The new section 80C has become effective w.e.f. 1st April, 2006. Even the section 80CCC on pension scheme contributions was merged with the above 80C.
The total deduction under this section (alongwith section 80CCC and 80CCD) is limited to Rs. 1.50 lakh ( In Budget 2014 Increased the limit from Rs. 1.00 lac).
Life Insurance Premium For individual, policy must be in self or spouse's or any child's name. For HUF, it may be on life of any member of HUF.
Sum paid under contract for deferred annuity For individual, on life of self, spouse or any child.
Sum deducted from salary payable to Govt. Servant for securing deferred annuity for self-spouse or child Payment limited to 20% of salary.
Contribution made under Employee's Provident Fund Scheme.
Contribution to PPF For individual, can be in the name of self/spouse, any child & for HUF, it can be in the name of any member of the family.
Contribution by employee to a Recognised Provident Fund.
Sum deposited in 10 year/15 year account of Post Office Saving Bank
Subscription to any notified securities/notified deposits scheme. e.g. NSS
Subscription to any notified savings certificate, Unit Linked Savings certificates. e.g. NSC VIII issue.
Contribution to Unit Linked Insurance Plan of LIC Mutual Fund e.g. Dhanrakhsa 1989
Contribution to notified deposit scheme/Pension fund set up by the National Housing Scheme.
Certain payment made by way of instalment or part payment of loan taken for purchase/construction of residential house property.
Condition has been laid that in case the property is transferred before the expiry of 5 years from the end of the financial year in which possession of such property is obtained by him, the aggregate amount of deduction of income so allowed for various years shall be liable to tax in that year.
Contribution to notified annuity Plan of LIC(e.g. Jeevan Dhara) or Units of UTI/notified Mutual Fund. If in respect of such contribution, deduction u/s 80CCC has been availed of rebate u/s 88 would not be allowable.
Subscription to units of a Mutual Fund notified u/s 10(23D).
Subscription to deposit scheme of a public sector, company engaged in providing housing finance.
Subscription to equity shares/ debenture forming part of any approved eligible issue of capital made by a public company or public financial institutions.
Tuition fees paid at the time of admission or otherwise to any school, college, university or other educational institution situated within India for the purpose of full time education of any two children. Available in respect of any two children
Section 80CCC: Deduction in respect of Premium Paid for Annuity Plan of LIC or Other Insurer
Payment of premium for annuity plan of LIC or any other insurer Deduction is available upto a maximum of Rs. 150,000. The premium must be deposited to keep in force a contract for an annuity plan of the LIC or any other insurer for receiving pension from the fund.
Section 80CCD: Deduction in respect of Contribution to Pension Account
Section 80CCD (1): Deduction in respect of Contribution to Pension Account (by Assessee}
Deduction available for the amount paid or deposited in a pension scheme notified or as may be notified by the Central Government subject to a maximum of :
(a) 10% of salary in the previous year in the case of an employee
(b) 10% of gross total income in any other case.
Section 80CCD (2): Deduction in respect of Contribution to Pension Account (by Employer}
Deduction available for the amount paid or deposited by the employer of the assessee in a pension scheme notified or as may be notified by the Central Government subject to a maximum of 10% of salary in the financial year.
Section 80CCF: Investment in Long Term Infrastructure Bonds Deduction Stands withdrawn from FY 2012-13
Investments in Long Term Infrastructure Bonds issued by Industrial Finance Corporation of India, LIC, Infrastructure Development Finance Company Limited or a Non-Banking Finance Company classified as an Infrastructure Finance Company by RBI with a minimum tenure of 10 years and Lock in period of 5 years. Maximum amount of deduction available is Rs. 20,000/-
(The deduction was over and above the combined deduction of Rs. 100,000/- available under section 80C, 80CCC and 80DDD.)
Section 80CCG:
Amount invested by resident individuals, whose gross total income does not exceed Rs. 12 lakhs, in listed shares or listed units in accordance with notified scheme for a lock-in period of 3 years (Subject to certain conditions).
