Last modified: 22 August 2016

Deductions under Chapter VI A

The impact of Deductions available under various sections of Income Tax Act is not same for all. It depends upon applicable tax rates as per the total taxable income and status of assessees. An assessee, whose income is taxable at higher rates will have more tax savings i.e. more impact on his / her tax liability than the assessee whose income is taxable at lower rates. You may use Maximize Tax Savings tool to check the impact of various availabe deductions on your tax liability.

Deductions Allowable to Individuals & HUFs under various sections of Chapter VI A :

Section 80C

For investments in specified schemes, saving instruments etc.

Details :
  1. Life insurance premium for policy:
    a) in case of individual, on life of assessee, assessee's spouse and any child of assessee
    b) in case of HUF, on life of any member of the HUF
  2. Sum paid under a contract for a deferred annuity:
    a) in case of individual, on life of the individual, individual's spouse and any child of the individual (however, contract should not contain an option to receive cash payment in lieu of annuity)
    b) in case of HUF, on life of any member of the HUF
  3. Sum deducted from salary payable to Government servant for securing deferred annuity or making provision for his wife/children [qualifying amount limited to 20% of salary]
  4. Contributions by an individual made under Employees' Provident Fund Scheme
  5. Contribution to Public Provident Fund Account in the name of:
    a) in case of individual, such individual or his spouse or any child of such individual
    b) in case of HUF, in the name of any member there of
  6. Contribution by an employee to a recognized provident fund
  7. Contribution by an employee to an approved superannuation fund
  8. Subscription to any notified security or notified deposit scheme of the Central Government.
    For this purpose, Sukanya Samriddhi Account Scheme has been notified vide Notification No. 9/2015, dated 21/1/2015. Any sum deposited during the year in Sukanya Samriddhi Account by an individual would be eligible for deduction. Amount can be deposited by an individual in the name of her girl child or any girl child for whom such an individual is the legal guardian.
  9. Subscription to notified savings certificates [National Savings Certificates (VIII Issue)]
  10. Contribution for participation in unit-linked Insurance Plan of UTI:
    a) in case of an individual, in the name of the individual, his spouse or any child of such individual
    b) in case of a HUF, in the name of any member thereof
  11. Contribution to notified unit-linked insurance plan of LIC Mutual Fund:
    a) in the case of an individual, in the name of the individual, his spouse or any child of such individual
    b) in the case of a HUF, in the name of any member thereof
  12. Subscription to notified deposit scheme or notified pension fund set up by National Housing Bank [Home Loan Account Scheme/National Housing Banks (Tax Saving) Term Deposit Scheme, 2008]
  13. Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, college, school or other educational institution situated in India, for full time education of any 2 of his/her children
  14. Certain payments for purchase/construction of residential house property
  15. Subscription to notified schemes of (a) public sector companies engaged in providing long-term finance for purchase/construction of houses in India for residential purposes/(b) authority constituted under any law for satisfying need for housing accommodation or for planning, development or improvement of cities, towns and villages, or for both
  16. Sum paid towards notified annuity plan of LIC or other insurer
  17. Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005)
  18. Contribution by an individual to any pension fund set up by any mutual fund which is referred to in section 10(23D) or by the UTI (UTI Retirement Benefit Pension Fund)
  19. Subscription to equity shares or debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions
  20. Subscription to any units of any approved mutual fund referred to in section 10(23D), provided amount of subscription to such units is subscribed only in 'eligible issue of capital' referred to above. 21. Term deposits for a fixed period of not less than 5 years with a scheduled bank, and which is in accordance with a scheme framed and notified.
  21. Subscription to notified bonds issued by the NABARD.
  22. Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions)
  23. 5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions)
Exemption :Up to 1,50,000 (Subject to overall limit of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD)
Available to :Individual and HUF

Section 80CCC

Contribution to certain specified Pension Funds

Details :Contribution to certain specified Pension Funds of LIC/other insurer (Subject to certain conditions).
Exemption :Up to 1,50,000 (Subject to overall limit of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD(1))
Available to :Individual

Section 80CCD(1)

Deduction in respect of assessee’s contributions to pension scheme of Central Government

Exemption :10% of salary in case of employees
10% of gross total income in case of others
(Subject to overall limit of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD(1))
Available to :Individual

Section 80CCD(1B)

Deduction in respect of the deposit under a pension scheme notified by Central Government (NPS)

Exemption :Up to Rs. 50,000. This deduction shall be in addition to deduction of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD(1)
Available to :Individual

Section 80CCD(2)

Deduction in respect of employer’s contributions to pension scheme notified by Central Government

Exemption :Upto 10% of salary
Available to :Individual

Section 80 CCG

Amount invested in listed shares

Details :Amount invested by specified resident individuals in listed shares or listed units in accordance with notified scheme for a lock-in period of 3 years (Subject to certain conditions).
Exemption :Deduction of 50% of total investment subject to maximum of Rs. 25,000 is allowed for 3 consecutive assessment years, beginning with the assessment year relevant to the previous year in which the listed shares or list units of equity oriented funds are first acquired
Available to :Specified Resident Individual - A resident individual whose gross total income for the relevant assessment year is not more than Rs. 12 lacs.

