Deductions from gross total income under Chapter VI-A of Income-tax Act 1961

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The document explains the framework of deductions available from gross total income under Chapter VI-A of the Income-tax Act, 1961, covering Sections 80C to 80U. It establishes that deductions are permitted only when there is positive gross total income and cannot result in a loss. The aggregate deduction cannot exceed the gross total income, and deductions must be claimed in the return of income filed within the prescribed due date. Certain taxpayers opting for alternative tax regimes under Sections 115BA, 115BAA, 115BAB, 115BAC, 115BAD, and 115BAE are restricted to limited deductions. Further, where deductions are allowed to an Association of Persons (AOP) or Body of Individuals (BOI), members cannot claim the same deduction on their share of income.

The document details various deductions. Section 80C allows individuals and Hindu Undivided Families to claim up to ₹1,50,000 for specified investments such as life insurance, provident funds, tuition fees, housing loan principal repayment, ELSS, and fixed deposits, subject to conditions like lock-in periods and eligibility restrictions. Sections 80CCC and 80CCD provide deductions for contributions to pension schemes, including annuity plans and the National Pension System, with additional benefits under Section 80CCD(1B) and separate treatment for employer contributions under Section 80CCD(2). Section 80CCH allows full deduction for contributions to the Agniveer Corpus Fund.

Health-related deductions are covered under Sections 80D, 80DD, and 80DDB. Section 80D permits deductions for health insurance, preventive check-ups, and medical expenses up to ₹1,00,000, subject to age-based limits and payment conditions. Section 80DD allows fixed deductions for dependents with disabilities, while Section 80DDB covers specified diseases with limits based on age. Section 80E provides deduction for interest on education loans for up to eight years. Housing-related interest deductions are available under Sections 80EE and 80EEA, while Section 80EEB covers interest on loans for electric vehicles.

Section 80G allows deductions for donations to specified funds and institutions ranging from 50% to 100%, subject to conditions such as non-cash payments above ₹2,000 and limits based on adjusted gross total income. Section 80GG provides deduction for rent paid, subject to prescribed ceilings and conditions. Section 80GGA allows 100% deduction for donations to scientific research or rural development institutions, while Sections 80GGB and 80GGC provide deductions for contributions to political parties, excluding cash payments.

Business-related deductions include Sections 80-IA, 80-IAB, 80-IAC, 80-IB, and 80-IE, which provide deductions for profits from infrastructure projects, SEZ development, startups, industrial undertakings, and activities in North-Eastern states. These deductions generally allow 100% of profits for specified periods, subject to conditions such as commencement dates, audit requirements, and filing of returns. Section 80-IBA allows deduction for housing projects meeting specific size, approval, and completion criteria. Section 80JJA provides deduction for businesses involved in biodegradable waste processing, while Section 80JJAA allows deduction for employment of new employees.

Further deductions include Section 80LA for offshore banking units and IFSC entities, Section 80M for inter-corporate dividends, and Section 80P for co-operative societies engaged in specified activities. Sections 80QQB and 80RRB provide deductions for royalty income from books and patents, respectively, subject to limits and certification requirements. Section 80TTA allows deduction up to ₹10,000 for savings account interest, while Section 80TTB provides up to ₹50,000 for senior citizens. Section 80U grants fixed deductions to individuals with disabilities.

The document also emphasizes procedural requirements such as furnishing audit reports, certificates, and prescribed forms for claiming deductions. It highlights that deductions must be based on income included in the gross total income, and double deductions are not permitted. Transfer pricing rules and market value adjustments apply in certain cases. Overall, the provisions aim to incentivize savings, investment, social contributions, and economic activities while ensuring compliance with specified conditions.

Income Tax Department
Ministry of Finance, Government of India

Deductions from Gross Total Income

Introduction

An assessee is taxed on the total income of the previous year relevant to the assessment year. Certain deductions are allowed from the gross total income of an assessee under Sections 80C to 80U. No deduction is allowed if the gross total income is nil. Deductions cannot create negative income or losses.

How much deduction can be claimed?

Section	Eligible Investment or Income	Who Can Claim?	Maximum Deduction
80C	Life insurance, tuition fee, provident fund, housing loan repayment, pension, fixed deposits, etc.	Individual or HUF	Rs. 1,50,000
80CCC	Annuity pension plan of LIC or other insurer	Individual	Rs. 1,50,000
80CCD(1)	Contribution to National Pension Scheme (NPS) or Atal Pension Yojana	Individual	10% of salary (employee) or 20% of gross total income (others)
80CCD(1B)	Additional contribution to NPS or Atal Pension Yojana	Individual	Rs. 50,000
80CCD(2)	Employer’s contribution to NPS	Individual	14% of salary (Central/State Govt) or 10% / 14% otherwise
80CCH	Contribution to Agniveer Corpus	Individual	100% of the contribution
80D	Health insurance, preventive health check-up, and medical treatment expenses	Individual or HUF	Rs. 1,00,000
80DD	Medical treatment or insurance premium for family member with disability	Resident Individual or HUF	Rs. 75,000 (disability), Rs. 1,25,000 (severe disability)
80DDB	Medical treatment for specified diseases or ailment	Resident Individual or HUF	Rs. 40,000 (normal), Rs. 1,00,000 (senior citizen)
80E	Interest on the education loan	Individual	Interest paid during the year

Note: The total amount of deductions under Section 80C, Section 80CCC, and Section 80CCD(1) cannot exceed Rs. 150,000.

Who Cannot Claim Deduction?

Alternative Tax Regime	Allowed to	Deduction allowable under Chapter VI-A
Section 115BA	Domestic Company	Section 80G, 80GGA, 80GGB and Section 80JJAA
Section 115BAA	Domestic Company	Section 80JJAA, Section 80M and Section 80LA(1A)
Section 115BAB	Domestic Company	Section 80JJAA and Section 80M
Section 115BAC	Individual/HUF/AOP/BOI/AJP	Section 80CCD(2), Section 80CCH(2), Section 80JJAA and Section 80LA(1A)
Section 115BAD	Resident Co-operative Society	Section 80JJAA and Section 80LA(1A)
Section 115BAE	Resident Co-operative Society engaged in manufacturing	Section 80JJAA

Details of tax regimes where specific deductions under Chapter VI-A are restricted.

Conditions for Claiming Deduction

Assessees must file returns on or before due dates to claim deduction under Sections 80-IA, 80-IAB, 80-IAC, 80-IB, 80-IC, 80-IE, 80JJAA, 80LA, 80QQB, 80RRB.
Certain deductions require filing audit or certification reports in prescribed forms such as Form 10CCB, 10CCC, 10CCD, 10CCE, 10CCF, 10DA, etc.

No Deduction to Members if Allowed to AOP or BOI

Section 80A prescribes that if an AOP or BOI is allowed deduction under Section 80G, 80GGA, 80GGC, 80-IA, 80-IB, 80-IC or 80-IE, no deduction shall be allowed to members of such AOP or BOI on income shares.

Investment Linked Deductions [Section 80C]

An Individual or Hindu Undivided Family (HUF) is eligible to claim deduction up to Rs. 1,50,000 for specified investments, deposits, or payments under this provision.
Deduction covers payments for life insurance, education expenses, contributions to provident fund, housing loan repayment, small savings schemes, pension funds, and fixed deposits, etc.
Deduction allowed on an actual payment basis in the year of payment, irrespective of the year to which the payment relates.
Deduction allowed for amounts paid/deposited in the following categories:

*Nature of Investment or Payment*	*Description*	*Other Conditions*
Insurance Schemes	Life Insurance, ULIPs, Deferred Annuity, Annuity Plans	– Individual can claim deduction for self, spouse, or children. – Deduction is not available for annuity plans purchased for family members. – HUFs can claim for members except deferred annuity schemes and annuity plans. – Deduction is restricted to a specified percentage of the actual capital sum assured: – Policies issued between 01-04-2003 and 31-03-2012: 20% of sum assured. – Policies issued on or after 01-04-2012: 10% of sum assured. – Minimum holding period for LIC is 2 years and for ULIP is 5 years. – If not held, deduction already allowed in the earlier years shall be deemed as income of the previous year in which insurance policy is terminated or ceased.
Education Expenses	Tuition fees for two children (full-time education only)	No deduction in respect of payment of any development fees, donation, or payment of a similar nature.
Employee Provident Fund	Contribution to statutory or recognized provident funds	– Employer’s contribution to employee’s provident fund is not deductible.
Public Provident Fund	Contribution to PPF accounts	– Individual can claim deduction for making deposit in the PPF account maintained for himself, spouse or children. – HUF can claim deduction for making deposit in the PPF account of any member.
Superannuation Fund	Contribution to approved superannuation funds	– Excess employer contribution over Rs, 7,50,000 to PF, NPS, and superannuation is taxable as salary.
Equity Linked Saving Scheme (ELSS)	Investment in ELSS or notified mutual funds	– Minimum deposit of Rs. 500 – Lock-in period is 3 years from the date of allotment of units. – Post lock-in, units can be tendered for repurchase. – In case of the death of the assessee, nominee or legal heir can withdraw the investment only after 1 year from allotment date. – Units are transferable, pledgeable, or assignable after 3 years.
Securities of Infrastructure Companies	Investment in equity shares/debentures of eligible companies	– Minimum holding period is 3 years from the date of acquisition. – If not held, deduction already allowed in the earlier years shall be deemed as income of the previous year in which securities are transferred.
Housing Loan	Repayment of principal and associated expenses on housing loans	– Sum paid for the stamp duty, registration fee or other sum in lieu of transfer of a residential house property is also eligible for deduction. – Deductions not allowed for costs towards addition, alteration, renovation, or repair after issue of completion certificate, occupation of house by assessee or others, or if house has been let out. – Minimum holding period is 5 years from the end of the financial year in which possession is obtained. – If not held, deduction already allowed in the earlier years shall be deemed as income of the previous year in which the house property is transferred.
Contribution to Pension Schemes	Investment in the pension fund set-up by a Mutual Fund or Tier-II account of the NPS	– The deduction for contribution to the NPS (Tier-II account) shall be available to the Central Government employee only. – Minimum initial contribution: Rs. 1,000; subsequent: Rs. 250 – Contributions in Tier-II account must be locked in for 3 years; during this period, assignments, pledges, or hypothecations are not permitted.
NABARD Bonds	Investment in NABARD Rural Bonds	–
National Saving Certificates (NSC)	Investment in NSC and reinvested interest	– Interests earned on deposits made during the tenure of NSC are deemed to be reinvested in NSC. – The amount of interest so re-invested is charged to tax as income from other sources.
Senior Citizen Saving Scheme	Deposits under Senior Citizen Saving Scheme	– If the accountholder closes the account before expiry of 5 years from the date of its deposit, the amount withdrawn shall be deemed as the income of the assessee for the previous year in which amount is withdrawn. – Only that amount shall be taxable which has been claimed as deduction under section 80C. – Where the amount is received by the nominee or the legal heirs on death of the assessee, it shall not be chargeable to tax.
Time Deposit with Post Office	Time deposits with Post Office
Sukanya Samriddhi Scheme	Contributions to accounts for any 2 girl children	–
Fixed Deposits	Fixed deposits with minimum 5-year maturity	The term deposits cannot be pledged to secure loans or as security to any other asset.

Contribution to Pension Fund of Insurance Companies [Section 80CCC]

Any individual (resident or non-resident) who has made payment or deposit under an annuity plan of LIC or any other insurer for receiving pension can claim deduction.
Deduction allowed is the lower of actual amount paid/deposited or Rs. 1,50,000.
No deduction for interest or bonus accrued or credited to the account.
If assessee surrenders annuity (whole or part) before maturity after claiming deduction, surrender value and interest or bonus accrued are taxable in the year of receipt.
Pension received by assessee or nominee, where deduction was claimed, is taxable in hands of receiver in year of receipt.

Deduction for Contribution to Pension Scheme [Section 80CCD]

An individual (resident or non-resident) can claim deduction for amount contributed to the National Pension Scheme (NPS), Atal Pension Yojana (APY), orNPS Vatsalya Scheme.
Maximum deduction of Rs. 1,50,000 can be claimed for contributions to own NPS account and APY under Section 80CCD(1).Deduction is allowed up to lower of actual contribution or 10% of salary for employee; 20% of gross total income for self-employed.
An additional deduction of up to Rs. 50,000 is available under Section 80CCD(1B)for contributions to own NPS account or NPS Vatsalya account of a minor child.
Total deduction for individual’s own NPS contribution can be up to Rs. 2,00,000 including additional Rs. 50,000 under Section 80CCD(1B).
Employer’s contribution deductible separately under Section 80CCD(2)and not subject to above limits.
Deduction under Section 80CCD(2)allowed for employer’s contribution to NPS account, limited to:
- 14% of salary (Central/State Government employees);
- 14% of salary if employee opts for new tax regime under Section 115BAC;
- 10% of salary in other cases.
- ‘Salary’ includes basic salary, dearness allowance (if terms provide), and commission as % of turnover, excluding other allowances/perquisites.
Amount received by the nominee on the death of the assessee or minor isnot considered income of such person.
Pension or annuity received on closure or opting out is fully taxable in hands of recipient.

Deduction for Contribution to Agniveer Corpus Fund [Section 80CCH]

Individuals enrolled under the Agnipath Scheme (Agniveers) are entitled to claim deduction for contributions made to the Agniveer Corpus Fund.
Full amount contributed by the Agniveer during the financial year is deductible.
Contribution made by the Central Government to the Agniveer Corpus Fund account of the Agniveer is included in salary income but allowed as deduction under section 80CCH(2).

Deduction in Respect of Health Insurance Premium [Section 80D]

Deduction is allowed for amounts paid for health insurance policies, preventive health check-ups, contribution to Central Government Health Scheme (CGHS), and medical expenditure.
Deduction can be claimed by an individual for himself, family (spouse and dependent children), or parents.
HUF is allowed deduction for amount incurred on any family member.
Maximum deduction under this provision is Rs. 1,00,000. An aggregate deduction for preventive health check-ups shall not exceed Rs. 5,000.

*Nature of the amount spent*	*Age of Family Member*		*Age of the parents*
*Nature of the amount spent*	*Below 60 years*	*60 years or above*	*Below 60 years*	*60 years or above*
Medical Insurance	25,000	50,000	25,000	50,000
Health Check-up	5,000	5,000	5,000	5,000
Medical Expenditure	–	50,000	–	50,000
Maximum deduction	25,000	50,000	25,000	50,000

HUFs not eligible for deduction for preventive health check-ups.
Deduction allowed for medical treatment expenses of senior citizens (aged 60 or above) not covered under health insurance.
Medical expenditure includes consultation fees, medicines, hearing aids, etc., whether or not covered under insurance.
Deduction allowed only if payment is made by any mode other than cash. Cash payment allowed for preventive health check-up only.
Deduction for single premium health insurance policies having cover of more than one year allowed proportionately for number of years covered, subject to maximum limits.

Deduction for Medical Treatment of Person with Disability [Section 80DD]

Deduction is allowed to aresident individual or Hindu Undivided Family (HUF) who incurs medical expenditure or pays insurance premiums for the benefit of a dependentfamily member suffering from disability.
For an individual assessee, dependent means spouse, children, parents, brothers, or sisters wholly or mainly dependent for support and maintenance. For HUF, dependent means any member of HUF wholly or mainly dependent for support and maintenance.
A flat deduction of Rs. 75,000 is allowed if the person is suffering from disability; Rs. 1,25,000 if suffering from severe disability.
Assessee must obtain a certificate of disability in Form 10-IAor any other format, as the case may be.
If the dependent predeceases the assessee, the amount paid or deposited under the insurance scheme is deemed to be the income of the assessee for the previous years in which the amount is received.
If the amount is received after the death of the assessee, it is exempt under Section 10(10D).
If the assessee predeceases the dependent, the lump sum or annuity received by the dependent under the insurance policy is exempt under Section 10(10D).
If a dependent receives any sum under an insurance policy in the event that the assessee attains the age of 60 years and the payment of such insurance scheme is stopped, the amount received is not taxable.

Deduction for Medical Treatment of Prescribed Disease or Ailment [Section 80DDB]

Deduction is allowed for amount incurred on medical treatment of specified diseases or ailments.
An individual can claim deduction for medical expenses for himself or a dependent person (spouse, children, parents, and brothers and sisters).
Hindu Undivided Family (HUF) can claim deduction for medical expenses incurred for any family member.
Deduction is allowed for actual amount incurred or Rs. 40,000, whichever is lower. For senior citizens, limit is Rs. 1,00,000.
Amount reimbursed or received under insurance or by employer reduces the deduction amount.
A prescription is also required from a specialist with specified qualifications. It contains the name and age of the patient, the name and address of the hospital (in case of a government hospital), the name of the disease or ailment, the name, address, registration number, and qualification of the specialist issuing the prescription.

Deduction for Interest on Education Loan [Section 80E]

Section 80Eallows individuals to claim deduction for interest paid on an education loan taken for higher education for themselves or their relatives. ‘Relative’ of an individual means his spouse, his children or the student for whom he is the legal guardian
Higher Education means any course pursued after passing the Senior Secondary Examination or equivalent from recognized institutions, including vocational courses.
Deduction allowed for the entire amount of interest paid during the financial year. No deduction for repayment of principal.
Deduction available for a maximum period of 8 assessment years starting from the year interest repayment begins.
However, if the entire interest is paid before expiry of 8 years, no deduction shall be allowed for any assessment year after the year of full payment.
To claim deduction, the loan must be taken from any bank, a notified financial institution, or anyapproved charitable institution.

Deduction for Interest on Housing Loan [Section 80EE]

Section 80EEallows deduction to an individual in respect of interest payable on housing loan for the acquisition of residential property, subject to specified conditions.
Deduction is allowed up to Rs. 50,000 per financial year for interest paid or payable.
Conditions for eligibility:
- Loan sanctioned between 01-04-2016 and 31-03-2017.
- Loan amount must not exceed Rs. 35 lakh.
- Stamp duty value of the residential property should not exceed Rs. 50 lakh.
- Assessee must not own any residential house property on the date of sanction of the loan.
- Loan must be taken from a bank, banking company, housing finance company, or similar institution.

Additional Deduction for Interest on Housing Loan [Section 80EEA]

Any individual (resident or non-resident) who has taken a housing loan during the specified period and meets certain conditions can claim deduction.
A deduction of up to Rs. 1,50,000 per financial year is allowed for interest paid or payable on such loan.
Conditions for eligibility:
- The assessee must not be eligible to claim deduction under Section 80EE.
- Loan must be sanctioned between 01-04-2019 and 31-03-2022.
- Stamp duty value of the property must not exceed Rs. 45 lakhs.
- The assessee must not own any residential house property on the date of loan sanction.
- Loan must be taken from a bank, banking company, or housing finance company.

Deduction for Interest on loan taken to buy Electric Vehicles [Section 80EEB]

Section 80EEBoffers deduction for interest paid on loans taken to purchase electric vehicles, promoting a pollution-free environment.
Any individual (resident or non-resident) who has taken a loan to purchase an electric vehicle.
A deduction of up to Rs. 1,50,000 for interest paid or payable during the year is allowed.
Loan must be sanctioned between 01-04-2019 and 31-03-2023.
The loan must be taken from a banking company, bank, banking institution, NBFC, or a systematically important non-deposit-taking NBFC.

Deduction in respect of Donations [Section 80G]

Any assessee (resident or non-resident) who makes a donation to specified funds, institutions, or associations is eligible to claim a deduction under Section 80G.The deduction allowed ranges from 50% to 100% of the donation amount, subject to certain limits and conditions.
Donations made in cash exceeding Rs. 2,000 are not eligible for deduction; donations in kind are not deductible.
Deduction under this provision is allowed in accordance with the following:
- 100% deduction without a maximum limit
- 50% deduction without a maximum limit
- 100% deduction subject to maximum limit
- 50% deduction subject to a maximum limit
Notified Funds and Institutions:

Donee

% of donation allowed as a deduction

🞍 National Defence Fund

🞍 PM National Relief Fund

🞍 PM Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND)

🞍 National Children’s Fund

🞍 CM Relief Fund or the Lieutenant Governor’s Relief Fund

🞍 Zila Saksharta Samiti

🞍 Army Central Welfare Fund

🞍 Indian Naval Benevolent Fund

🞍 Air Force Central Welfare Fund

🞍 Andhra Pradesh CM Cyclone Relief Fund

🞍 National Sports Development Fund

🞍 National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities

🞍 Swachh Bharat Kosh (not being in pursuance of CSR)

🞍 Clean Ganga Fund (not being in pursuance of CSR)

Note: Donations to Swachh Bharat Kosh and Clean Ganga Fund are eligible for deduction only if the amount is not spent by the assessee in pursuance of Corporate Social Responsibility (CSR).

🞍 National Fund for Control of Drug Abuse

🞍 PM Drought Relief Fund

🞍 Notified temple, mosque, gurudwara, church or other place (for repairs or renovation)

🞍 Shri Ram Janambhoomi Teerth Kshetra [Notification S.O. 1434 (E), dated 8-5-2020]

100%

100% (to resident assessee only)

100%

50%

50% [Note 1]

🞍 National Illness Assistance Fund

🞍 National Blood Transfusion Council or State Blood Transfusion Council

🞍 Fund set up by a State Government for medical relief to the poor

🞍 National Cultural Fund

🞍 Fund for Technology Development and Application

🞍 National Foundation for Communal Harmony

🞍 PM Armenia Earthquake Relief Fund

🞍 Africa (Public Contributions – India) Fund

🞍 CM Earthquake Relief Fund, Maharashtra

🞍 A university or educational institution of National eminence approved by the tax authorities

🞍 Fund set up by the State Government of Gujarat exclusively for providing relief to the victims of the earthquake in Gujarat.

🞍 Family Planning Association of India/Red Cross Society of India [Letter No. W. 110421/1/77-C&G(FP), dated 11-1-1977]

🞍 Government or any approved local authority, institution or association to be utilised for the purpose of promoting family planning.

🞍 Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India

🞍 Government or any local authority to be utilised for any charitable purpose other than the purpose of promoting family planning

🞍 Any corporation specified in Section 10(26BB) for promoting interest of minority community

🞍 Any authority constituted in India either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both.

🞍 Any other fund or institution fulfilling the conditions specified in Section 80G(5).

100%

100% [Note 1]

100% (to the company assessee only) [Note 1]

50% [Note 1]

50%[Note 1]

50% [Note 1]

Note 1: Where the aggregate amount donated to the funds or institutes specified above exceeds 10% of the adjusted gross total income (AGTI), the amount in excess of such 10% shall not be eligible for deduction.

The adjusted gross total Income shall be computed in the manner explained in the table below:

*Particular*	*Amount*
Gross total income	xxx
Less:
(a) Amount deductible under Section 80C to 80U (Except Section 80G)	xxx
(b) Share of profit in AOP eligible for rebate under Section 86	xxx
(c) Long-term capital gains, short-term capital gains (Section 111A), and any other special income chargeable to tax under Sections 115A, 115AB, 115AC, 115ACA, 115AD and 115D	xxx
Adjusted Gross Total Income	xxx

Under Section 80G, a donor is entitled to a deduction only if the donee fund or institution complies with the conditions specified under Section 80G(5).
One key condition is that the donee fund or institution must file a statement of donation with the Income-tax Department and furnish a certificate of donation to the donor specifying the amount received during the year. Such certificate serves as evidence to substantiate the deduction claimed.
The claim for deduction will be allowed only on the basis of information furnished to the Income-tax Department regarding the donation.
If an amount has been claimed and allowed as a deduction under this provision, thenno deduction is allowed for the same amount under any other provision of the Income-tax Act.
Deduction shall not be denied to the donor on the following grounds:
- If, after donation, the income of the fund or institution becomes taxable due to non-compliance with Sections 11, 12, or 12A; or
- If exemption under Section 11 or 12 is denied under Section 13(1)(c) regarding income arising from investments made in concerns as referred to in Section 13(2)(h), provided such investment does not exceed 5% of the capital of the concern.

Deduction for Rent Paid [Section 80GG]

Deduction under Section 80GGis available only to individuals (resident or non-resident), including salaried and self-employed persons.
Not allowed to those claiming HRA exemption under Section 10(13A).
Deduction can be claimed for rent paid on furnished or unfurnished accommodation used for own residence.
The deduction is the leastof the following:
- Rent paid minus 10% of total income,
- 25% of total income, or
- Rs. 5,000 per month (i.e., Rs. 60,000 per year).
The assessee, his spouse, minor child, or HUF of which he is a member must not own any residential accommodation at the place where he ordinarily resides or performs duties of his office or employment or carries on his business or profession.
The assessee must also not own a self-occupied residential property at any other location (i.e., one with annual value taken as nil).
Deduction is allowed only if the assessee furnishes Form No. 10BAelectronically.
Total income is computed after all other deductions under Chapter VI-A, but before deducting the amount under Section 80GG.

Deduction for Donations towards Scientific Research or Rural Development [Section 80GGA]

Any assessee not having any income taxable under the head “Profits and Gains of Business or Profession”is eligible to claim a deduction for amounts contributed to specified associations or institutions for scientific research or rural development.
No deduction shall be allowed for cash contributions exceeding Rs. 2,000.
Eligible Donations:
- Donations made to research associations approved under Section 35(1)(ii)/(iii); or universities, colleges, or other institutions approved under Section 35(1)(ii)/(iii), undertaking scientific or statistical research or social science research.
- Donations made to associations or institutions undertaking approved rural development programmes under Section 35CCA, or associations or institutions with the objective of training persons for implementing rural development programmes. The assessee needs to furnish a certificate from such association or institution to claim a deduction under this provision.
- Donations to notified rural development funds or the National Urban Poverty Eradication Fund are also eligible.
- Donations to public sector companies, local authorities, or associations/institutions approved by the National Committee for projects promoting social and economic welfare or uplift of the public.
Deduction allowed shall not be denied solely because approval to the institution or programme was withdrawn after the donation.
100% of the donation amountis deductible under this provision.
If any amount has been claimed and allowed under Section 80GGA, no deduction shall be allowed under any other provision for the same amount.
A deduction is allowed based on information furnished by the donee to the income tax department. It is subject to verification according to the risk management strategy.

