DEDUCTIONS FROM GROSS TOTAL INCOME (CHAPTER VI-A) UPDATED AS ON APRIL 1, 2017


1. DEDUCTION IN RESPECT OF INVESTMENTS IN SPECIFIED ASSETS (SECTION 80C) 

 

Section 80C provides for a deduction of savings in specified modes of Investments from gross total income. It is available only to an Individual or HUF. The Maximum permissible deduction is Rs.1.5 lakh along with deduction u/s 80CCC & 80CCD.
Admissible Deductions:-

1. Premium paid on insurance on the life of the Individual or HUF only to the extent of such premium or other payment made not in excess of 10% (As amended by the Finance Act,2012) of Actual Capital Sum Assured. Explanation to Sec 80C (3A) has been introduced to provide that the Actual Capital Sum Assured in respect of the life insurance policies to be issued on or after 1st April, 2012 shall mean the minimum amount assured under the policy on happening of the event at any time during the term of the policy without taking into Account the following:-
· The Value of Premium to be Returned or

· Any Benefit by way of bonus or otherwise to be received over & above the sum actually assured.

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2. Sum paid under the contract for deferred on the life of the Assessee or his/her spouse or children.
3. Sum deducted by the government from the salary of an employee for securing a deferred annuity for self, spouse or children.
4. Contribution to any PPF.
5. Contribution by an employee to RPF.
6. Contribution by an employee to an Approved Superannuation Fund.
7. The contribution made to any PPF set up by the Central Government.
8. Subscription to any deposit scheme or contribution to any Pension fund set up by the National Housing Bank.
9. Payment of Tuition fees by an Individual Assessee at the time of admission to any university, college, school or other educational institutions within India for the purpose of full-time education of any two children.
10. Subscription to deposit scheme of Public Sector, engaged in providing housing finance.
11. Subscription to units of Mutual Funds notified u/s 10(23D).
12. Sum deposited in Fixed Deposits (FDs) with tenure of five years.
13. Sum deposited in 5 yrs Post Office Time Deposit (POTD) scheme.
2. DEDUCTION IN RESPECT OF CONTRIBUTION TO CERTAIN PENSION FUNDS (SECTION 80CCC)

Deduction in respect of Payment of premium for annuity plan of LIC or any other Insurer is provided. The Premium must be deposited to keep in force a contract for annuity plan of LIC or any other insurer for receiving a pension from the fund. For this purpose, the Interest or Bonus accrued or credited to the Assessee’s Account shall not be reckoned as Contribution. The Maximum Deduction allowed is Rs.1.5 lakh.
3. DEDUCTION IN RESPECT OF CONTRIBUTION TO PENSION SCHEME OF CENTRAL GOVERNMENT (SECTION 80CCD)

Contribution towards NPS by Employee[80CCD(1)]: Taxpayer is an individual and he is employed by the central government (on or after January 1, 2004), or employed by any other person or self-employed. He has in the previous year deposited any amount in his account under NPS. Under this, Employee is to contribute 10% of their salary or more and deduction is available under section 80CCD(1) which is restricted to 10% of the salary and for a person other than employee deduction is restricted to 10% of GTI. For the A.Y 2015-16 amount of deductible under section 80CCD(1) cannot exceed Rs. 1 Lacs.

Contribution towards NPS by Employer [80CCD(2)]: Contribution by the employer to NPS is deductible under section 80CCD(2) in the hands of the concerned employee in the year in which contribution is made. However, no deduction is available in respect of employer’s contribution which is in excess of 10 percent of the salary of the employee.

4. LIMIT ON DEDUCTION U/S 80C, 80CCC, 80CCD 

The Limit for maximum deduction available u/s 80C, 80CCC, 80CCD (combined together) is Rs.1.5 Lakh only.

5. DEDUCTION IN RESPECT OF MEDICAL INSURANCE PREMIUM (SECTION 80D)
This Section provides for a deduction of Rs. 25000 in respect of premium paid towards a health insurance policy for the Assessee or his family (spouse and dependent children) or any contribution made to the Central Government Health Scheme in aggregate and a further deduction of Rs. 30,000 is allowed of premium paid in respect of health insurance policy for parents. An increased deduction of Rs. 30000 shall be allowed in case any of the persons mentioned above are senior citizens (i.e. of age 60 years or above).Further, it is provided that for claiming such deduction u/s 80D the payment must be by any mode other than cash.

