Taxexcel: 80DD

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Monday 7 September 2020

The Section 80D contains grants a tax deduction on medical insurance charges and medical use. It is granted on the expenses paid for a medical insurance strategy for the taxpayer himself and/or a nearby family member. Section 80D of Income Tax offers a deduction over and above to the deductions under Section 80C of Income Tax Act

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Download All in One TDS on Salary for Non-Govt (Private) employeesfor the Financial Year 2017-18.

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Salary Structure with Tax Deduction Section

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Automated Form 16 Part B

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Download Automated Master of Form 16 Part A&B for the Financial Year 2016-17 [ This Excel Utility can prepare at a time 100 employees Form 16 Part A&B with all up dated Tax Section and Tax Section as per Finance Bill 2016]

Deductions on Section 80C, 80CCC, 80CCD & 80CCD(1B)

Section 80C

The deduction under section 80C is allowed from your Gross Total Income. These are available to an Individual or an HUF.

Broadly speaking, this section provides deduction from total income in respect of various investments / expenditures / payments. Total Deduction under section 80C, 80CCC and 80CCD(1) together cannot exceed Rs 1,50,000 for the financial year 2016-17, excluding U/s 80CCD(2) And 80CCD(1B).

Section 80CCC: Deduction in respect of Premium Paid for Annuity Plan of LIC or Other Insurer

This section provides the deduction to an Individual for any amount paid or deposited in any annuity plan of LIC any other insurer for receiving the pension from a fund referred to in Section 10(23AAB).

In case the annuity is surrendered before the date of its maturity, the surrender value is taxable in the year of receipt.

Section 80CCD: Deduction in respect of Contribution to Pension Account

Total Deduction under Section 80C, 80CCC and 80CCD(1) cannot exceed Rs 1,50,000. Employer’s contribution under section 80CCD(2) towards NPS is outside the monetary ceiling mentioned above & Rs. 50 thousand can get additional tax relief from U/s 80CCD(1B)

Deductions on Savings Bank Account

Section 80 TTA: Deduction from gross total income in respect of any Income by way of Interest on Savings account

Deduction from gross total income of an individual or HUF, up to a maximum of Rs. 10,000/-, in respect of interest on deposits in savings account ( not time deposits ) with a bank, co-operative society or post office, is allowable

Deductions on House Rent

Section 80GG: Deduction in respect of House Rent Paid

Deduction available is the least of

Rent paid minus 10% of total income
Rs.5000/- per month
25% of total income, provided

Assessee or his spouse or minor child should not own residential accommodation at the place of employment.
He should not be in receipt of house rent allowance.
He should not have self-occupied residential premises in any other place.

Deductions on Loan for Higher Studies

Section 80E: Deduction in respect of Interest on Loan for Higher Studies

Deduction in respect of interest on loan is taken for pursuing higher education. The deduction is also available for the purpose of higher education of a relative w.e.f. A.Y. 2008-09.

Deductions on Rajiv Gandhi Equity Saving Scheme (RGESS)

Section 80CCG: Rajiv Gandhi Equity Saving Scheme (RGESS)

The Rajiv Gandhi Equity Saving Scheme (RGESS) was launched after the 2012 Budget. Investors whose annual income is less than Rs. 10 lakhs can invest in this scheme (up to Rs. 50,000) and get a deduction of 50% of the investment.

So, if you invest Rs. 50,000 (maximum amount eligible for income tax rebate is Rs. 50,000), you can claim a tax deduction of Rs. 25,000 (50% of Rs. 50,000).

Deductions on Medical Insurance

Section 80D: Deduction in respect of Medical Insurance

The deduction is available up to Rs. 20,000/- for senior citizens and up to Rs. 25,000/ in other cases for insurance of self, spouse, and dependent children. Additionally, a deduction for insurance of parents (father or mother or both) is available to the extent of Rs. 30,000/- if parents are senior Citizen and Rs. 15,000/- in other cases. Therefore, the maximum deduction available under this section is to the extent of Rs. 55,000/-. From A.Y 2016-17, within the existing limit a deduction of up to Rs. 5,000 for preventive health check-up is available.

Deductions on Medical Expenditure on Self or Dependent Relative

Section 80DDB: Deduction in respect of Medical Expenditure on Self or Dependent Relative

A deduction to the extent of Rs. 80,000/- or the amount actually paid, whichever is less is available for expenditure actually incurred by resident assessee on himself or dependent relative for medical treatment of specified disease or ailment. The diseases have been specified in Rule 11DD. A certificate in form 10 I is to be furnished by the assessee from any Registered Doctor.