Contributions by Companies to Political Parties [Section 80GGB]

An Indian company contributing to a political party or an electoral trust can claim a deduction under this section. However, contributions made in cash are not deductible.

Contributions by persons other than Companies to Political Parties [Section 80GGC]

A deduction is available to any assessee, other than a local authority or an artificial juridical person funded wholly or partly by the Government, for contributions made to a political party or an electoral trust. Contributions made in cash are not eligible for deduction.

Profits from Industrial Undertaking or Infrastructural Development [Section 80-IA]

Deduction under this section is available to any assessee deriving profits from specified eligible businesses. The deduction is allowed up to 100% of profits for 10 consecutive assessment years out of 15 or 20 years, as applicable.
Development, operation or maintenance of an infrastructure facility– This includes:

– A road including a toll road, a bridge or a rail system;

– A highway project including housing or other activities being an integral part of the highway project;

– A water supply project, water treatment system, irrigation project, sanitation and sewerage system or solid waste management system;

– A port, airport, inland waterway, inland port or navigational channel in the sea.

Where the housing or other activities are an integral part of the highway project, profits from such activities are exempt if:

– Such profits are computed as per Rule 18BBE;

– Profits are transferred to a special reserve account

– Actually utilised for the core highway project within 3 years from the year the amount was transferred to the reserve.

Unutilised amounts are taxable in the year of transfer to the reserve account. Separate books shall be maintained, and a certificate in Form No. 10CCC (specifying the amount credited to the reserve account and the amount utilised during the relevant previous year for the highway project) must be submitted.

Conditions for Infrastructure Projects:

– Owned by an Indian company, a consortium, or a statutory body;

– Agreement with Central/State Government or authority for developing, operating or maintaining a new infrastructure facility;

– Operation commenced between 01-04-1995 and 31-03-2017.

Development, operation or maintenance of an industrial park or SEZ – Applicable to developers and operators of industrial parks and SEZs.

– Deduction of 100% profits for 10 consecutive years within 15 years from commencement.

– No deduction for SEZs notified on or after 01-04-2005 (such SEZs fall under Section 80-IAB).

– SEZs and industrial parks must be notified under Central Government schemes:

- - SEZ is notified between 01-04-1997 to 31-03-2006; and
  - Industrial Parks or SEZs were notified between 01-04-1997 and 31-03-2006.
Generation or distribution of power—This applies to the generation or generation and distribution of power, transmission or distribution by laying a network of new lines and substantial renovation and modernization of the existing network of transmission/distribution lines.
- Deduction of 100% profits for 10 years within 15 years from commencement
- Power generation: Business commenced between 01-04-1993 and 31-03-2017
- Transmission or distribution of power: Business commenced between 01-04-1999 and 31-03-2017
- Substantial renovation and modernisation: Business commenced between 01-04-2004 and 31-03-2017
- The undertaking should not be formed by splitting up or reconstructing a business already in existence (except Section 33B).
- Second-hand plant or machinery should not be used (except if its value does not exceed 20% of the total value of plant and machinery)
Reconstruction or revival of power-generating plants – Assessee claiming deduction under this provision is required to fulfil the following conditions:

– It is set up for the reconstruction or revival of a power-generating plant;

– Undertaking shall be owned by an Indian company formed before 30-11-2005 with majority equity participation by public sector companies to enforce the security interest of the lenders to the company owning the power generating plant and notified before 31-12-2005 by the Central Government;

– Such undertaking begins to generate, transmit, or distribute power before 31-03-2011.

– Deduction of 100% profits for 10 years within 15 years from commencement.

No deduction shall be allowed where the business is in the nature of a works contract awarded by any person, including the Government.

Other Conditions

Deduction computed by deeming that the eligible business is the only source of income.
‘Initial Assessment Year’ is the first year opted by the assessee for claiming the deduction [Circular No. 1/2016, dated 15-02-2016].
Deduction cannot be claimed under any other provision of ‘Chapter VI-A under the heading C’ (Section 80HH to 80RRB). Further, the deduction amount shall not exceed the profits and gains of the eligible business.
Profit must not exceed reasonably expected; AO may recompute income.
Transfer pricing norms apply to specified domestic transactions.
Deduction claim under this section requires:
- Audit report under Form 10CCB (electronically filed 1 month before the due date to file return of income under section 139(1));
- Accompanied by separate financials and agreements/approvals with the Government/statutory authority.
Return of income must be filed within the due date under Section 139(1) to claim a deduction.

Deduction for Profits from Business of Developing a Special Economic Zone (SEZ) [Section 80-IAB]

Developers of SEZ can claim a deduction for profits and gains from the operation and maintenance of SEZ.
Deduction available for 100% profits for 10 consecutive assessment years out of 15 years from commencement.
Deduction amount is computed assuming the eligible business is the sole income source for the previous year.
No deduction if development of SEZ begins on or after 1st April 2017.
SEZ must be notified by the Central Government on or after 1st April 2005.
Development must begin on or before 31st March 2017.
SEZ notified on or before 31st March 2005 is not eligible here; such deduction is available under Section 80-IA.
Deduction claim under this section requires books of account audited by a Chartered Accountant. Audit report to be furnished electronically in Form 10CCBone month before the due date of furnishing the return of income under section 139(1).
Profit must not exceed reasonably expected; AO may recompute income.
Transfer pricing norms apply to specified domestic transactions.
Return of income must be filed within the due date under Section 139(1)to claim a deduction.
Deduction cannot be claimed under any other provision of ‘Chapter VI-A under the heading C’ (Section 80HHto 80RRB). Further, the deduction amount shall not exceed the profits and gains of the eligible business.
If the operation/maintenance of the SEZ is transferred to another developer, the transferee is allowed a deduction for the remaining period of 10 years as if no transfer occurred.
The same applies to the amalgamation or demerger of SEZ developer Indian companies.

Deduction to an Eligible Start-up [Section 80-IAC]

Eligible startups (companies or LLPs) can claim deduction for profits and gains from eligible business activities.
Deduction is allowed up to 100% of profits and gains for 3 consecutive assessment years out of 10 assessment years beginning from the year of incorporation. Deduction is computed assuming the eligible business is the sole source of income during the relevant year.
Meaning of Eligible Startup – Section 80-IACdefines an ‘eligible start-up’ as a Company or a Limited Liability Partnership which fulfils the following conditions:

– Incorporated on or after 1st April 2016 but before 1st April 2030.

– Turnover does not exceed Rs. 100 crore in the previous year for which deduction is claimed.

– Holds a certificate of eligible business from the Inter-Ministerial Board of Certification notified by the Central Government.

– Engaged in the business of innovation, development or improvement of products/processes/services or scalable business models with high potential for employment generation or wealth creation.

– Registered with the Department for Promotion of Industry and Internal Trade (DPIIT). CBDT had clarified that DPIIT recognition doesn’t automatically qualify a start-up for section 80-IAC deduction.

Start-up must not be formed by splitting up or reconstructing an existing business, except for re-establishment/revival under Section 33B.
Start-up must not be formed by transfer of previously used plant/machinery, except if used outside India before installation and imported (with certain conditions). The condition is deemed fulfilled if the second-hand plant/machinery value does not exceed 20% of the total value.
DPIIT recognized start-up must apply in Form 1 to the Inter-Ministerial Board of Certification with:

– Annual accounts for the last 3 financial years;

– Copy of income-tax returns for the last 3 financial years;

🞍 Copy of Memorandum of Association, LLP deed, board resolution, etc.

The board may request additional information and reject the application with reasons if the criteria are not met.

DPIIT may revoke the certificate if issued on false information. Revoked certificate deemed never to have been issued/granted.
Deduction claim under this section requires books of account audited by a Chartered Accountant. Audit report to be furnished electronically in Form 10CCBone month before the due date of furnishing the return of income under section 139(1).
Profit must not exceed reasonably expected; AO may recompute income.
Transfer pricing norms apply to specified domestic transactions.
Return of income must be filed within the due date under Section 139(1)to claim a deduction.
Deduction cannot be claimed under any other provision of ‘Chapter VI-A under the heading C’ (Section 80HHto 80RRB). Further, the deduction amount shall not exceed the profits and gains of the eligible business.

Deduction for Profits from Certain Industrial Undertakings [Section 80-IB]

Deduction is available to assessee deriving profits and gains from Processing, Preservation, and Packaging of specified food items [Section 80-IB(11A)]
Applicable to processing/preservation/packaging of fruits, vegetables, meat and meat products, poultry, marine, dairy products, and integrated business of handling/storage/transportation of food grains.
Deduction for 10 years from the year in which it begins its operation.

– If assessee is a company, 100% for the first 5 years, 30% for the next 5 years;

– Any other assessee – 100% for the first 5 years and 25% in the next 5 years.

Assessee must commence its operation on or after 01-04-2001; however, if the assessee is engaged in the business of processing, preservation and packaging of meat or meat products or poultry or marine or dairy products, its business must commence on or after 01-04-2009.
Deduction claim under this section requires books of account audited by a Chartered Accountant. Audit report to be furnished electronically in Form 10CCBone month before the due date of furnishing the return of income under section 139(1).
Profit must not exceed reasonably expected; AO may recompute income.
Transfer pricing norms apply to specified domestic transactions.
Return of income must be filed within the due date under Section 139(1)to claim a deduction.
Deduction cannot be claimed under any other provision of ‘Chapter VI-A under the heading C’ (Section 80HHto 80RRB). Further, the deduction amount shall not exceed the profits and gains of the eligible business.
If the undertaking is transferred in the scheme of amalgamation or demerger, the amalgamated or the resulting company is allowed a deduction for the remaining period as if no transfer occurred.
The undertaking must not be formed by splitting up or reconstructing an existing business, except for re-establishment/revival under Section 33B.
Such an undertaking must not be formed by the transfer of previously used plant/machinery, except if used outside India before installation and imported (with certain conditions). The condition is deemed fulfilled if the second-hand plant/machinery value does not exceed 20% of the total value.

Deduction for Profits from Housing Projects [Section 80-IBA]

Assessees deriving profits from developing and building housing projects or notified rental housing projects are eligible for deduction.
Deduction is 100% of profits and gains from such business.
No deduction allowed if the housing project is executed as a works contract awarded by any person, including the Government.
Time Limit for Approval and Completion:

– Project approved between 01-06-2016 and 31-03-2022.

– Project to be completed within 5 years from the approval date.

– In cases of multiple approvals, it shall be considered approved on the date when the building plan was initially approved.

– The project shall be deemed to be completed on the date the certificate of completion of the project is obtained.

Area of project and residential units: the total area of the plot of land and the carpet area of the residential units does not exceed:

– Location of residential units is Bengaluru, Chennai, Delhi National Capital Region (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurugram, Faridabad), Hyderabad, Kolkata and Mumbai (whole of Mumbai Metropolitan Region) – 1000 sq. meters for area of land, 60 sq. meters for carpet area of residential unit;

– For other locations – 2000 sq. meters for the area of land, 90 sq. meters for the carpet area of the residential unit.

The carpet area of the shops/commercial space doesn’t exceed 3% of the aggregate carpet area.
Utilisation of land – The Project must utilise a specified minimum percentage of the floor area ratio (FAR) as per the rules made by the Government or local authority.

FAR = Total covered area of plinth area on all the floors / Area of the plot of land

Specified percentage in this behalf is as follows:

– Where location is Bengaluru, Chennai, Delhi National Capital Region (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurugram, Faridabad), Hyderabad, Kolkata and Mumbai (whole of Mumbai Metropolitan Region) – % of floor area ratio not less than 90%;

– For other locations – % of floor area ratio not less than 80%.

Stamp duty value of the residential unit in such project does not exceed Rs. 45 lakhs if approved on or after 01-09-2019.
Where an individual has been allotted a residential unit in the housing project, no other residential unit in that project shall be allotted to him or his spouse or his minor children.
The assessee shall maintain separate books of accounts in respect of such housing project.
Deduction must be claimed in return of income filed on or before the due date.
Where an assessee fails to complete the project within 5 years from the approval date, prior deductions become taxable as business income in the year the completion period expires.
Deduction claimed once in any previous year cannot be claimed again in another year.

Deduction for Profits from Undertakings in North-Eastern States [Section 80-IE]

Any undertaking deriving profits from an eligible business or from the manufacture/production of eligible articles or things in North-Eastern States (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura) can claim a deduction under Section 80-IE.
Eligible Businesses:
- Service Sector:

– Hotels (minimum two-star category);

– Adventure and leisure sports (including ropeways);

– Medical and health services (nursing homes with at least 25 beds);

– Running an old-age home;

– Operating vocational training institutes for hotel management, catering and food craft, entrepreneurship development, nursing and para-medical, civil aviation-related training, fashion designing and industrial training.;

– Running an IT-related training centre;

– Manufacturing of IT hardware;

– Biotechnology.

- Manufacturing Sector: Manufacture/production of eligible articles or things, excluding:

– Tobacco and manufactured tobacco substitutes (Chapter 24 of the First Schedule to the Central Excise Tariff Act, 1985);

– Pan masala (Chapter 21 of the First Schedule to the Central Excise Tariff Act, 1985);

– Plastic carry bags < 20 microns (Notification No. S.O. 705(E), dated 02-09-1999 and S.O. 698(E), dated the 17-06-2003);

– Petroleum oil or gas refinery products (Chapter 27 of the First Schedule to the Central Excise Tariff Act, 1985).

Eligible if operations begin or a substantial expansion is achieved between 01-04-2007 and 01-04-2017.
Deduction is allowed equal to 100% of profits and gains for 10 years starting from the year operations commence or the substantial expansion is completed.
Deduction computed assuming the eligible business is the sole source of income.
No deduction if the total period of deduction under Section 80-IEor the second provisoto Section 80-IB(4) or Section 80-IC or Section 10C, as the case may be, exceeds 10 assessment years.
Deduction claim under this section requires books of account audited by a Chartered Accountant. Audit report to be furnished electronically in Form 10CCBone month before the due date of furnishing the return of income under section 139(1).
Profit must not exceed reasonably expected; AO may recompute income.
Transfer pricing norms apply to specified domestic transactions.
Return of income must be filed within the due date under Section 139(1)to claim a deduction.
Deduction cannot be claimed under any other provision of Chapter VI-A, Section 10A, Section 10AA, Section 10Bor Section 10BA.Further, the deduction amount shall not exceed the profits and gains of the eligible business.
If the undertaking is transferred in the scheme of amalgamation or demerger, the amalgamated or the resulting company is allowed a deduction for the remaining period as if no transfer occurred.
The undertaking must not be formed by splitting up or reconstructing an existing business, except for re-establishment/revival under Section 33B.
Such an undertaking must not be formed by the transfer of previously used plant/machinery, except if used outside India before installation and imported (with certain conditions). The condition is deemed fulfilled if the second-hand plant/machinery value does not exceed 20% of the total value.

Deduction for Collection & Processing of Bio-degradable Waste [Section 80JJA]

Any assessee deriving income from any of the following businesses can claim the deduction under this section:

– Collecting and processing or treating bio-degradable waste for generating power;

– Producing bio-fertilizers, bio-pesticides, other biological agents, or biogas; or

– Making pellets or briquettes for fuel or organic manure.

100% of the profits from the eligible business can be claimed as deduction for a period of 5 consecutive assessment years beginning with the assessment year relevant to the previous year in which the business commences.

Deduction in Respect of Employment of New Employees [Section 80JJAA]

Any assessee with profits from business and liable for tax audit can claim this deduction. The deduction is linked to hiring additional employees.
Deduction equals 30% of the additional employee cost in each of the 3 years starting from the assessment year relevant to the year of additional employment.
Additional employee cost refers to the total emoluments paid or payable to additional employees hired during the year.
For new business, emoluments in the first year are deemed additional costs. However, for existing businesses, the additional cost is nil if there is no increase in employee numbers compared to the previous year’s end or if the payment mode is other than an account payee cheque or bank draft, or by use of electronic clearing systems through a bank account or specified electronic modes.
‘Additional Employee‘ means an employee who has been employed by the assessee during the previous year and whose employment has the effect of increasing the total number of employees employed by the assessee as on the last day of the preceding year, but does not include:

– An employee whose total emoluments exceed Rs. 25,000 per month;

– An employee for whom the entire contribution is paid by the Government under the Employees’ Pension Scheme [Notified under the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 vide Notification No. GSR 748(E), dated 16-11-1995];

– An employee who does not participate in the recognised provident fund;

– An employee employed for a period of less than 240 days. In the case of an assessee engaged in the business of manufacturing of apparel, footwear or leather products,this period is 150 days.

Where an employee is employed during the previous year for a period of less than 240/150 days, but is employed for a period of 240/150 days in the immediately succeeding year, he shall be deemed to have been employed in the succeeding year.

‘Emoluments’ means any sum paid or payable to an employee in lieu of his employment. However, it does not include the following:

– Employer’s contribution to the pension fund, provident fund or any other fund for the benefit of the employee under any law;

– Lump-sum payment paid or payable at the time of termination of service or superannuation or voluntary retirement, such as gratuity, severance pay, leave encashment, voluntary retrenchment benefits, commutation of pension, etc.

Conditions for claiming deduction–

– Business not formed by splitting/reconstruction except as per Section 33B.

– Business not acquired via transfer or reorganization.

– Assessee must furnish the accountant’s report electronically in Form 10DA at least one month before the due date for return filing.

Deduction to Offshore Banking Units and International Financial Services Centres (IFSC) [Section 80LA]

Eligible assessee – The following person can claim deduction under this section:

– Scheduled banks having offshore banking units in a SEZ.

– A bank incorporated by or under laws outside India with offshore banking units in a SEZ.

– Units of International Financial Services Centres (IFSC).

Income Eligible for Deduction – The following incomes are eligible for deduction:

– Income arising from an offshore banking unit in a SEZ;

– Income arising from business referred under Section 6(1) of the Banking Regulation Act, 1949, with an undertaking located in a SEZ or related to SEZ development, operation or maintenance;

– Income from any unit of the IFSC approved for setting up in SEZ; or

– Income from the transfer of an asset (aircraft or ship) leased by an IFSC unit referred to above, provided the IFSC unit commenced operations on or before 31-03-2030.

Quantum and Period of Deduction –

– For Units of an IFSC: 100% deduction for 10 consecutive assessment years out of 15 years, starting from the year relevant to obtaining permission under the Banking Regulation Act, SEBI Act or the IFSC Authority Act.

– For Others: 100% deduction for 10 consecutive years, starting from the year relevant to obtaining permission under the Banking Regulation Act, SEBI Act or under any other applicable law.

Conditions to Claim Deduction – The assessee must electronically furnish the following documents with the return of income:

– Chartered Accountant’s report in Form No. 10CCF certifying the correctness of the claimed deduction.

– Copy of permission obtained under Section 23(1)(a) of the Banking Regulation Act, 1949, or registration under the International Financial Services Centre Authority Act, 2019.

Deduction for Inter-Corporate Dividend [Section 80M]

A domestic company is eligible to claim deduction for dividend income received from another domestic company, a foreign company, or a business trust.
Deduction is allowed when the domestic company further distributes the dividend to its shareholders on or before one month prior to the due date of furnishing the original return of income.
Dividend amount claimed as deduction in a previous year cannot be claimed againin any other year.

Deduction in Respect of Income of Co-operative Societies [Section 80P]

Every co-operative society is eligible to claim deduction under this section except:

– Co-operative banks (other than primary agricultural credit societies or primary co-operative agricultural and rural development banks)

– Regional rural banks

Amount of deduction to a co-operative society engaged in specified activities: A co-operative society engaged in the following activities is allowed deduction for 100% of its income:

– Business of banking or providing credit facilities to its members;

– Marketing of agricultural produce grown by its members;

– Purchase and supply of agricultural implements, seeds, livestock, or other articles intended for agriculture to its members;

– Processing of agricultural produce of its members without the aid of power;

– Collective disposal of the labour of its members;

– Fishing or allied activities, including the purchase of material and equipment for supplies to members;

– Cottage industry fulfilling prescribed conditions (Circular No. 722, dated 19-09-1995).

A co-operative society engaged in the activities of collective disposal of labour or fishing or allied activities is eligible to claim deduction only if rules and bye-laws of the society restrict voting rights to individuals contributing labour or carry on the fishing or allied activities, co-operative societies providing financial assistance to the society, or the State Government.
Amount of deduction to a primary society: A primary society is allowed to claim a deduction for the whole of the profits or gains arising from a business if it is engaged in supplying milk, oilseeds, fruits or vegetables grown by its members to the following:

– Federal co-operative societies, engaged in the business of supplying milk, oilseeds, fruits, or vegetables; or

– The Government/local authorities, or

– Government companies/corporations established by or under a Central, State or Provincial Act which is engaged in the supplying of milk, oilseeds, fruits or vegetables to the public.

Amount of deduction to any other co-operative society: Any other co-operative society engaged in any activities, other than those specified above, is allowed to claim a deduction for profit and gains attributable to such activities. However, the maximum amount that can be claimed as a deduction is Rs. 1,00,000 for consumer co-operative societies and Rs. 50,000 for other co-operative societies.
Amount of deduction for interest or dividends – Deduction allowed for the entire interest or dividend income from investments in other co-operative societies.
Amount of deduction for rental income – Deduction allowed for the entire amount of income from letting out godowns or warehouses used for storage, processing, or marketing of commodities.
Amount of deduction for interest on securities or income from house property – Deduction allowed for the entire amount of income if the gross total income is up to Rs. 20,000. However, this deduction is not available to the housing societies, urban consumer societies, societies carrying on a transport business, or societies engaged in manufacturing operations with the aid of power.
If the assessee is eligible to claim deduction under other provisions also, the deduction under this section is allowed after reducing the amount claimed elsewhere.

Deduction in Respect of Royalty Income [Section 80QQB]

A resident individual author (including joint authors) can claim deduction for deriving income by:

– Lump-sum consideration for the assignment or grant of his copyright interest in any book;

– Royalty or copyright fees for such book;

– Non-refundable advance payment of royalties/copyright fees.

Deduction is allowed for an amount equal to the income earned as royalty or Rs. 3 lakhs, whichever is lower. If there are joint authors, each can claim deduction up to Rs. 3 lakhs.
If royalty or copyright fees are not a lump sum consideration, the deduction is limited to 15% of the value of books sold during the previous year (without allowing any expenses). Any excess royalty beyond 15% not considered for deduction.
If the royalty income is earned outside India, deduction is allowed only for royalty income earned in foreign exchange that is brought to India within 6 months from the end of the previous year (or an extended period allowed by RBI or other competent authority). Assessee is required to furnish a certificate in Form 10Helectronically.
To claim the deduction, the assessee must furnish a certificate in Form 10CCDfrom the payer of income, filed electronically with the return of income.
Amount claimed under this provision cannot be claimed under any other provision in any other year.

Deduction in Respect of Royalty on Patents [Section 80RRB]

A resident individual, being a patentee, can claim deduction for royalty income received in respect of patents registered on or after 01-04-2003 under the Patents Act, 1970.
Royalty means consideration (including lump sum consideration) for:

– Transfer or granting of a licence of patent rights; or

– Imparting information about the use or working of a patent; or

-Use of patent; or

– Rendering services connected to activities referred to above.

But excludes:

– Consideration that is taxable as capital gains; or

– Consideration for the sale of products manufactured using patented processes or patented articles for commercial use.

Deduction is allowed for an amount equal to the income earned as royalty or Rs. 3 lakhs, whichever is lower. If there are joint owners, each can claim deduction up to Rs. 3 lakhs.
Where a compulsory license is granted under the Patent Act, 1970, the deduction is limited to the royalty amount under the terms and conditions of a licence settled by the Controller General of Patents, Designs and Trade Marks.
If the royalty income is earned outside India, deduction is allowed only for royalty income earned in foreign exchange that is brought to India within 6 months from the end of the previous year (or an extended period allowed by RBI or other competent authority). Assessee is required to furnish a certificate in Form 10Helectronically.
To claim the deduction, the assessee must furnish a certificate in Form 10CCE, duly signed by the Controller General of Patents, Designs and Trade Marks, filed electronically with the return of income.
Amount claimed under this provision cannot be claimed under any other provision in any other year.

Deduction for Interest on Deposits in Savings Account [Section 80TTA]

Section 80TTAprovides deduction to an individual or Hindu Undivided Family (HUF) from interest income earned on deposits in a savings bank account (excluding time deposits) held with:

– Banking companies or institutions;

– Co-operative societies engaged in banking business (including land mortgage or land development banks);

– Post offices.

Senior citizens must claim deduction for interest under Section 80TTB, not Section 80TTA.
Partners or members cannot claim deduction on interest income from savings accounts held by the firm/AOP/BOI.
Deduction is allowed equal to the interest credited or Rs. 10,000, whichever is lower.

Deduction to Senior Citizens from Interest on Deposits [Section 80TTB]

Section 80TTBprovides deduction to an individual being a resident senior citizen from interest income earned on bank deposits held with:

– Banking companies or institutions;

– Co-operative societies engaged in banking business (including land mortgage or land development banks);

– Post offices.

Partners or members cannot claim deduction on interest income from deposits held by the firm/AOP/BOI.
Deduction is allowed equal to the interest credited or Rs. 50,000, whichever is lower.

