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Income Tax Deductions Under Section 80 Of Income Tax Act

Published on 20 Apr 2019 by Shivi

At the time of filing the Income Tax Return, a person who is eligible to pay his/her taxes for the financial year can claim several deductions from the total income earned that year. The deductions are laid down under Chapter VI A of the Income Tax Act, 1961.

Legistify has prepared a complete guide on the different deductions available to different kinds of persons under the Income Tax laws and rules in India:

Income Tax Deductions In India

Section 80C: Deductions on Investments

Under Section 80C of the IT Act, deduction of INR 1,50,000 can be claimed from the total income to be paid by a person. However, this deduction is only allowed in the case of an Individual or a Hindu Undivided Family.

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

Section 80CCC allows an income tax deduction of 100% or INR 1,50,000, whichever is lower, for any payment or deposit to an annuity plan of LIC or any other insurer by an individual. The annuity plan must be to receive a pension from a fund referred to under Section 10(23AAB) of the Act. However, any pension received from a surrender of annuity, along with any interest or bonus accrued on the annuity, is taxable in the year in which it is received.  

Section 80CCD: Deduction for Contribution to Pension Account

An employee avail this deduction whether he/she is employed or self-employed on the amount deposited under a pension scheme notified by the Central Government. The following deduction is allowed under this provision, whichever is lower:

  1. 10% of the Salary (in case of other employment) or 20% of the Gross Total Income (in case of self-employment).

  2. An additional deduction of up to INR 50,000 for investment in NPS Scheme.

  3. Additional deduction for the employer’s contribution to employee’s pension account of up to 10% of the salary of the employee.

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

The deduction is available to a resident individual, whose gross total income is less than INR 12 lakhs. The deduction can be availed at the time of ITR Return Filing if the following conditions are met:

  1. The assessee must be a new retail investor as per the notified scheme.

  2. The investment must be made in such listed investor as per the notified scheme.

  3. The minimum lock-in period in respect of such investment must be 3 years from the date of acquisition as per the notified scheme.

A deduction of 50% of the amount invested in equity shares or INR 25,000 for three consecutive Assessment Years is allowed, whichever is lower. The deduction can only be claimed until FY 2018-19 as the scheme has been discontinued.

Section 80D: Deduction for Medical Insurance

The deduction is available to an individual or a HUF for up to INR 25,000 for insurance of self, spouse and dependent children. An additional deduction for insurance of parents is available for up to INR 25,000 if they are less than 60 years of age or INR 50,000 they are more than 60 years old. In case, a taxpayer's age and parents age is 60 years or above, the maximum deduction available under this section is to the extent of INR 100,000.

Section 80DDB: Deduction for Medical Expenditure

The deduction is available to a resident individual or a HUF for up to INR 40,000. The deduction can be claimed for any expenses incurred towards the treatment of certain specified medical diseases or ailments for self or any dependents. In case of a HUF, the deduction can be claimed for medical expenses for any of the members of HUF.

If the individual on behalf of whom such expenses are incurred is a senior citizen, a deduction up to INR 1 lakh can be claimed by the individual or HUF taxpayer. Any reimbursement of medical expenses by an insurer or employer must be reduced when calculating the deduction under this provision.

Section 80DD: Deduction for Handicapped Dependent Relative

Section 80DD deduction is available for any expenses incurred on medical treatment, training and rehabilitation of a handicapped dependent relative and to pay for any scheme for maintenance of dependent handicapped relative.

Deduction up to INR 75,000 can be claimed when the disability is 40% or more but less than 80% and up to INR 1,25,000 when the disability is severe.

Section 80E: Deduction for Interest on Education Loan for Higher Studies

A deduction can be claimed by an individual in the Income Tax Return for the interest paid on a loan taken in pursuance of higher education for a maximum of 8 years or till the entire interest is repaid, whichever is earlier.   

Section 80EE: Deductions on Home Loan Interest for First Time Home Owners

First time home buyers can avail a deduction in the following cases:

  1. The value of property purchased is INR 50 lakhs or less.

  2. The amount of Loan taken is INR 35 lakhs or less.

Section 80G: Donations

The donation must be made in any mode of payment other than cash if it exceeds INR 10,000 and must not be made in kind to claim the deduction.

