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Deductions under Chapter- VIA

Contents
1

Introduction

2

Section Nature of Deduction

DEDUCTIONS UNDER CHAPTER VI-A

6.1††† Introduction

The Income Tax Act provides for allowability of certain deductions from the gross total income of the assessee. These deductions are given in Chapter VIA of the Income Tax Act. For the purpose of TDS, the employer/ DDO may allow some of these deductions to the employee on furnishing of the required particulars. The deductions allowable by the DDO/employer are being described .


Section  Nature of Deduction Remarks
80CCC Payment of premia for annuity The premium must plan of LIC or any other insurer, be deposited to keep Deduction is available upto a in force a contract for maximum of Rs. 10,000 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.
80D

Payment of medical insurance premia. Deduction is available upto Rs. 10,000

The premium is to be paid by cheque and the insurance scheme should be framed by the General Insurance Corporation of India & approved by the Central Govt. or any other insurer and approved by the regulatory authority & Development authority.The premium should be paid in respect of health insurance of the assessee or his family members
80DD  Deduction of Rs. 40,000 in respect of a) expenditure incurred on medical treatment, (including nursing), training and rehabi≠litation of a handicapped dependent relative.

 

The handicapped dependent should be a dependent relative suffering a perma≠nent disability (including blindness) or mentally retarded, as certified by a specified physician or psychiatrist.

 

b) Payment or deposit to specified scheme for maintenance of dependent handicapped relative Note : The new section 80DD replace the earlier sections of 80DD and 80DDA which are now clubbed together under the new section.
80DDB Deduction of Rs. 40,000 in respect of medical expenditure incurred Expenditure must be actually incurred by resident assessee on himself or dependant relative for medical treatment of specified disease or ailment. The diseases have been specified in Rule HDD. A certificate in form 101 is to be furnished by the assessee from any registered doctor
80E Deduction in respect of repayment of loan taken 
upto Rs. 40,000 per year.

This provision has been introducedto         provide relief to students taking loans for higher studies. The repayment of the principal amount of loan and interest thereon will be allowed as deduction upto Rs. 3.2 lakhs over a period of 8 years.

80G Donations to certain funds,charitable institutions etc.

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

80GG Deduction available is the least of

(i) Rent paid less 10% of total income
(ii) Rs. 2,000 per month
(iii) 25% of total income

1) Assessee or his total spouse or minor child should not own residential accommodation   at the place of employment.
2)  He should not be
in  receipt  of house
rent allowance.
3)   He   should   not
have a self occupied
residential premises in any other place
80L

Interest/Dividend/Income from :
a)     any Govt. Security (Central or
State)

b)    NSC, VI, VII & VIII issues

c)           Notified  debentures   of public
sector   undertakings,   cooperative
societies/Land  mortgage  bank  or
land development bank.

d)  Notified   National   Deposit
Scheme

e)  Any other deposit Scheme framed
by Central Govt. and notified.

f)  Deposit   under   Post   Office
Monthly   Income   Account   rules,
1987.

g)    deposits with banking companies,
banking   co-op,   societies,   land
mortgage   or   land   development
bank.

h) deposits with banks established under any law made by Parliament.

i)     Deposits   with     financial corporations approved by Central Government 

j)   Deposits   with   any   authority constituted in India under any law for   planning,development   or  improvement of cities, towns and villages etc.

k) Deposits with co-op. Societies.

1)   Deposits,   with   any   public companies   providing   long   term finance for construction or purchase of houses.

m) Income from U.T.I.

n) Income from Units of Mutual Fund specified under clause (23D) of Sec. 10.

Rs. 9000 plus an addition deduction of Rs. 3000 allowed in respect of interest on any Central/State Govt. Securities
80U Deduction of Rs. 40,000/- to an individual who suffers from a physical disability (including blindness) or mental retardation Certificate should be obtained from a Govt. Doctor. The relevant rule is Rule 11D.

In respect of section 80G, no deduction should be allowed by the employer/DDO, from the salary income in respect of any donations made for charitable purposes. The tax relief on such donations as admissible u/s 80G will have to be claimed by the taxpayer in the return of income. However, DDOs, on due verification, may allow donations to the following bodies to the extent of 50% of the contribution:

a) The Jawaharlal Nehru Memorial Fund;

b) The Prime Minister's Drought Relief Fund;

c) The National Children's Fund;

d) The Indira Gandhi Memorial Trust;

e) The Rajiv Gandhi Foundation, and to the following bodies to the extent of 100% of the contribution:

1) The†† National†† Defence†† Fund†† or†† the†† Prime Minister's National Relief Fund;

2) The Prime Minister's Armenia Earthquake Relief Fund;

3) The Africa (Public Contribution-India) Fund;

4) The†† National†† Foundation†† for†† Communal Harmony;

5) The Chief Minister's Earthquake Relief Fund, Maharashtra;

6) The National Blood Transfusion Council;

7) The State Blood Transfusion Council;

8) The Army Central Welfare Fund;

9) The Indian Naval Benevolent Fund;

10) The Air Force Central Welfare Fund;

11) The Andhra Pradesh Chief Minister's Cyclone Relief Fund, 1996;

(12) The National Illness Assistance Fund;

(13) The Chief Minister's Relief Fund or Lieutenant Governor's Relief Fund, in respect of any State or Union Territory, as the case may be, subject to certain conditions;

(14) The University or educational†† institution†† of national eminence approved by the prescribed authority;

(15) The National Sports Fund to be set up by the Central Government;

(16) The National Cultural Fund set up by the Central Government;

(17) The Fund for Technology Development and Application set up by the Central Government;

(18) The national trust for welfare of persons with autism, cerebral palsy mental retardation and multiple disabilities.

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