Deduction in Case of a Person Suffering from a Disability [Section 80U]

Resident individuals suffering from disability or severe disability can claim deduction under this section.
A flat deduction of Rs. 75,000 is allowed if the person is suffering from disability; Rs. 1,25,000 if suffering from severe disability.
Assessee must obtain a certificate of disability in Form 10-IAor any other format, as the case may be.
If the disability is temporary and requires reassessment after a specified period, the certificate is valid for such specified period, and to claim further deductions, a new certificate shall be required.

Income-tax Act, 1961

Section – 80A

CHAPTER VIA
DEDUCTIONS TO BE MADE IN COMPUTING TOTAL INCOME
A.—General

Deductions to be made in computing total income.

80A. (1) In computing the total income of an assessee, there shall be allowed from his gross total income, in accordance with and subject to the provisions of this Chapter, the deductions specified in sections 80C to 80U.

(2) The aggregate amount of the deductions under this Chapter shall not, in any case, exceed the gross total income of the assessee.

(3) Where, in computing the total income of an association of persons or a body of individuals, any deduction is admissible under section 80G or section 80GGA or section 80GGC or section 80HH or section 80HHA or section 80HHB or section 80HHC or section 80HHD or section 80-I or section 80-IA or section 80-IB or section 80-IC or section 80-ID or section 80-IE or section 80J or section 80JJ, no deduction under the same section shall be made in computing the total income of a member of the association of persons or body of individuals in relation to the share of such member in the income of the association of persons or body of individuals.

(4) Notwithstanding anything to the contrary contained in section 10A or section 10AA or section 10B or section 10BA or in any provisions of this Chapter under the heading “C.—Deductions in respect of certain incomes“, 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.

(5) Where the assessee fails to make a claim in his return of income for any deduction under section 10A or section 10AA or section 10B or section 10BA or under any provision of this Chapter under the heading “C.—Deductions in respect of certain incomes”, no deduction shall be allowed to him thereunder.

(6) Notwithstanding anything to the contrary contained in section 10A or section 10AA or section 10B or section 10BA or in any provisions of this Chapter under the heading “C.—Deductions in respect of certain incomes”, where any goods or services held for the purposes of the undertaking or unit or enterprise or eligible business are transferred to any other business carried on by the assessee or where any goods or services held for the purposes of any other business carried on by the assessee are transferred to the undertaking or unit or enterprise or eligible business and, the consideration, if any, for such transfer as recorded in the accounts of the undertaking or unit or enterprise or eligible business does not correspond to the market value of such goods or services as on the date of the transfer, then, for the purposes of any deduction under this Chapter, the profits and gains of such undertaking or unit or enterprise or eligible business shall be computed as if the transfer, in either case, had been made at the market value of such goods or services as on that date.

Explanation.—For the purposes of this sub-section, the expression “market value”,—

(i) in relation to any goods or services sold or supplied, means the price that such goods or services would fetch if these were sold by the undertaking or unit or enterprise or eligible business in the open market, subject to statutory or regulatory restrictions, if any;

(ii) in relation to any goods or services acquired, means the price that such goods or services would cost if these were acquired by the undertaking or unit or enterprise or eligible business from the open market, subject to statutory or regulatory restrictions, if any;

(iii) in relation to any goods or services sold, supplied or acquired means the arm’s length price as defined in clause (ii) of section 92F of such goods or services, if it is a specified domestic transaction referred to in section 92BA.

(7) Where a deduction under any provision of this Chapter under the heading “C.—Deductions in respect of certain incomes” is claimed and allowed in respect of profits of any of the specified business referred to in clause (c) of sub-section (8) of section 35AD for any assessment year, no deduction shall be allowed under the provisions of section 35AD in relation to such specified business for the same or any other assessment year.

Section – 80AB

Deductions to be made with reference to the income included in the gross total income.

80AB. Where any deduction is required to be made or allowed under any section included in this Chapter under the heading “C.—Deductions in respect of certain incomes” in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income.

Section – 80AC

Deduction not to be allowed unless return furnished.

80AC. Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after—

(i) the 1st day of April, 2006 but before the 1st day of April, 2018, 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;

(ii) the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading “C.—Deductions in respect of certain incomes“,

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 sub-section (1) of section 139.

Section – 80C

B.—Deductions in respect of certain payments

Deduction in respect of life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc.

80C. (1) In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, in accordance with and subject to the provisions of this section, the whole of the amount paid or deposited in the previous year, being the aggregate of the sums referred to in subsection (2), as does not exceed one hundred and fifty thousand rupees.

(2) The sums referred to in sub-section (1) shall be any sums paid or deposited in the previous year by the assessee—

(i) to effect or to keep in force an insurance on the life of persons specified in sub-section (4);

(ii) to effect or to keep in force a contract for a deferred annuity, not being an annuity plan referred to in clause (xii), on the life of persons specified in subsection (4):

Provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity;

(iii) by way of deduction from the salary payable by or on behalf of the Government to any individual being a sum deducted in accordance with the conditions of his service, for the purpose of securing to him a deferred annuity or making provision for his spouse or children, in so far as the sum so deducted does not exceed one-fifth of the salary;

(iv) as a contribution by an individual to any provident fund to which the Provident Funds Act, 1925 (19 of 1925) applies;

(v) as a contribution to any provident fund set up by the Central Government and notified by it in this behalf in the Official Gazette, where such contribution is to an account standing in the name of any person specified in sub-section (4);

(vi) as a contribution by an employee to a recognised provident fund;

(vii) as a contribution by an employee to an approved superannuation fund;

(viii) as subscription, in the name of any person specified in sub-section (4), to any such security of the Central Government or any such deposit scheme as that Government may, by notification in the Official Gazette, specify in this behalf;

(ix) as subscription to any such savings certificate as defined in clause (c) of section 2 of the Government Savings Certificates Act, 1959 (46 of 1959), as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(x) as a contribution, in the name of any person specified in sub-section (4), for participation in the Unit-linked Insurance Plan, 1971 (hereafter in this section referred to as the Unit-linked Insurance Plan) specified in Schedule II of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);

(xi) as a contribution in the name of any person specified in sub-section (4) for participation in any such unit-linked insurance plan of the LIC Mutual Fund referred to in clause (23D) of section 10, as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(xii) to effect or to keep in force a contract for such annuity plan of the Life Insurance Corporation or any other insurer as the Central Government may, by notification in the Official Gazette, specify;

(xiii) as subscription to any units of any Mutual Fund referred to in clause (23D) of section 10 or from the Administrator or the specified company under any plan formulated in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(xiv) as a contribution by an individual to any pension fund set up by any Mutual Fund referred to in clause (23D) of section 10 or by the Administrator or the specified company, as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(xv) as subscription to any such deposit scheme of, or as a contribution to any such pension fund set up by, the National Housing Bank established under section 3 of the National Housing Bank Act, 1987 (53 of 1987) (hereafter in this section referred to as the National Housing Bank), as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(xvi) as subscription to any such deposit scheme of—

(a) a public sector company which is engaged in providing long-term finance for construction or purchase of houses in India for residential purposes; or

(b) any authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both, as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(xvii) as tuition fees (excluding any payment towards any development fees or donation or payment of similar nature), whether at the time of admission or thereafter,—

(a) to any university, college, school or other educational institution situated within India;

(b) for the purpose of full-time education of any of the persons specified in sub-section (4);

(xviii) for the purposes of purchase or construction of a residential house property the income from which is chargeable to tax under the head “Income from house property” (or which would, if it had not been used for the assessee’s own residence, have been chargeable to tax under that head), where such payments are made towards or by way of—

(a) any instalment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis; or

(b) any instalment or part payment of the amount due to any company or co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; or

(1) the Central Government or any State Government, or

(2) any bank, including a co-operative bank, or

(3) the Life Insurance Corporation, or

(4) the National Housing Bank, or

(5) any public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes which is eligible for deduction under clause (viii) of subsection (1) of section 36, or

(6) any company in which the public are substantially interested or any co-operative society, where such company or co-operative society is engaged in the business of financing the construction of houses, or

(7) the assessee’s employer where such employer is an authority or a board or a corporation or any other body established or constituted under a Central or State Act, or

(8) the assessee’s employer where such employer is a public company or a public sector company or a university established by law or a college affiliated to such university or a local authority or a co-operative society; or

(d) stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee, but shall not include any payment towards or by way of—

(A) the admission fee, cost of share and initial deposit which a shareholder of a company or a member of a co-operative society has to pay for becoming such shareholder or member; or

(B) the cost of any addition or alteration to, or renovation or repair of, the house property which is carried out after the issue of the completion certificate in respect of the house property by the authority competent to issue such certificate or after the house property or any part thereof has either been occupied by the assessee or any other person on his behalf or been let out; or

(xix) as subscription to equity shares or debentures forming part of any eligible issue of capital approved by the Board on an application made by a public company or as subscription to any eligible issue of capital by any public financial institution in the prescribed form.

Explanation.—For the purposes of this clause,—

(a) “eligible issue of capital” means an issue made by a public company formed and registered in India or a public financial institution and the entire proceeds of the issue are utilised wholly and exclusively for the purposes of any business referred to in sub-section (4) of section 80-IA;

(b) “public company” shall have the meaning assigned to it in section 3 of the Companies Act, 1956 (1 of 1956);

(c) “public financial institution” shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956);

(xx) as subscription to any units of any mutual fund referred to in clause (23D) of section 10 and approved by the Board on an application made by such mutual fund in the prescribed form:

Provided that this clause shall apply if the amount of subscription to such units is subscribed only in the eligible issue of capital of any company.

explanation.—For the purposes of this clause “eligible issue of capital” means an issue referred to in clause (i) of the Explanation to clause (xix) of sub-section (2);

(xxi) as term deposit—

(a) for a fixed period of not less than five years with a scheduled bank; and

(b) which is in accordance with a scheme framed and notified, by the Central Government, in the Official Gazette for the purposes of this clause. —For the purposes of this clause, “scheduled bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), or a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), or a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank, being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934);

(xxii) as subscription to such bonds issued by the National Bank for Agriculture and Rural Development, as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(xxiii) in an account under the Senior Citizens Savings Scheme Rules, 2004;

(xxiv) as five year time deposit in an account under the Post Office Time Deposit Rules, 1981;

(xxv) being an employee of the Central Government, as a contribution to a specified account of the pension scheme referred to in section 80CCD—

(a) for a fixed period of not less than three years; and

(b) which is in accordance with the scheme as may be notified by the Central Government in the Official Gazette for the purposes of this clause. —For the purposes of this clause, “specified account” means an additional account referred to in sub-section (3) of section 20 of the Pension Fund Regulatory and Development Authority Act, 2013 (23 of 2013).

(3) The provisions of sub-section (2) shall apply only to so much of any premium or other payment made on an insurance policy, other than a contract for a

deferred annuity, issued on or before the 31st day of March, 2012, as is not in excess of twenty per cent of the actual capital sum assured. Explanation.—In calculating any such actual capital sum assured, no account shall be taken—

(i) of the value of any premiums agreed to be returned, or

(ii) of any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.

(3A) The provisions of sub-section (2) shall apply only to so much of any premium or other payment made on an insurance policy, other than a contract for a deferred annuity, issued on or after the 1st day of April, 2012 as is not in excess of ten per cent of the actual capital sum assured : Provided that where the policy, issued on or after the 1st day of April, 2013, is for insurance on life of any person, who is—

(a) a person with disability or a person with severe disability as referred to in section 80U, or

(b) suffering from disease or ailment as specified in the rules made under section 80DDB, the provisions of this sub-section shall have effect as if for the words “ten per cent”, the words “fifteen per cent” had been substituted.

Explanation.—For the purposes of this sub-section, “actual capital sum assured” in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account—

(i) the value of any premium agreed to be returned; or

(ii) any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.

(4) The persons referred to in sub-section (2) shall be the following, namely:—

(a) for the purposes of clauses (i), (v), (x) and (xi) of that sub-section,—

(i) in the case of an individual, the individual, the wife or husband and any child of such individual, and

(ii) in the case of a Hindu undivided family, any member thereof;

(b) for the purposes of clause (ii) of that sub-section, in the case of an individual, the individual, the wife or husband and any child of such individual;

(ba) for the purposes of clause (viii) of that sub-section, in the case of an individual, the individual or any girl child of that individual, or any girl child for whom such person is the legal guardian, if the scheme so specifies;

(c) for the purposes of clause (xvii) of that sub-section, in the case of an individual, any two children of such individual.

(5) Where, in any previous year, an assessee—

(i) terminates his contract of insurance referred to in clause (i) of sub-section (2), by notice to that effect or where the contract ceases to be in force by reason of failure to pay any premium, by not reviving contract of insurance,—

(a) in case of any single premium policy, within two years after the date of commencement of insurance; or

(b) in any other case, before premiums have been paid for two years; or

(ii) terminates his participation in any unit-linked insurance plan referred to in clause (x) or clause (xi) of sub-section (2), by notice to that effect or where he ceases to participate by reason of failure to pay any contribution, by not reviving his participation, before contributions in respect of such participation have been paid for five years; or

(iii) transfers the house property referred to in clause (xviii) of sub-section (2) before the expiry of five years from the end of the financial year in which possession of such property is obtained by him, or receives back, whether by way of refund or otherwise, any sum specified in that clause,

then,—

(a) no deduction shall be allowed to the assessee under sub-section (1) with reference to any of the sums, referred to in clauses (i), (x), (xi) and (xviii) of sub-section (2), paid in such previous year; and

(b) the aggregate amount of the deductions of income so allowed in respect of the previous year or years preceding such previous year, shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year.

(6) If any equity shares or debentures, with reference to the cost of which a deduction is allowed under sub-section (1), are sold or otherwise transferred by the assessee to any person at any time within a period of three years from the date of their acquisition, the aggregate amount of the deductions of income so allowed in respect of such equity shares or debentures in the previous year or years preceding the previous year in which such sale or transfer has taken place shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year.

Explanation.—A person shall be treated as having acquired any shares or debentures on the date on which his name is entered in relation to those shares or debentures in the register of members or of debenture-holders, as the case may be, of the public company.

(6A) If any amount, including interest accrued thereon, is withdrawn by the assessee from his account referred to in clause (xxiii) or clause (xxiv) of subsection (2), before the expiry of the period of five years from the date of its deposit, the amount so withdrawn shall be deemed to be the income of the assessee of the previous year in which the amount is withdrawn and shall be liable to tax in the assessment year relevant to such previous year:

Provided that the amount liable to tax shall not include the following amounts, namely:—

any amount of interest, relating to deposits referred to in clause (xxiii) or clause (xxiv) of sub-section (2), which has been included in the total income of the assessee of the previous year or years preceding such previous year; and

any amount received by the nominee or legal heir of the assessee, on the death of such assessee, other than interest, if any, accrued thereon, which was not included in the total income of the assessee for the previous year or years preceding such previous year.

(7)⁷⁷ [***]

(8) In this section,—

(i) “Administrator” means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);

(ii) “contribution” to any fund shall not include any sums in repayment of loan;

(iii) “insurance” shall include—

(a) a policy of insurance on the life of an individual or the spouse or the child of such individual or a member of a Hindu undivided family securing the payment of specified sum on the stipulated date of maturity, if such person is alive on such date notwithstanding that the policy of insurance provides only for the return of premiums paid (with or without any interest thereon) in the event of such person dying before the said stipulated date;

(b) a policy of insurance effected by an individual or a member of a Hindu undivided family for the benefit of a minor with the object of enabling the minor, after he has attained majority to secure insurance on his own life by adopting the policy and on his being alive on a date (after such adoption) specified in the policy in this behalf;

(iv) “Life Insurance Corporation” means the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956);

(v) “public company” shall have the same meaning as in section 3 of the Companies Act, 1956 (1 of 1956);

(vi) “security” means a Government security as defined in clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944);

(vii) “specified company” means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);

(viii) “transfer” shall be deemed to include also the transactions referred to in clause (f) of section 269UA.

Section – 80CCC

Deduction in respect of contribution to certain pension funds.

80CCC. (1) Where an assessee being an individual has in the previous year paid or deposited any amount out of his income chargeable to tax to effect or keep in force a contract for any annuity plan of Life Insurance Corporation of India or any other insurer for receiving pension from the fund referred to in clause (23AAB) of section 10, he shall, in accordance with, and subject to, the provisions of this section, be allowed a deduction in the computation of his total income, of the whole of the amount paid or deposited (excluding interest or bonus accrued or credited to the assessee’s account, if any) as does not exceed the amount of one hundred and fifty thousand rupees in the previous year.

(2) Where any amount standing to the credit of the assessee in a fund, referred to in sub-section (1) in respect of which a deduction has been allowed under sub-section (1), together with the interest or bonus accrued or credited to the assessee’s account, if any, is received by the assessee or his nominee—

(a) on account of the surrender of the annuity plan whether in whole or in part, in any previous year, or

(b) as pension received from the annuity plan,

an amount equal to the whole of the amount referred to in clause (a) or clause (b) shall be deemed to be the income of the assessee or his nominee, as the case may be, in that previous year in which such withdrawal is made or, as the case may be, pension is received, and shall accordingly be chargeable to tax as income of that previous year.

(3) Where any amount paid or deposited by the assessee has been taken into account for the purposes of this section,—

(a)⁷⁹ [***]

(b) a deduction with reference to such amount shall not be allowed under section 80C for any assessment year beginning on or after the 1st day of April, 2006.

Section – 80CCD

Deduction in respect of contribution to pension scheme of Central Government.

80CCD. (1) Where an assessee, being an individual employed by the Central Government on or after the 1st day of January, 2004 or, being an individual employed by any other employer, or any other assessee, being an individual has in the previous year paid or deposited any amount in his account under a pension scheme notified or as may be notified by the Central Government, he shall, in accordance with, and subject to, the provisions of this section, be allowed a deduction in the computation of his total income, of the whole of the amount so paid or deposited as does not exceed,—

(a) in the case of an employee, ten per cent of his salary in the previous year; and

(b) in any other case, twenty per cent of his gross total income in the previous year.

(1A) [***]

(1B) An assessee referred to in sub-section (1), shall be allowed a deduction in computation of his total income, whether or not any deductions is allowed under sub-section (1), of the whole of the amount paid or deposited in the previous year in his account under a pension scheme notified or as may be notified by the Central Government, which shall not exceed fifty thousand rupees:

Provided that no deduction under this sub-section shall be allowed in respect of the amount on which a deduction has been claimed and allowed under subsection (1).

Following second proviso shall be inserted after the proviso to sub-section (1B) of section 80CCD by the Finance Act, 2025, w.e.f. 1-4-2026:

Provided further that the deduction under this sub-section shall also be allowed, where any payment or deposit is made to the account of a minor under the pension scheme referred to in the said sub-section, by the assessee, being the parent or guardian of such minor, subject to the condition that the aggregate amount of deduction under this sub-section shall not exceed fifty thousand rupees.

(2) Where, in the case of an assessee referred to in sub-section (1), the Central Government or the State Government or any other employer makes any contribution to his account referred to in that sub-section, the assessee shall be allowed a deduction in the computation of his total income, of the whole of the amount contributed by the Central Government or the State Government or any other employer as does not exceed—

(a) fourteen per cent, where such contribution is made by the Central Government or the State Government;

(b) ten per cent, where such contribution is made by any other employer, of his salary in the previous year:

[Provided that where the total income of the assessee is chargeable to tax under sub-section (1A) of section 115BAC, the provisions of sub-section (2) shall have effect as if for the words “ten per cent” referred to in clause (b), the words “fourteen per cent” had been substituted.]

(3) Where any amount standing to the credit of the assessee ⁸¹[in his account] referred to in sub-section (1) or sub-section (1B), in respect of which a deduction has been allowed under those sub-sections or sub-section (2), together with the amount accrued thereon, if any, is received by the assessee or his nominee, in whole or in part, in any previous year,—

(a) on account of closure or his opting out of the pension scheme referred to in sub-section (1) or sub-section (1B); or

(b) as pension received from the annuity plan purchased or taken on such closure or opting out,

the whole of the amount referred to in clause (a) or clause (b) shall be deemed to be the income of the assessee or his nominee, as the case may be, in the previous year in which such amount is received, and shall accordingly be charged to tax as income of that previous year:

Provided that the amount received by the nominee, on the death of the assessee, under the circumstances referred to in clause (a), shall not be deemed to be the income of the nominee.

Following second proviso shall be inserted after the proviso to sub-section (3) of section 80CCD by the Finance Act, 2025, w.e.f. 1-4-2026:

Provided further that the amount received by a person, being the parent or guardian or nominee of a minor, on account of closure of the pension scheme referred to in sub-section (1B) due to the death of the minor, shall not be deemed to be the income of such person.

^81a[(3A) Where any amount standing to the credit of the assessee, being a subscriber to the Unified Pension Scheme, in his account referred to in sub-section (1) or sub-section (1B), in respect of which a deduction has been allowed under those sub-sections or sub-section (2), together with the amount accrued thereon, if any, is received by the assessee or his nominee, in whole or in part, in any previous year on account of his superannuation or voluntary retirement or retirement under clause (j) of rule 56 of the Fundamental Rules [which is not treated as penalty under the Central Civil Services (Classification, Control and Appeal) Rules, 1965], as may be applicable, the whole of the amount shall be deemed to be the income of the assessee or his nominee, as the case may be, in the previous year in which such amount is received, and shall accordingly be charged to tax as income of that previous year.]

(4) Where any amount paid or deposited by the assessee [in his account or the account of a minor] has been allowed as a deduction under sub-section (1) or sub-section (1B)],—

(a) ⁸³[***]

(b) no deduction with reference to such amount shall be allowed under section 80C for any assessment year beginning on or after the 1st day of April, 2006.

(5) For the purposes of this section, the assessee shall be deemed not to have received any amount in the previous year if such amount is used for purchasing an annuity plan in the same previous year.

^81a[(6) For the purposes of sub-section (3A), the assessee shall be deemed not to have received any amount in the previous year if such amount is transferred to pool corpus from individual corpus on account of his superannuation or voluntary retirement or retirement under clause (j) of rule 56 of the Fundamental Rules [which is not treated as penalty under the Central Civil Services (Classification, Control and Appeal) Rules, 1965], as may be applicable.] [Explanation.—For the purposes of this section,—

(i) “pool corpus” and “individual corpus” shall have the same meanings as assigned to them in notification number FX-1/3/2024-PR, dated the 24th January, 2025, of the Department of Financial Services;

(ii) “salary” includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites.]

Section – 80D

Deduction in respect of health insurance premia.

80D. (1) In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted such sum, as specified in subsection (2) or sub-section (3), payment of which is made by any mode as specified in sub-section (2B), in the previous year out of his income chargeable to tax.

(2) Where the assessee is an individual, the sum referred to in sub-section (1) shall be the aggregate of the following, namely:—

(a) the whole of the amount paid to effect or to keep in force an insurance on the health of the assessee or his family or any contribution made to the Central Government Health Scheme or such other scheme as may be notified by the Central Government in this behalf or any payment made on account of preventive health check-up of the assessee or his family as does not exceed in the aggregate twenty-five thousand rupees; and

(b) the whole of the amount paid to effect or to keep in force an insurance on the health of the parent or parents of the assessee or any payment made on account of preventive health check-up of the parent or parents of the assessee as does not exceed in the aggregate twenty-five thousand rupees;

(c) the whole of the amount paid on account of medical expenditure incurred on the health of the assessee or any member of his family as does not exceed in the aggregate fifty thousand rupees; and

(d) the whole of the amount paid on account of medical expenditure incurred on the health of any parent of the assessee, as does not exceed in the aggregate fifty thousand rupees:

Provided that the amount referred to in clause (c) or clause (d) is paid in respect of a senior citizen and no amount has been paid to effect or to keep in force an insurance on the health of such person:

Provided further that the aggregate of the sum specified under clause (a) and clause (c) or the aggregate of the sum specified under clause (b) and clause (d) shall not exceed fifty thousand rupees.

Explanation.—For the purposes of clause (a), “family” means the spouse and dependant children of the assessee.

(2A) Where the amounts referred to in clauses (a) and (b) of sub-section (2) are paid on account of preventive health check-up, the deduction for such amounts shall be allowed to the extent it does not exceed in the aggregate five thousand rupees.

(2B) For the purposes of deduction under sub-section (1), the payment shall be made by—

(a) any mode, including cash, in respect of any sum paid on account of preventive health check-up;

(b) any mode other than cash in all other cases not falling under clause (i).

(3) Where the assessee is a Hindu undivided family, the sum referred to in sub-section (1), shall be the aggregate of the following, namely:-

(a) whole of the amount paid to effect or to keep in force an insurance on the health of any member of that Hindu undivided family as does not exceed in the aggregate twenty-five thousand rupees; and

(b) the whole of the amount paid on account of medical expenditure incurred on the health of any member of the Hindu undivided family as does not exceed in the aggregate fifty thousand rupees:

Provided that the amount referred to in clause (b) is paid in respect of a senior citizen and no amount has been paid to effect or to keep in force an insurance on the health of such person:

Provided further that the aggregate of the sum specified under clause (a) and clause (b) shall not exceed fifty thousand rupees.

(4) Where the sum specified in clause (a) or clause (b) of sub-section (2) or clause (a) of sub-section (3) is paid to effect or keep in force an insurance on the health of any person specified therein, and who is a senior citizen, the provisions of this section shall have effect as if for the words “twenty-five thousand rupees”, the words “fifty thousand rupees” had been substituted.