Deductions on Medical Expenditure for a Handicapped Relative

Section 80DD: Deduction in respect of Rehabilitation of Handicapped Dependent Relative

Deduction of Rs. 50,000/- is available on:

expenditure incurred on medical treatment, (including nursing), training and rehabilitation of handicapped dependent relative.
Payment or deposit to specified scheme for maintenance of dependent handicapped relative.

Further, if the dependant is a person with severe disability, a deduction of Rs. 100,000/- is also available under this section. The handicapped dependent should be a dependent relative suffering from a permanent disability (including blindness) or mentally retarded, as certified by a specified physician or psychiatrist.

Note: A person with 'severe disability' means a person with 80% or more of one or more disabilities as outlined in section 56(4) of the 'Persons with disabilities (Equal opportunities, protection of rights and full participation)' Act.

Deductions on Person suffering from Physical Disability

Section 80U: Deduction in respect of Person suffering from Physical Disability

Deduction of Rs. 75,000/- to an individual who suffers from a physical disability (including blindness) or mental retardation. Further, if the individual is a person with severe disability, deduction of Rs. 125,000/- shall be available u/s 80U. The certificate should be obtained from a Govt. Doctor. The relevant rule is Rule 11D.

Deduction for donations towards Social Causes

Section 80G: Deduction for donations towards Social Causes

The various donations specified in Sec. 80G are eligible for deduction up to either 100% or 50% with or without restriction as provided in Sec. 80G. 80G deduction not applicable in case donation is done in form of cash for an amount over Rs 10,000.

Donations with 100% deduction without any qualifying limit:

National Defence Fund set up by the Central Government
Prime Minister’s National Relief Fund
National Foundation for Communal Harmony
An approved university/educational institution of National eminence
Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
Fund set up by a State Government for the medical relief of the poor
National Illness Assistance Fund
National Blood Transfusion Council or to any State Blood Transfusion Council
National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
National Sports Fund
National Cultural Fund
Fund for Technology Development and Application
Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund in respect of any State or Union Territory
the Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
The Maharashtra Chief Minister’s Relief Fund during October 1, 1993, and October 6, 1993
Chief Minister’s Earthquake Relief Fund, Maharashtra
Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat (contribution made during January 26, 2001, and September 30, 2001) or
Prime Minister’s Armenia Earthquake Relief Fund
Africa (Public Contributions — India) Fund

Donations with 50% deduction without any qualifying limit.

Jawaharlal Nehru Memorial Fund
Prime Minister’s Drought Relief Fund
National Children’s Fund
Indira Gandhi Memorial Trust
The Rajiv Gandhi Foundation

Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income

Government or any approved local authority, institution or association to be utilized for the purpose of promoting family planning
Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India.

Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income

Any other fund or any institution which satisfies conditions mentioned in Section 80G(5)
Government or any local authority to be utilized for any charitable purpose other than the purpose of promoting family planning
Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both
Any corporation referred in Section 10(26BB) for promoting interest of minority community
For repairs or renovation of any notified temple, mosque, gurudwara, church or another place.

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Thursday 7 January 2016

For the individuals or company in India, if the gross income is under taxable income, has to pay tax. However with the provisions available in the income tax sections exemptions are given on certain incomes. There are many tax saving options , on which an individual/company can avail tax exemption on total income.

Tax saving planning is one of the main objects for an individual who come under taxable income. Plan early to avoid confusions and analyze the various sections of tax deductions under the Income Tax Act .

We already discussed about the tax deductions under Section 80C (Click here to know about Section 80C deductions). Planning of tax doesn’t end with Section 80C. Apart from 80C several tax emption sections are available in Income tax act. So, its prudent to analyze other tax deductions provided by the Income Tax Act, 1961 and start looking beyond 80C. Here, we take an attempt to understand them briefly to benefit you.

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Download Automated Master of Form 16 Part B for F.Y.2015-16 [This Excel Utility Can prepare at a time 100 employees Form 16 Part A&B as per new Finance Budget 2015]

80D-Medical Insurance

The premium which is paid towards Mediclaim/Health insurance for self, Spouse, children and parents is considered tax deduction under U/s 80D. The sudden medical expenses incurred for self and family members comes under this section. The maximum amount for claiming deduction is Rs.25,000. The individuals above 60years of age can avail tax deduction Rs 30,000.