Donations eligible for 100% deduction without qualifying limit:

  1. Prime Minister's National Relief Fund

  2. National Defense Fund set up the Central Government

  3. Prime Minister's Armenia Earthquake Relief Fund

  4. Africa (Public Contributions India) Fund

  5. National Foundation for Communal Harmony

  6. University/Educational Institution of National Eminence approved by Prescribed Authority

  7. Maharashtra Chief Minister's Earthquake Relief Fund

  8. Fund set up by the State Government of Gujarat, for providing relief to Gujarat earthquake victims

  9. Zila Saksharta Samiti

  10. The National Blood Transfusion Council or a State Blood Transfusion Council.

  11. Any fund to provide medical relief to the poor, set up by the State Government.

  12. The Army Central Welfare Fund or the Indian Naval Benevolent Fund or The Air Force Central Welfare Fund.

  13. The Andhra Pradesh Chief Minister's Cyclone Relief Fund, 1996

  14. National Illness Assistance Fund

  15. Chief Minister's Relief Fund or Lieutenant Governor's Relief Fund for any State or UT.

  16. National Sports Fund set up the Central Government

  17. National Cultural Fund set up the Central Government

  18. Central Government's Fund for Technology Development & Application

  19. National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities

  20. National Children's Fund.

  21. Swachh Bharat Kosh and Clean Ganga Fund set up by the Central government.

  22. National fund for control of drug abuse.

Donations eligible for 50% deduction of donation amount without qualifying limit:

  1. Jawaharlal Nehru Memorial Fund

  2. Prime Minister's Drought Relief Fund

  3. Indira Gandhi Memorial Trust

  4. Rajiv Gandhi Foundation

Donations eligible for 100% deduction of donation amount with qualifying limit:

  1. To Government or any approved local authority/institution/association for the purposes of family planning.

  2. Donations by a company to Indian Olympic Association or other notified association or institution for the development of infrastructure or sponsorship for sports & games.

Donations eligible for 50% deductions of donation amount with qualifying limit:

  1. To Government or any approved local authority/institution/association for purposes other than family planning.

  2. Any other fund or institution which fulfils the conditions of section 80G(5)

  3. To any Indian authority for the purpose of satisfying the need for housing accommodation or for planning development of cities, towns villages.

  4. To any corporation (specified under section 10(26BB)) for promoting the interest of members of a minority community.

  5. Donations to any notified temple, mosque, gurdwara, church or any other place notified by the Central Government for the purpose of repair and renovation.

Section 80GG: Deduction for House Rent Paid Where HRA is not Received

To claim this  deduction at the time of ITR Filing in India, the following conditions must be met:

  • The taxpayer must not have a self-occupied residential property in any other place.

  • The taxpayer must be living on rent and paying rent.

A deduction can be claimed for the rent paid minus 10% of adjusted total income, INR 5,000 per month or 25% of the adjusted total income, whichever is less.

Section 80GGB: Deduction on Contributions by companies to Political Parties

An Indian company can claim this deduction for the amount contributed to any political party or an electoral trust, only if the mode of payment is other than cash.

Section 80GGC: Deduction on Contributions given by a Person to Political Parties

Any person other than a company, local authority and an artificial juridical person wholly or partly funded by the government can claim this deduction for any contribution made to any political party or an electoral trust, only if the mode of payment is other than cash.

Section 80RRB: Deduction on Royalty of a Patent

Any income earned through royalty for a patent registered on or after April 1, 2003, under the Patents Act, 1970 is eligible for a deduction up to INR 3 lakhs or the income received, whichever is less. The taxpayer must be a citizen of India.

Section 80 TTA: Deduction from Income for Interest on Savings Bank Account

A deduction of up to INR 10,000 can be claimed against interest from a savings bank account. Interest from a savings bank account must be first included in other income and deduction can be claimed of the total interest earned or INR 10,000, whichever is less. This deduction is allowed to an individual or a HUF. It can be claimed for interest on deposits in savings account with a bank, co-operative society, or post office. Section 80TTA deduction is not available on the interest income from fixed deposits, recurring deposits, or interest income from corporate bonds.  

Section 80 TTB: Deduction of Interest on Deposits for Senior Citizens

A deduction on the interest income from deposits held by senior citizens is allowed  for up to INR 50,000. The deduction can be claimed at the time of Income Tax Return Filing.

Section 80U: Deduction for Person suffering from Physical Disability

A deduction of INR 75,000 is available to a resident individual suffering from any physical disability (including blindness) or mental retardation and INR 1,25,000 in case of severe disability.

Legistify’s accounting experts can help you with your income tax returns for the current financial year and help you save taxes by applying the right deductions available. You can call us at 08468833013 or send an email at [email protected] to know more.

Tags: Income Tax 
Income Tax 

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