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Deductions to be made in Computing Total Income [Sections 80A to 80U (Chapter VIA)]

The aggregate of income computed under each head, after giving effect to the provisions for clubbing of income and set off of losses, is known as "Gross Total Income". In computing the total income of an assessee, certain deductions are permissible under sections 80C to 80U from Gross Total Income.

These deductions are however not allowed from the following incomes although these incomes are part of Gross Total Income:

  1. Long-term capital gains.

  2. Short-term capital gain on transfer of equity shares and units of equity oriented fund through a recognised stock exchange i.e. short-term capital gain covered under section 111A.

  3. Winnings of lotteries, races, etc.

  4. Incomes referred to in sections 115A, 115AB, 115AC, 115ACA, 115AD and 115D.

These deductions are of two types:—

  1. Ddeductions on account of certain payments and investments covered under sections 80C to 80GGC.

  2. Deductions on account of certain incomes which are already included under Gross Total Income covered under sections 80-IA to 80U.

The income arrived at, after claiming the above deductions from Gross Total Income, is known as Total Income. It may also be called Taxable Income. The Total Income, thus calculated, should be rounded off to the nearest Rs. 10.

Deduction from Gross Total Income [Section 80A to 80U] (Chapter VIA)

Basic Rules of Deductions [Sections 80A/80AB/80AC]

  1. Deductions cannot exceed Gross Total Income [Section 80A(2)]:

  2. The aggregate amount of deductions under sections 80C to 80U. i.e., under Chapter VI-A shall not, in any case, exceed the "Gross Total Income" (exclusive of long-term capital gains, short-term capital gain covered under section 111A, winnings of lotteries, crossword, puzzles, etc. and income referred to in sections 115A to 115AD and 115D) of the assessee. Therefore, the total income after deductions will either be positive or nil. It cannot be negative due to deductions. If the "Gross total income" is negative or nil, no deduction can be permitted under this Chapter.

  3. Deduction not allowed to members if allowed to AOP/BOI [Section 80A(3)]:

  4. If a deduction is allowed under the above sections to the AOP or BOI then deductions for the same payment/income will not be allowed to the members of the AOP/BOI. [Section 80A(3)].

  5. Double deduction not allowed and deduction cannot exceed the profit of the particular undertaking or unit or enterprise, etc. [Section 80A(4)]:

  6. Notwithstanding anything to the contrary contained in section 10AA or in any provisions of this Chapter under the heading "C.—Deductions in respect of certain incomes" (i.e. deductions under sections 80-IA to 80RRB), where, in the case of an assessee, any amount of profits and gains of an undertaking or unit or enterprise or eligible business is claimed and allowed as a deduction under any of those provisions for any assessment year, deduction in respect of, and to the extent of, such profits and gains shall not be allowed under any other provisions of this Act for such assessment year and shall in no case exceed the profits and gains of such undertaking or unit or enterprise or eligible business, as the case may be.

  7. Deduction allowed only when it is claimed by the assessee [Section 80A(5)]:

  8. Where the assessee fails to make a claim in his return of income for any deduction under section 10AA or under any provision of this Chapter under the heading "C.—Deductions in respect of certain incomes" (i.e. sections 80-IA to 80RRB), no deduction shall be allowed to him thereunder.

  9. Profit or gain to be recomputed if inter unit or inter business transfer is not at market value [Section 80A(6)]

  10. Assessee's duty to place relevant material:

  11. If an assessee approaches a statutory authority for obtaining a concession under the taxing statute, he should in fairness place all the material before the said authority and be also in a position to satisfy the said authority that he was entitled to obtain the concession.

  12. Deduction to be allowed in respect of net income included in Gross Total Income [Section 80-AB]:

  13. Where any deduction is required to be made or allowed under any section in respect of any income then for the purpose of computing the deduction under that section, the net income computed in accordance with the provisions of the Income-tax Act (before making any deduction under this chapter i.e. Chapter VIA) shall alone be regarded as the income received by the assessee and which is included in his Gross Total Income. [Section 80AB].

  14. Benefits of certain deductions not to be allowed in cases where return is not filed within the specified time limit [Section 80AC]:

    Where in computing the total income of an assessee, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC or section 80-ID or section 80-IE, no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under section 139(1).

Deduction under Chapter VI-A

[ Sec.- 80C, 80CCC, 80CCD, 80CCF, 80CCG, 80D, 80DD, 80DDB, 80E, 80EE, 80G, 80GG, 80GGA, 80GGB, 80GGC, 80 IA, 80IB, 80IC, 80ID, 80IE, 80JJA, 80JJAA, 80LA, 80P, 80QQB, 80RRB, 80TTA, 80U ]

