Unit III · Law of Taxation

Exemptions, clubbing and set-off

Study aid only. Confirm statute numbers with the current bare Act and the official OU LL.B. (3-YDC) 2024–25 syllabus PDF.

Statute sections

Act / instrument	Section	Name
Income-tax Act, 1961	10	Incomes not included in total income
Income-tax Act, 1961	60–64	Clubbing of income
Income-tax Act, 1961	70–80	Set-off and carry-forward of losses

(1981) 4 SCC 173 · Supreme Court of India

Charging and computation provisions are construed strictly in favour of the assessee where two readings are possible.

(1985) 3 SCC 230 · Supreme Court of India

Colourable devices are not legitimate tax planning; the court looks at the true nature of the transaction.