Presentation on permissible deductions

from gross total income under Income Tax

Act 1961
By
Dr. Sanjay P Sawant Dessai
Associate Professor
VVMs Shree Damodar College of
Commerce and Economics Margao Goa

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PERMISSIBLE DEDUCTIONS FROM GROSS TOTAL INCOME

CHAPTER VI A- U/S 80C TO 80 U:

Sec. 80C Deductions in respect of Life insurance

premium, deferred annuity, contribution to provident
fund, subscription to certain equity shares or debentures
etc.
80CCC Deduction in respect of contribution to pension
fund
80CCD- Deduction in respect of contribution to a notified
pension sachems (NPS)
80CCE -The aggregate amount of deductions under
section 80C, section 80CCC and section 80CCD shall
not, in any case, exceed one lakh rupees.
80CCG-Deduction in respect of investment made under
an equity savings scheme.
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 80D- Deduction in respect of medical insurance

premia
80DD Deduction in respect of maintenance
including medical treatment of dependent who is
a person with disability
80E- Deduction in respect of loan taken for
higher education
80G Donation
80 TTA Interest on bank savings accounts
80U - Deduction in the case of person with
disability
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Sec. 80C
Deductions in respect of Life insurance premium, deferred annuity, contribution to
provident fund, subscription to certain equity shares or debentures etc.

Only anindividualor a Hindu undivided family can claim

deduction under section 80C.
Amount paid --1. Life Insurance premiumto effect or keep in force insurance
on life of (a) self, spouse and any child in case ofindividualand
(b) any member, in case of HUF. (Insurance premium should not
exceed 20% of the actual capital sum assured)
2. To effect or keep in forcea deferredannuitycontracton life
of self, spouse and any child in case ofindividual.
3. By way ofdeduction fromsalary payableby or on behalf of
the Governmentto any individualfor the purpose of securing
to him adeferredannuityor making provision for his spouse or
children. The sum so deducted does not exceed 1/5th of the
salary.
4. As
contribution
(not
being
repayment
of
loan)
by
anindividualtoStatutoryProvident Fund.
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Deductions U/s 80 C
5. As contribution toPublicProvident Fundscheme, 1968, in the
name of self, spouse and any child in case ofindividualand any
member in case of HUF.
6. As contribution by an employee to arecognisedprovident
fund.
7. As
contribution
by
an
employee
to
anapproved
superannuation fund.
8. Any sum deposited in a10 year or 15 year account under the
Post Office Savings Bank (CTD) Rules, 1959, in the name of
self and as a guardian of minor in case ofindividualand in the
name of any member in case of HUF.
9. Subscription to the NSC (VIII issue).
10.. As a contribution to Unit-linked Insurance Plan (ULIP) of UTI or
LIC Mutual Fund (Dhanraksha plan) in the name of self, spouse
and child in case ofindividualand any member in case of HUF.
11.To effect or to keep in force a contract for suchannuityplan of the
LIC (i.e., Jeevan Dhara, Jeevan Akshay and their upgradations) or5
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any other insurer as referred to in by the Central Government

Deductions U/s 80 C
12. As subscription toany units of any Mutual Fundreferred u/s.
10(23D)(Equity Linked Saving Schemes).
13. As a contribution by anindividualto anypension fundset up
by any Mutual Fund referred u/s 10(23D).
14. As subscription to any such deposit scheme ofNational
Housing Bank (NHB), or as a contribution to any such pension
fund set up by NHB as notified by Central Government
15. As subscription tonotified deposit schemesof (a) Public
sector
company
providing
long-term
finance
for
purchase/construction of residential houses in India or (b) Any
authority constituted in India for the purposes of housing or
planning, development or improvement of cities, towns and
villages.
16. Astuition
fees(excluding
any
payment
towards
any
development fees or donation or payment of similar nature), to
any university, college, school or other educational institution
situated within India for the purpose of full-time education of any
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two children ofindividual.

Deductions U/s 80 C
17.Towards the cost ofpurchase or construction of a residential
house property(including the repayment of loans taken from
Government, bank, LIC, NHB, specified assessees employer etc.,
and also the stamp duty, registration fees and other expenses for
transfer of such house property to the assessee). The income from
such house property should be chargeable to tax under the head
Income from house property.
18.As subscription toequity shares or debenturesforming part of
any eligible issue of capital of public company or any public
financial institutionapproved by Board.
19.AsTerm Deposit(Fixed Deposit)for 5 years or more with
Scheduled Bankin accordance with a scheme framed and
notified by the Central Government.
20.As subscription to any notified bonds of National Bank for
Agriculture and Rural Development (NABARD).
21.In an account under theSenior Citizen Savings Schemes
Rules, 2004.
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22.As five year term depositin an account under thePost Office

Deductions U/s 80 C
Extent of Deduction
100% of the 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/-.

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80CCC Deduction in respect of contribution to certain

pension fund

Deduction in respect of Payment of

premium for annuity plan of LIC or any
other insurer.
Deduction is available up to a maximum of
Rs. 100,000/-.
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.
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80CCD
80CCD- Deduction in respect of
contribution to a notified pension
sachems (NPS)

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80CCG-Deduction in respect of investment made under an equity savings scheme.