DEDUCTION UNDER CHAPTER VI-A IN RESPECT OF 'PAYMENTS'
Section Nature of Payment Who can Claim
80C LIfe Insurance Premia, Provident Fund Contribution (Maximum : Rs. 1,50,000) Individuals
80CCC Pension Fund [ Maximum : Rs. 1,50,000 Individuals
80CCD(1) Deduction available in respect of Employee’s / Assessee’s Contribution to National Pension Scheme (NPS) [Section 80CCD(1)] Individuals
80CCD(1B) Additional Deduction of Rs. 50,000 is available in respect of Employee’s / Assessee’s Contribution to National Pension Scheme (NPS) [Section 80CCD(1B)] Individuals
80CCD(2) Deduction available in respect of Eemployer’s Contribution to National Pension Scheme (NPS) [Section 80CCD(2)] Employees
80D Deduction in respect of Health or Medical Insurance Premium Individual/HUF
80DD Deduction in respect of Maintenance Including Medical Treatment of a Dependent who is a Person with Disability Resident Individual/ Resident HUF
80DDB Deduction in respect of Medical Treatment , etc. Resident Individual/ Resident HUF
80E Payment of interest of Loan taken for higher studies Individual
80EE Deduction in respect of Interest on Loan taken for Residential House Property Individual
80G Deduction in respect of Donations to certain Funds, Charitable Institutions , etc. [Section 80G ] All Assessee
80GG Deduction in respect of Rents Paid [Section 80GG] Individual
80GGA Deduction in respect of certain Donations for Scientfic Research or Rural Development [Section 80GGA] All assessees not having any income chargeable under the head 'Profits and gains of business or profession'
80GGB/GGC Contribution to Political Parties  
DEDUCTION UNDER CHAPTER VI-A IN RESPECT OF 'CERTAIN INCOMES'
80-IA

Deduction in respect of Profit and Gains from Industrial Undertaking or Enterprises engaged in infrastructure Development [Section 80IA]

All Assessee
80-IAB

Deduction in respect of profits and gains by an undertaking or an enterprise engaged in development of Special Economic Zone (SEZ)

Developers
80-IAC Special Provision in respect of Eligible Business of Eligible Start Up [Section 80-IAC] [W.e.f. A.Y. 2017-18] Companies / LLPs
80-IB Deduction in respect of Profit & Gain from certain Industrial Undertaking other than Infrastructure Development Undertaking [Section 80-IB] All Assessee
80-IBA Deduction in respect of Profits and Gains from Housing Projects [Section 80-IBA] All Assessee
80-IC Deduction in respect of Profits and Gains of Certain Undertaking or Enterprises in certain Special Category States. [Section 80-IC] All Assessee
80-ID Deduction in respect of Profits and Gains from Business of Hotels and Convention center in NCR All Assessee
80-IE

Deduction in respect of certain undertaking in North-Eastern States

All Assessee
80-JJA

Deduction In Respect Of Profit And Gains From Business Of Collecting And Processing Of Bio-Degradable Waste

All Assessee
80-JJAA

Deduction In Respect Of Employment Of New Employees [Section 80-JJAA] w.e.f. A.Y. 2017-18

All Assessee
80LA

Deduction in respect of certain incomes of Offshore Banking Units and International Financial Services Centre

Scheduled Banks
80P

Deduction in respect of income of Co-operative Societies

Co-operatives Societies
80PA

Deduction in respect of income of Farm Producer Companies [W.e.f. A.Y. 2019-20]

Producers Companies
80QQB

Deduction in respect of royalty income, etc., of authors of certain books other than text books [ Maximum Rs. 3,00,000]

Resident Individuals
80RRB

Deduction in respect of royalty on patents [ Maximum Rs. 3,00,000]

Resident Individuals
80TTA

Deduction in respect of interest on deposits in savings accounts to the maximum extent of Rs. 10,000

Individuals / HUF
80TTB

Senior citizen to be allowed a deduction of Rs. 50,000 on account of interest on deposits with Banks / co-operative bank / post office.

[W.e.f. A.Y. 2019-20]

Senior Citizens
80U

Deduction in case of a person with disability [ Maximum : Rs.1,25,000]

Resident Individuals
Deductions to be made in Computing Total Income [Sections 80A to 80U (Chapter VIA)]

Related Topics...Deductions from Gross Total Income

  1. DEDUCTIONS UNDER 'CHAPTER VI-A' IN RESPECT OF "PAYMENT & INVESTMENT" ARE ALLOWED FROM SECTION 80C TO 80GGC

    Section 80C Section 80CCC Section 80CCD
    Section 80CCG Section 80D Section 80DD
    Section 80DDB Section 80E Section 80EE
    Section 80G Section 80GG Section 80GGA
  2. DEDUCTIONS UNDER 'CHAPTER VI-A' IN RESPECT OF "INCOMES" ARE ALLOWED FROM SECTION 80-IA TO 80U

    Section 80-IA Section 80-IAB Section 80-IAC
    Section 80-IB Section 80-IBA Section 80-IC
    Section 80-ID Section 80-IE Section 80-JJA
    Section 80-JJAA Section 80-LA Section 80-P
    Section 80-PA Section 80-QQB Section 80-RRB
    Section 80-TTA Section 80-TTB Section 80-U
 

 

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