Explanation.—[***]

(4A) Where the amount specified in clause (a) or clause (b) of sub-section (2) or clause (a) of sub-section (3) is paid in lump sum in the previous year to effect or to keep in force an insurance on the health of any person specified therein for more than a year, then, subject to the provisions of this section, there shall be allowed for each of the relevant previous year, a deduction equal to the appropriate fraction of the amount.

Explanation.—For the purposes of this sub-section,—

(i) “appropriate fraction” means the fraction, the numerator of which is one and the denominator of which is the total number of relevant previous years;

(ii) “relevant previous year” means the previous year beginning with the previous year in which such amount is paid and the subsequent previous year or years during which the insurance shall have effect or be in force.

(5) The insurance referred to in this section shall be in accordance with a scheme made in this behalf by—

(i) the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and approved by the Central Government in this behalf; or

(ii) any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999).

Explanation.—For the purposes of this section,—

(i) “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;

(ii) [***]

Section – 80DD

Deduction in respect of maintenance including medical treatment of a dependant who is a person with disability.

80DD. (1) Where an assessee, being an individual or a Hindu undivided family, who is a resident in India, has, during the previous year,—

(a) incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or

(b) paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability,

the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of a sum of seventy-five thousand rupees from his gross total income in respect of the previous year:

Provided that where such dependant is a person with severe disability, the provisions of this sub-section shall have effect as if for the words “seventy-five thousand rupees”, the words “one hundred and twenty-five thousand rupees” had been substituted.

(2) The deduction under clause (b) of sub-section (1) shall be allowed only if the following conditions are fulfilled, namely:—

(a) the scheme referred to in clause (b) of sub-section (1) provides for payment of annuity or lump sum amount for the benefit of a dependant, being a person with disability,—

(a) in the event of the death of the individual or the member of the Hindu undivided family in whose name subscription to the scheme has been made; or

(b) on attaining the age of sixty years or more by such individual or the member of the Hindu undivided family, and the payment or deposit to such scheme has been discontinued;

(b) the assessee nominates either the dependant, being a person with disability, or any other person or a trust to receive the payment on his behalf, for the benefit of the dependant, being a person with disability.

(3) If the dependant, being a person with disability, predeceases the individual or the member of the Hindu undivided family referred to in sub-section (2), an amount equal to the amount paid or deposited under clause (b) of sub-section (1) shall be deemed to be the income of the assessee of the previous year in which such amount is received by the assessee and shall accordingly be chargeable to tax as the income of that previous year.

(3A) The provisions of sub-section (3) shall not apply to the amount received by the dependant, being a person with disability, before his death, by way of annuity or lump sum by application of the condition referred to in sub-clause (ii) of clause (a) of sub-section (2).

(4) The assessee, claiming a deduction under this section, shall furnish a copy of the certificate issued by the medical authority in the prescribed form and manner, along with the return of income under section 139, in respect of the assessment year for which the deduction is claimed:

Provided that where the condition of disability requires reassessment of its extent after a period stipulated in the aforesaid certificate, no deduction under this section shall be allowed for any assessment year relating to any previous year beginning after the expiry of the previous year during which the aforesaid certificate of disability had expired, unless a new certificate is obtained from the medical authority in the form and manner, as may be prescribed, and a copy thereof is furnished along with the return of income.

Explanation.—For the purposes of this section,—

(a) “Administrator” means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);

(b) “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 Hindu undivided family, a member of the Hindu undivided family,

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;

(c) “disability” shall have the meaning assigned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) and includes “autism”, “cerebral palsy” and “multiple disability” referred to in clauses (a), (c) and (h) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

(d) “Life Insurance Corporation” shall have the same meaning as in clause (iii) of sub-section (8) of section 88;

(e) “medical authority” means the medical authority as referred to in clause (p) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) or such other medical authority as may, by notification, be specified by the Central Government for certifying “autism”, “cerebral palsy”, “multiple disabilities”, “person with disability” and “severe disability” referred to in clauses (a), (c), (h), (j) and (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

(f) “person with disability” means a person as referred to in clause (t) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) or clause (j) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

(g) “person with severe disability” means—

(i) a person with eighty per cent or more of one or more disabilities, as referred to in sub-section (4) of section 56 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996); or

(ii) a person with severe disability referred to in clause (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

(h) “specified company” means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002).

Section – 80DDB

Deduction in respect of medical treatment, etc.

80DDB. Where an assessee who is resident in India has, during the previous year, actually paid any amount for the medical treatment of such disease or ailment as may be specified in the rules made in this behalf by the Board—

(a) for himself or a dependant, in case the assessee is an individual; or

(b) for any member of a Hindu undivided family, in case the assessee is a Hindu undivided family,

the assessee shall be allowed a deduction of the amount actually paid or a sum of forty thousand rupees, whichever is less, in respect of that previous year in which such amount was actually paid :

Provided that no such deduction shall be allowed unless the assessee obtains the prescription for such medical treatment from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist, as may be prescribed :

Provided further that the deduction under this section shall be reduced by the amount received, if any, under an insurance from an insurer, or reimbursed by an employer, for the medical treatment of the person referred to in clause (a) or clause (b) :

Provided also that where the amount actually paid is in respect of the assessee or his dependant or any member of a Hindu undivided family of the assessee and who is a senior citizen, the provisions of this section shall have effect as if for the words “forty thousand rupees”, the words “one hundred thousand rupees” had been substituted :

Explanation.—For the purposes of this section,—

(i) “dependant” means—

(a) in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them,

(b) in the case of a Hindu undivided family, a member of the Hindu undivided family, dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance;

(ii) [***]

(iii) “insurer” shall have the meaning assigned to it in clause (9) of section 2 of the Insurance Act, 1938 (4 of 1938);

(iv) “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;

(v) [***]

Section – 80E

Deduction in respect of interest on loan taken for higher education.

80E. (1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education or for the purpose of higher education of his relative.

(2) The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the interest referred to in sub-section (1) is paid by the assessee in full, whichever is earlier.

(3) For the purposes of this section,—

(a) “approved charitable institution” means an institution specified in, or, as the case may be, an institution established for charitable purposes and approved by the prescribed authority under clause (23C) of section 10 or an institution referred to in clause (a) of sub-section (2) of section 80G;

(b) “financial institution” means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf;

(c) “higher education” means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, board or university recognised by the Central Government or State Government or local authority or by any other authority authorised by the Central Government or State Government or local authority to do so;

(d) “initial assessment year” means the assessment year relevant to the previous year, in which the assessee starts paying the interest on the loan;

(e) “relative”, in relation to an individual, means the spouse and children of that individual or the student for whom the individual is the legal guardian.

⁷⁷ Omtt. by Act No. 08 of 2023, w.e.f. 1-4-2023.

⁷⁹Omtt. by Act No. 08 of 2023, w.e.f. 1-4-2023.

⁸⁰Ins. by Act No. 15 of 2024, w.e.f. 1-4-2025.

⁸¹ Words “or a minor, in his account or the account of a minor, as the case may be,” shall be sub. for “in his account” by Act No. 7 of 2025, w.e.f. 1-42026.

^81aInserted by the Act No. 29 of 2025, w.r.e.f. 1-4-2025.

^81bSubstituted by the Taxation Laws (Amendment) Act, 2025, w.r.e.f. 1-4-2025. Prior to its substitution, Explanation, read as under:

“Explanation.—For the purposes of this section, “salary” includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites.”

⁸²Italicised words shall be Ins. by Act No. 7 of 2025, w.e.f. 1-4-2026.

⁸³Omtt. by Act No. 08 of 2023, w.e.f. 1-4-2023.

Income-tax Rules, 1962

Rule – 6ABBA

[Other electronic modes.

6ABBA. The following shall be the other electronic modes for the purposes of clause (d) of first proviso to section 13A, clause (f) of sub-section (8) of section 35AD, sub-section (3), sub-section (3A), proviso to sub-section (3A) and sub-section (4) of section 40A, second proviso to clause (1) of section 43, subsection (4) of section 43CA, proviso to sub-section (1) of section 44AD, second proviso to sub-section (1) of section 50C, second proviso to sub-clause (b) of clause (x) of sub-section (2) of section 56, clause (b) of first proviso of clause (i) of Explanation to section 80JJAA, section 269SS, section 269ST and section 269T, namely:—

(a) Credit Card;

(b) Debit Card;

(d) IMPS (Immediate Payment Service);

(e) UPI (Unified Payment Interface);

(f) RTGS (Real Time Gross Settlement);

(g) NEFT (National Electronic Funds Transfer), and

(h) BHIM (Bharat Interface for Money) Aadhaar Pay.]

Rule – 11A

E.—Deductions to be made in computing total income

Medical authority for certifying autism, cerebral palsy and multiple disabilities and certificate to be obtained from the medical authority for the purposes of deduction under section 80DD and section 80U.

11A. (1) For the purposes of clause (e) of the Explanation to sub-section (4) of section 80DD and clause (d) of the Explanation to sub-section (2) of section 80U, the medical authority for certifying “autism”, “cerebral palsy”, “multiple disabilities”, “person with disability” and “severe disability” referred to in clauses (a), (c), (h), (j) and (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999), shall consist of the following,—

(i) a Neurologist having a degree of Doctor of Medicine (MD) in Neurology (in case of children, a Paediatric Neurologist having an equivalent degree); or

(ii) a Civil Surgeon or Chief Medical Officer in a Government hospital.

(2) For the purposes of sub-section (4) of section 80DD and sub-section (2) of section 80U, the assessee shall furnish along with the return of income, a copy of the certificate issued by the medical authority,—

(i) in Form No. 10-IA, where the person with disability or severe disability is suffering from autism, cerebral palsy or multiple disability; or

(ii) in the form prescribed vide notification No. 16-18/97-NI.1, dated the 1st June, 2001 published in the Gazette of India, Part I, Section 1, dated the 13th June, 2001 and Notification No. 16-18/97-NI.1, dated the 18th February, 2002 published in the Gazette of India, Part I, Section 1, dated the 27th February, 2002 and notified under the Guidelines for evaluation of various disabilities and procedure for certification, keeping in view the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996), in any other case.

(3) Where the condition of disability is temporary and requires reassessment after a specified period, the certificate shall be valid for the period starting from the assessment year relevant to the previous year during which the certificate was issued and ending with the assessment year relevant to the previous year during which the validity of the certificate expires.

Rule – 11AA

⁶⁵[Requirement for approval of institution of fund under clause (vi) of sub-section (5) of section 80G.

11AA. (1) An application for approval under clause (vi) of sub-section (5) of section 80G, the institution or fund (hereinafter referred to as ‘the applicant’) shall be made in the following Form, namely:—

(a) Form No. 10A in case of application under [clause (i) or sub-clause (A) of] clause (iv) of first proviso to sub-section (5) of section 80G to the Principal Commissioner or Commissioner authorised by the Board; or

⁶⁷[(b) Form No. 10AB in case of application under clause (ii) or clause (iii) or sub-clause (B) of clause (iv) of the first proviso to sub-section (5) of section 80G to the Principal Commissioner or Commissioner authorised under the said proviso.]

(2) The application under sub-rule (1) shall be accompanied by the following documents, as required by Form No. 10A or 10AB, as the case may be, namely:-

(a) where the applicant is created, or established, under an instrument, self-certified copy of the instrument;

(b) where the applicant is created, or established, otherwise than under an instrument, self-certified copy of the document evidencing the creation or establishment of the applicant;

(c) self-certified copy of registration with Registrar of Companies or Registrar of Firms and Societies or Registrar of Public Trusts, as the case may be;

(d) self-certified copy of registration under Foreign Contribution (Regulation) Act, 2010 (42 of 2010), if the applicant is registered under such Act;

(e) self-certified copy of existing order granting registration under clause (vi) of sub-section (5) of section 80G;

(f) self-certified copy of order of rejection of application for grant of approval under clause (vi) of sub-section (5) of section 80G, if any;

(g) where the applicant has been in existence during any year or years prior to the financial year in which the application for registration is made, self-certified copies of the annual accounts of the applicant relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up;

(h) note on the activities of the applicant.

(3) Form No. 10A or 10AB, as the case may be, shall be furnished electronically, —

(i) under digital signature, if the return of income is required to be furnished under digital signature;

(ii) through electronic verification code in a case not covered under clause (i).

(4) Form No. 10A or 10AB, as the case may be, shall be verified by the person who is authorised to verify the return of income under section 140, as applicable to the applicant.

(5) On receipt of an application in Form No.10A, the Principal Commissioner or Commissioner, authorised by the Board shall pass an order in writing granting approval under clause (i) or (iii) of the second proviso read with third proviso of sub-section (5) of section 80G in Form No. 10AC and issue a sixteen digit alphanumeric Unique Registration Number (URN) to the applicants making application as per clause (a) of sub-rule (1).

(6) If, at any point of time, it is noticed that Form No. 10A has not been duly filled in by not providing, fully or partly, or by providing false or incorrect information or documents required to be provided under sub-rule (1) or (2) or by not complying with the requirements of sub-rule (3) or (4), the Principal Commissioner or Commissioner, as referred to in sub-rule (5), after giving an opportunity of being heard, may cancel the approval granted in Form No. 10AC and Unique Registration Number (URN), issued under sub-rule (5), and such approval or such Unique Registration Number (URN) shall be deemed to have never been granted or issued.

⁶⁸[(7) In case of an application made under,—

(i) clause (iv) of the first proviso to sub-section (5) of section 80G as it stood immediately before its amendment vide the Finance Act, 2023; or

(ii) sub-clause (A) of clause (iv) of first proviso to sub-section (5) of section 80G,

the provisional approval shall be effective from the assessment year relevant to the previous year in which such application is made.]

(8) In case of an application made in Form No. 10AB under clause (ii) of sub-rule (1), the order of approval or rejection or cancellation under second proviso to sub-section (5) of section 80G shall be in Form No. 10AD and in case if the approval is granted, sixteen digit alphanumeric number Unique Registration Number (URN) shall be issued, by the Principal Commissioner or Commissioner referred to in second proviso to sub-section (5) of section 80G.

(9) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall:

(i) lay down the data structure, standards and procedure of,—

(a) furnishing and verification of Form No. 10A or 10AB, as the case may be;

(b) passing the order under second proviso to sub-section (5) of section 80G;

(ii) be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to the said application made or order so passed as the case may be.

Rule – 11B

Conditions for allowance for deduction under section 80GG.

11B. The deduction to be allowed under section 80GG in respect of any expenditure incurred by an assessee towards payment of rent for any furnished or unfurnished accommodation occupied by him for the purposes of his own residence shall be allowed subject to the condition that the assessee files the declaration in Form No. 10BA.

Rule – 11C

Prescribed fields for the purposes of deduction in respect of remuneration received from foreign employers or Indian concerns under section 80RRA.

11C. For the purposes of clause (vi) of Explanation 2 to section 80RRA, the prescribed fields shall be,—

(a) the profession of actuaries;

(b) banking;

(d) journalism.]

Rule – 11DD

Specified diseases and ailments for the purpose of deduction under section 80DDB.

11DD. (1) For the purposes of section 80DDB, the following shall be the eligible diseases or ailments :

(i) Neurological Diseases where the disability level has been certified to be of 40% and above,—

(a) Dementia;

(b) Dystonia Musculorum Deformans;

(d) Ataxia;

(e) Chorea;

(f) Hemiballismus;

(g) Aphasia;

(h) Parkinsons Disease;

(ii) Malignant Cancers;

(iii) Full Blown Acquired Immuno-Deficiency Syndrome (AIDS);

(iv) Chronic Renal failure;

(v) Hematological disorders:

(i) Hemophilia;

(ii) Thalassaemia.

⁷⁰[(2) The prescription in respect of the diseases or ailments specified in sub-rule (1) shall be issued by the following specialists:—

(a) for diseases or ailments mentioned in clause (i) of sub-rule (1) – a Neurologist having a Doctorate of Medicine (D.M.) degree in Neurology or any equivalent degree, which is recognised by the Medical Council of India;

(b) for diseases or ailments mentioned in clause (ii) of sub-rule (1) – an Oncologist having a Doctorate of Medicine (D.M.) degree in Oncology or any equivalent degree which is recognised by the Medical Council of India;

(c) for diseases or ailments mentioned in clause (iii) of sub-rule (1) – any specialist having a post-graduate degree in General or Internal Medicine, or any equivalent degree which is recognised by the Medical Council of India;

(d) for diseases or ailments mentioned in clause (iv) of sub-rule (1) – a Nephrologist having a Doctorate of Medicine (D.M.) degree in Nephro-logy or a Urologist having a Master of Chirurgiae (M.Ch.) degree in Urology or any equivalent degree, which is recognised by the Medical Council of India;

(e) for diseases or ailments mentioned in clause (v) of sub-rule (1) – a specialist having a Doctorate of Medicine (D.M.) degree in Hematology or any equivalent degree, which is recognised by the Medical Council of India:

Provided that where in respect of any diseases or ailments specified in sub-rule (1), the patient is receiving the treatment in a Government hospital, the prescription may be issued by any specialist working full-time in that hospital and having a post-graduate degree in General or Internal Medicine or any equivalent degree, which is recognised by the Medical Council of India.

(3) The prescription referred to in sub-rule (2) shall contain the name and age of the patient, name of the disease or ailment along with the name, address, registration number and the qualification of the specialist issuing the prescription:

Provided that where the patient is receiving the treatment in a Government hospital, such prescription shall also contain the name and address of the Government hospital.]

Rule – 18AAA

Prescribed authority for approval of a University or any educational institution of national eminence for the purpose of section 80G. 18AAA. For the purpose of sub-clause (iiif) of clause (a) of sub-section (2) of section 80G, the prescribed authority,—

(a) in relation to a university or any non-technical institution of national eminence, shall be the Director General (Income-tax Exemptions), who shall grant approval with the concurrence of the Secretary, University Grants Commission;

(b) in relation to any technical institution of national eminence, shall be the Director General (Income-tax Exemptions) who shall grant approval with the concurrence of the Secretary, All India Council of Technical Education.

Explanation.—For the purposes of this rule,—

(1) “All India Council of Technical Education” means the All India Council of Technical Education established under section 3 of the All India Council for Technical Education Act, 1987 (52 of 1987);

(2) “University Grants Commission” means the University Grants Commission established under section 4 of the University Grants Commission Act, 1956 (3 of 1956).

Rule – 18AAAAA

Guidelines for specifying an association or institution for the purposes of notification under clause (c) of sub-section (2) of section 80G.

18AAAAA. In specifying an association or institution for notification under clause (c) of sub-section (2) of section 80G, the Central Government shall satisfy itself that,—

(a) the association or institution has as its object the control, supervision, regulation or encouragement in India of the games or sports notified under Explanation 4 to section 80G;

(b) the association or institution has a proven record of its dedication towards development of infrastructure of sports or games or promotion of sports or games for at least a period of three years;

(c) the association or institution does not distribute any part of its income in any manner to its members except as grants to any association or institution affiliated to it;

(d) the association or institution applies the amount received by way of donation referred to in clause (c) of sub-section (2) of section 80G for purposes of development of infrastructure for games or sports in India or for sponsoring of games or sports in India;

(e) the association or institution maintains regular accounts of its receipt and expenditure;

(f) the association or institution files its return of income regularly;

(g) the notification issued by the Central Government under clause (c) of sub-section (2) of section 80G shall have effect in relation to the assessment year or years, not exceeding three assessment years (including an assessment year or years commencing before the date on which such notification is issued), as may be specified in such notification.

Rule – 18AAB

Prescribed authority for approval of companies engaged in Scientific and Industrial Research and Development for the purposes of section 80-IA.

18AAB. For the purposes of sub-section (4B) of section 80-IA, the prescribed authority shall be the Secretary, Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India.

Rule – 18BBB

Form of audit report for claiming deduction under section 80-I or 80-IA or 80-IB or section 80-IC.

18BBB. (1) The report of the audit of the accounts of an assessee, which is required to be furnished under sub-section (7) of section 80-IA or sub-section (7) of section 80-I, except in the cases of multiplex theatres as defined in sub-section (7A) of section 80-IB or convention centres as defined in sub-section (7B) of section 80-IB or hospitals in rural areas as defined in sub-section (11B) of section 80-IB, shall be in Form No. 10CCB.

(2) A separate report is to be furnished by each undertaking or enterprise of the assessee claiming deduction under section 80-I or 80-IA or 80-IB or 80-IC and shall be accompanied by the Profit and Loss Account and Balance Sheet of the undertaking or enterprise as if the undertaking or the enterprise were a distinct entity.

(3) In the case of an enterprise carrying on the business of developing or operating and maintaining or developing, operating and maintaining an infrastructure facility, the form shall be accompanied by a copy of the agreement of the enterprise with the Central Government or the State Government or the local authority for carrying on the business of developing or operating and maintaining or developing, operating and maintaining the infrastructure facility.

(4) In any other case, the form shall be accompanied by a copy of the agreement, approval or permission, as the case may be, to carry on the activity signed or issued by the Central Government or the State Government or the local authority for carrying on the eligible business.

⁵²Inserted by the IT (Third Amdt.) Rules, 2020, w.r.e.f. 1-9-2019.

⁶⁵Substituted by the IT (Sixth Amdt.) Rules, 2021, w.e.f. 1-4-2021.

⁶⁶Substituted for “clause (i) or” by the IT (Eleventh Amdt.) Rules, 2023, w.e.f. 1-10-2023.

⁶⁷Substituted by the IT (Eleventh Amdt.) Rules, 2023, w.e.f. 1-10-2023.

⁶⁸Substituted by the IT (Eleventh Amdt.) Rules, 2023, w.e.f. 1-10-2023.

⁷⁰Substituted by the IT (Fifteenth Amdt.) Rules, 2015, w.e.f. 12-10-2015.

Income-tax Forms

¹[Appendix IV
FORM NO. 1
[See rule 11UE (1)]

Undertaking under sub-rule (1) of rule 11UE of the Income-tax Rules, 1962

To,
Principal Commissioner/Commissioner
………… …………….. ………………………………..

Sir/Madam,

I …………………………………….. (name in block letters) son/daughter of …………………………………… designation ………………………………….. and nationality …………………………………. and related passport number………………………………….. (hereinafter referred to as “signatory”) having Permanent Account Number/Aadhaar Number (see Note 1) …………………………………………………………………. on behalf of ………………………………………… (name of the declarant) having Permanent Account Number/Aadhaar number/Tax Deduction Account Number (see Note 2) ……………………………………….. and being duly authorised and competent to represent the declarant in this regard pursuant to Board Resolution and legal authorisation (see Note 3), as the case may be ,hereby declare as follows:

(a) That specified orders have been passed or made in respect of income accruing or arising through or from the transfer of an asset or a capital asset situate in India in consequence of the transfer of a share or interest in a company or entity registered or incorporated outside India made before the 28th day of May, 2012 and particulars of such specified orders are provided in Part A of the Annexure.