Further Deduction of Rs. 5000 shall be allowed in respect of payment made on Account of preventive health check-up of self, spouse, children or parents made during the previous year. This deduction is within the overall limit of Rs. 25000 or Rs.30000, as the case may be. For claiming this deduction payment can be in any mode including cash.

6. DEDUCTION IN RESPECT OF REHABILITATION OF HANDICAPPED DEPENDENT RELATIVE (SECTION 80DD)

It provides for a deduction to an Assessee being an individual or HUF who is a resident of India. Deduction of Rs. 75,000  is available in respect of any Amount paid for the medical treatment (including nursing), training and rehabilitation of a dependent, or any amount paid or deposited under a scheme framed in this behalf.


In the case of severe disability (i.e. a person with 80% or more disability), the deduction of Rs. 1,25,000 (Rs. 1,00,000  for the assessment year 2010 -11 to 2015-16 Rs. 75,000 up to the assessment year 2009-10) shall be available.

Dependent means In the case of an Individual the spouse, children, parents, brothers, sisters, of the individual and in the case of HUF, any member who is wholly dependent on the assessee.
7. DEDUCTION IN RESPECT OF MEDICAL TREATMENT (SECTION 80DDB)

The deduction of Rs. 40000 or Amount actually paid whichever is less shall be allowed to an Assessee who is resident in India being an Individual or HUF. A deduction shall be allowed for any amount paid for the medical treatment of such disease or ailment as may be specified in the rules. In case the Amount is paid in respect of a senior citizen (i.e. of age 60 years or above) then the deduction would be Rs.60000 or the Amount actually paid whichever is less.

8. DEDUCTION IN RESPECT OF INTEREST ON LOAN TAKEN FOR HIGHER EDUCATION (SECTION 80E)

This section provides deduction to an Individual in respect of any interest paid on loan taken for the purpose of pursuing his higher education or the for the purpose of higher education [i.e all fields of studies (including vocational studies)pursued after passing the senior secondary examination] of his/her relative i.e. spouse or children of the Individual or the student for whom the Individual is the legal guardian. The loan must have been taken from any financial institution or approved charitable institution. The amount of deduction is amount is paid by the individual during the previous year and such amount is paid out of his income chargeable to income tax.
9. DEDUCTION IN RESPECT OF INTEREST ON LOAN TAKEN FOR RESIDENTIAL HOUSE PROPERTY APPLICABLE FORM a.y 2017-18 (SECTION 80EE)

The following conditions should be satisfied in order to claim deduction under section 80EE:-
  1. The assessee is an individual. He may be the resident or non-resident.
  2. He has taken a loan and loan is taken for acquisition of residential house property. The loan is taken from the bank or a housing finance company and loan has been sanctioned during April 1, 2016, and March 31, 2017.
  3. The amount of loan sanctioned for residential house property does not exceed Rs. 35 lakhs and value of residential house property does not exceed Rs. 50 lakhs.
  4. Assessee does not own any residential house property on the date of sanction of loan.
  5. This deduction is over and above the Rs, 2 lakh limit under section 24 of the income tax act.
If above conditions are satisfied, the assess can claim deduction under section 80EE of the interest payable on the above loan or Rs. 50,000 whichever is less. This deduction is available for the assessment year 2017-18 and subsequent assessment years.
10. DEDUCTION  IN RESPECT OF DONATIONS TO CERTAIN FUNDS, CHARITABLE INSTITUTIONS ETC. (SECTION 80G)

The deduction under section 80G is available to any taxpayer (may be individual, company, firm or any other person, may be resident or non -resident). The various donations specified under this section are eligible for deduction up to either 50% or 100% with or without restrictions. Sub-Section 5D has been inserted in section 80G to provide that no deduction shall be allowed in respect of donation of any sum exceeding Rs.10000 unless such sum is paid by any mode other than cash.

12. DEDUCTION IN RESPECT OF RENT PAID (SECTION 80GG)

Admissible deduction:-
The deduction will be least of the following:-
· Actual Rent paid less 10% of the total income before allowing such deduction, or
· 25% of such total income or
· Rs. 5000 per month
Total income will not include long-term capital gains and any income referred to in sections 115A to 115D.

Conditions to be satisfied:-

· Assessee should not be in receipt of House Rent Allowance.
· The expenditure incurred by him on rent of any furnished or unfurnished accommodation should exceed 10% of his total income arrived at after all deductions under Chapter VI-A except section 80GG.
· The Accommodation should be occupied by the Assessee for the purpose of his own residence.
· The Assessee should not have self-occupied residential premises in any other place.
· Assessee should file a declaration in form 10BA, confirming the details of rent paid.