80DD-Handicapped Dependents

If you having dependent who is differently abled, the there is provision to get deduction for expenses on his maintenance and medical treatment. Paying premium for the medical treatment of a dependent physically disabled person, you can avail exemption under the section 80DD. You can get these claim up to Rs 50,000 or actual expenditure incurred, whichever is lesser. For severe conditions this limit exempted up to 1lakh. The exemption applies those, the dependents(parents, spouse, children or sibling) should not have claimed any deduction for self. The diseases like Blindness and Vision problems, leprosy cured, Hearing impairment, Locomotors disability , mental retardness or illness with 40% or more considerable under this section.

80DDB - Treatment of Certain Diseases

The expenditure incurred for the medical treatment of self or your dependents can claim a deduction of up to Rs. 80,000 or the actual amount paid, whichever is less, under the section 80DDB. Dependent can be parents, spouse, children or siblings with completely dependent on you. For a senior citizen this exemption is Rs. 80,000, or the amount actually paid for medical expenses. The individuals who want to claim a deduction under this section need to submit a medical certificate from a doctor working in a government hospital. Diseases like Neurological, Parkinson, Malignant Cancers, AODS, Chronic Renal Failure, Hemophia, Thalassemia covered under this section. The expenses claimed by the insurance companies not considered under this section and cannot be exempted.

80E - Education Loan

The education loan interest for pursuing higher education for self and dependent is completely tax exemptible. The exemption is only for interest on education loan and no deduction on principal paid. The loan education loan for self , spouse or children only. For pursuing full time courses only this loan interest deductible is applicable. This deduction is applicable for a period of eight years or till the interest is paid, whichever is earlier.

80G - Donations to approved charitable organizations

The donations given to charitable organizations can get tax deduction u/s 80G. The donations made under philanthropic ground are exempted for 100% of the amount donated while for others its 50% of the donated amount. Receipts issued by the charitable institution with singed , stamped and registration number issued by Income Tax Deparment printed on it , is must and considered for tax deduction. The name on the receipt should match with that on PAN number. The donations made to approved organizations and institutions qualify for deduction. Only donations made in cash or cheque are eligible for deduction.

80GG - House Rent in case HRA is not part of Salary

For salaried individuals as a salary component or self-employed person staying in a rented house does not receive any kind of HRA, they can claim a deduction under 80GG. If you or your spouse or your children having own home can’t get tax deduction under this section. You can claim tax deduction Rs 2000 or 25% of annual income or rent paid 10% of annual income whichever is less.

80U - Physically Disabled Assesse

The individual resident of India, who is suffering from specified disability can get tax deduction u/s 80U In order to avail this deduction one should from disabilities like Blindness and Vision problems, Leprosy cured, Hearing impairment, Locomotor disability, Mental retardation, Autism, Cerebral Palsy . For normal disabilities with 40% or more disabilities the tax deduction is Rs 75,000. For more than 80% disability can avail tax deduction Rs 1,25,000/- .

80TTA - Interest on Saving Account

According to the 80TTA, which is newly introduced in Budget 2012, allows deduction of Rs 10,000 on interest earned on saving bank account.

80EE - Home loan interest Additional Deduction

In the Budget 2013 has introduced a new section 80EE, which gives additional exemption up to Rs 1 lakh on payment of interest on Home loan. The loan which is taken from banks or housing finance companies in the financial year 2012-13 is applicable to this and also the house, which Is not cost more than Rs.40 lakh. The borrower should not own any other property at the time of loan sanction. The additional deduction on interest payment of home loans can be claimed in financial year 2013-14. In case, if you are not able to exhaust the limit in financial year 2013-14, the balance can be claimed in FY 2014-15.

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Download Automated Master of Form 16 Part A&B for FY 2014-15 [This Excel Utility can prepare at a time 50 employees Form 16 Part A&B for FY 2014-15 with all amended Tax Slab and Section]

Brief the tax section with deduction

Entertainment Allowance:

The first deduction which you claim from salary is Entertainment Allowance. Entertainment allowance received is first included in the employee’s income and then a deduction is allowed in case of government employees, for a sum equal to 1/5th of salary (excluding all allowances, benefits and other perquisites) or Rs. 5,000, whichever is less.