Deduction of 50 % of total investment subject to maximum of Rs. 25,000 in 3 consecutive assessment years, beginning with the assessment year relevant to the previous year in which the listed shares or list units of equity oriented funds are first acquired.
Section 80D: Deduction in respect of Medical Insurance
Deduction under section 80D is available for medical claim policy By individual for family and HUF for their members.
Amount Of deduction : Two type of Deductions are available to Individuals under this section from Assessment year 2009-10
Deduction on Medical insurance premium paid for himself,spouse,dependent children =Rs 15000 maximum (proposed to increase to Rs. 25000 in Budget-2015).
Deduction on Medical insurance premium paid for parents,whether dependent on assesee or not is Rs 15000 maximum or Rs. 20000 (proposed to increase to Rs. 30000 in Budget-2015)if parents are senior Citizen.
From AY 2013-14, within the existing limit a deduction of upto Rs. 5,000 for preventive health check-up is available.
Therefore, the maximum deduction available under this section is to the extent of Rs. 40,000/-
Mode of payment:Insurance Premium should be paid by any mode other than by Cash .Means if insurance premium is paid by cash then no deduction is available.
Section 80DD: Deduction available to resident Individual and HUF in respect of Rehabilitation of Handicapped Dependent Relative
Deduction of Rs. 50,000/- w.e.f. 01.04.2004 in respect of
Expenditure incurred on medical treatment, (including nursing), training and rehabilitation of handicapped dependent relative.
Payment or deposit to specified scheme for maintenance of dependant handicapped relative.
Further, if the dependant is a person with severe disability a deduction of Rs. 100,000/- shall be 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.
Section 80DDB: Deduction allowed to resident Individual and HUF in respect of Medical Expenditure on Self or Dependent Relative
A deduction to the extent of Rs. 40,000/- (Rs. 60,000 in case of senior citizen) 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.
Section 80E: Deduction in respect of Interest on Loan for Higher Studies
This deduction is available to only for interest repayment on loan taken for pursuing higher education.
This deduction is available for individual only and not for other type of assessee.
80 E (deduction on Interest on study loan) was available to parents and person himself but now after finance act 2009(2) it is available to Legal guardian also.
Section 80EE: Deduction in respect of Interest on Residential House Property
Tax deduction under Section 80EE of the Income Tax Act 1961, can be claimed by first-time home buyers for the amount they pay as interest on home loan. The maximum deduction that can be claimed under this section is Rs. 50,000 during a financial year. The amount can be claimed over and beyond the deduction of Section 24 and Section 80C, which are Rs. 2,00,000 and Rs. 1,50,000, respectively.
Section 80EE was designed for the first time in the FY 2013-14 for individual taxpayers to avail tax deduction on interest on home loans. At that time, the maximum deduction that could be claimed was Rs. 1,00,000. This tax benefit was available for only two years - FY 2013-14 and FY 2014-15. The Section was reintroduced on FY 2016-17, and the quantum of deduction was changed to Rs. 50,000 for interest paid towards home loan.
The conditions associated with claiming deductions under Section 80EE are:
This must be the first house that the taxpayer has purchased.
The value of the house should be Rs. 50 lakhs or less.
The home loan availed should be Rs. 35 lakhs or less.
Section 80EE allows deduction only for the interest portion of a home loan.
The home loan has been sanctioned by a Housing Finance Company or a Financial Institution.
As on the date of the loan sanction, the individual must not be owning another house.
The loan should not have been availed for commercial properties.
For claiming deductions under this section, the loan should have been sanctioned between 01.04.16 to 31.03.17.
