Deductions from gross total income under section 80C to 80 U of income tax act 1961

Deductions from gross total income under section 80 C to 80 U of income tax are given below:

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

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

Admissible Deductions:-

Premium paid on insurance on 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.

Sum paid under the contract for deferred on life of the Assessee or his/her spouse or children.

Sum deducted by the government from the salary of an employee for securing a deferred annuity for self, spouse or children.

Contribution to any PPF.

Contribution by an employee to RPF.

Contribution by an employee to an Approved Superannuation Fund.

Contribution made to any PPF set up by the Central Government.

Subscription to any deposit scheme or contribution to any Pension fund set up by the National Housing Bank.

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.

Subscription to deposit scheme of Public Sector, engaged in providing housing finance.

Subscription to units of Mutual funds notified u/s 10(23D).

Sum deposited in Fixed Deposits (FDs) with tenure of five years.

Sum deposited in 5 yrs Post Office Time Deposit (POTD) scheme.

2. DEDUCTION IN RESPECT OF CONTRIBUTION TO CERTAIN PENSION FUNDS (SECTION 80CCC)

Deduction inrespect of Payment of premium for annuity plan of LIC or any other Insurer isprovided. The Premium must be deposited to keep in force a contract for annuity plan of LIC or any other insurer for receiving pension from the fund. For thispurpose, the Interest or Bonus accrued or credited to the Assessees Accountshall not be reckoned as Contribution.

The Maximum Deduction allowed is Rs.1.5 lakh.

3. DEDUCTIONIN RESPECT OF CONTRIBUTION TO PENSION SCHEME OF CENTRAL GOVERNMENT (SECTION80CCD)

Contribution towards NPS by Employee[80CCD(1)]:Tax payer 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 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 avaiabe in respect of employer’s contribution which is in excess of 10 percent of the salary of the employee.

4. LIMITON DEDUCTION U/S 80C, 80CCC, 80CCD

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

5. DEDUCTIONIN RESPECT OF INVESEMENT BY A RESIDENT INDIVIDUAL IN LISTED EQUITY SHARES(SECTION 80CCG)

This Sectionprovides one time deduction to a Resident Individual who has acquired listed equity shares in a previous year in accordance with a scheme notified by theCentral Government. The Amount of deduction would be 50% of amount invested insuch shares or Rs.25000 whichever is less.

Conditions to be satisfied:

The gross total income of the Assessee should beless than or equal to Rs.10 lakhs (Rs. 12 Lakhs from A.Y 2014-15).

The Assessee should be a New Retail Investor(explained below).

The investment should be made in such listedshares as per the requirement specified under the notified scheme.

The Minimum lock-in period is 3 years from thedate of Acquisition.

New Retail Investor means the followingpersons:-

Any individual who has not opened a DematAccount and has not made any transactions in the derivative segment ;

Any individual who has opened a Demat Accountbefore the notification of the scheme but has not made any transactions in theequity segment or derivative segment and

Any individual who is not the first accountholder of an existing joint Demat Account shall be deemed to have not opened anAccount for the purpose of this scheme.

If any Individual afterclaiming such deduction fails to satisfy the conditions then the deduction earlier claimed shall be deemedto be the income of the Previous Year in which he fails to comply with the condition.

6. DEDUCTIONIN RESPECT OF MEDICAL INSURANCE PREMIUM (SECTION 80D)

This Sectionprovides for a deduction of Rs. 25000 in respect of premium paid towards a health insurance policy for the Assessee or his family (spouse and dependentchildren) or any contribution made to the Central Government Health Scheme inaggregate and a further deduction of Rs. 25000 is allowed of premium paid inrespect of health insurance policy for parents.An increased deduction of Rs. 50000 shall be allowed in case any of thepersons mentioned above are senior citizens (i.e. of age 60 years or above). Furtherit is provided that for claiming such deduction u/s 80D the payment must be byany mode other than cash.

FurtherDeduction of Rs. 5000 shall be allowed in respect of payment made on Account ofpreventive health check-up of self, spouse, children or parents made during theprevious year. This deduction is within the overall limit of Rs. 25000 orRs. 50000, as the case maybe.For claimingthis deduction payment can be by any mode including cash.

7. DEDUCTIONIN RESPECT OF REHABILITATION OF HANDICAPPED DEPENDENT RELATIVE (SECTION 80DD)

It provides fora deduction to an Assessee being an individual or HUF who is a resident inIndia.Deduction of Rs. 75,000 (Rs. 50,000 up to assessment year 2015-16) is available in respect of any Amount paid for the medical treatment(including nursing), training and rehabilitation of a dependent, or any amountpaid or deposited under a scheme framed in this behalf.
In case ofsevere 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.

DependentmeansIn the case ofan Individual the spouse, children, parents, brothers, sisters, of theindividual and in the case of HUF, any member who is wholly dependent on theassessee.

