CHAPTER VIA — DEDUCTIONS TO BE MADE IN COMPUTING TOTAL INCOME
Case Laws & Commentary
SECTION 80AA — COMPUTATION OF DEDUCTION UNDER SECTION 80M (OMITTED)
Omitted-Section Note (Income-tax Act, 1961 as amended by Finance Act, 2026)
STATUS — OMITTED PROVISION
Section 80AA of the Income-tax Act, 1961 stands OMITTED and is not in force for any current assessment year. This note records the omission for completeness of the Chapter VIA series.
BARE-ACT ENTRY (verbatim, Income-tax Act, 1961 as amended by Finance Act, 2025)
80AA. [Omitted by the Finance Act, 1997, w.e.f. 1-4-1998.]
A. HISTORICAL NOTE
Section 80AA governed the manner of computing the inter-corporate dividend deduction under section 80M. It required that the deduction be computed with reference to the dividend income as reduced by expenditure incurred in earning it (i.e. the net dividend), not the gross dividend.
It was inserted by the Finance (No. 2) Act, 1980 with retrospective effect from 1 April 1968 to displace the construction in Cloth Traders (P) Ltd. v. Addl. CIT (1979) 118 ITR 243 (SC). Its validity and retrospective operation were upheld in Distributors (Baroda) (P) Ltd. v. Union of India (1985) 155 ITR 120 (SC), which overruled Cloth Traders. The section became otiose once section 80M was recast and was omitted with effect from 1 April 1998. The net-dividend principle is now embedded in section 80M itself (reinserted by the Finance Act, 2020).
B. CASE LAW
The provision stands omitted and confers no deduction for any current assessment year. No case law is digested. Decisions rendered under it survive only as historical authority and for reassessment of years in which it was in force.
Editorial note on sourcing
Bare-Act omission entry reproduced verbatim from the Income-tax Act, 1961 as amended by the Finance Act, 2025 (no Finance Act, 2026 change affects an already-omitted provision). Insertion/omission history stated from the bare-Act footnote. No case law is digested for an omitted provision; any historical authority is noted only for context.
Case Laws & Commentary
SECTION 80AA — COMPUTATION OF DEDUCTION UNDER SECTION 80M (OMITTED)
Omitted-Section Note (Income-tax Act, 1961 as amended by Finance Act, 2026)
STATUS — OMITTED PROVISION
Section 80AA of the Income-tax Act, 1961 stands OMITTED and is not in force for any current assessment year. This note records the omission for completeness of the Chapter VIA series.
BARE-ACT ENTRY (verbatim, Income-tax Act, 1961 as amended by Finance Act, 2025)
80AA. [Omitted by the Finance Act, 1997, w.e.f. 1-4-1998.]
A. HISTORICAL NOTE
Section 80AA governed the manner of computing the inter-corporate dividend deduction under section 80M. It required that the deduction be computed with reference to the dividend income as reduced by expenditure incurred in earning it (i.e. the net dividend), not the gross dividend.
It was inserted by the Finance (No. 2) Act, 1980 with retrospective effect from 1 April 1968 to displace the construction in Cloth Traders (P) Ltd. v. Addl. CIT (1979) 118 ITR 243 (SC). Its validity and retrospective operation were upheld in Distributors (Baroda) (P) Ltd. v. Union of India (1985) 155 ITR 120 (SC), which overruled Cloth Traders. The section became otiose once section 80M was recast and was omitted with effect from 1 April 1998. The net-dividend principle is now embedded in section 80M itself (reinserted by the Finance Act, 2020).
B. CASE LAW
The provision stands omitted and confers no deduction for any current assessment year. No case law is digested. Decisions rendered under it survive only as historical authority and for reassessment of years in which it was in force.
Editorial note on sourcing
Bare-Act omission entry reproduced verbatim from the Income-tax Act, 1961 as amended by the Finance Act, 2025 (no Finance Act, 2026 change affects an already-omitted provision). Insertion/omission history stated from the bare-Act footnote. No case law is digested for an omitted provision; any historical authority is noted only for context.