(b) The declarant has (strike off the options that are not applicable),

(i) not filed any appeal or application or petition or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings constituted under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court against the relevant orders, and hereby undertakes that it shall not file any appeal, application, petition or proceeding in future against the relevant order or orders. Particulars of such relevant order or orders are provided in Part B of the Annexure;

(ii) filed one or more appeals or applications or petitions or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court against the relevant orders and has irrevocably withdrawn, on a with prejudice basis, all such appeals or applications or petitions or proceeding and evidence thereof is furnished herewith and hereby undertakes that it shall not file any appeal, application, petition or proceeding in future against the relevant order or orders. Particulars of such appeals or applications or petitions or proceeding filed and irrevocably withdrawn with prejudice by the declarant, are provided in Part C of the Annexure;

(iii) filed one or more appeals or applications or petitions or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court against the relevant order or orders and all the appeals or applications or petitions or proceeding filed by the declarant have been disposed of and no further appeal or application or petition or proceeding has been filed by the declarant and evidence thereof is furnished herewith and hereby undertake that it shall not file any appeal, application, petition or proceeding in future against the relevant order or orders. Particulars of such appeals or applications or petitions or proceeding filed and disposed of, are provided in Part C of the Annexure;

(iv) filed appeals or applications or petitions or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court against the relevant orders and one or more of such appeals or applications or petitions or proceeding are pending as on the date of this undertaking and hereby undertakes to irrevocably withdraw, terminate and discontinue any and all such appeals or applications or petitions or proceeding that are pending as on the date of signing this undertaking, on a with prejudice basis, in accordance with clause (e) below. The declarant further undertakes that it shall not file any such appeal, application, petition or proceeding in future against the relevant order or orders. Particulars of such pending appeals or applications or petitions or proceeding filed by the declarant and their status as on the date of this undertaking, are provided in Part D of the Annexure;

(i) not initiated any proceeding for arbitration, conciliation or mediation, and no notice has been given thereof under any law for the time being in force or under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise against the relevant orders, and hereby undertakes that it shall not initiate any such arbitration, conciliation or mediation in future. Particulars of such relevant order or orders are provided in Part B of the Annexure;

(ii) initiated proceeding for arbitration, conciliation or mediation, or notices thereof has been given, under any law for the time being in force or under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise against the relevant order or orders and has irrevocably, on a with prejudice basis, withdrawn any such proceeding for arbitration, conciliation or mediation, and notices given thereof and evidence thereof is furnished herewith. The declarant hereby undertakes that it shall not reopen in future any such proceeding or initiate or file any such arbitration, conciliation or mediation in future arising out of or in connection with the relevant order or orders. Particulars of such proceeding for arbitration, conciliation or mediation and notices given thereof, initiated and irrevocably withdrawn with prejudice by the declarant, are provided in Part E of the Annexure;

(iii) initiated proceeding for arbitration, conciliation or mediation, or notices thereof has been given, under any law for the time being in force or under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise against the relevant order or orders and all the arbitration, conciliation or mediation filed by the declarant have been disposed of and no further proceeding has been initiated by the declarant and evidence thereof is furnished herewith. The declarant hereby undertakes that it shall not reopen in future any such proceeding or initiate or file any such arbitration, conciliation or mediation in future arising out of or in connection with the relevant order or orders. Particulars of such proceeding for arbitration, conciliation or mediation and notices given thereof, initiated and disposed of, are provided in Part E of the Annexure;

(iv) initiated proceeding for arbitration, conciliation or mediation, or notices thereof has been given, under any law for the time being in force or under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise against the relevant order or orders and one or more of such proceeding or notices are pending on the date of undertaking and hereby undertakes to irrevocably withdraw, terminate and discontinue any and all such proceeding or notices for arbitration, conciliation or mediation that are pending as on the date of signing this undertaking, on a with prejudice basis, in accordance with clause (e) below. Particulars of such pending proceeding and notices filed by the declarant are provided in Part F of the Annexure. The declarant hereby further undertakes that it shall not initiate any such arbitration, conciliation or mediation in future arising out of or in connection with the relevant order or orders;

(v) received or got any awards, orders, judgments or any other reliefs issued in favour of the declarant, arising out of or in any way relating to the imposition of tax, interest and penalty based on the relevant order or orders, under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise and hereby undertakes to irrevocably waive any right to seek or pursue any claim or costs or declaratory relief in relation to or arising out of such awards, orders or judgments or any other relief that may have been ordered, issued or passed against India and any Indian affiliate, whether it is in proceeding initiated by the declarant or by India and any Indian affiliate. The declarant also undertakes to irrevocably waive any right to seek or pursue any claim for costs or relief in respect of any proceeding initiated by the Republic of India to set aside such award, order or judgment or any other relief issued in favour of the declarant. The declarant hereby undertakes that it shall not initiate or file any such arbitration, conciliation or mediation in future. Particulars of such awards, orders, judgment or any other relief are provided in Part G of the Annexure;

(d) The declarant has (strike off the options that are not applicable),

(i) not initiated any proceeding to enforce or pursue attachments in connection with any awards, orders, judgments, any other relief that may have been ordered, issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the declarant as referred in clause (c) of this undertaking either against the Republic of India and any Indian affiliate, and hereby undertakes that it shall not initiate any such proceeding in future. Particulars of such award, order or judgment are provided in Part B of the Annexure;

(ii) initiated proceeding to enforce or pursue attachments in connection with any awards, orders, judgments or any other relief that may have been ordered, issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the declarant, as referred to in clause (c) of this undertaking against the Republic of India and any Indian affiliate. The declarant has irrevocably and with prejudice withdrawn or discontinued any such proceeding and hereby undertakes that it shall not reopen any such proceeding in future or file or initiate fresh proceeding to enforce or pursue attachments and evidence thereof is furnished herewith. Particulars of such proceeding, initiated and withdrawn or discontinued by the declarant, are provided in Part H of the Annexure;

(iii) initiated proceeding to enforce or pursue attachments in connection with any awards, orders, judgments or any other relief that may have been ordered, issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the declarant, as referred to in clause (c) of this undertaking against the Republic of India and any Indian affiliate. All such proceeding filed by the declarant have been disposed of and no further proceeding has been filed by the declarant and evidence is herewith furnished and hereby undertakes that it shall not reopen any such proceeding in future or file or initiate fresh proceeding to enforce or pursue attachments. Particulars of such proceeding, initiated and disposed of, are provided in Part H of the Annexure;

(iv) initiated proceeding to enforce or pursue attachments in connection with any awards, orders, judgments, or any other relief that may have been ordered, issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the declarant as referred to in clause (c) of this undertaking, either against the Republic of India and any Indian affiliate and one or more of such proceeding are pending on the date of undertaking and, the declarant has obtained one or more orders from any court or other authority which remain outstanding against India and any Indian Affiliate. The declarant hereby undertakes that it shall not file in future any such proceeding to enforce or pursue attachments regarding any awards, orders, judgments, or any other relief that may have been ordered , issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the declarant as referenced in clause (c) of this undertaking or to enforce the orders from any court or other authority which remain outstanding against Republic of India and any Indian Affiliate. The declarant further undertakes to fully cooperate with the Republic of India or any Indian affiliate which is subject to such outstanding order, in order to set-aside or otherwise nullify any such outstanding order, and irrevocably and with prejudice waives any rights or remedies arising from such outstanding order. Particulars of such proceeding are provided in Part I of the Annexure. The declarant also undertakes to irrevocably withdraw, terminate and discontinue with prejudice any and all such proceeding to enforce or pursue attachments in accordance with clause (e).

(e) The declarant hereby undertakes as follows:

(i) to irrevocably and with prejudice withdraw, discontinue, terminate and take all necessary steps to irrevocably and with prejudice close the pending proceeding referred in sub-clause (iv) of clause (b), sub-clause (iv) of clause (c), sub-clause (v) of clause (c) and sub-clause (iv) of clause (d) of this undertaking, as well as any other pending proceeding against India or Indian affiliates relating to the relevant order or orders and not referenced in clauses (b), (c) and (d) above, and not to pursue in any way and by any means in future the pending proceeding as referenced in clauses (b), (c), and (d) above, and any other pending proceeding relating to the relevant order or orders not referred in the above clauses and any other fresh proceeding relating to the relevant order or orders. In so acting, declarant shall act in accordance with this undertaking and in full cooperation with the Republic of India;

(ii) to irrevocably terminate, release, discharge, and forever irrevocably waive any right, whether direct or indirect, and any claims, demands, liens, actions, suits, causes of action, obligations, controversies, debts, costs, attorneys’ fees, court’s fees, expenses, damages, judgments, orders, declaratory reliefs and liabilities of whatever kind or nature at law, in equity, or otherwise, whether now known or unknown previously (or in future discovered), suspected or unsuspected, and whether or not concealed or hidden, which have existed or may have existed, or do exist or which hereafter can, shall or may exist , in relation to any award, order, judgment, or any other relief as referred in clauses (b), (c) and (d) of this undertaking, against the Republic of India and all Indian affiliates, ordered, issued or passed in connection with the relevant order or orders, whether it is in proceeding initiated by the declarant or by Republic of India and any Indian Affiliate. The declarant further undertakes to fully cooperate with the Republic of India or any Indian affiliate which is subject to any outstanding order referenced in clause (d), in order to set-aside or otherwise nullify any such outstanding order, and irrevocably and with prejudice waives any rights or remedies arising from such outstanding order. For the avoidance of doubt, the declarant’s irrevocable waiver includes irrevocable waiver of any right provided by any existing ex parte, provisional, or other kind of court order permitting enforcement or attachment against the Republic of India and any Indian affiliate, in furtherance of any award, order judgment, or any other relief that may have been ordered or issued or passed by any arbitral tribunal as referred in clauses (b), (c) and (d) above. For further avoidance of doubt, the declarant also undertakes to irrevocably waive any right to seek or pursue any claim for costs in respect of any proceeding initiated by Republic of India and any Indian affiliate to set aside such award, order or judgement ordered, issued or passed in favour of the declarant. Such irrevocable waiver includes, but is not limited to, any right under any relevant ex parte order;

(iii) to irrevocably waive any right to seek or pursue any claim for costs in respect of any proceeding initiated by the Republic of India to set aside such award, order or judgment, or any other relief issued in favour of the declarant.

(f) The declarant specifically represents that all Parts of the Annexure as described in this undertaking are full and complete to the best of its knowledge.

(g) The declarant hereby undertakes to irrevocably terminate, release, discharge and forever irrevocably waive any right, whether direct or indirect, and any remedies, claims, demands, liens, actions, suits, causes of action, obligations, controversies, debts, costs, attorneys’ fees, court’s fees, expenses, damages, judgments, orders, compensation, and liabilities of whatever kind or nature at law, in equity, or otherwise, whether now known or unknown, suspected or unsuspected, and whether or not concealed or hidden, which have existed or may have existed, or do exist or which hereafter can, shall or may exist, based on pursuit of any remedy or any and all claims, demands, damages, judgments, awards, costs, expenses, compensation or liabilities of any kind (whether asserted or unasserted) in relation to any facts, events, or omissions occurring from the beginning of time to the date of this undertaking and thereafter in future in relation to taxation of said income or relevant order or orders, or any related award, judgment or court order, which may otherwise be available to the declarant under any law for the time being in force, in equity, under any statute or under any agreement entered into by Republic of India with any country or territory outside Republic of India, whether for protection of investment or otherwise , whether it is in proceeding initiated by the declarant or by Republic of India and any Indian affiliate. For the avoidance of doubt, the declarant’s above waiver includes an irrevocable waiver of any claim against India and any Indian Affiliate to costs incurred or interest accrued in relation to the relevant order or orders, or any related ongoing or completed litigation, arbitration, conciliation or mediation. Moreover, for the avoidance of any doubt, the declarant hereby undertakes (for itself and on behalf of all related parties) to forgo any reliance on any right under any award, judgment, or court order pertaining to the relevant order or orders or under the relevant order or orders.

(h) The declarant further represents that as of the date of this undertaking, it has not transferred any of its claims under any award, judgment, or court order pertaining to the relevant order or orders or under the relevant order or orders, or granted any rights, to third parties, and further undertakes to not transfer any of its claims to third parties after entering this undertaking. Where any such claim or right is transferred, the declarant confirms that it has provided the particulars of all the interested parties in Part L, and the undertakings from each of such interested parties is attached with this undertaking in accordance with Part M of the Annexure.

(i) In the event that, notwithstanding the foregoing, any person asserts, brings, files or maintains any claim against the Republic of India or Indian affiliates (hereinafter collectively referred to as “releasees”) at any time on or after the date of furnishing this undertaking, the declarant shall indemnify, defend and hold harmless such releasees from and against any and all costs, expenses (including attorney’s fees and court’s fees), interest, damages, and liabilities of any nature arising out of or in any way relating to the assertion or, bringing, filing or maintaining of such claim. The declarant specifically represents that, to the best of its knowledge, after—

(i) the execution of this undertaking;

(ii) the execution of any separate related undertaking by any other party in connection with the relevant order or orders; and

(iii) irrevocable withdrawal of all pending proceeding as outlined in this undertaking,

no other claim regarding the said relevant order or orders referenced above, or any related award, judgment, or court order, shall remain outstanding against the Republic of India or any Indian affiliates. To avoid any doubt, the declarant’s indemnity of releasees under this clause shall include any claim brought by any third party alleging that it has obtained the declarant’s claims under an award, judgment or court order or the relevant order or orders. An indemnity bond to this effect is attached in Part N of the undertaking.

(j) For the removal of any doubt, the declarant fully assumes the risk through the indemnity in clause (i) of any omission or mistake with respect to securing releasees against any related claim by any person. If the declarant fails to obtain any release from such person, the declarant warrants that it will indemnify the Republic of India or any Indian affiliates from any defense costs, court costs, and damages. An indemnity bond to the effect of clauses (i) and (j) is annexed to the undertaking.

(k) The declarant further undertakes to refrain from facilitating, procuring, encouraging or otherwise assisting any person (including but not limited to any related party or interested party) from bringing any proceeding or claims of any kind referred to in the above clauses, or any proceeding or claim of any kind related to any relevant order or orders referred to above (whether in respect of tax, interest or penalty). The declarant shall notify by a public notice or press release, at any time before furnishing intimation in Form No. 3 where this Form is required to be furnished under rule 11UF and before furnishing this undertaking in other cases, that by signing this undertaking any claims arising out of or relating to the relevant order or orders or any related award, judgment or court order, no longer subsist. Such public notice or press release shall include, among other things, confirmation that,—

(i) the declarant (and its related parties) forever irrevocably forgo any reliance on any right and provisions under any award, judgment or court order pertaining to the relevant order or orders or under the relevant order or orders;

(ii) the declarant has provided this undertaking, which includes a complete release of the Republic of India and any Indian Affiliates with respect to any award, judgment or court order pertaining to the relevant order or orders or under the relevant order or orders, and with respect to any claim pertaining to the relevant order or orders;

(iii) the undertaking also includes an indemnity against any claims brought against the Republic of India or any India affiliate, including by related parties or interested parties, contrary to the release; and

(iv) the declarant confirms it will treat any such award, judgment or court order as null and void and without legal effect to the same extent as if it had been set aside by a competent court and will not take any action or initiate any proceeding or bring any claim based on that.

(l) The declarant confirms that the undertakings given herein are intended to be enforceable by the Republic of India, including so as to secure the irrevocable waiver, withdrawal or discontinuance (as appropriate) of all the proceeding and claims referred to in any of the clauses of this undertaking.

(m) The declarant represents and warrants that:

(i) it has full legal power and authority to execute and deliver this undertaking (including but not limited to the issuance of the indemnity described in clauses (i) and (j)under applicable law;

(ii) the execution, delivery and performance of this undertaking (including but not limited to the issuance of the indemnity described in clauses (i) and (j) has been duly authorised by all necessary corporate action, including but not limited to any board resolution or similar authorisation under applicable law (see Note 3);

(iii) this undertaking constitutes the legal, valid and binding obligation of the declarant, enforceable against the declarant in accordance with its terms;

(iv) such authorisations described in the above sub-clauses (i), (ii) and (iii) are effective under applicable law, and to this end, letters from local counsel in the relevant jurisdictions are attached to this undertaking which confirm the legality of such authorisations under applicable law.

(n) The declarant confirms that by submitting the present undertaking, it fulfills the conditions specified in the Explanation below the sixth proviso to Explanation 5 to clause (i) of sub-section (1) of section 9.

(o) The details of the bank account in which the refund may be credited are provided in Part J of the Annexure.

(p) The details of all the interested parties are provided in Part K and Part L of the Annexure. The undertaking in Part M of the Annexure by each of such persons is attached with this undertaking. The declarant represents and warrants that:

(i) all such undertakings have been executed and delivered by the person who has full legal power and authority to execute and deliver such undertakings;

(ii) the execution, delivery and performance of this undertaking has been duly authorised by all necessary corporate action; and

(iii) this undertaking constitutes the legal, valid and binding obligation of the declarant, enforceable against such person in accordance with its terms. Such separate, related undertakings may take the same form as this undertaking.

(q) The declarant is or is not covered under sub-rule (6) of rule 11UF and in case if the declarant is not covered under said sub-rule all the conditions provided under sub-rule (2) of rule 11UE have been fulfilled.

(r) This undertaking is governed by relevant Indian law and any dispute with respect to this undertaking shall be subject to Indian laws and be decided in accordance with the procedures specified in the Act under the exclusive jurisdiction of the relevant income-tax authorities, tribunals or courts in Republic of India, as the case may be, which are empowered to decide disputes under the Act.

I also confirm that I am aware of all the consequences and implications of this undertaking.

Place:…………………….
Date: …………………….

Signature
………………………..

Attachments

1. The Board Resolution or legal authorisation, as the case may be, as referred to in clause (m) of the undertaking

2. An indemnity bond to the effect of clause (i) and clause (j) of the undertaking attached in Part N of the undertaking.

3. Copy of the public notice referred to in clause (k) of the undertaking, where Form No. 3 is not required to be furnished under sub-rule (6) of rule 11UF.

4. Attachments as required in different parts of the Annexure to this undertaking.

Notes

1. This information is required to be furnished where the Permanent Account Number or Aadhaar Number of the signatory is available.

2. Company Identification Number and Taxpayer Identification Number are to be provided where Permanent Account Number or Aadhaar Number or Tax Deduction Account Number of the declarant are not available.

3. The Board Resolution or legal authorisation, as referred to in clause (m) of the undertaking shall, among other things:

(a) record the signatory’s power and authority to give the undertaking on behalf of the declarant; and

(b) record the declarant’s power and authority to indemnify defend and hold harmless the Republic of India and the Indian affiliates in accordance with clause (i) of the undertaking.

VERIFICATION

Verified that the contents of this undertaking are true to the best of my knowledge and belief. No part of the undertaking is false and nothing has been concealed or misstated therein.

Verified at________________ place_______________ on this the_________ day________________ of ______ month_______________ , year .

Place:…………………….
Date: …………………….

Signature
……………………….

Annexure

Part A– Particulars of the relevant order or orders:

Sl. No.	Assessment Year or Financial year	Income-tax Authority passing the order	Details of the order under consideration		Taxes or penalty determine d	Interest	Total demand	Relief, provided in any appeal proceeding, if any	Demand recovered from the declarant	Pending demand or refund due as on date	Details of the attachments made by any Income-tax Authority
			Section and sub-sectio n of the Income-ta x Act, 1961	Date of order
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)

Part B– Particulars of the relevant order or orders covered by sub-clause (i) of clauses (b), (c) and (d) of the undertaking:

Sl. No.	Sl. No. in Part A where the relevant order is mentioned	No appeal or application or petition or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court has been filed(refer clause (b)(i) of the undertaking).	No proceeding has been initiated for arbitration, conciliation or mediation, and no notice has been given thereof under any law for the time being in force or under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise (refer clause (c)(i) of the undertaking).	No proceeding initiated to enforce or pursue attachments in connection with any award, order or judgment, any other relief that may have been ordered or issued or passed by any tribunal or court or other judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the declarant against the Republic of India and Indian affiliates (refer clause (d)(i) of the undertaking).
(1)	(2)	(3)	(4)	(5)
		Applicable or Not applicable	Applicable or Not applicable	Applicable or Not applicable

Part C: Particulars of the appeals or applications or petitions or proceeding under sub-clauses (ii) and (iii) of clause (b) of the undertaking:

Sl. No.	Sl. No. in Part A where the relevant order is mentioned	Nature of appeals or applications or petitions or proceeding	Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court before whom such appeals or applications or petitions or proceeding has been filed	Date of filing the appeals or applications or petitions or proceeding	Date of disposing of or withdrawal such appeals or applications or petitions or proceeding (Please attach a copy of order by the Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court accepting the withdrawal or disposing of)
(1)	(2)	(3)	(4)	(5)	(6)

Part D – Particulars of the appeals or applications or petitions or proceeding under sub-clause (iv) of clauses (b) of the undertaking:

Sl. No.	Sl. No. in Part A where the relevant order is mentioned	Nature of appeals or applications or petitions or proceeding	Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court before whom such appeals or applications or petitions or proceeding has been filed	Date of filing the appeals or applications or petitions or proceeding
(1)	(2)	(3)	(4)	(5)

Part E – Particulars of the proceeding for arbitration, conciliation or mediation, or notices under sub-clause (ii) and (iii) of clause (c) of the undertaking:

Sr. No.	Sl. No in Part A where the relevant order is mentioned	Nature of proceeding for arbitration, conciliation or mediation, or notices thereof with case number or Notice given	Particulars (including the name of the country) where such proceeding for arbitration, conciliation or mediation are pending or notices thereof have been issued	Date of initiating the proceeding for arbitration, conciliation or mediation/ issue of notice	Name of the agreement entered into by India under which the proceeding for arbitration, conciliation or mediation are pending	Status of the proceeding for arbitration, conciliation or mediation	Date of disposing of or withdrawal of such proceeding for arbitration, conciliation or mediation, or notices (Please attach evidence of such disposing of or withdrawal, including order of the Tribunal or court or other judicial or quasi-judicial or administrative authority).
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)

Part F – Particulars of the proceeding for arbitration, conciliation or mediation, or notices under sub-clause (iv) of clause (c) of the undertaking:

Sl. No.	Sl. No in Part A where the relevant order is mentioned	Nature of proceeding for arbitration, conciliation or mediation, or notices thereof with case number or Notice given	Particulars (including the name of the country) where such proceeding for arbitration, conciliation or mediation are pending of notices thereof have been issued	Date of initiating the proceeding for arbitration, conciliation or mediation /issue of notice	Name of the agreement entered into by India under which the proceeding for arbitration, conciliation or mediation are pending	Status of the proceeding for arbitration, conciliation or mediation
(1)	(2)	(3)	(4)	(5)	(6)	(7)

Part G – Particulars of the award, order or judgment or any other relief under sub-clause (v) of clause (c) of the undertaking:

Sl. No.	Sl. No. in Part A here the relevant order is mentioned	Nature of such award, order or judgment or any other relief	Particulars (including the name of the country) where proceeding related to such award, order, judgment or any other relief were held	Date of such award, order, judgment or any other relief along with reference number	Status of the award, order, judgment or any other relief
(1)	(2)	(3)	(4)	(5)	(6)

Part H – Particulars of the proceeding to enforce any award, order or judgment or any other relief under sub-clauses (ii) and (iii) of clause (d) of the undertaking:

Sl. No.	Sl. No. in Part A where the relevant order is mentioned	Nature of proceeding to enforce such ward, order or judgment or any other relief	Particulars (including the name of the country) where such proceeding to enforce any ward, order or judgment or any other relief are taking place	Date of filing proceeding to enforce any ward, order or judgment or any other relief	Nature of such award, order or judgment or any other relief (Attach copy thereof)	Status of the proceeding to enforce such ward, order or judgment or any other relief	Date of disposing of or withdrawal of proceeding to enforce such award, order or judgment or any other relief (Please attach a copy of evidence of such disposing of/ withdrawal, including order of the Court or other judicial authority).
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)

Part I – Particulars of the proceeding to enforce any award, order or judgment or any other relief under sub-clause (iv) of clause (d) of the undertaking:

Sl. No.	Sl. No in Part A where the relevant order is mentioned	Nature of proceeding to enforce such award, order or judgment or any other relief	Particulars (including the name of the country) where such proceeding to enforce any ward, order or judgment or any other relief are taking place	Date of filing proceeding to enforce any award, order or judgment or any other relief	Nature of such award, order or judgment or any other relief (Attach copy thereof)	Status of the proceeding to enforce such award, order or judgment or any other relief
(1)	(2)	(3)	(4)	(5)	(6)	(7)

Part J – Details of bank account in Republic of India to which the refund is to be remitted

Sl. No.	Bank Name and Address	Account Number and other required details for remittance
(1)	(2)	(3)

Part K– Details of all the companies or entities in the entire chain of holding of the declarant till the ultimate holding company or entity of the declarant:

Sl. No.	Name of holding company	Percentage of the ownership by such holding company in the declarant as on the date of undertaking	If the ownership in the declarant is not held directly by such holding company, the chain of ownership with the names of all the companies in the chain of ownership
(1)	(2)	(3)	(4)

Part L- Details of all the interested parties other than the interested parties covered under Part K

Sl. No.	Name of such persons whose interest may be affected directly or indirectly by this undertaking	Nature of interest of such person	Amount of interest of such person (Rs), if available
(1)	(2)	(3)	(4)

PART M Undertaking by person(s) declared in Part K and Part L of the Undertaking

To,
Principal Commissioner/Commissioner

Sir/Madam,

…………………. ……………….

I………………….. (name in block letters) son/daughter of…………………………………………….. designation ……………….. .and nationality …………………………. .and related passport number……………………………… (hereinafter referred to as “signatory”) having Permanent Account Number/Aadhaar Number (see Note 1) ………………………………. on behalf of …………………………………. . (name of the interested party)
having Permanent Account Number/Aadhaar number/Tax Deduction Account Number (see Note 2) …………………………………………. . and being duly authorised and competent to represent the interested party in this regard pursuant to Board Resolution and legal authorisation (see Note 3), as the case may be , hereby declare as follows:

(a) The particulars of specified orders that have been passed or made in respect of income accruing or arising through or from the transfer of an asset or a capital asset situate in India in consequence of the transfer of a share or interest in a company or entity registered or incorporated outside Republic of India made before the 28th day of May, 2012 in the case of declarant and the nature of interest of the interested party in such specified orders are provided in Part MA of the Annexure.

(b) The interested party has (strike off options that are not applicable):

(i) not filed any appeal or application or petition or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court against the relevant order or orders, and hereby undertakes that it shall not file any appeal, application, petition or proceeding in future against the relevant order or orders. Particulars of such relevant order or orders are provided in Part MB of the Annexure;

(ii) filed one or more appeals or applications or petitions or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court against the relevant order or orders and has irrevocably, on a with prejudice basis, withdrawn all such appeals or applications or petitions or proceeding or such appeals or applications or petitions or proceeding have been disposed at any time before the date of filing Form No. 1, and hereby undertake that it shall not file any appeal, application, petition or proceeding in future against the relevant order or orders. Particulars of such appeals or applications or petitions or proceeding filed and irrevocably withdrawn with prejudice by the interested party, are provided in Part MC of the Annexure.

(iii) filed one or more appeals or applications or petitions or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court against the relevant order or orders and all the appeals or applications or petitions or proceeding filed by the interested party have been disposed of and no further appeal or application or petition or proceeding has been filed by the interested party and evidence thereof is furnished herewith and hereby undertake that it shall not file any appeal, application, petition or proceeding in future against the relevant order or orders. Particulars of such appeals or applications or petitions or proceeding filed and disposed of, are provided in Part MC of the Annexure.

(iv) filed appeals or applications or petitions or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court against the relevant order or orders and one or more of such appeals or applications or petitions or proceeding are pending as on the date of this undertaking and hereby undertakes to irrevocably withdraw, terminate and discontinue any and all such appeals or applications or petitions or proceeding that are pending as on the date of signing this undertaking, on a with prejudice basis, in accordance with clause (e) below. The interested party further undertakes that it shall not file any such appeal, application, petition or proceeding in future against the relevant order or orders. Particulars of such pending appeals or applications or petitions or proceeding filed by the interested party and their status as on the date of this undertaking, are provided in Part D of the Annexure. Particulars of any appeals or applications or petitions or proceeding as described in this clause (b) which are not covered by the sub-clauses (i) and (ii) are also provided in Part MD of the Annexure.

