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Deductions for certain investment or payments Section 80C:

Applicability

  • Individual or HUF

Conditions

  • Investment or Contribution should be made in approved investment schemes.
  • The payments need not be necessarily to be made out of income.
  • Deduction shall be allowed only payment basis not an accrual basis.

Amount of deduction

  • Amount Invested or Rs. 1, 00,000 whichever is less. However, as per Section 80CCE, the total deduction the assessee can claim u/s. 80C, 80CCC and 80CCD shall be restricted in aggregate to Rs. 1,00,000/-.

Eligible Investment

Nature of Payment

Payments made by the

Individual

Individual

  • LIC- Maximum Premium Payment Deductible is 20% Of Sum Assured.

Self, Spouse, Child

Any Member of HUF

  • Deferred Annuity deducted from Govt Employees Salary (not exceeding 1/5th salary)

Self, Spouse, Child

NA

  • Contribution to Statutory or Recognized Provident Fund

Self

NA

  • Contribution to Public Provident Fund- Minimum Rs.500 Maximum Rs.70, 000 per Account as per PPF rules.

Self, Spouse, Child

Any Member of HUF

  • Contribution to Approved Superannuation Fund

Self

NA

  • Deposits in Post Office Saving Bank (CTD)

[ Deposits in 10year or 15 year deposit account not eligible]

Self, Minor under his guardianship

Any Member of HUF

  • Subscription to National Saving Scheme, 1992 & National Saving Certificate. [ Interest Accrued]

Self

Any Member of HUF

  • Contribution to Unit Linked Insurance Plan of UTI/ LIC and Continues for minimum period 5 year.

Self, Spouse, Child

Any Member of HUF

  • Contribution to Pension Fund of Mutual Fund/ UTI

Self

NA

  • Subscription to Units of Mutual Funds/ UTI.

Self, Spouse, Child

Any Member of HUF

  • Deposits with National Housing Bank.

Self, Spouse, Child

Any Member of HUF

  • Tuition Fees paid to University, College, School or Educational Institution located in India for full time Education.

Two Children

NA

  • Housing Loan Repayment- Minimum Holding Period of house- 5 Year.

Self

NA

  • Term Deposits for at least 5 Year with a Scheduled bank in accordance with a scheme framed and notified by the Central Govt for this Purpose

Self

NA


Note:


Repayment of Housing Loan:

  • House Constructed or Purchased out of loan must be for residential purposes.
  • The Assesses should not transfer the house for 5 Years.
  • If the Assesses transfer the property within 5 years of construction/ acquisition then no deduction shall be allowed in respect of repayments made during the year of termination.

Deduction available to an assesses for contributions made to annuity plans of LIC and other Insurers- Section 80CCC

Applicability

  • Individual

Nature of Payment

  • Amount paid or deposited by individual in an Annuity Plan of LIC or any other insurer for receiving pension.

Conditions

  • Payment shall be made out of Income chargeable to tax.
  • In the hand of Nominee: Pension received shall be taxable in the year of receipts.

Amount of deduction

  • Amount Invested or Rs. 1, 00,000 whichever is less. However, as per Section 80CCE, the total deduction the assessee can claim u/s. 80C, 80CCC and 80CCD shall be restricted in aggregate to Rs. 1,00,000/-.

Deduction available for central government employees for contribution towards approved pension scheme- Section 80CCD

Applicability

  • Individual employed by Central Govt on or after 01.012004.

Nature of Payment

  • Employees contribution to approved pension scheme of the central govt.

Amount of deduction

  • Amount paid or 10% of salary, whichever is less.

Mediclaim insurance Policy- U/ s 80D

Applicability

  • Individual or HUF, Resident or Non-resident.

Nature of Payment

 Mediclaim insurance policy taken-

  • In case of Individual: Individual, spouse, dependent parents and children.
  • In case of HUF: Any member of HUF.

Conditions

  • Payment shall be made by cheque only.
  • Payment made out of chargeable income only.
  • Payment as per GIC scheme or any other insurer as approved by Central Govt.

Amount of deduction

  • Senior Citizen: Rs.15, 000/- or Premium Paid [Whichever is Less]
  • Other than Senior Citizen: Rs.10, 000/- or Premium Paid [Whichever is Less]

Deduction available for expenditure incurred for medical treatment of dependant- U/s 80DD

Applicability

  • Individual or HUF.

Nature of Payment

  • Expenditure incurred for medical treatment, nursing, training and rehabilitation of dependent relative of individual or dependent member of HUF suffering from permanent physical disability.
  • Amount deposited in approved scheme of LIC/ UTI or other approved insurer which provides for payment of recurring or lump sum amount for the benefit of the handicapped dependent after the demise of the assessee.

Conditions

  • The assessee shall furnish a copy of the certificate issued by medical authority.
  • Deposited or payment made or out of chargeable income only.
  • Subscription shall be made in the name of assessee only.

Amount of deduction

  • Special (Severe Disability): If the dependent is a person with severe disability [disability over 80%] deduction is Rs.75, 000/-
  • General: A fixed deduction of Rs.50, 000/- irrespective of amount paid.