Assessee is a resident individual

Deduction allowed in the computation of his total
income
Fifty per cent of the amount invested in
listed(notified ) equity shares or units to the
extent such deduction does not exceed twentyfive thousand rupees.
Gross total income does not exceed rupees 10
lakhs
Investment is locked in for period of 3 years
Its applicable for first time investor
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Amendment from financial year 2014 -15

onwards

The deduction shall be allowed for

three consecutive assessment years,
beginning with the assessment year
relevant to the previous year in
which the listed equity shares or
listed units of equity oriented fund
were first acquired.

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80D- Deduction in respect of medical

insurance premia
Deduction in respect of Medical Insurance Premium for Self and
family members.
For Individual
Mediclaim premium paid for Self, Spouse or dependant children.
Maximum deduction available is Rs 15,000.
In case of senior citizen -deduction amount is enhanced to Rs.
20,000.
Additional deduction:
Mediclaim premium paid for parents.
Maximum deduction Rs 15,000.
In case any of the parents covered by the Med-claim policy is a
senior citizen, deduction amount is to Rs. 20,000.

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80DD Deduction in respect of maintenance including

medical treatment of dependent who is a person with
disability

Deduction of Rs. 50,000 available to assessee

towards expenditure incurred
for medical
treatment of dependent
Available to the parents, spouse, Children,
brothers & sisters or any one of such dependents
in respect of either medical expenditure incurred
on medical treatment of or for the deposits for
future needs of the disabled or handicapped
dependent.
If disability is 80% or more a sum of Rs. 1,00,000
is allowed.
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80E- Deduction in respect of loan taken for

higher education

Conditions -The following conditions should be satisfied 1. The taxpayer is an individual.

2. He had taken a loan for the purpose of pursuing his
higher education or his relatives. Spouse, children or the
student for whom the individual is legal gardian)
Higher education for this purpose means full-time studies
for any graduate or post-graduate course in engineering,
medicine, management, etc.
3. The aforesaid loan was taken from any bank, an
approved charitable institution or a financial institution
notified by the Government.
4. During the previous year, the taxpayer has paid interest
on such loan.
5. Such interest is paid out of his income chargeable to tax.

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80G Donation

1. Deductions under section 80G is available to any

taxpayer (individual/ firm/HUF/ Company)
2. Donation in kind is not eligible for deduction.

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Amount of deduction
Without any ceiling of 10% of adjusted Gross Total
Income:
100% of deduction if donation given to
1. National Defence Fund set up by the Central Government
2. Prime Ministers National Relief Fund
3. Prime Ministers Armenia Earthquake Relief Fund
4. Africa (Public Contributions India) Fund
5. National Foundation for Communal Harmony
6. An approved university/educational institution of National
eminence;
7. The Maharashtra Chief Ministers Relief Fund during October 1,
1993 and October 6,1993;

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8. Chief Ministers Earthquake Relief Fund, Maharashtra

9. Any fund set up by the State Government of Gujarat
exclusively for providing relief to the victims of earthquake
in Gujarat
10.Any Zila Saksharta Samiti constituted in any district under
the chairmanship of the Collector of that district
11. National Blood Transfusion Council or to any State Blood
Transfusion Council
12.any fund set up by a State Government for the medical
relief to the poor
13. the Army Central Welfare Fund or the Indian Naval
Benevolent Fund or the Air Force Central Welfare Fund
14. Andhra Pradesh Chief Ministers Cyclone Relief Fund, 1996
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15.National Illness Assistance Fund

16. Chief Ministers Relief Fund or Lieutenant Governors Relief Fund in
respect of any State or Union Territory
17.National Sports Fund
18. National Cultural Fund
19. Fund for Technology Development and Application
20. National Trust for Welfare of Persons with Autism
21. Cerebral Palsy
22.Mental Retardation and Multiple Disabilities
23. 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)

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Without ceiling of 10
percent
50% of deduction if donation given to
1. Jawaharlal Nehru Memorial Fund
2. Prime Ministers Drought Relief Fund
3. National Childrens Fund
4. Indira Gandhi Memorial Trust
5. Rajiv Gandhi Foundation.

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Withceiling of 10% of adjusted Gross Total Income:

(a) 100% of qualifying amount, if donation given to

Government or any approved local authority
Institution or association to be utilised 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.

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With 10 percent ceiling

(b) 50% of qualifying amount if donation given to
1. any other fund or any institution which satisfies conditions
mentioned in Section 80G(5)
2. Government or any local authority to be utilised for any
charitable purpose other than the purpose of promoting
family planning
3.
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
4.
Any corporation referred in Section 10(26BB) for
promoting interest of minority community
5. For repairs or renovation of any notified temple, mosque,
gurudwara, church or other place.
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Steps followed in calculating deductions admissible

1. Gross qualifying amount it is an amount aggregate

of the donation made to any of the institutions / funds
2. Net qualifying amount limited to 10 percent of
adjusted gross total income.
3. Adjusted gross total income gross total income as
reduced by the following
a)
amount deductable under section 80C to 80U
(except 80G)
b) Such sum on which income tax is not payable
c) Long term capital gains
d) Short term capital gains taxable under section 111A

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80TTA.
Applicable to Individual and HUF
Income by way of interest on deposits (not
being time deposits) in a savings account with

(a) a banking company

(b) a co-operative society engaged in carrying
on the business
Deductions
Maximum Rs. 10,000.
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80U - Deduction in the case of person with

disability
Persons Covered-Individual resident in India.

Extent of Deduction
(a) Rs. 50,000/- in case of normal
disability or
(b) Rs. 1,00,000/- in case of severe
disability.
Severe Disability means a person
suffering from 80% or more
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