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Deductions at a Glance in Income Tax

 

 

The following deductions are allowed from salary:
Professional Tax -Actual amount paid by the employee.

What are the permissible Deductions an assessee can claim under l.T. Act?

Important Deductions that can be claimed under Chapter VI A of I.T. Act are:

SI.
No.

I.T.
Sec.

Allowance/Perks Allowed

Amount of Deduction

Categories of
Assessees

1.
a.

 

 

 

 

b.

 

c.


80 C

 

 

 

 

80 CCC

 

80 CCD

Life Insurance Premia,
Provident Fund **NSc
ELSS,Post-Otf ice 5 year
Time Deposit, Tuition Fees
(max.2 Children),Sr. Citizen
Saving Scheme 2004.
Repayment of principal of
Housing Loan,Bank Fixed
Deposit of 5 Yrs period,
Notified NABARD Bonds

Premium paid towards
approved Pension Fund
(like LIC’s Jeevan
Suraksha) max. 1.5 Lakh

Contribution to Central
Govt. pension/NPS
Schemes. Upto 10% of
Salary with matching
contribution from Govt.
(Max. Rs. 1 lakh)


Maximum
overall deductions
allowed under
section
80C,
80CCC
80CCD
is
Rs. 1.5 lakh.


Individuals/HUF

 

 

 

 

Individuals/HUF

 

Central Govt.
Employees / Non
Govt. Employees/ All Private Sector employees

 

d. 80 CCG

New Equity scheme for deduction upto 50% for Investment upto Rs. 50,000 directly into Equity.

 

Max. 25,000

[New retail Investors whose income is below Rs.12 lakhs. (Lock-in period 3 yrs.)]

2.

80 D

(a) Medical Insurance
Premium paid by cheque
for policies taken from
GIC/ other IRDA approved Insurers

(b) For Senior Citizens

1 Rs.15,000 for SeIf/
Spouse/Children. AddI.
15,000 for Parents.
2. For Senior Citizen
Rs. 20,000

Individuals/HUF.

Note : Contributions made by serving & retiring Central Govt. staff is also eligible under his section.

Note : Upto Rs.5,000 incurred for preventive check-ups can be claimed within overall limit of Rs.15,000 or 20,000 U/s 80D.

Permissible Deductions from Gross Tatal Income : Deductions allowed under Chapter VI-A i.e. Section 80C to 80U , cannot exceed Gross Total Income of an Assessee excluding Short Term Capital Gains U/s 111A and any Long Term Capital Gains.


The following are additional Deductions apart from 80C, 8OCCC & 8OCCD:

3.

80 DD

(a)Any expenditure for Medical, Nursing & Rehabilitation incurred on dependent relative suffering from permanent Physical Disability* AND


(b) Deposits under LIC,
UTrs Scheme & other
IRDA approved Insurers for
the benefit of Physically
Handicapped dependent
(e.g. LICs Jeevan Aadhar)

Rs. 50,000/-
with an additional
Rs. 50000/-, if the disability is severe exceeding
80%
i.e. Rs. 1 Lakh

Individuals?
HUF


*Individuals suffering from
permanent disability including blindness, mental r e I a r d at i o n autism, cerebral palsy or multiple disabilities.

4.

80DDB

(a) Actual expenditure incurred on Medical treatment of Self or dependent relative or a member of HUE suffering from terminal disease like, Cancer, AIDS, Renal failure, etc.

(b) For Senior Citizens

Upto
Rs. 40,000

 

 

Upto Rs.60,000

Individuals/
HUF

5.

80E

Interest on Loan taken from Financial/Charitable Instn.for Self/ Spouse/ Children for Higher Education above X Std. (for a max. period of 8 years)


Any amount

 


Resident Individuals

6a.

80G

Donations made to National Defence Fund, P.M.’s Relief Fund, Political parties/Electrol Trusts, Approved Funds of reputed Educational Institutions National Trust for welfare of persons with Autism, Cerebral Palsy etc.

100% of
Donation

All Assesses

6b.

80G

Donations made to Jawaharlal Memorial Fund, PM’s Drought Relief Fund, National Children Fund, Any Charitable Institution! Trust, Religious Institutions, A corporation established by the Government for promoting interest of the members of a Minority Community

 

50% of
Donation.
In some cases
donation is
restricted to
10% of gross
total income.
100% in some
cases like
National
Defence Fund

All Assesses

 

Deductions allowed only if made in Cheque / Draft.

7.

80GG

Deduction in respect of rents paid, provided no house is owned by self, spouse, minor child or HUF in the place of work and is residing in any of the specified cities and subject to tiling of declaration in Form No. 10BA

25% of
income or
rent paid in
excess of 10%
of income or
ceiling of
Rs. 24,000 p.a.
whichever
is less

Individuals (no exemption is allowed to those who are in receipt of HRA & claiming deduction u/s 10(13A)]

8.

80U

Persons suffering from
Permanent Physical
Disability as specified
in Rule 11D

Rs. 50,000
(Rs. 1,00,000 in
case of Severe
Disability)

 

9. 80 TTA Interest on S.B. Account Max. of Rs. 10,000 All Assessee

10.

24

Int. on Housing Loan:
Taken upto 31-3-99 max. of Taken after 01-4-99 max. of
(Provided house is constructed within 3 years)

Loan for Repairs / Renewals

Rs. 30,000
Rs. 2 Lakh

Assesses having
Self Occupied
House Property.

 

Rs. 30,000

No limit in respect of let-out property

Note: Al, the above deductions will be allowed only on satisfying the conditions specified in the relevant sections of the Income Tax Act. Deduction u/s 80C to 80U cannot exceed Gross Total Income.

 
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