deduction from such income, computed in the manner specified in sub-section
(2).
(2) The deduction under this section shall be equal to the whole of such income
referred to in sub-section (1), or an amount of   `   300000, whichever is less.
(3) Where the income by way of such royalty or the copyright fee is not a lump sum
consideration   in lieu   of all rights of the assessee in the book, so much of the income,
before allowing expenses attributable to such income, as is in excess of 15% of the
value of such books sold during the tax year shall be ignored for the purposes of
deduction under this section.
18.   Substituted by the Finance Act, 2026, w.e.f.   1-4-2026 .   Prior to its substitution, section 150
read as under :
‘150.   Interpretation for purposes of section 149.— For the purposes of section 149,—
( a )   “consumers’ co-operative society” means a society for the benefit of the consumers;
( b )   “primary agricultural credit society” has the same meaning as assigned to it in Part
V of the Banking Regulation Act, 1949 (10 of 1949); and
( c )   “primary co-operative agricultural and rural development bank” means a society
having an area of operation confined to a taluk, the principal object of which is to
provide long-term credit for agricultural and rural development activities.’

──────────

SOURCE PDF PAGE 213
(4) In respect of any income earned from any source outside India, so much of the
income shall be taken into account for the purpose of this section as is brought
into India by, or on behalf of, the assessee in convertible foreign exchange within
six months from the end of the tax year in which such income is earned or within
such further period as the competent authority may allow in this behalf.
(5) Deduction under this section shall not be allowed unless the assessee furnish -
es a certificate in such form and manner, as may be prescribed, duly verified by
any person responsible for making such payment to the assessee as referred to in
sub-section (1), along with the return of income, setting forth such particulars as
may be prescribed.
(6) Deduction under this section shall not be allowed in respect of any income
earned from any source outside India, unless the assessee furnishes a certificate, in
the prescribed form from the prescribed authority, along with the return of income
in the prescribed manner.
(7) Where a deduction for any tax year has been claimed and allowed in respect of
any income referred to in this section, no deduction in respect of such income shall
be allowed under any other provision of this Act in any tax year.
(8) For the purposes of this section,—
( a )   “author” includes a joint author;
( b )   “books” shall not include brochures, commentaries, diaries, guides, jour -
nals, magazines, newspapers, pamphlets, text-books for schools, tracts
and other publications of similar nature, by whatever name called;
( c )   “competent authority” means the Reserve Bank of India or such other
authority as is authorised under any law in force for regulating payments
and dealings in foreign exchange;
( d )   “lump sum”, in regard to royalties or copyright fees, includes an advance
payment on account of such royalties or copyright fees which is not
returnable.
Deduction in respect of royalty on patents.
152.   (1) An assessee, being an individual, who is—
( a )   resident in India;
( b )   a patentee;
( c )   in receipt of income by way of royalty in respect of a patent registered
on or after the 1st April, 2003 under the Patents Act, 1970 (39 of 1970);
and
( d )   having gross total income for the tax year which includes royalty,
shall be allowed a deduction from such income computed in the manner specified
in sub-sections (2) to (7).
(2) The deduction under this section shall be equal to the whole of such income
referred to in sub-section (1) or   `   300000, whichever is less.