(i) not initiated any proceeding for arbitration, conciliation or mediation, and no notice has been given thereof under any law for the time being in force or under any agreement entered into by Republic of India with any other country or territory outside India, whether for protection of investment or otherwise against the relevant order or orders, and hereby undertakes that it shall not initiate any such arbitration, conciliation or mediation in future. Particulars of such relevant order or orders are provided in Part MB of the Annexure;

(ii) initiated proceeding for arbitration, conciliation or mediation, or notices thereof has been given, under any law for the time being in force or under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise against the relevant order or orders and has irrevocably, on a with prejudice basis, withdrawn any such proceeding for arbitration, conciliation or mediation, and notices given thereof. The interested party hereby undertakes that it shall not reopen in future any such proceeding or initiate or file any such arbitration, conciliation or mediation in future arising out of or in connection with the relevant order or orders. Particulars of such proceeding for arbitration, conciliation or mediation and notices given thereof, initiated and irrevocably withdrawn with prejudice by the interested party, are provided in Part ME of the Annexure.

(iii) initiated proceeding for arbitration, conciliation or mediation, or notices thereof has been given, under any law for the time being in force or under any agreement entered into by Republic of India with any other country or territory outside India, whether for protection of investment or otherwise against the relevant order or orders and all the arbitration, conciliation or mediation filed by the interested party have been disposed of and no further proceeding has been initiated by the interested party and evidence thereof is furnished herewith. The interested party hereby undertakes that it shall not reopen in future any such proceeding or initiate or file any such arbitration, conciliation or mediation in future arising out of or in connection with the relevant order or orders. Particulars of such proceeding for arbitration, conciliation or mediation and notices given thereof, initiated and disposed of, are provided in Part ME of the Annexure.

(iv) has initiated proceeding for arbitration, conciliation or mediation, or notices thereof has been given, under any law for the time being in force or under any agreement entered into by Republic of India with any other country or territory outside Republic of India, whether for protection of investment or otherwise against the relevant order or orders and one or more of such proceeding or notices are pending on the date of undertaking and hereby undertakes to irrevocably withdraw, terminate and discontinue any and all such proceeding or notices for arbitration, conciliation or mediation that are pending as on the date of signing this undertaking, on a with prejudice basis, in accordance with clause (e). Particulars of such pending proceeding and notices filed by the interested party are provided in Part F of the Annexure. The interested party hereby further undertakes that it shall not initiate any such arbitration, conciliation or mediation in future arising out of or in connection with the relevant order or orders. Particulars of any proceeding for arbitration, conciliation or mediation, or notices thereof, which are not covered by the sub-clause (i) and sub- clause (ii), are also provided in Part MF of the Annexure.

(v) received or got any awards, orders, judgements or any other reliefs issued in favour of the interested party, arising out of or in any way relating to the imposition of tax, interest and penalty based on the relevant order or orders, under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise and hereby undertakes to irrevocably waive any right to seek or pursue any claim or costs or declaratory relief in relation to or arising out of such awards, orders or judgments or any other relief that may have been ordered, issued or passed against India and any Indian affiliate, whether it is in proceeding initiated by the interested party or by India and any Indian affiliate. The interested party also undertakes to irrevocably waive any right to seek or pursue any claim for costs in respect of any proceeding initiated by the Republic to set aside such award, order or judgment issued in favour of the interested party. The interested party hereby undertakes that it shall not initiate or file any such arbitration, conciliation or mediation in future. Particulars of such awards, orders, judgment or any other relief are provided in Part MG of the Annexure.

(d) The interested party has (strike off options that are not applicable):

(i) not initiated any proceeding to enforce or pursue attachments in connection with any awards, orders, judgments, or any other relief that may have been ordered, issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the interested party as referred in clause (c) of this undertaking either against the Republic of India and any Indian affiliate, and hereby undertakes that it shall not initiate any such proceeding in future. Particulars of such award, order or judgment are provided in Part MB of the Annexure.

(ii) initiated proceeding to enforce or pursue attachments in connection with any awards, orders, judgements or any other relief that may have been ordered, issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the interested party, as referred to in clause (c) of this undertaking against the Republic of India and any Indian affiliate. The interested party has irrevocably and with prejudice withdrawn or discontinued any such proceeding and hereby undertakes that it shall not reopen any such proceeding in future or file fresh proceeding to enforce or pursue attachments. Particulars of such proceeding, initiated and withdrawn or discontinued by the interested party, are provided in Part MH of the Annexure.

(iii) initiated proceeding to enforce or pursue attachments in connection with any awards, orders, judgements or any other relief that may have been ordered, issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the interested party, as referred to in clause (c) of this undertaking against the Republic of India and any Indian affiliate. All such proceeding filed by the interested party have been disposed of and no further proceeding has been filed by the interested party and evidence is herewith furnished and hereby undertakes that it shall not reopen any such proceeding in future or file or initiate fresh proceeding to enforce or pursue attachments. Particulars of such proceeding, initiated and disposed of, are provided in Part MH of the Annexure.

(iv) initiated proceeding to enforce or pursue attachments in respect of any awards, orders, judgments, or any other relief that may have been ordered, issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the interested party as referred to in clause (c) of this undertaking, either against the Republic of India and any Indian affiliate and one or more of such proceeding are pending on the date of undertaking and, interested party has obtained one or more orders from any court or other authority which remain outstanding against India and any Indian affiliate. The interested party hereby undertakes that it shall not file in future any such proceeding to enforce or pursue attachments regarding any awards, orders, judgments, or any other relief that may have been ordered , issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the interested party as referenced in clause (c) of this undertaking or to enforce the orders from any court or other authority which remain outstanding against India and any Indian affiliate. The interested party further undertakes to fully cooperate with the Republic of India or any Indian affiliate which is subject to such outstanding order, in order to set-aside or otherwise nullify any such outstanding order, and irrevocably and with prejudice waives any rights or remedies arising from such outstanding order. Particulars of such proceeding, are provided in Part MI of the Annexure. Particulars of any such proceeding, to enforce or pursue attachments in connection with any awards, orders, judgments, or any other relief, which are not covered by the sub-clauses (i) and (ii), are also provided in Part MI of the Annexure. The interested party also undertakes to irrevocably withdraw, terminate and discontinue with prejudice any and all such proceeding to enforce or pursue attachments in accordance with clause (e) below.

(e) The interested party hereby undertakes as follows: –

(i) to irrevocably and with prejudice withdraw, discontinue, terminate and take all necessary steps to irrevocably and with prejudice close the pending proceeding referred in sub-clause (iv) of clause (b), sub-clause (iv) of clause (c), sub-clause (v) of clause (c) and sub-clause (iv) of clause (d) of this undertaking, as well as any other pending proceeding against Republic of India or Indian affiliates relating to the relevant order or orders and not referenced in clauses (b), (c) and (d) above, and not to pursue in any way and by any means in future the pending proceeding as referenced in clauses (b), (c) and (d) and any other pending proceeding relating to the relevant order or orders not referred in the above clauses and any other fresh proceeding relating to the relevant order or orders. In so acting, interested party shall act in accordance with this undertaking and in full cooperation with the Republic of India.

(ii) to irrevocably terminate, release, discharge, and forever irrevocably waive any right, whether direct or indirect, and any claims, demands, liens, actions, suits, causes of action, obligations, controversies, debts, costs, attorneys’ fees, court’s fees, expenses, damages, judgments, orders, declaratory reliefs, and liabilities of whatever kind or nature at law, in equity, or otherwise, whether now known or unknown previously (or in future discovered), suspected or unsuspected, and whether or not concealed or hidden, which have existed or may have existed, or do exist or which hereafter can, shall or may exist , in relation to any award, order, judgment, or any other relief as referred in clauses (b), (c) and (d) of this undertaking, against the Republic of India and all Indian affiliates, ordered, issued or passed in connection with the relevant order or orders, whether it is in proceeding initiated by the interested party or by India and any Indian affiliate. For the avoidance of doubt, the interested party’s irrevocable waiver includes irrevocable waiver of any right provided by any existing ex parte, provisional, or other kind of court order permitting enforcement or attachment against the Republic of India and any Indian affiliate, in furtherance of any award, order, judgment, or any other relief that may have been ordered or issued or passed by any arbitral tribunal as referred in clauses (b), (c) and (d). The interested party further undertakes to fully cooperate with the Republic of India or any Indian affiliate which is subject to any outstanding order referenced in clause (d), in order to set aside or otherwise nullify any such outstanding order, and irrevocably and with prejudice waives any rights or remedies arising from such outstanding order. For further avoidance of doubt, the interested party also undertakes to irrevocably waive any right to seek or pursue any claim for costs in respect of any proceeding initiated by Republic of India and any Indian Affiliate to set aside such award, order or judgment ordered, issued or passed in favour of the interested party. Such irrevocable waiver includes, but is not limited to, any right under any relevant ex parte order.

(f) The interested party specifically represents that all Parts of the Annexure as described in this undertaking are full and complete to the best of its knowledge.

(g) The interested party hereby undertakes to irrevocably terminate, release, discharge, and forever irrevocably waive any right, whether direct or indirect, and any remedies, claims, demands, liens, actions, suits, causes of action, obligations, controversies, debts, costs, attorneys’ fees, court’s fees, expenses, damages, judgments, orders, compensation and liabilities of whatever kind or nature at law, in equity, or otherwise, whether now known or unknown, suspected or unsuspected, and whether or not concealed or hidden, which have existed or may have existed, or do exist or which hereafter can, shall or may exist, based on pursuit of any remedy or any and all claims, demands, damages, judgments, awards, costs, expenses, compensation or liabilities of any kind (whether asserted or unasserted) in relation to any facts, events, or omissions occurring from the beginning of time to the date of this undertaking and thereafter in future in relation to taxation of said income or relevant order or orders, or any related award, judgment or court order, which may otherwise be available to the interested party under any law for the time being in force, in equity, under any statute or under any agreement entered into by India with any country or territory outside India, whether for protection of investment or otherwise , whether it is in proceeding initiated by the interested party or by India and any Indian affiliate. For the avoidance of doubt, the interested party’s above waiver includes an irrevocable waiver of any claim against India and any Indian affiliate to costs incurred or interest accrued in relation to the relevant order or orders, or any related ongoing or completed litigation, arbitration, conciliation or mediation. Moreover, for the avoidance of any doubt, the interested party hereby undertakes to forgo any reliance on any right under any award, judgment, or court order pertaining to the relevant order or orders or under the relevant order or orders.

(h) The interested party further represents that as of the date of this undertaking, it has not transferred any of its claims under any award, judgment, or court order pertaining to the relevant order or orders or under the relevant order or orders, or granted any rights, to third parties, and further undertakes to not transfer any of its claims to third parties after entering this undertaking.

(i) In the event that, notwithstanding the foregoing, any person asserts, brings , files or maintains any claim against the Republic of India or Indian affiliates (hereinafter collectively referred to as “releasees”)at any time on or after the date of furnishing this undertaking, the interested party shall indemnify, defend and hold harmless such releasee from and against any and all costs, expenses (including attorneys’ fees and court’s fees), interest, damages, and liabilities of any nature arising out of or in any way relating to the assertion or, bringing, filing or maintaining of such claim. The interested party specifically represents that, to the best of its knowledge, after

(i) the execution of this undertaking;

(ii) the execution of any separate related undertaking by any other party in connection with the relevant order or orders; and

(iii) irrevocable withdrawal of all pending proceeding as outlined in this undertaking.

no other claim regarding the said relevant order or orders referenced above, or any related award, judgment, or court order, shall remain outstanding against the Republic of India or any Indian affiliate. To avoid any doubt, the interested party’s indemnity of releasees shall include any claim brought by any third party alleging that it has obtained the interested party’s claims under an award, judgment or court order or the relevant order or orders. An indemnity bond to this effect is attached in Part N of the undertaking.

(j) For the avoidance of any doubt, the interested party fully assumes the risk through the indemnity in clause (i) of any omission or mistake with respect to securing releasees against any related claim by any person. If the interested party fails to obtain any release from such person, the interested party warrants that it will indemnify the Republic of India or any Indian affiliates from any defense costs, court costs, and damages. An indemnity bond to the effect of clauses (i) and (j) is annexed to the undertaking.

(k) The interested party further undertakes to refrain from facilitating, procuring, encouraging or otherwise assisting any party (including but not limited to any related party) from bringing any proceeding or claims of any kind referred to in the above clauses, or any proceeding or claim of any kind related to any relevant order or orders referred to above (whether in respect of tax, interest or penalty). The interested party shall notify by a public notice or press release, at any time before furnishing intimation in Form No. 3 where Form No. 3 is required to be furnished under rule 11UF and before furnishing this undertaking in other cases, that by signing this undertaking any claims arising out of or relating to the relevant order or orders or any related award, judgment or court order, no longer subsist. Such public notice shall include, among other things, confirmation that,-

(i) the interested party forever irrevocably forgoes any reliance on any right and provisions under any award, judgment, or court order pertaining to the relevant order or orders or under the relevant order or orders;

(ii) the interested party has provided this undertaking, which includes a complete release of the Republic of India and any Indian Affiliate with respect to any award, judgment, or court order pertaining to the relevant order or orders or under the relevant order or orders, and with respect to any claim pertaining to the relevant order or orders;

(iii) the undertaking also includes an indemnity against any claims brought against the Republic of India or any India affiliate contrary to the release; and

(iv) the interested party confirms it will treat any such award, judgment, or court order as null and void and without legal effect to the same extent as if it had been set aside by a competent court and will not take any action or initiate any proceeding or bring any claim based on that.

(l) The interested party confirms that the undertakings given herein are intended to be enforceable by the Republic of India, including so as to secure the irrevocable waiver, withdrawal or discontinuance (as appropriate) of all the proceeding and claims referred to in any of the clauses of this undertaking.

(m) The interested party represents and warrants that:

(i) it has full legal power and authority to execute and deliver this undertaking (including but not limited to the issuance of the indemnity described in clauses (i) and (j) under applicable law;

(iii) this undertaking constitutes the legal, valid and binding obligation of the interested party, enforceable against the interested party in accordance with its terms;

(n) This undertaking is governed by relevant Indian law and any dispute with respect to this undertaking shall be subject to Indian laws and be decided in accordance with the procedures specified in the Act under the exclusive jurisdiction of the relevant Income-tax authorities, tribunals or courts in India, as the case may be, which are empowered to decide disputes under the Act.

I also confirm that, I am aware of all the consequences and implications of this undertaking.

Place: ……………….. .
Date: ……………………….. .

Signature ………………………

Attachments

1. The Board Resolution and legal authorisation, as referred to in clause (m) of Part M.

2. An indemnity bond to the effect of clauses (i) and (j) of Part M in Part N of the undertaking in Form No. 1;

3. Copy of the public notice referred to in clause (k) of Part M, where Form No. 3 is not required to be furnished under sub-rule (6) of rule 11UF.

4. Attachments as required in different parts of the Annexure to Part M of this undertaking

Notes:

1. This information is required to be furnished where the Permanent Account Number or Aadhaar Number of the signatory is available.

2. Company Identification Number and Taxpayer Identification Number are to be provided where Permanent Account Number/Aadhaar Number or Tax Deduction Account Number of the interested party are not available.

3. The Board Resolution or legal authorisation, as referred to in clause (m) of the undertaking shall, among other things:

- record the Signatory’s power and authority to give the undertaking on behalf of the interested party; and
- record the interested party’s power and authority to indemnify defend and hold harmless the Republic of India and the Indian affiliates in accordance with clause (i) of the undertaking.

VERIFICATION

Verified that the contents of this undertaking are true to the best of my knowledge and belief. No part of the undertaking is false and nothing has been concealed or misstated therein.

Verified at ______ place_________ on this the ___day ____of___month______ ,_year________ .

Place: ……………..
Date: ……………….

Signature ………………….

………………….

Annexure

Part MA– Particulars of the relevant order or orders:

Sl. No.	Assessment Year or Financial year	Income-tax Authority passing the order	Details of the order under consideration		Nature of interest of the interested party
			Section and sub-section of the Income-tax Act, 1961	Date of order
(1)	(2)	(3)	(4)	(5)	(6)

Part MB– Particulars of the relevant order or orders covered by sub-clause (i) of clauses (b), (c) and (d) of the undertaking:

Sl. No.	Sl. No. in Part MA where the relevant order is mentioned	No appeal or application or petition or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court has been filed(refer clause (b)(i) of the undertaking).	No proceeding has been initiated for arbitration, conciliation or mediation, and no notice has been given thereof under any law for the time being in force or under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise (refer clause (c)(i) of the undertaking).	No proceeding initiated to enforce or pursue attachments in connection with any award, order or judgment, any other relief that may have been ordered or issued or passed by any tribunal or court or other judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the interested party against the Republic of India and Indian affiliates (refer clause (d)(i) of the undertaking).
(1)	(2)	(3)	(4)	(5)
		Applicable or Not applicable	Applicable or Not applicable	Applicable or Not applicable

Part MC – Particulars of the appeals or applications or petitions or proceeding under sub-clauses (ii) and (iii) of clause (b) of the undertaking:

Sl. No.	Sl. No. in Part MA where the relevant order is mentioned	Nature of appeals or applications or petitions or proceeding	Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court before whom such appeals or applications or petitions or proceeding has been filed	Date of filing the appeals or applications or petitions or proceeding	Date of disposing of or withdrawal such appeals or applications or petitions or proceeding (Please attach a copy of order by the Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court accepting the withdrawal or disposing of)
(1)	(2)	(3)	(4)	(5)	(6)

Part MD – Particulars of the appeals or applications or petitions or proceeding under sub-clause (iv) of clause (b) of the undertaking:

Sl. No.	Sl. No. in Part MA where the relevant order is mentioned	Nature of appeals or applications or petitions or proceeding	Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court before whom such appeals or applications or petitions or proceeding has been filed	Date of filing the appeals or applications or petitions or proceeding
(1)	(2)	(3)	(4)	(5)

Part ME – Particulars of the proceeding for arbitration, conciliation or mediation, or notices under sub-clauses (ii) and (iii) of clause (c) of the undertaking:

Sl. No.	Sl. No Part MA where the relevant order is mentioned	Nature of proceeding for arbitration, conciliation or mediation, or notices thereof with case number or Notice given	Particulars (Including the name of the country) where such proceeding for arbitration, conciliation or mediation are pending or notices thereof have been issued	Date of initiating the proceeding for arbitration, conciliation or mediation/ issue of notice	Name of the agreement entered into by India under which the proceeding for arbitration, conciliation or mediation are pending	Status of the proceeding for arbitration, conciliation or mediation	Date of disposing of or withdrawal of such proceeding for arbitration, conciliation or mediation, or notices (Please attach evidence of such disposing of or withdrawal, including order of the Tribunal or court or other judicial or quasi-judicial or administrative authority).
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)

Part MF – Particulars of the proceeding for arbitration, conciliation or mediation, or notices under sub-clause (iv) of clause (c) of the undertaking:

Sl. No.	Sl. No. in Part MA where the relevant order is mentioned	Nature of proceeding for arbitration, conciliation or mediation, or notices thereof with case number or Notice given	Particulars (Including the name of the country) where such proceeding for arbitration, conciliation or mediation are pending of notices thereof have been issued	Date of initiating the proceeding for arbitration, conciliation or mediation or issue of notice	Name of the agreement entered into by India under which the proceeding for arbitration, conciliation or mediation are pending	Status of the proceeding for arbitration, conciliation or mediation
(1)	(2)	(3)	(4)	(5)	(6)	(7)

Part MG – Particulars of the award, order or judgment or any other relief under sub-clause (v) of clause (c) of the undertaking:

Sl. No.	Sl. No. in Part MA where the relevant order is mentioned	Nature of such award, order or judgment or any other relief	Particulars (Including the name of the country) where proceeding related to such award, order, judgment or any other relief were held	Date of such award, order, judgment or any other relief along with reference number	Status of the award, order, judgment or any other relief
(1)	(2)	(3)	(4)	(5)	(6)

Part MH – Particulars of the proceeding to enforce any award, order or judgment or any other relief under sub-clauses (ii) and (iii) of clause (d) of the undertaking:

Sl. No.	Sl. No. in Part MA where the relevant order is mentioned	Nature of proceeding to enforce such award, order or judgment or any other relief	Particulars (Including the name of the country)where such proceeding to enforce any award, order or judgment or any other relief are taking place	Date of filing proceeding to enforce any award, order or judgment or any other relief	Nature of such award, order or judgment or any other relief (Attach copy thereof)	Status of the proceeding to enforce such award, order or judgment or any other relief	Date of disposing of/ withdrawal of proceeding to enforce such award, order or judgment or any other relief (Please attach a copy of evidence of such disposing of or withdrawal, including order of the Court or other judicial authority)
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)

Part MI – Particulars of the proceeding under sub-clause (iv) of clause (d) of the undertaking:

Sl. No.	Sl. No. in Part MA where the relevant order is mentioned	Nature of proceeding to enforce such award, order or judgment or any other relief	Particulars (Including the name of the country)where such proceeding to enforce any award, order or judgment or any other relief are taking place	Date of filing proceeding to enforce any award, order or judgment or any other relief	Nature of such award, order or judgment or any other relief (Attach copy thereof)	Status of the proceeding to enforce such award, order or judgment or any other relief
(1)	(2)	(3)	(4)	(5)	(6)	(7)

Part N

INDEMNITY BOND

This Indemnity Bond (“Bond”) is made on this………….. day of……….. , 2021 by………….. (name in block letters) son/daughter of………………….. designation and nationality……………………… and related passport number…………….. (hereinafter referred to as “Signatory”) having Permanent Account Number/Aadhaar Number/Tax Deduction Account Number (See Note 1)………………. on behalf of……………. (name of the declarant or interested party, as the case may be) having Permanent Account Number/Aadhaar number/Tax Deduction Account Number………………………… (See Note 2) and being duly authorised and competent to represent the declarant or interested party, as the case may be, in this regard pursuant to Board Resolution or legal authorisation (See Note 3), of the FIRST PART.

And

The Republic of India and any Indian affiliate (hereinafter collectively referred to as “releasees”) of the OTHER PART

WHEREAS:

A. The Income-tax Rules, 1962 have been amended and the Income-tax (31st Amendment) Rules, 2021 have come into force from the date of their publication in the Official Gazette.

B. The declarant or interested party, as the case may be, has filed an undertaking under sub-rule (1) of rule 11UE of the Income -tax Rules, 1962, to which this indemnity bond is annexed. Any defined terms not defined herein shall have the same meaning as the definitions given under rule 11UE and the undertaking.

C. Pursuant to the above, the declarant or interested party, as the case may be, has agreed to indemnify, defend and hold harmless the Republic of India and Indian affiliates from and against any and all costs, expenses (including attorney fees and court fees), interest, damages, and liabilities of any nature arising out of or in any way relating to the assertion or, bringing, filing or maintaining of any claim at any time after the date of furnishing the undertaking in Form No. 1 by any person, related to any relevant order or orders, or in relation to any award, order, judgment, or any other relief, or to any dispute underlying the award, and the declarant or interested party, as the case may be, has agreed to furnish an indemnity bond to this effect, such that the declarant or interested party, as the case may be, fully assumes the risk of any omission or mistake with respect to identification and procurement of authorisations and undertakings from any related parties or interested parties as provided in the undertaking, and securing the Republic of India and Indian affiliates from any claim related to any relevant order or orders, or in relation to any award, order, judgment, or any other relief or to the dispute underlying the award against the Republic of India or Indian affiliates in connection with the relevant order or orders.

D. Accordingly the declarant or interested party, as the case may be, is executing this Indemnity Bond in favour of the Republic of India on the terms appearing hereunder.

NOW THIS INDEMINTY BOND WITNESSETH AS FOLLOWS:

1. In the event that any person or entity asserts, brings, files or maintains any claim against any releasee at any time on or after the date of furnishing this undertaking, related to any relevant order or orders, or in relation to any award, order, judgment, or any other relief, or to any dispute underlying the award, against the Republic of India or Indian affiliates in connection with the relevant order or orders, the declarant or interested party, as the case may be, shall indemnify, defend and hold harmless such releasees from and against any and all costs, expenses (including attorney fees and court fees), interest, damages, and liabilities of any nature arising out of or in any way relating to the assertion or, bringing, filing or maintaining of such claim.

2. The declarant or interested party, as the case may be, specifically represents that, to the best of its knowledge, after—

(i) the execution of this undertaking;

(ii) the execution of any separate related undertaking by any other party in connection with the relevant order or orders; and

(iii) withdrawal of all pending proceeding as outlined in this undertaking,

that no other claim regarding the said relevant order or orders referenced above, or any related award, judgment, or court order, or any aspect of the dispute underlying the award shall remain outstanding against the Republic of India or other releasee.

Explanation I.-For the removal of any doubt, the declarant’s or interested party’s indemnity of releasees under this clause shall include any claim brought by any third party alleging that it has obtained declarant’s or interested party’s, as the case may be, claims under an award, judgment or court order or the relevant order or orders.

Explanation II.- the declarant or interested party, as the case may be, fully assumes the risk through this indemnity of any omission or mistake with respect to securing releasees against any related claim by any person. If the declarant or interested party, as the case may be, fails to obtain any release from such person, the declarant or interested party, as the case may be, indemnifies through this document the releasees from any defense costs, court costs, and damages.

3. This Indemnity Bond shall be governed by the relevant laws of India and the Delhi High Court shall have sole jurisdiction to entertain and try any dispute or difference arising out of or in connection with the terms of this Bond.

IN WITNESS WHEREOF the undersigned herein has signed and set his hands on this ………………. day of………… , 2021.

For and on behalf of the declarant or interested party, as the case may be,

__________

Name and address of Witness

Signature of the Witness

Place:
Date:

Notes

1. This information is required to be furnished where the Permanent Account Number or Aadhaar Number of the signatory is available.

