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HUFs too eligible for Rs 3,000 hike in I-T exemption

The government, which announced tax sops on July 31 for small investors, clarified that the Rs 3,000 hike in the exemption limit to Rs 15,000 for tax on income from interests and dividends will be available to individuals as well as Hindu Undivided Families (HUFs).

An official release said on Friday that an assessee who is an individual or a Hindu undivided family is allowed a deduction in respect of income from dividends, units or interest earned from certain specified deposits and securities.

"The total deduction admissible under section 80 (L) of the Income Tax Act shall be Rs 15,000 as against the present limit of Rs 12,000," a government statement said.

Of the Rs 15,000, the statement said, Rs 12,000 shall be allowable from income by way of interest on national savings certificates, fixed deposits, saving bank accounts, deposits under the Post Office (Monthly Income Account) Rules, 1987, dividends from any Indian company, income received from units of Unit Trust of India or mutual funds. Earlier, this limit was Rs 9,000.

The additional deduction of Rs 3,000 from interest on government securities shall continue to be available as in the past, the statement said, adding that this enhanced deduction of Rs 15,000 shall be available from the assessment year 2003-04 onwards.

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