──────────

SOURCE PDF PAGE 214
(3) Where a compulsory licence is granted in respect of any patent under the Patents
Act, 1970 (39 of 1970), the income by way of royalty for the purpose of allowing
deduction under this section shall not exceed the amount of royalty under the terms
and conditions of a licence settled by the Controller under that Act.
(4) In respect of any income earned from any source outside India, so much of the
income, shall be taken into account for the purpose of this section as is brought
into India by, or on behalf of, the assessee in convertible foreign exchange within
six months from the end of the tax year in which such income is earned or within
such further period as the competent authority referred to in section 151(8)( c )may
allow in this behalf.
(5) No deduction under this section shall be allowed unless the assessee furnishes a
certificate in the prescribed form, duly signed by the authority as may be prescribed,
along with the return of income setting forth such particulars as may be prescribed.
(6) No deduction under this section shall be allowed in respect of any income
earned from any source outside India, unless the assessee furnishes a certificate in
such form, from the authority or authorities, as may be prescribed, along with the
return of income.
(7) Where a deduction for any tax year has been claimed and allowed in respect of
any income referred to in this section, no deduction in respect of such income shall
be allowed under any other provision of this Act in any tax year.
(8) For the purposes of this section,—
( a )   “Controller” means the authority as defined in section 2(1)( b ) of the
Patents Act, 1970 (39 of 1970);
( b )   “lump sum” includes a non-returnable advance payment for royalties;
( c )   “patent” means any patent granted, including a patent of addition, under
the Patents Act, 1970 (39 of 1970);
( d )   “patentee” means the true and first inventor recorded as the patentee
under the Patents Act, 1970 (39 of 1970), including joint patentees
recorded as such true and first inventors;
( e )   “patent of addition” shall have the same meaning as assigned to it in
section 2(1)( q ) of the Patents Act, 1970 (39 of 1970);
( f )   “patented article” and “patented process” shall have the same meanings
as assigned to them in section 2(1)( o ) of the Patents Act, 1970 (39 of
1970);
( g )   “royalty” in respect of a patent, means consideration for—
( i )   the transfer of all or any rights (including the granting of a licence)
in respect of a patent; or
( ii )   the imparting of any information concerning the working of, or the
use of, a patent; or
( iii )   the use of any patent; or
( iv )   the rendering of any services in connection with the activities
referred to in sub-clauses ( i ) to ( iii ), but does not include any
consideration,—

──────────

SOURCE PDF PAGE 215
( A )   which would be the income of the recipient chargeable under
the head “Capital gains”; or
( B )   for sale of product manufactured with the use of patented
process or of the patented article for commercial use;
( h )   “true and first inventor” shall have the same meaning as assigned to it
in section 2(1)( y ) of the Patents Act, 1970 (39 of 1970).
D.—Deductions in respect of other incomes
Deduction for interest on deposits.
153.   (1) An assessee who is—
( a )   an individual, not being a senior citizen; or
( b )   an individual, being a senior citizen; or
( c )   a Hindu undivided family,
shall be allowed a deduction from the gross total income, subject to conditions
specified in sub-section (2), where it includes income by way of interest on deposits
with—
( i )   a banking company to which the Banking Regulation Act, 1949 (10 of
1949), applies (including any bank or banking institution referred to in
section 51 of that Act); or
( ii )   a co-operative society engaged in carrying on the business of banking
(including a co-operative land mortgage bank or a co-operative land
development bank); or
( iii )   a Post Office as defined in section 2( d ) of the Post Office Act, 2023
(43 of 2023).
(2) The deduction under sub-section (1) shall be allowed for a tax year as follows:—
( a )   in case of an assessee mentioned in sub-section (1)( a ) or ( c ), the whole of
the interest up to a maximum amount of   `   10000 on deposits in a savings
account, excluding time deposits;
( b )   in case of an assessee mentioned in sub-section (1)( b ), the whole of the
interest up to a maximum amount of   `   50000 on deposits in any account,
including time deposits.
(3) Where the income referred to in sub-section (2)( a ) is derived from any deposit
in a savings account held by, or on behalf of, a firm, an association of persons or
a body of individuals, no deduction shall be allowed under this section in respect
of such income in computing the total income of any partner of the firm or any
member of such association or any individual of such body of individuals.
(4) Where the income referred to in sub-section (2)( b ) is derived from any deposit
held by, or on behalf of, a firm, an association of persons or a body of individuals, no
deduction shall be allowed under this section in respect of such income in computing
the total income of any partner of the firm or any member of such association or
any individual of such body of individuals.
(5) For the purposes of this section, the expression “time deposits” means the
deposits repayable on expiry of fixed periods.