3. The Board Resolution or legal authorisation, as referred to in clause (m) of the undertaking shall, among other things:

(a) record the signatory’s power and authority to give the undertaking on behalf of the declarant or interested party, as the case may be; and

(b) record the declarant or interested party’s power and authority, as the case may be, to indemnify defend and hold harmless the Republic of India and the Indian affiliates in accordance with clause (i) of the undertaking).]

Form No. : 2

¹[FORM NO. 2
[See rule 11UF]
Form for Certificate Under sub-rule (2) of rule 11UF

<Name of the declarant>
Address of the declarant

Sir/Madam

1. The……………………… (name of the declarant) (hereinafter referred to as the declarant) with Permanent Account Number/Aadhaar number/Tax Deduction Account Number/Company Identification Number and Taxpayer Identification Number……….. has filed an undertaking in Form No. 1 dated………. under sub-rule (1) of the rule 11UE of the rules.

2. Pursuant to the undertaking filed by the declarant in Form No. 1 under sub-rule (1) of rule 11UE, the provisions of fifth proviso to Explanation 5 to clause (i) of sub-section (1) of section 9 of the Act shall be applicable to the orders mentioned below, subject to the fulfilment of the conditions specified in said proviso read with relevant rules and fulfilment of the undertakings by the declarant in Form No. 1:

TABLE

Sl. No.

Sl. No. of the Table in Part A of Form

No. 1 where the relevant order is mentioned

Assessment
Year or
Financial
year

Income-tax Authority passing the order

Details of the
order under
consideration

Taxes or
Penalty
determined

Interest

Total demand

Relief, provided in any appeal proceeding,

if any

Demand recovered from the declarant

Pending demand

or refund due as on date

Details of
the
attachments
made by
any
Income-tax
Authority

Section
and
sub-section
of the
Income-tax
Act, 1961

Date
of
order

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

(12)

(13)

3. Demand recovered, as per the column (11) of the Table above, shall be refunded to the declarant, subject to the conditions under sub-rule (2) of the rule 11UE and the provisions of the Act, without any interest as per the provisions of the sixth proviso to Explanation 5 to clause (i) of sub-section (1) of section 9 of the Act, attachments, if any, the details whereof are provided in column (13) of the Table, shall be revoked and appeals or applications or petitions or proceeding, if any, filed by any income-tax authority or any other person representing the Republic of India with respect to the specified orders, as per column (2) of the Table, shall be withdrawn or intimation shall be sent to the concerned person, on the issue of Form No. 4, as per the procedure provided in sub-rule (16) of rule 11UF. Further, no interest under section 244A of the Act will be payable to the declarant as per the provisions of sixth proviso to Explanation 5 to clause (i) of sub-section (1) of section 9 of the Act.

Certificate No…….

Place……
Date

…………….
(Principal Commissioner/Commissioner of Income-tax) ]

Form No. : 2A

[Omitted by the IT (Tenth Amdt.) Rules, 2001, w.e.f. 2-7-2001. Earlier, existing Form No. 2A was inserted by the IT (Third Amdt.) Rules, 1994, w.e.f. 1-6-1994; substituted by the IT (Fourth Amdt.) Rules, 1995, w.e.f. 1-6-1995; amended by the IT (Fourth Amdt.) Rules, 1998, w.e.f. 1-4-1998 and later on substituted by the IT (Fifth Amdt.) Rules, 2000, w.e.f. 11-5-2000.]

Form No. : 2B

[Omitted by the IT (Twenty-first Amdt.) Rules, 2021, w.e.f. 29-7-2021 (see rule 130). Earlier, Form No. 2B was inserted by the IT (Sixteenth Amdt.) Rules, 1995, w.e.f. 23-8-1995; amended by the IT (Eighth Amdt.) Rules, 1999, w.e.f. 18-5-1999, IT (Sixth Amdt.) Rules, 2000, w.e.f. 11-5-2000 and later on substituted by the IT (Fifteenth Amdt.) Rules, 2001, w.e.f. 27-7-2001.]

Form No. : 2C

[Omitted by the IT (Twenty-first Amdt.) Rules, 2021, w.e.f. 29-7-2021 (see rule 130). Earlier, Form No. 2C was inserted by the IT (Eighth Amdt.) Rules, 1997, w.e.f. 27-6-1997; substituted by the IT (Eleventh Amdt.) Rules, 1998, w.e.f. 25-8-1998; amended by the IT (Seventh Amdt.) Rules, 2000, w.e.f. 11-5-2000 and IT (Eighteenth Amdt.) Rules, 2002, w.e.f. 29-7-2002 and later on substituted IT (Sixteenth Amdt.) Rules, 2001, w.e.f. 27-7-2001.]

Form No. : 2E

[Omitted by the IT (Twenty-first Amdt.) Rules, 2021, w.e.f. 29-7-2021 (see rule 130). Earlier, Form No. 2E was inserted by the IT (Sixth Amdt.) Rules, 2003, w.e.f. 14-5-2003 and later on amended by the IT (Ninth Amdt.) Rules, 2004, w.e.f. 14-7-2004 and IT (Sixteenth Amdt.) Rules, 2005, w.e.f. 20-6-2005.]

Form No. : 3

¹[FORM NO. 3
[See rule 11UF]
Intimation for Withdrawal under sub-rule (3) of rule 11UF of the Income- tax Rules, 1962

To,

The Principal Commissioner/Commissioner

Sir/Madam,

I…(name in block letters) son/daughter of…………………………………………… designation………………… .and nationality …………………………………………………. .and related passport number…(hereinafter referred to as “signatory”) having Permanent Account Number/Aadhaar Number………………………………… (see Note 1) on behalf of……………………………. . (name of the declarant) having Permanent Account Number/Aadhaar number/Tax Deduction Account Number (see Note 2) ……………………………………………. . and being duly authorised and competent to represent the declarant in this regard pursuant to Board Resolution and legal authorisation (see Note 3), as the case may be, hereby confirm that the declarant has received an order in Form No. 2 dated_______

Pursuant thereto, I confirm that the pending appeals or applications or petitions, arbitration, conciliation, mediation, claims or other proceeding, if any, as referred in Part D, Part F, Part G, Part I and Part M of the undertaking in Form No. 1 dated…… have been irrevocably, on a with prejudice basis, withdrawn or discontinued and are not being pursued. The evidence of action taken in this regard are enclosed herewith.

Place…………..
Date……………

………………………….
Signature/Verification

Attachments

1. Attach the Board Resolution or legal authorisation, as the case may be, as referred to in clause (m) of the undertaking.

2. Attach the evidence of action taken as referred above.

VERIFICATION

Verified that the contents of this intimation are true to the best of my knowledge and belief. No part of the intimation is false and nothing has been concealed or misstated therein.

Verified at….. place………. on this the……… day…………. of…. month……… ,…year……….

Place…………..
Date……………

………………………….
Signature/Verification

Notes

1. This information is required to be furnished where the Permanent Account Number or Aadhaar Number of the signatory is available.

2. Company Identification Number and Taxpayer Identification Number are to be provided where Permanent Account Number or Aadhaar Number or Tax Deduction Account Number of the interested party are not available.

3. The Board Resolution or legal authorisation, as referred to in clause (m) of the undertaking and such Board resolution or legal authorisation shall, among other things:

(a) record the signatory’s power and authority to give the undertaking on behalf of the interested party; and

(b) record the interested party’s power and authority to indemnify defend and hold harmless the Republic of India and the Indian affiliates in accordance with clause (i) of the undertaking.]

Form No. : 3AA

[Omitted by the IT (Twenty-first Amdt.) Rules, 2021, w.e.f. 29-7-2021 (see rule 130). Earlier, Form No. 3AA was inserted by the IT (Fourteenth Amdt.) Rules, 2002, w.e.f. 1-4-2003 and later on amended by the IT (Fifteenth Amdt.) Rules, 2004, w.e.f. 1-4-2005.]

Form No. : 3AAA

[Omitted by the IT (Twenty-first Amdt.) Rules, 2021, w.e.f. 29-7-2021 (see rule 130). Earlier, Form No. 3AAA was inserted by the IT (Sixth Amdt.) Rules, 1986, w.e.f. 1-4-1987 and later on amended by the IT (Ninth Amdt.) Rules, 1987 and IT (Fourteenth Amdt.) Rules, 2002, w.e.f. 1-4-2003.]

Form No. : 3AB

[Omitted by the IT (Thirty-second Amdt.) Rules, 1999, w.e.f. 19-11-1999. Earlier, Form No. 3AB was inserted by the IT (Amdt.) Rules, 1978 and amended by the IT (Sixth Amdt.) Rules, 1986, w.e.f. 1-4-1987.]

¹Inserted by the Income-tax (Thirty-first Amendment) Rules, 2021, w.e.f. 1-10-2021.

Tax Reference Tables

Deductions allowable to tax payer

DEDUCTIONS^*

[AY 2026-27]

*Section*	*Nature of deduction*		*Who can claim*
*(1)*	*(2)*		*(3)*
	Against ‘salaries’
16(ia)	Standard Deduction (a) In case of normal tax regime – Rs. 50,000 or the amount of salary, whichever is lower; (b) In case of new tax regime under section 115BAC(1A)(ii) – Up to Rs. 75,000 or the amount of salary, whichever is lower		Individual – Salaried Employee & Pensioners
16(ii)	Entertainment allowance [actual or at the rate of 1/5th of salary, whichever is less] [limited to Rs. 5,000]		Government employees
16(iii)	Employment tax		Salaried assessees
	Against ‘income from house properties’
23(1), first proviso	Taxes levied by local authority and borne by owner if paid in relevant previous year		All assessees
24(a)	Standard deduction [30% of the annual value (gross annual value less municipal taxes)]		All assessees
24(b)	Interest on borrowed capital (Rs. 30,000/Rs. 2,00,000, subject to specified conditions)		All assessees
25A(2)	Standard deduction of 30 per cent of arrears of rent or unrealised rent received		All assessees
	Against ‘profits and gains of business or profession’ A. Deductible items
30	Rent, rates, taxes, repairs (excluding capital expenditure) and insurance for premises		All assessees
31	Repairs (excluding capital expenditure) and insurance of machinery, plant and furniture		All assessees
32(1)(i)	Depreciation¹ in respect of following assets shall be allowed at prescribed percentage on actual cost of an asset (i.e., Straight Line Method): i. Tangible Assets (buildings, machinery, plant or furniture); ii. Intangible Assets (know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature not being goodwill of business or profession). However, if asset is acquired and put to use for less than 180 days during the previous year, the deduction shall be restricted to 50% of depreciation computed above. Note: Taxpayers engaged in business of generation or generation and distribution of power have the option to claim depreciation on written down value basis also		Taxpayer engaged in business of generation or generation and distribution of power.
32(1)(ii)	Depreciation¹ in respect of following assets shall be allowed at prescribed percentage on written down value of each block of asset (as per WDV method): i. Tangible Assets (buildings, machinery, plant or furniture); ii. Intangible Assets (know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature not being goodwill of business or profession). However, if asset is acquired and put to use for less than 180 days during the previous year, the deduction shall be restricted to 50% of depreciation computed above.		All assessees engaged in business or profession
32(1)(iia)	Additional depreciation shall be allowed at 20% of actual cost of new plant and machinery [other than ships, aircraft, office appliances, second hand plant or machinery, etc.] (Subject to certain conditions). However, if an asset is acquired and put to use for less than 180 days during the previous year, 50% of additional depreciation shall be allowed in year of acquisition and balance 50% would be allowed in the next year.		All taxpayers engaged in: a) manufacture or production of any article or thing; or b) generation, transmission or distribution of power (if taxpayer is not claiming depreciation on straight line basis).
33AB	Tea/Coffee/Rubber Development Account – Amount deposited in account with National Bank (Special Account) or in Deposit Account of Tea Board, Coffee Board or Rubber Board in accordance with approved scheme or 40% of profits of business, whichever is less (subject to certain conditions)		Assessees engaged in business of growing and manufacturing Tea/Coffee/Rubber in India
33ABA	Amount deposited in Special Account with SBI/Site Restoration Account or 20 per cent of profits, whichever is less (subject to certain conditions)		Assessee carrying on business of prospecting for, or extraction or production of, petroleum or natural gas or both in India
35(1)(i)	Revenue expenditure on scientific research pertaining to business of assessee is allowed as deduction (Subject to certain conditions). Note: Expenditure on scientific research incurred within 3 years before commencement of business (in the nature of purchase of materials and salary of employees other than perquisite) is allowed as deduction in the year of commencement of business to the extent certified by prescribed authority.		All assessee
35(1)(ii)²⁶	100% of contribution made to approved research association, university, college or other institution to be used for scientific research shall be allowed as deduction (Subject to certain conditions)		All assessee
35(1)(iia)	100% of contribution made to an approved company registered in India to be used for the purpose of scientific research is allowed as deduction (Subject to certain conditions)		All assessee
35(1)(iii)	100% of contribution made to approved research association, university, college or other institution with objects of undertaking statistical research or research in social sciences shall be allowed as deduction (Subject to certain conditions)		All assessee
35(1)(iv) read with 35(2)	Capital expenditure incurred during the year on scientific research relating to the business carried on by the assessee is allowed as deduction (Subject to certain conditions) Capital expenditure incurred within 3 years before commencement of business is allowed as deduction in the year of commencement of business. Note: i. Capital expenditure excludes acquisition of land and acquisition of any interest in land; ii. No depreciation shall be allowed on the assets acquired with the capital expenditure deductible under this provision..		All assessee
35(2AA)²⁶	100% of payment made to a National Laboratory or University or an Indian Institute of Technology or a specified person is allowed as deduction (Subject to certain conditions). The payment should be made with the specified direction that the sum shall be used in scientific research undertaken under an approved programme.		All assessee
35(2AB)²⁶	100% of any expenditure incurred by a company on scientific research (including capital expenditure other than on land and building) on in-house scientific research and development facilities as approved by the prescribed authorities shall be allowed as deduction (Subject to certain conditions). Note: Company should enter into an agreement with the prescribed authority for co-operation in such research and development and fulfils such conditions with regard to maintenance of accounts and audit thereof and furnishing of reports in such manner as may be prescribed;		Company engaged in business of bio-technology or in any business of manufacturing or production of eligible articles or things
35ABA	Capital expenditure incurred and actually paid for acquiring any right to use spectrum for telecommunication services shall be allowed as deduction over the useful life of the spectrum in equal instalments		All Assessee engaged in telecommunication services
35ABB	Expenditure incurred for obtaining licence to operate telecommunication services either before commencement of such business or thereafter at any time during any previous year		All assessees
35AD	Capital expenditure incurred, wholly and exclusively, for the purpose of any specified business [setting up and operating a cold chain facility; setting up and operating a warehousing facility for storage of agricultural produce; laying and operating a cross-country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of such network; building and operating, anywhere in India, a hotel of two-star or above category as classified by the Central Government; building and operating, anywhere in India, a hospital with at least one hundred beds for patients; developing and building a notified housing project under a scheme for slum redevelopment or rehabilitation framed by the Government, as the case may be, in accordance with prescribed guidelines; developing and building a notified housing project under a scheme for affordable housing framed by the Government, as the case may be, in accordance with prescribed guidelines; production of fertilizer in India; setting up and operating an inland container depot or a container freight station which is approved/notified under the Customs Act, 1962; bee-keeping and production of honey and beeswax; and setting up and operating a warehousing facility for storage of sugar. Lying and operating a slurry pipeline for the transportation of iron ore; setting-up and operating a notified semi-conductor wafer fabrication manufacturing unit; developing or maintaining and operating or developing, maintaining and operating a new infrastructure facility⁴, carried on by the assessee during the previous year in which such expenditure is incurred (subject to certain conditions) Note: No deduction of any capital expenditure above Rs 10,000 shall be allowed where such expenditure is incurred otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed.		All assessees Note: Such deduction is available to Indian company in case of following business, namely;- i) Business of laying and operating a cross-country natural gas or crude or petroleum oil pipeline network. ii) Developing or maintaining and operating or developing, maintaining and operating a new infrastructure facility.
35CCA	Payment to associations/institutions for carrying out rural development programmes (subject to certain conditions)		All assessees
35CCC	100% of expenditure on notified agricultural extension project (subject to certain conditions)		All assessees
35CCD	100% of expenditure on notified skill development project (subject to certain conditions)		A company
35D	Amortisation of certain preliminary expenses [deductible in 5 equal annual instalments] (subject to certain conditions)		Indian companies and resident non-corporate assessees
35DD	Amortisation of expenditure incurred after 31-3-1999 in case of amalgamation or demerger in the hands of an Indian company (one-fifth of such expenditure for 5 successive previous years) (subject to certain conditions)		Indian Company
35DDA	Amortisation of expenditure incurred under voluntary retirement scheme in 5 equal annual instalments starting with the year when the expenditure is incurred		All assessees
35E	Expenditure on prospecting, etc., for certain minerals [deductible in ten equal annual instalments] (subject to certain conditions)		Indian companies and resident non-corporate assessees engaged in prospecting, etc., for minerals
36(1)(i)	Insurance premium covering risk of damage or destruction of stocks/stores		All assessees
36(1)(ia)	Insurance premium covering life of cattle owned by a member of co-operative society engaged in supplying milk to federal milk co-operative society		Federal milk co-operative societies
36(1)(ib)	Medical insurance premium paid by any mode other than cash, to insure employee’s health under (a) scheme framed by GIC of India and approved by Central Government; or (b) scheme framed by any other insurer and approved by IRDA		All assessees as employers
36(1)(ii)	Bonus or commission paid to employees		All assessees
36(1)(iii)	Interest on borrowed capital²		All assessees
36(1)(iiia)	Pro rata amount of discount on a zero coupon bond based on tenure of such bond and calculated in prescribed manner		All assessees
36(1)(iv)	Contributions to recognised provident fund and approved superannuation fund [subject to certain limits and conditions]		All assessees as employers
36(1)(iva)	Any sum paid by assessee-employer by way of contribution towards a pension scheme, as referred to in section 80CCD, on account of an employee to the extent it does not exceed 14 per cent of the employee’s salary in the previous year.		All assessees as employers
36(1)(v)	Contributions to approved gratuity fund [subject to certain limits and conditions]		All assessees as employers
36(1)(va)	Contributions to any provident fund or superannuation fund or any fund set up under Employees’ State Insurance Act, 1948 or any other fund for welfare of such employees, received from employees if the same are credited to the employee’s account in relevant fund or funds before due date		All assessees as employers
36(1)(vi)	Allowance in respect of animals which have died or become permanently useless [subject to certain conditions]		All assessees
36(1)(vii)³	Bad debts which have been written off as irrecoverable [subject to limitation in the case of banks and financial institutions]		All assessees
36(1)(viia)	Provision for bad and doubtful debts
		up to 8.5 per cent of total income before making any deduction under this clause and Chapter VI-A, and up to 10 per cent of aggregate average advances made by its rural branches	Certain scheduled banks, non-scheduled banks (but other than foreign banks) and co-operative bank (other than primary agricultural credit society or primary co-operative agricultural and rural development bank)
		up to 5 per cent (10% in case of Public Financial Institutions, State Financial Corporations and State Industrial Investment Corporations in any of the two consecutive assessment years 2003-04 and 2004-05 – subject to certain conditions) of total income before making any deduction under this clause and Chapter VI-A	Foreign banks/Public financial institutions/State financial corporations/State industrial investment corporations. Non-Banking Financial Company
36(1)(viii)	Amounts transferred to special reserve [subject to certain conditions and maxi-mum of 20 per cent of profits derived from eligible business]		Specified entities, namely, financial corporations/financial corporation which is a public sector company/banking company/co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank/housing finance company/any other financial corporation including a public company
36(1)(ix)	Expenditure for promoting family planning amongst employees (deductible in 5 equal annual instalments in case of capital expenditure)		Companies
36(1)(xii)	Any expenditure (not being in the nature of capital expenditure) incurred by a notified corporation or body corporate, by whatever name called, constituted or established by a Central, State or Provincial Act, for the objects and purposes authorised by the Act under which such corporation or body corporate was constituted or established		Notified corporation or body corporate, by whatever name called, constituted or established by a Central, State or Provincial Act
36(1)(xiv)	Contribution to notified credit guarantee trust fund for small industries		Public financial institution
36(1)(xv)	Securities Transaction Tax paid if corresponding income is included as income under the head ‘Profits and gains of business or profession’		All assessees
36(1)(xvi)	Amount equal to commodities transaction tax paid by an assessee in respect of taxable commodities transactions entered into in the course of his business during the previous year, if the income arising from such transactions is included in the income computed under the head “Profits and gains of business or profession”		All assessees
36(1)(xvii)	Amount of expenditure incurred by a co-operative society for purchase of sugarcane shall be allowed as deduction to the extent of lower of following: a) Actual purchase price of sugarcane; or b) Price of sugarcane fixed or approved by the Government		Co-operative society engaged in business of manufacturing sugar
36(1)(xviii)	Marked to market loss or other expected loss as computed in accordance with the ICDS notified under section 145(2)		All Assessees
37(1)	Any other expenditure [not being personal or capital expenditure and expenditure mentioned in sections 30 to 36] laid out wholly and exclusively for purposes of business or profession⁵		All assessees
	B. Non-deductible items
37(2B)	Advertisement in souvenir, brochure, tract, pamphlet, etc., of political party		All assessees
40(a)(i)	Interest, royalty, fees for technical services or other chargeable sum payable outside India, or in India to a non-resident or foreign company, on which tax has not been deducted or after deduction, has not been paid on or before the due date of filing of return under section 139(1). Where in respect of any such sum, tax has been deducted in any subsequent year or, has been deducted in the previous year but paid in any subsequent year after the expiry of the time prescribed under sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid However, where deductor has failed to deduct the tax and he is not deemed to be an assessee in default under first proviso to section 201(1), then it shall be deemed that the deductor has deducted and paid the tax on the date on which the payee has furnished his return of Income.		All assessees
40(a)(ia)	30% of any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in sub-section (1) of section 139.		All assessees
	However, where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid. However, where deductor has failed to deduct the tax and he is not deemed to be an assessee in default under first proviso to section 201(1), then it shall be deemed that the deductor has deducted and paid the tax on the date on which the payee has furnished his return of Income.
40(a)(ib)	Any sum paid or payable to a non-resident which is subject to a deduction of Equalisation levy would attract disallowance if such sum was paid without deduction of such levy or if it was deducted but not deposited with the Central Government till the due date of filing of return.		All assessees
	However, where in respect of any such sum, Equalisation levy is deducted or deposited in subsequent year, as the case may be, the expenditure so disallowed shall be allowed as deduction in that year.
40(a)(ii)	Rate or tax (including surcharge or cess) levied on the profits or gains of any business or profession		All assessees
40(a)(iib)	Amount paid by way of royalty, licence fee, service fee, privilege fee, service charge or any other fee or charge, by whatever name called, which is levied exclusively on, or any amount which is appropriated, whether directly or indirectly, from a State Government undertaking by the State Government		State Govt. undertakings
40(a)(iii)	Salaries payable outside India, or in India to a non-resident, on which tax has not been paid/deducted at source		All assessees as employers
40(a)(iv)	Payments to provident fund/other funds for employee’s benefit for which no effective arrangements are made to secure that tax is deducted at source on payments made from such funds which are chargeable to tax as ‘salaries’		All assessees as employers
40(a)(v)	Tax actually paid by an employer referred to in section 10(10CC)		All assessees as employers
40(b)	Interest, salary, bonus, commission or remuneration paid to partners (subject to certain conditions and limits)		Firms
40(ba)	Interest, salary, bonus, commission or remuneration paid to members (subject to certain conditions and limits)		Association of persons or body of individuals (except a company or a co-operative society, society registered under Societies Registration Act, etc.)
40A(2)	Expenditure involving payment to relative/director/partner/substantially interested person, etc., which, in the opinion of the Assessing Officer, is excessive or unreasonable		All assessees
40A(3)	100% of payments exceeding Rs. 10,000 (Rs. 35,000 in case of payment made for plying, hiring or leasing goods carriages) made to a person in a day otherwise than by account payee cheque/bank draft or use of electronic clearing system through a bank account or through such other electric mode as may be prescribed (subject to certain conditions)		All assessees
40A(7)	Any provision for payment of gratuity to employees, other than a provision made for purposes of contribution to approved gratuity fund or for payment of gratuity that has become payable during the year (subject to specified conditions)		All assessees as employers
40A(9)	Any sum paid for setting up or formation of, or as contribution to, any fund, trust, company, AOP, BOI, Society or other institution, other than recognised provident fund/approved superannuation fund/pension scheme referred to in section 80CCD/approved gratuity fund		All assessees as employers
40(A)(13)	No deduction shall be allowed in respect of marked to market loss or other unexpected loss except as allowable under section 36(1)(xviii)		All assessee
	C. Other deductible items
42(1)	Allowances specified in agreement entered into by Central Government with any person (subject to certain conditions and terms of agreement)		Assessees engaged in prospecting for or extraction or production of mineral oils
42(2)	Expenditure remaining unclaimed as reduced by proceeds of transfer		Assessee whose business consists of prospecting for or extraction or production of petroleum and natural gas and who transfers any interest in such business
43B	Any sum which is actually paid, relating to (i) tax/duty/cess/fee levied under any law, (ii) contribution to provident fund/superannuation fund/gratuity fund/any fund for employees’ welfare, (iii) bonus/commission to employees, (iv) interest on loan/borrowing from any public financial institution, State Financial Corporation or State Industrial Investment Corporation (v)interest payments to scheduled banks/Co-operative banks (other than a primary agricultural and development bank)/primary co-operative agricultural and rural development bank on loans or advances, (vi) interest on loan or borrowings from NBFC, (vii) sum payable by employers by way of leave encashment to employees, (viii) sum payable to the Indian Railways for the use of railway assets, and (ix) sum payable to a micro or small enterprise beyond the time limit specified in section 15 of MSME Act. Deduction will not be allowed in year in which liability to pay is incurred unless actual payment is made in that year or before the due date of furnishing of return of income for that year Note: However, payment made to micro or small enterprise beyond the time limit shall be allowed as deduction only on actual payment.		All assessees
44A	Expenditure in excess of subscription, etc., received from members (subject to certain conditions and limits)		Trade, professional or similar association
44C	Head office expenditure (subject to certain conditions and limits)		Non-resident
	Against ‘capital gains’
48(i)	Expenditure incurred wholly and exclusively in connection with transfer of capital asset		All assessees
48(ii)	Cost of acquisition of capital asset and of any improvement thereto (indexed cost of acquisition and indexed cost of improvement, in case of long-term capital assets). Note : (1) The cost of acquisition/ improvement shall not include the deductions claimed on the amount of interest under Section 24(b) or Chapter VIA. [Subject to exceptions contained in Explanation 1 and 2 to Section 48(iii)]. (2) The benefit of indexed cost of acquisition and indexed cost of improvement shall be available if long-term capital gain arises from the transfer which takes place before 23-07-2024.		All assessees
48(iii)	Deduction in respect of the capital gains charged to tax under section 45(4), which is attributable to the capital asset remaining with the firm		Firm, AOP or BOI
54	Long-term capital gains on sale of residential house and land appurtenant thereto invested in purchase/construction of another residential house⁸ (subject to certain conditions and limits)		Individual/HUF
54B	Capital gains on transfer of land used for agricultural purposes, by an individual or his parents or a HUF, invested in other land for agricultural purposes (subject to certain conditions and limits)		Individual/HUF
54D	Capital gains on compulsory acquisition of land or building forming part of an industrial undertaking invested in purchase/construction of other land/building for shifting/re-establishing said undertaking or setting up new industrial undertaking (subject to certain conditions and limits)		Any assessee
54EC	Long-term capital gains arising from transfer of land or building. The exemption⁹ is allowed if the amount of capital gains is invested in bonds of NHAI, REC or any other notified bond.		Any assessee
54EE	Long-term capital gain invested in long-term specified assets being units of such fund as may be notified by Central Government to finance start-ups		All assesses
54F	Net consideration on transfer of long-term capital asset other than residential house invested in residential house¹⁰ (subject to certain conditions and limits)		Individual/HUF
54G	Capital gain on transfer of machinery, plant, land or building used for the purposes of the business of an industrial undertaking situate in an urban area (transfer being effected for shifting the undertaking to a non-urban area) invested in new machinery, plant, building or land, in the said non-urban area, expenses on shifting, etc. (subject to certain conditions and limits)		Any assessee
54GA	Exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area to any Special Economic Zone (subject to certain conditions and limits)		All assessees
54GB	Exemption in respect of capital gain arising from the transfer of a long-term capital asset, being a residential property (a house or a plot of land), owned by the eligible assessee, and such assessee before the due date of furnishing of return of income under sub-section (1) of section 139 utilises the net consideration for subscription in the equity shares of an eligible company and such company has, within one year from the date of subscription in equity shares by the assessee, utilised this amount for purchase of specified new asset (subject to certain conditions and limits).		Individual/HUF
	W.e.f. April 1, 2017, eligible start-up is also included in definition of eligible company.
	Against ‘income from other sources’ A. Deductible items
57(i)	Deduction from dividend income on account of interest expense, which shall not exceed 20% of the dividend income.		All assessees
57(i)	Any reasonable sum paid by way of commission or remuneration for the purpose of realising interest on securities		All assessees
57(ia)	Contributions to any provident fund or superannuation fund or any fund set up under Employees’ State Insurance Act, 1948 or any other fund for welfare of employees, if the same are credited to employees’ accounts in relevant funds before due date		All assessees
57(ii)	Repairs, insurance, and depreciation of building, plant and machinery and furniture		Assessees engaged in business of letting out of machinery, plant and furniture and buildings on hire
57(iia)	In case of family pension, 33¹/₃ per cent of such pension or Rs. 15,000, whichever is less Note: the enhanced threshold of Rs. 25,000 shall be applicable if income-tax is computed under section 115BAC(1A)(ii).		Assessees in receipt of family pension on death of employee being member of assessee’s family
57(iii)	Any other expenditure (not being capital expenditure) expended wholly and exclusively for earning such income		All assessees
57(iv)	In case of interest received on compensation or on enhanced compensation referred to in section 145A(2), a deduction of 50 per cent of such income (subject to certain conditions)		All assessees
	B. Non-deductible items
58(1)(a)(i)	Personal expenses		All assessees
58(1)(a)(ii)	Interest chargeable to tax which is payable outside India on which tax has not been paid or deducted at source		All assessees
58(1)(a)(iii)	‘Salaries’ payable outside India on which no tax is paid or deducted at source		All assessees
58(1A)	Disallowance due to TDS default (Covered by section 40(a)(ia) and 40(a)(iia))		All assessees
58(2)	Expenditure of the nature specified in section 40A		All assessees
58(4)	Expenditure in connection with winnings from lotteries, crossword puzzles, races, games, gambling or betting		All assessees
	For certain payments
80C	> Life insurance premium for policy : – in case of individual, on life of assessee, assessee’s spouse and any child of assessee – in case of HUF, on life of any member of the HUF > Sum paid under a contract for a deferred annuity : – 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) – in case of HUF, on life of any member of the HUF > 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] > Contributions by an individual made under Employees’ Provident Fund Scheme > Contribution to Public Provident Fund Account in the name of: – in case of individual, such individual or his spouse or any child of such individual – in case of HUF, any member of HUF > Contribution by an employee to a recognised provident fund > Contribution by an employee to an approved superannuation fund > 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 21.01.2015. 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 or in the name of girl child of an individual or in the name of the girl child for whom such an individual is the legal guardian. > Subscription to notified savings certificates [National Savings Certificates (VIII Issue)] > Contribution for participation in unit-linked Insurance Plan of UTI : – in case of an individual, in the name of the individual, his spouse or any child of such individual – in case of a HUF, in the name of any member thereof > Contribution to notified unit-linked insurance plan of LIC Mutual Fund [Dhanaraksha 1989] – in the case of an individual, in the name of the individual, his spouse or any child of such individual – in the case of a HUF, in the name of any member thereof > 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] > 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 > Certain payments for purchase/construction of residential house property > 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 > Sum paid towards notified annuity plan of LIC (New Jeevan Dhara/New Jeevan Dhara-I/New Jeevan Akshay/New Jeevan Akshay-I/New Jeevan Akshay-II/Jeewan Akshay-III plan of LIC) or other insurer > Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005) > 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) > Subscription to equity shares or debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions > 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. > Term deposits for a fixed period of not less than 5 years with a scheduled bank, and which is in accordance with a scheme¹¹ framed and notified. > Subscription to notified bonds issued by the NABARD. > Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions) > 5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions) > Contribution to specified account of the pension scheme referred to in 80CCD, in case of central Government employee.		Individual/HUF