Note:
Specified Diseases Includes:

  • Neurological diseases
  • Cancer
  • AIDS
  • Chronic renal failure
  • Hemophilia
  • Thalassaemia

Deduction in respect of repayment of loan taken for Higher Education- U/s 80E

Applicability

  • Individual

Nature of Payment

  • Payment of Interest on education loan taken from financial institution or approved charitable institution for the purpose of pursing Higher Education.

Conditions

  • Period: Deduction is available for a maximum of 8 Assessment Years including 1st year of repayment or until the interest is fully repaid [W.E.L]
  • Payment made or out of chargeable income only.
  • Meaning of Higher Education: Higher Education means full time for any graduation or post-graduation in engineering, medicine, management or for post-graduation in applied sciences, pure sciences including mathematics and statistics.

Amount of deduction

  • Interest on education loan

The tax benefit available to an assessee in respect of rent paid by him but is not in receipt of HRA- U/s 80GG

Applicability

  • If assessee paying rent and receiving HRA Allowance.

 

Conditions

  • Assessee should not be in receipt of HRA.
  • No Residential House at a place of Business.
  • Property at other place- Not claimed as self occupied.
  • Assessee should file a declaration in form-10BA declaring the amount of rent paid and name and address of the person to whom rent is paid.

Amount of deduction

Least of the following amount is deductible-

    • Rent paid Less 10% of Adjusted Total Income; or
    • Rs.2, 000/- per month; or
    • 25% of Adjusted Total Income*

*Adjusted Total Income:

Particulars

Rs.

Grass Total Income
Less: Long-Term Capital Gains- Section 112(2)
Short-Term Capital Gains- section 111A
All other deductions under chapter VI-A Except 80GG

XXXX
(XXX)
(XXX)
(XXX)

Adjusted Total Income

XXX


Deduction in respect of donation made by an individual U/s 80G

Applicability

  • All assesses [except for donations u/s 80G (2)(c), which is applicable for donations made only by company].

Eligible contribution

  • Assessees are entitled to deduction U/s 80G if they have contribution to or donated to Approved Funds and Charitable institutions.

Conditions

  • Donation should be made in sum of money and not in kind.
  • The assessee should produce proof of payment along with the return of income.

Meaning of Charitable institution: Charitable institution includes funds/ institution which incur any expenditure for an amount not exceeding 5% of its total income for any religious nature.

What are the various bodies, the donations to which, are entitled to 100% & 50% deductions without any limit


Deduction @100% of the amount donated, if amount is donated to the following institution:

Deduction @50% of the amount donated, if amount is donated to the following institution:

  1. National defence fund.
  2. Prime ministers national relief fund.
  3. Pms Armenia earthquake relief fund.
  4. Africa [public contribution] India funds.
  5. National foundation for communal harmony.
  6. Approved universities/ educational institution of national eminence.
  7. Maharashtra chief ministers earthquake relief fund.
  8. National/ state blood transfusion council.
  9. Zila saksharta samithi of any district.
  10. Any fund set up by a state govt to provide medical relief to the poor.
  11. Army central welfare fund, air force central fund or Indian naval benevolent fund.
  12. Andhra Pradesh chief minsters cyclone relief fund.
  13. National illness assistance fund.
  14. Chief Ministers/ lieutenant governors relief fund for any state/ union territory.
  15. Notational sports fund.
  16. National trust for welfare of persons with autism, cerebral palsy, mental retardation and multiple disabilities.
  17. Gujarat relief fund.
  18. Fund for technology & application.
  1. Jawaharlal Nehru Memorial Fund.
  2. PM Drought Relief Fund.
  3. National Childrens Fund.
  4. Indira Gandhi Memorial Fund.
  5. Rajiv Gandhi Foundation.

 

Computation of Restricted deduction for donations given:

Steps

Procedure

1

Compute Gross Total Income

2

Compute Adjusted Gross Total Income=
Gross Total Income
Less: a) Long Term Capital Gain
b) Short Term Capital Gain on Sale of Securities(on which STT
Has been paid U/s 111A.
c) Other deductions under Chapter VIA excluding Sec.80G
d) Income on which Tax is not payable.
e) Income U/s 115A, 115B, 115AC, 115AD of Non-Resident
Indians/ Foreign Companies.

3

Compute Actual donation made towards funds qualifying for restricted deduction.

4

Compute 10% of Adjusted Gross Total Income.

5

Maximum permissible donation is Step 3 or Step 4 [Whichever is Less].

6

Amount of deduction: Maximum permissible donation shall be given first for deductions qualifying for 100% restricted deduction and balance towards donations qualifying for 50% restricted deduction.


DEDUCTION IN CASE OF A PERSON WITH DISABILITY U/s 80U

Applicability

  • Individual who is Resident in India.

Conditions

  • The concerned assessee must attach a copy of certificate signed by prescribed medical authority along with return of income filed u/s. 139.

Amount of deduction

  • Rs. 50,000/- in case of normal disability or
  • Rs. 75,000/- in case of severe disability.

 

 
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