Section 80EEA: Interest on loan for acquiring residential house property, sanctioned during FY 2019-20
Deduction of up to Rs 1,50,000 towards interest on loan is avialble to individual on following conditions
The loan has been sanctioned by the financial institution during the period beginning on the 1st day of April, 2019 and ending on the 31st day of March, 2020;
the stamp duty value of residential house property does not exceed forty-five lakh rupees;
the assessee does not own any residential house property on the date of sanction of loan.
The deduction is available from Assessment Year 2020-21 and subsequent assessment years.
Section 80EEB: Interest on loan for acquiring Electric Vehicle, sanctioned during 1st April 2019 and 31st March 2023
Deduction of up to Rs 1,50,000 towards interest on loan is avialble to individual on following conditions
The loan has been sanctioned during 1st April 2019 to 31st March 2023
'Electric Vehicle' means a vehicle which is powered exclusively by an electric motor whose traction energy is supplied exclusively by traction battery installed in the vehicle and has such electric regenerative braking system, which during braking provides for the conversion of vehicle kinetic energy into electrical energy;
The deduction is available from Assessment Year 2020-21 and subsequent assessment years.
Section 80G: Deduction in respect of Various Donations
The various donations specified in Sec. 80G are eligible for deduction upto either 100% or 50% with or without restriction as provided in Sec. 80G
Section 80GG:Deduction in respect of House Rent Paid
Deduction available is the least of
Rent paid less 10% of total income
Rs. 2000/- per month i.e. Maximum Deduction available is 24,000/-
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.
Section 80GGA, 80GGC, 80QQB & 80RRB
Section 80GGA: Deduction in respect of certain donations for scientific research or rural development
Deduction for any sum paid by the assessee to a scientific research association which has as its object the undertaking of scientific research or to a University, college or other institution to be used for scientific research : Provided that such association, University, college or institution is for the time being approved for the purposes of clause (ii) of sub-section (1) of section 35.
Section 80GGC: Deduction in respect of contributions given by any person to political parties
In computing the total income of an assessee, being any person, except local authority and every artificial juridical person wholly or partly funded by the Government, there shall be deducted any amount of contribution made by him, in the previous year, to a political party [or an electoral trust].
Explanation. For the purposes of sections 80GGB and 80GGC, political party means a political party registered under section 29A of the Representation of the People Act, 1951
Section 80QQB: Royalty Income of resident individuals on patents.
Maximum deduction Rs. 3,00,000/-
Section 80RRB: Royalty Income of resident individual authors of certain books other than text books.
Maximum deduction Rs. 3,00,000/-
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, upto 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 w.e.f. 01.04.2012 (Assessment Year 2013-14).
Section 80U: Deduction in respect of Person suffering from Physical Disability
Deduction of Rs. 50,000/- 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. 75,000/- shall be available u/s 80U. Certificate should be obtained from a Govt. Doctor. The relevant rule is Rule 11D.
Deductions Allowable under Section 24 of Income Tax Act
Where a housing property has been acquired / constructed / repaired / renewed with borrowed capital, the amount of interest payable yearly on such capital is allowed as deduction under Section 24 of Income Tax Act, subject to the limits stated below. Penal interest on housing loan is not eligible for deduction. If a fresh loan has been raised to repay the original loan and the new loan has been used only for the purpose of repaying the original loan then, the interest accrued on such fresh loan is allowed for deduction.
If the property is acquired or constructed with the capital borrowed on or after 01-04-1999 and such acquisition or construction is completed within 3 years of the end of the financial year in which capital was borrowed then the actual interest payable is allowed as deduction subject to a maximum Rs. 2,00,000/- w.e.f. FY 14-15 enhanced from Rs. 1,50,000/-
In other case interest up to maximum Rs. 30,000/- is deductible.
The ceiling of Rs.2,00,000/- or Rs. 30,000/- is only in case the property is self occupied. There is no limit on deduction of interest if the property is let out.