Professional Tax:

Tax on employment by whatever name called, levied by a State under Article 80C 276 of the Constitution shall be allowed as a deduction. [Sec. 16(iii)]

Deductions Permissible under Chapter VI-A:

Certain deductions are available from the gross taxable income, under sections 80C to 80U. Important deductions are:

Deposit/Contribution to Life Insurance Premium, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, bank deposits under notified scheme, 5 years POTD, Senior Citizen Saving Scheme, etc. [Sec. 80C]

Contribution to LIC Pension Plan (Jeevan Suraksha) or Pension Fund of other insurance companies. [Sec. 80CCC]

Contribution to notified Pension Scheme by employees of Central Government or any other employer or by any other individual. [Sec. 80CCD]

Investment in listed equity shares (w.e.f 1-4-2014) A.Y.2014-15 [or listed units of equity-oriented mutual funds] under Rajiv Gandhi Equity savings Scheme. [Sec. 80CCG]

Payment of Medical Insurance Premia (Mediclaim) or contribution to Central Government Health Scheme. [Sec. 80D]:

Deductible upto a maximum of Rs. 15,000 (Rs. 20,000 in case the person insured is a senior citizen). Besides, an additional deduction upto Rs. 15,000 (Rs. 20,000 in case the person insured is a senior citizen) [The age limit for a senior citizen from A.Y.2013-14 is 60 years or more] shall be allowable in respect of medical insurance premium for parent(s).

W.e.f. A.Y. 2013-14, deduction can also be availed for any payment for preventive health check-up of the assesses, his family and parents, subject to a limit of Rs. 5,000 within the aforesaid ceilings.

Expenditure on medical Treatment etc. and deposit for maintenance of handicapped dependents. [Sec. 80DD]:

A deduction is allowed to compensate for any expenditure incurred by an assesses, during a year, for the medical treatment (including nursing), training and rehabilitation of one or more handicapped relatives wholly dependent on him, and for amount deposited in an approved scheme of LIC or UTI, for the benefit of a handicapped dependent. A fixed deduction of Rs. 50,000 is allowable, in aggregate for any or both the purpose specified above, irrespective of the actual amount of expenditure incurred.

Expenditure or Medical Treatment of assess/dependant relative [Sec. 80DDB]:

Deduction for the amount of expenditure incurred or Rs. 40,000, whichever is less, is allowable for any year during which expenditure is actually incurred for the medical treatment of specified diseases or ailments for the assesses himself or a dependent relative. If the patient is a senior citizen the deduction allowable shall be the expenditure incurred or Rs. 60,000 whichever is less. Besides, any amount received under a medical insurance policy shall be reduced from the amount of deduction allowable.

Interest on Loan taken for Higher Education. [Sec. 80E]:

Any amount paid by way of interest on a loan taken from any financial institution or any approved charitable institution for the purpose of pursing his higher education, is deduction without any limit.

Interest on Loan taken for first residential house. [Sec. 80EE]:

Deduction is allowable for interest on housing loan from a bank/housing finance company, for allowable is Rs. 1, 00,000, subject to specified conditions. The deduction is allowable for A.Y. 2014-15 and A.Y. 2015-16 only.]

Donation for Charitable Purposes [Sec. 80G]:

There are a number of donations in respect of which deduction is permissible under Sec. 80G. Deduction @ 50% is available for donation to Jawaharlal Nehru Memorial Fund, Prime Minister Drought Relief Fund, [National Children’s Fund] Indira Gandhi Memorial Trust or Rajiv Gandhi Foundation etc. 100% deduction is allowed for donations to National Defense Fund, Prime Minister’s National Relief Fund, [National Children’s Fund,]National Foundation for Communal Harmony, Chief Minister’s/Lt. Governor’s Relief Fund etc. Deduction is granted subject to the prescribed maximum ceiling and on furnishing of appropriate certificate from the done organization.

Donation of a sum exceeding Rs. 10,000 shall be eligible for deduction, only if it paid by a mode other than cash.

Expenditure on Rent. [Sec. 80GG]:

Rent paid by an assesses not owning a house and not in receipt of house rent allowance u/s 10(13A) for residential accommodation whether furnished or unfurnished, is deductible subject to the prescribed ceilings. [w.e.f 1-4-2014, for A.Y. 2014-15]

Donations to specified institutions/associations for Research or for Rural Development [Sec. 80GGA]:

Donation of a sum exceeding Rs. 10,000 shall be eligible for deduction, only if it paid by a mode other than cash.

Physical Disability [Sec. 80U]:

Rs. 50,000 for disability and Rs. 1, 00,000 for severe disability.

Download Automated Form 16 Part B for the financial Year 2014-15 [ This Excel Utility can prepare One by One Form 16 Part B]

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Download Automated Master of Form 16 Part A&B for the Financial Year 2014-15 [ This Excel Utility can prepare at a time 100 employees Form 16 Part A&B with all up dated Tax Section and Tax Slab]