8. DEDUCTIONIN RESPECT OF MEDICAL TREATMENT (SECTION 80DDB)

The deduction ofRs. 40000 or Amount actually paid whichever is less shall be allowed to anAssessee who is resident in India being an Individual or HUF. Deduction shallbe allowed of any amount paid for the medical treatment of such disease orailment as may be specified in the rules. In case the Amount is paid in respectof a senior citizen (i.e. of age 60 years or above) then the deduction would beRs.100000 or the Amount actually paid whichever is less.

9. DEDUCTIONIN RESPECT OF INTEREST ON LOAN TAKEN FOR HIGHER EDUCATION (SECTION 80E)

This sectionprovides deduction to an Individual in respect of any interest paid on loantaken for the purpose of pursuing his higher education or the for the purposeof 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 theIndividual or the student for whom the Individual is the legal guardian. Theloan must have been taken from any financial institution or approved charitableinstitution. 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.

10. DEDUCTIONIN RESPECT OF INTEREST ON LOAN TAKEN FOR RESIDENTIAL HOUSE PROPERTYAPPLICABLE FORM a.y 2017-18 (SECTION 80EE)

The following conditions should be satisfied in order to claim deduction under section 80EE:-

1. Assessee is an individual. He may be resident or non resident.
2. He has taken a loan and loan is taken for acquisition of residential house property. Loan is taken form bank or a housing finance company and loan has been sanctioned during/after FY 16-17.
3. The amount of loan sanctioned for residential house property does not exceeds Rs. 35 lakhs and value of residential house property does not exceeds 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 lakhs 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.

11. DEDUCTION IN RESPECT OF DONATIONS TO CERTAIN FUNDS, CHARITABLE INSTITUTIONS ETC. (SECTION80G)

The deduction under section 80G is availabe to any tax payer (may be individual, company, firm or any other person, maybe resident or non -resident). The variousdonations specified under this section are eligible to deduction upto either50% or 100% with or without restrictions.Sub Section 5Dhas been inserted in section 80G to provide that no deduction shall be allowedin respect of donation of any sum exceeding Rs. 2000 unless such sum is paid byany mode other than cash.

12. DEDUCTIONIN RESPECT OF RENT PAID (SECTION 80GG)

Admissiblededuction :-

The deductionwill be least of the following:-

Actual Rent paid less 10% of the total incomebefore allowing such deduction, or

25% of such total income or

Rs. 5000 per month (Rs. 2000 per month, upto the assessment year 2016-17)
Total income will not include longterm capital gains and any income referred to in sections 115A to 115D.

Conditions to be satisfied:-

Assessee should not be in receipt of House RentAllowance.

The expenditure incurred by him on rent of anyfurnished or unfurnished accommodation should exceed 10% of his total incomearrived at after all deductions under Chapter VI A except section 80GG.

The Accommodation should be occupied by theAssessee for the purpose of his own residence.

The Assessee should not have self occupiedresidential premises in any other place.

Assesseeshould file a declaration in form 10BA, confirming the details of rent paid.

13. DEDUCTIONIN RESPECT OF DONATIONS FOR SCIENTIFIC RESEARCH AND RURAL DEVELOPMENT (SECTION80GGA)

AdmissibleDeductions:-

Any sum paid by the Assessee to the ResearchAssociation which has, as its object, the undertaking of scientific research

Any sum paid to an Association or Institutionwhich has, as its object, the undertaking of any programme of Rural Developmentto be used for carrying for carrying out any programme of Rural Development.

Any sum paid to Research Association which has,as its object the undertaking of research in Social Science or StatisticalResearch.

Any sum paid to Public Sector company or a localauthority for carrying out any eligible project or scheme.

Any sum paid to Rural Development fund.

Any sum paid to National Urban Poverty EducationFund (NUPEF).

Sub-section (2A) has been inserted which provides thatno 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.

14. DEDUCTIONIN RESPECT OF CONTRIBUTIONS GIVEN BY COMPANIES TO POLITICAL PARTIES (SECTION80GGB)

This provides ofdeduction of any sum contributed in the Previous Year by an Indian Company toany Political Party or an Electoral Trust. From assessment year 2014-15, no deduction shall be allowed in respect of any sum contributed by way of cash.

14. DEDUCTIONIN RESPECT OF CONTRIBUTIONS GIVEN BY ANY PERSON TO POLITICAL PARTIES (SECTION80GGC)

This provides fordeduction of any sum contributed in the Previous Year by any Person to aPolitical Party or an Electoral Trust. It will not be available to a LocalAuthority and an Artificial Judicial Person.From assessment year 2014-15, no deduction shall be allowed in respect of any sum contributed by way of cash.

DEDUCTIONS FROM GROSS TOTAL INCOME (CHAPTER VI-A), DEDUCTIONS FROM GROSS TOTAL INCOME, DEDUCTION UNDER CHAPTER VI-A, CHAPTER VI-A DEDUCTION, DEDUCTION US 80C TO 80U,Deductions from gross total income under section 80C to 80 U of income tax act 1961