Relief U/S 89 (Arrears Paid)
Where an assessee is in receipt of a sum in the nature of salary, being paid in arrears or in advance or is in receipt, in any one financial year, of salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, or is in receipt of a sum in the nature of family pension as defined in the Explanation to clause (iia) of section 57, being paid in arrears, due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed, the Assessing Officer shall, on an application made to him in this behalf, grant such relief as may be prescribed
The following proviso shall be inserted in section 89 by the Finance (No. 2) Act, 2009, w.e.f. 1-4-2010 :
Provided that no such relief shall be granted in respect of any amount received or receivable by an assessee on his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of a public sector company referred to in sub-clause (i) of clause (10C) of section 10, a scheme of voluntary separation, if an exemption in respect of any amount received or receivable on such voluntary retirement or termination of his service or voluntary separation has been claimed by the assessee under clause (10C) of section 10 in respect of such, or any other, assessment year.
Relief U/S 91. COUNTRIES WITH WHICH NO AGREEMENT EXISTS. Paid
(1) If any person who is resident in India in any previous year proves that, in respect of his income which accrued or arose during that previous year outside India (and which is not deemed to accrue or arise in India), he has paid in any country with which there is no agreement under section 90 for the relief or avoidance of double taxation, income-tax, by deduction or otherwise, under the law in force in that country, he shall be entitled to the deduction from the Indian income-tax payable by him of a sum calculated on such doubly taxed income at the Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal.
(2) If any person who is resident in India in any previous year proves that in respect of his income which accrued or arose to him during that previous year in Pakistan he has paid in that country, by deduction or otherwise, tax payable to the Government under any law for the time being in force in that country relating to taxation of agricultural income, he shall be entitled to a deduction from the Indian income-tax payable by him - (a) Of the amount of the tax paid in Pakistan under any law aforesaid on such income which is liable to tax under this Act also; or
(b) Of a sum calculated on that income at the Indian rate of tax; whichever is less.
(3) If any non-resident person is assessed on his share in the income of a registered firm assessed as resident in India in any previous year and such share includes any income accruing or arising outside India during that previous year (and which is not deemed to accrue or arise in India) in a country with which there is no agreement under section 90 for the relief or avoidance of double taxation and he proves that he has paid income-tax by deduction or otherwise under the law in force in that country in respect of the income so included he shall be entitled to a deduction from the Indian income-tax payable by him of a sum calculated on such doubly taxed income so included at the Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal.
Relief U/S 90 Salary in two or more countries and double taxation relief Paid
Substantial number of such Indians renders services both in and outside India during the same assessment year. They receive salary and other income in India as well as outside India. They may receive remuneration either from the same employer or from different employers. In certain cases, the salary of such employees accrues partially in India and partially outside India during any assessment year.
In case the employees are residents of India, by virtue of S. 5 of the Income-tax Act, 1961, their global income becomes liable to tax in India. Income accruing to or received by resident Indians outside India may be taxable under the laws of the countries where such income is received or accrues. Additionally, such income is also taxable in India.
Double Taxation Avoidance agreement, if any, entered into between India and a country outside India comes to the aid of such employees, by providing a relief u/s.90 against double taxation. Employees are entitled to relief u/s.90 in respect of their salary and other income that has been doubly taxed. Relevant portion of S. 90 is extracted below for convenience.
"90. (1) The Central Government may enter into an agreement with the Government of any country outside India:
(a) for the granting of relief in respect of :
(i) income on which have been paid both income-tax under this Act and income-tax in that country; or
(ii) income-tax chargeable under this Act and under the corresponding law in force in that country to promote mutual economic relations, trade and investment, or
(b) for the avoidance of double taxation of income under this Act and under the corresponding law in force in that country, or
(c) for exchange of information for the prevention of evasion or avoidance of income-tax chargeable under this Act or under the corresponding law in force in that country, or investigation of cases of such evasion or avoidance, or
(d) for recovery of income-tax under this Act and under the corresponding law in force in that country, and may, by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreement.
(2) Where the Central Government has entered into an agreement with the Government of any country outside India U/ss.(1) for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee."