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 to you on your tax liability.

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

Section 80CFor 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)
Exempt AmountUp to 1,50,000 (Subject to overall limit of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD)
Available toIndividual and HUF
Section 80CCCContribution to certain specified Pension Funds
DetailsContribution to certain specified Pension Funds of LIC/other insurer (Subject to certain conditions).
Exempt AmountUp to 1,50,000 (Subject to overall limit of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD)
Available toIndividual
Section 80CCDContribution to NPS
DetailsContribution to Pension Scheme (NPS) notified by the Central Government (Subject to certain conditions).
Note:-
  1. Deduction under section 80CCD(2) on account of contribution made by the employer to a pension scheme is not subject to ceiling limit of Rs. 1,50,000 as provided under Section 80CCE.
  2. Addition deduction of Rs. 50,000 shall not be allowed in respect of contribution which is considered for deduction under Section 80CCD(1), i.e., limit of 10% of salary/gross total income
  3. Any payment from NPS to an employee because of closure or his opting out of the pension scheme is chargeable to tax. However, with effect from the assessment year 2017-18, the whole amount received by the nominee from NPS on death of the assessee shall be exempt from tax.
Exempt AmountAmount contributed to pension scheme or 10% of salary/gross total income*, whichever is less (subject to ceiling limit of Rs. 1,50,000 as provided under Section 80CCE) shall be allowed as deduction under Section 80CCD(1).
Additional deduction to the extent of Rs. 50,000 shall also be available to the assessee under section 80CCD(1B). The additional deduction is not subject to ceiling limit of Rs. 1,50,000 as provided under Section 80CCE.
Contribution made by employer shall also be allowed as deduction under section 80CCD(2) while computing total income of the employee. However, amount of deduction could not exceed 10% of salary of the employee.
*10% of salary in case of employees otherwise 10% of gross total income.
Available toIndividual
Section 80 CCGAmount invested in listed shares
DetailsAmount 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).
Exempt AmountDeduction 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 toSpecified Resident Individual - A resident individual whose gross total income for the relevant assessment year is not more than Rs. 12 lacs.
Section 80DAmount invested in Health Insurance
DetailsAmount 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.
Exempt AmountIn 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 toIndividual / HUF
Section 80DDExpenditure incurred for the medical treatment of a dependent
Detailsa) 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).
Exempt AmountRs. 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 toResident Individual and HUF
Section 80DDBExpenditure incurred for medical treatment of specified diseases
DetailsExpenses 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).
Exempt AmountUp 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 toResident Individual and HUF
Section 80EInterest paid on Educational Loan
DetailsAmount 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).
Exempt AmountThe amount of interest paid during initial year and 7 immediately succeeding assessment years (or until the above interest is paid in full).
Available toIndividual
Section 80EEInterest on loan for acquiring residential house property, sanctioned during FY 2016-17
DetailsInterest 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.
Exempt AmountDeduction of up to Rs. 50,000 towards interest on loan.
Available toIndividual
Section 80GGRent paid for residential accommodation
DetailsRent paid for furnished/unfurnished residential accommodation (Subject to certain conditions)
Exempt AmountLeast 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 toIndividual not receiving HRA
Section 80QQBRoyalty income of books
DetailsRoyalty income of authors of certain specified category of books other than text books
Exempt AmountLeast 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 toResident Individual Authors
Section 80RRBRoyalty of patents
DetailsRoyalty in respect of patents registered on or after 01.04.2003 (subject to certain conditions)
Exempt Amount100% of royalty subject to maximum of Rs. 3,00,000
Available toResident Individual - Patentee
Section 80 TTAInterest on Savings Bank accounts
DetailsInterest on deposits in saving account with a banking company, a post office, co-operative society engaged in banking business, etc. (Subject to certain conditions)
Exempt Amount100% of amount of such income subject to maximum of Rs. 10,000
Available toIndividual and HUF
Section 80UPersons with Disability
DetailsA 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]
Exempt AmountRs. 75,000 (Rs. 1,25,000 in case of severe disability)
Available toResident Individual

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