Section 80D

Amount invested in Health Insurance

Details :Amount paid (in any mode other than cash) by an individual or HUF to LIC or other insurer to effect or keep in force an insurance on the health of specified person*. An individual can also make payment to the Central Government health scheme and/or on account of preventive health check-up.
* specified person means:
- In case of Individual - self, spouse, dependent children or parents
- In case of HUF - Any member thereof
Note:
1. Deduction for preventive health check-up shall not exceed in aggregate Rs. 5,000.
2. Payment on account of preventive health check-up may be made in cash.
3. Within overall limit, deduction shall also be allowed up to Rs. 30,000 towards medical expenditure incurred on the health of specified person provided such person is a very senior citizen and no amount has been paid to effect or to keep in force an insurance on the health of such person.
4. 'Senior citizen' means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year.
5. 'Very senior citizen' means an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year.
Exemption :In case of Individual, amount paid: a) For self, spouse and dependent children: Up to Rs. 25,000 (Rs. 30,000 if specified person is a senior citizen or very senior citizen) b) For parents: additional deduction of Rs. 25,000 shall be allowed (Rs. 30,000 if parent is a senior citizen or very super senior citizen) In case of HUF, up to Rs. 25,000 (Rs. 30,000 if specified person is a senior citizen or very senior citizen).
The aggregate amount of deduction cannot exceed Rs. 60,000/- in case of an individual and Rs. 30,000/- in case of HUF.
Available to :Individual / HUF

Section 80DD

Expenditure incurred for the medical treatment of a dependent

Details :a) Any expenditure incurred for the medical treatment (including nursing), training and rehabilitation of a dependent, being a person with disability
b) Any amount paid or deposited under an approved scheme framed in this behalf by the LIC or any other insurer or the Administrator or the specified company for the maintenance of a dependent, being a person with disability
(Subject to certain conditions).
Exemption :Rs. 75,000 (Rs. 1,25,000 in case of severe disability)
Note:
"dependant" means -
(i) in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them;
(ii) in the case of a HUF, any member thereof, dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance, and who has not claimed any deduction under section 80U in computing his total income for the assessment year relating to the previous year.
Available to :Resident Individual and HUF

Section 80DDB

Expenditure incurred for medical treatment of specified diseases

Details :Expenses actually paid for medical treatment of specified diseases and ailments for:
a) In case of Individual: Assessee himself or wholly dependent spouse, children, parents, brothers and sisters
b) In case of HUF: Any member of the family who is wholly dependent upon the family
(Subject to certain conditions).
Exemption :Up to Rs. 40,000 (Rs. 60,000 in case of senior citizen and Rs. 80,000 in case of very senior citizen)
With effect from assessment year 2016-17, the prescription for medical treatment may be obtained from any specialist doctor not necessarily from a doctor working in Government hospital only.
Available to :Resident Individual and HUF

Section 80E

Interest paid on Educational Loan

Details :Amount paid out of income chargeable to tax by way of payment of interest on loan taken from financial institution/approved charitable institution for pursuing higher education (Subject to certain conditions).
Exemption :The amount of interest paid during initial year and 7 immediately succeeding assessment years (or until the above interest is paid in full).
Available to :Individual

Section 80EE

Interest on loan for acquiring residential house property, sanctioned during FY 2016-17

Details :Interest payable on loan taken up to Rs. 35 lakhs by taxpayer from any financial institution, sanctioned during the FY 2016-17, for the purpose of acquisition of a residential house property whose value doesn't exceed Rs. 50 lakhs.
Note:
1. On the date of sanction of loan, taxpayer should not own any other residential house property.
2. The deduction is available from AY 2017-18 and subsequent assessment years.
Exemption :Deduction of up to Rs. 50,000 towards interest on loan.
Available to :Individual

Section 80G

Deduction in respect of donations to certain funds, charitable institutions, etc.

Exemption :Deduction upto 100% / 50% of the aggregate amount of donation. For details please refer setion 80G of Income Tax Act.
Available to :All assessees

Section 80GG

Rent paid for residential accommodation

Details :Rent paid for furnished/unfurnished residential accommodation (Subject to certain conditions)
Exemption :Least of the following shall be exempt from tax: a) Rent paid in excess of 10% of total income*;
b) 25% of the Total Income; or
c) Rs. 5,000 per month.
Total Income = Gross total income minus long term capital gains, short-term capital gains under section 111A, deductions under sections 80C to 80U (other than 80GG) and income under section 115A
Available to :Individual not receiving HRA

Section 80QQB

Royalty income of books

Details :Royalty income of authors of certain specified category of books other than text books
Exemption :Least of the following shall be exempt from tax:
a) In case of Lump sum payment - Amount of royalty income subject to maximum of Rs. 3,00,000
b) In other cases - amount of such income subject to maximum of 15% of value of books sold during the previous year.
Available to :Resident Individual Authors

Section 80RRB

Royalty of patents

Details :Royalty in respect of patents registered on or after 01.04.2003 (subject to certain conditions)
Exemption :100% of royalty subject to maximum of Rs. 3,00,000
Available to :Resident Individual - Patentee

Section 80 TTA

Interest on Savings Bank accounts

Details :Interest on deposits in saving account with a banking company, a post office, co-operative society engaged in banking business, etc. (Subject to certain conditions)
Exemption :100% of amount of such income subject to maximum of Rs. 10,000
Available to :Individual and HUF

Section 80U

Persons with Disability

Details :A resident individual who, at any time during the previous year, is certified by the medical authority to be a person with disability [as defined under Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995]
Exemption :Rs. 75,000 (Rs. 1,25,000 in case of severe disability)
Available to :Resident Individual

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