Notes:

1. Deduction is limited to whole of the amount paid or deposited subject to a maximum of Rs. 1,50,000¹². This maximum limit of Rs. 1,50,000¹² is the aggregate of the deduction that may be claimed under sections 80C, 80CCC and 80CCD.

2. The sums paid or deposited need not be out of income chargeable to tax of the previous year. Amount may be paid or deposited any time during the previous year, but the deduction shall be available on so much of the aggregate of sums as do not exceed the total income chargeable to tax during the previous year.

3. Life Insurance premium is part of gross qualifying amount for the purpose of deduction under section 80C. Payment of premium which is in excess of 10 per cent (if policy is issued on or after 1-4-2013, 15% in case of insurance on life of person with disability referred to in section 80U or suffering from disease or ailment specified in section 80DDB/rule 11DD) of actual capital sum assured shall not be included in gross qualifying amount. The value of any premiums agreed to be returned or of any benefit by way of bonus or otherwise, over and above the sum actually assured, which is to be or may be received under the policy by any person, shall not be taken into account for the purpose of calculating the actual capital sum assured.

The limit of 10 per cent will be applicable only in the case of policies issued on or after 1-4-2012. In respect of policies issued prior to 1-4-2012, the old limit of 20 per cent of actual sum assured will be applicable.

With effect from 1-4-2013, ‘actual capital sum assured’ in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account—

(i) the value of any premium agreed to be returned; or

(ii) any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.

4. Where, in any previous year, an assessee—

(i) terminates his contract of insurance, by notice to that effect or where the contract ceases to be in force by reason of failure to pay any premium, by not reviving contract of insurance,—

(a) in case of any single premium policy, within two years after the date of commencement of insurance; or

(b) in any other case, before premiums have been paid for two years; or

(ii) terminates his participation in any unit-linked insurance plan (ULIP), by notice to that effect or where he ceases to participate by reason of failure to pay any contribution, by not reviving his participation, before contributions in respect of such participation have been paid for five years; or

(iii) transfers the house property before the expiry of five years from the end of the financial year in which possession of such property is obtained by him, or receives back, whether by way of refund or otherwise, any sum specified in that clause,

then,—

(a) no deduction shall be allowed to the assessee with reference to any of such sums, paid in such previous year; and

If any equity shares or debentures, with reference to the cost of which a deduction is allowed, are sold or otherwise transferred by the assessee to any person at any time within a period of three years from the date of their acquisition, the aggregate amount of the deductions of income so allowed in respect of such equity shares or debentures in the previous year or years preceding the previous year in which such sale or transfer has taken place shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year.

A person shall be treated as having acquired any shares or debentures on the date on which his name is entered in relation to those shares or debentures in the register of members or of debenture-holders, as the case may be, of the public company.

5. If any amount, including interest accrued thereon, is withdrawn by the assessee from his deposit account made under (a) Senior Citizen Saving Scheme or (b) Post Office Time Deposit Rules, before the expiry of the period of five years from the date of its deposit, the amount so withdrawn shall be deemed to be the income of the assessee of the previous year in which the amount is withdrawn and shall be liable to tax in the assessment year relevant to such previous year.

The amount liable to tax shall not include the following amounts, namely:—

(i) any amount of interest, relating to deposits referred to above, which has been included in the total income of the assessee of the previous year or years preceding such previous year; and

(ii) any amount received by the nominee or legal heir of the assessee, on the death of such assessee, other than interest, if any, accrued thereon, which was not included in the total income of the assessee for the previous year or years preceding such previous year.

*Section*	*Nature of deduction*	*Who can claim*
*(1)*	*(2)*	*(3)*
80CCC¹³	Contributions to certain pension funds of LIC or any other insurer (up to Rs. 1,50,000) (subject to certain conditions)¹⁴	Individual
^1480CCD	Contribution to pension scheme notified by Central Government up to 10% of salary (subject to certain conditions and limits)¹⁵ Contribution made by employer shall also be allowed as deduction under 80CCD(2) while computing total income of the employee. However, amount of deduction could not exceed 14% of salary where contribution is made by central/state government and 10%* of salary, where contribution is made by any other employee. * 14% in case income of assessee is chargeable to tax under section 115BAC(1A) (new tax regime). Note: Amount deposited in the minor’s account is also allowed as deduction. The deduction is allowed to the parent subject to a maximum limit of Rs 50,000.	Individual
80CCH	Amount paid/deposited in Agniveer Corpus Fund by assessee and contribution made by Central Government to such fund	Individual
80D¹⁷	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 (subject to limit)	Individual/HUF
80D¹⁷	> specified person means: – In case of Individual – self, spouse, dependent children or parents – In case of HUF – Any member thereof > Deduction for preventive health check-up shall not exceed in aggregate Rs. 5,000. > Payment on account of preventive health check-up may be made in cash.	Individual/HUF
80DD	Deduction of Rs. 75,000 (Rs. 1,25,000 in case of severe disability) to a resident individual/HUF where (a) any expenditure has been incurred for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability [as defined under Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995] (w.e.f. assessment year 2005-06 including autism, cerebral palsy and multiple disability as referred to in National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities Act, 1999), or (b) any amount is 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)	Resident Individual/HUF
80DDB	Expenses actually paid for medical treatment of specified diseases and ailments subject to certain conditions¹⁸	Resident Individual/HUF
80E	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 education¹⁹ (subject to certain conditions) (maximum period : 8 years)	Individual
80EE	Interest payable on loan taken by an individual from any financial institution for the purpose of acquisition of a residential house property subject to certain condition. (Maximum deduction 50,000)	Individual
80EEA	Interest payable on loan taken by an individual, who is not eligible to claim deduction under 80EE, from any financial institution for the purpose of acquisition of a residential house property subject to certain condition. (Maximum deduction 1,50,000)	Individual
80EEB	Interest payable on loan taken by an individual from any financial institution for the purpose of purchase of an electric vehicle subject to certain condition. (Maximum deduction 1,50,000)	Individual
80G	Donations to certain approved funds, trusts, charitable institutions/donations for renovation or repairs of notified temples, etc. [amount of deduction is 50 per cent of net qualifying amount]. 100 per cent of qualifying donations to National Defence Fund, Prime Minister’s National Relief Fund, Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND) Prime Minister’s Armenia Earthquake Relief Fund, Africa (Public Contributions – India) Fund, National Children’s Fund (from 1-4-2014), Government or approved association for promoting family planning, universities and approved educational institutions of national eminence, National Foundation for Communal Harmony, Chief Minister’s Earthquake Relief Fund (Maharashtra), Zila Saksharta Samitis, National or State Blood Transfusion Council, Fund set up by State Government to provide medical relief to the poor, Army Central Welfare Fund, Indian Naval Benevolent Fund and Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, National Illness Assistance Fund, Chief Minister’s Relief Fund or the Lt. Governor’s Relief Fund in respect of any State or Union Territory, National Sports Fund, National Cultural Fund, Fund for Technology Development and Application, Indian Olympic Association, etc.²⁰, fund set up by State Government of Gujarat exclusively for providing relief to victims of earthquake in Gujarat, National Trust for Welfare of Persons with Autism, Cerebral palsy, Mental retardation and Multiple Disabilities, and sums paid between 26-1-2001 and 30-9-2001 to any eligible trust, institution or fund for providing relief to Gujarat earthquake victims²¹, the Swachh Bharat Kosh and the Clean Ganga Fund (from assessment year 2015-16) and National Fund for Control of Drug Abuse (from assessment year 2016-17) [subject to certain conditions and limits]²²	All assessees
80GG	Rent paid in excess of 10% of total income for furnished/unfurnished residential accommodation (subject to maximum of Rs. 5,000 p.m. or 25% of total income, whichever is less) (subject to certain conditions)	Individuals not receiving any house rent allowance
80GGA²³	Certain donations for scientific, social or statistical research or rural development programme or for carrying out an eligible project or scheme or National Urban Poverty Eradication Fund (subject to certain conditions)	All assessees not having any income chargeable under the head ‘Profits and gains of business or profession’
80GGB	Sum contributed to any political party/electoral trust²⁴	Indian company
80GGC	Sum contributed to any political party/ electoral trust²⁴	All assessees, other than local authority and artificial juridical person wholly or partly funded by Government
	For certain incomes
80-IA	Profits and gains from industrial undertakings engaged in infrastructure facility, telecommunication services, industrial park, development of Special Economic Zone, power undertakings, etc. (subject to certain conditions and limits)²⁵	All assessees
	No deduction under this section shall be available to an enterprise which starts the development or operation and maintenance of the infrastructure facility on or after the 1st day of April, 2017.
80-IAB	Profits and gains derived by undertaking/enterprise from business of developing a Special Economic Zone notified on or after 1-4-2005 (subject to certain conditions and limits)	Assessee being Developer of SEZ
	No deduction under this section shall be available to an assessee, being a developer, where the development of Special Economic Zone begins on or after the 1st day of April, 2017.
80-IAC	Profit and gains derived by an eligible start-up from specified business (subject to certain conditions)²⁷	Company and LLP
80-IB	Profits and gains from industrial undertakings, cold storage plant, hotel, scientific research & development, mineral oil concern, housing projects, cold chain facility, multiplex theatres, convention centres, ships, etc. (subject to certain conditions and limits)	All assessees No deduction shall be available to an enterprise which commence the business activity on or after 1-4-2017.
80-IBA	Profits and gains derived by assessee from the business of developing and building affordable housing projects. (subject to certain conditions)	All assessees
80-IC	Profits and gains derived by an undertaking or an enterprise in special category States (Himachal Pradesh, Uttaranchal, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura) (subject to certain limits, time limits and conditions), (a) which has begun or begins to manufacture or produce any article or thing, not being any article or thing specified in the Thirteenth Schedule, or which manufactures or produces any article or thing, not being any article or thing specified in the Thirteenth Schedule and undertakes substantial expansion during the specified period. (b) which has begun or begins to manufacture or produce any article or thing specified in the Fourteenth Schedule or commences any operation specified in that Schedule, or which manufactures or produces any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule and undertakes substantial expansion during the specified period	All assessees
80-ID	Profits and gains from business of hotels and convention centres in specified areas (subject to certain conditions).	All assessees
80-IE	Deduction in respect of certain undertakings in North Eastern States.	All assessees
80JJA	Entire income from business of collecting and processing or treating of bio-degradable waste for generating power, or producing bio-fertilizers, bio-pesticides or other biological agents or for producing bio-gas, making pellets or briquettes for fuel or organic manure (for 5 consecutive assessment years)	All assessees
80JJAA	Deduction of 30% of additional employee cost in respect of employment of new employees.	Assessee to whom section 44AB applies
	Additional employee cost means total emoluments paid or payable to additional employees employed during the previous year.
	Deduction shall be allowed for first three Assessment Years including the Assessment Year relevant to previous year in which such employment is provided.
	(Subject to certain other condition)
80LA	Certain incomes of Scheduled banks/banks incorporated outside India having Offshore Banking Units in a Special Economic Zone/Units of International Financial Services Centre (subject to certain conditions and limits)	Scheduled Banks/banks incorporated outside India/Units of International Financial Services Centre
80M	Inter-corporate dividend shall be allowed to be reduced from total income of company receiving the dividend if same is further distributed to shareholders within the prescribed period.	Domestic Company
80P	Specified incomes [subject to varying limits specified in sub-section (2)]	Co-operative societies
80PA	Profit derived from processing or marketing of agricultural produce.	Producer Company
80QQB	Royalty income of author of certain specified category of books (up to Rs. 3,00,000) (subject to certain conditions)	Resident Individual – Author
80RRB	Royalty on patents up to Rs. 3,00,000 in the case of a resident individual who is a patentee and is in receipt of income by way of royalty in respect of a patent registered on or after 1-4-2003 (subject to certain conditions).	Resident individuals
80TTA	Interest on deposits in savings bank accounts (up to Rs. 10,000 per year)	Individuals/HUFs (except Senior Citizen)
80TTB	Interest on deposit in saving account or fixed deposit (upto Rs. 50,000 per year)	Senior citizen
80U	Deduction of Rs. 75,000 to 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] [w.e.f. assessment year 2005-06 including autism, cerebral palsy, and multiple disabilities as defined under National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities Act, 1999] [in the case of a person with severe disability, allowable deduction is Rs. 1,25,000] (subject to certain conditions).	Resident individuals
	Rebates
87A	Tax rebate in case of individual resident in India, whose total income does not exceed Rs. 5,00,000. Quantum of rebate shall be an amount equal to hundred per cent of such income-tax or an amount of Rs. 12,500, whichever is less. Further, a maximum rebate of Rs. 60,000 is allowed under 87A from the amount of income tax on total income, which is chargeable to tax under section 115BAC(1A). However, this rebate is allowed if the total income of assessee chargeable to tax under section 115BAC(1A) is up to Rs. 12,00,000. Note: The total rebate under section 87A shall not exceed the amount of income tax payable as per the rates provided in section 115BAC(1A) [effective from AY 2026-27]	Resident Individual

1. Provisions of section 32 shall apply whether or not the assessee has claimed depreciation.

2. If sum is borrowed for acquiring a capital asset, interest thereon pertaining to the period before asset is first put to use shall not be allowed as deduction.

3. W.e.f. assessment year 2016-17, bad-debts shall be allowed as deduction even if they are not written-off from books of accounts. Such deduction shall be allowed if amount of debt or part thereof has been taken into account in computing income on the basis of Income Computation and Disclosure Standards notified under section 145(2) without recording the same in the accounts.

4. With effect from assessment year 2018-19 business of developing or maintaining and operating or developing, maintaining and operating a new infrastructure facility, has been included.

♦ Section 35AD was amended by Finance (No. 2) Act, 2014 with effect from assessment year 2015-16 :

With a view to ensure that the capital asset on which investment linked deduction has been claimed is used for the purposes of the specified business, sub-section (7A) has been inserted in section 35AD to provide that any asset in respect of which a deduction is claimed and allowed shall be used only for the specified business for a period of 8 years beginning with the previous year in which such asset is acquired or constructed. Moreover, if such asset is used for any purpose other than the specified business, the total amount of deduction so claimed and allowed in any previous year in respect of such asset (as reduced by the amount of depreciation allowable in accordance with the provisions of section 32 as if no deduction had been allowed), shall be deemed to be income of the assessee chargeable under the head “Profits and gains of business or profession” of the previous year in which the asset is so used. However, this provision will not apply to a company which has become a sick industrial company under section 17(1) of the Sick Industrial Companies (Special Provisions) Act within the time period of 8 years as stated above.

♦ Where any deduction under section 35AD has been availed of by the assessee on account of capital expenditure incurred for the purposes of specified business in any assessment year, no deduction under section 10AA shall be available to the assessee in the same or any other assessment year in respect of such specified business.

5. With effect from assessment year 2015-16 a new Explanation 2 has been inserted in section 37(1) to clarify that expenditure incurred by the assessee on Corporate Social Responsibility activities in accordance with section 135 of the Companies Act, 2013 will not be considered as expenditure incurred by the assessee for the purposes of the business or profession.

Further, with effect from assessment year 2022-23, a new Explanation 3 has been inserted in section 37(1) to clarify that expenditure incurred to provide perquisite, in whatever form to any person, irrespective of whether the recipient is engaged in any business or profession, where the acceptance of such benefit or perquisite is a violation of any rule, law or regulation, which governs the recipient, shall be deemed to have not been incurred for business or profession and accordingly, the deduction for the same shall not be available. Furthermore, the expenditure, whether constituting an offence as per the prevailing laws in India or outside India, or prohibited by any law in force – whether in India or outside India, shall not be eligible for deduction under section 37(1) .

8. One residential house in India with effect from assessment year 2015-16. With effect from Assessment Year 2020-21, a taxpayer has an option to make investment in two residential house properties in India. This option can be exercised by the taxpayer only once in his lifetime provided the amount of long-term capital gain does not exceed Rs. 2 crores. With effect from Assessment Year 2023-24, the exemption shall be limited to Rs. 10 crores.

10. One residential house in India with effect from assessment year 2015-16. With effect from Assessment Year 2023-24, the aggregate of amount invested in new house property and deposited in capital gain account scheme shall be considered as eligible investment to the extent of Rs. 10 crores.

11. See Bank Term Deposits Scheme, 2006.

12. with effect from assessment year 2015-16.

13. Where deduction is claimed under this section, deduction in relation to same amount cannot be claimed under section 80C.

14. section 80CCE provides that the aggregate amount of deductions under section 80C, section 80CCC and section 80CCD(1) shall not, in any case, exceed Rs. 1,50,000

With effect from assessment year 2015-16, amended sub-section (1) has clarified that a non-government employee can claim deduction under section 80CCD even if his date of joining is prior to January 1, 2004.

15. With effect from the assessment year 2012-13 section 80CCE is amended so as to provide that contribution made by the Central Government or any other employer to a pension scheme under sub-section (2) of section 80CCD shall not be included in the limit of deduction of Rs. 1,50,000 provided under section 80CCE.

With effect from assessment year 2016-17, sub-section (1A) of section 80CCD which laid down maximum deduction limit of Rs. 1,00,000 (under sub-section (1)) has been deleted.

Further, a new sub-section (1B) is inserted to provide for additional deduction to the extent of Rs. 50,000. The additional deduction is not subject to ceiling limit of Rs. 1,50,000 as provided under section 80CCE.

However, it is to be noted that additional deduction of Rs. 50,000 shall not be allowed in respect of contribution which is considered for deduction under section 80CCD(1), i.e., within limit of 10% of salary/gross total income

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.

17. The deduction under Section 80Dwill be available as per the limit specified below:

	Individual	HUF
	For self, spouse and dependent children : Rs. 25,000 (Rs. 50,000 if person insured is a senior citizen*);	Premium up to Rs. 25,000 (Rs. 50,000 if member insured is a senior citizen) paid to insure any member of the family.
	For parents of the assessee : (Additional) Rs. 25,000 (Rs. 50,000 if person insured is a senior citizen)	NA
	Medical expenditure if no amount is paid in respect of health insurance-Rs.50,000 (only in case of senior citizen)	Medical expenditure if no amount is paid in respect of health insurance-Rs.50,000 (only in case of senior citizen)
	Aggregate amount of deduction cannot exceed Rs.1,00,000 in any case	Aggregate amount of deduction cannot exceed Rs.50,000 in any case.

*‘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.

18. Maximum deduction is Rs. 40,000 (Rs. 1,00,000 where expenditure is incurred for a senior citizen [w.e.f assessment year 2019-20])

With effect from assessment year 2016-17, the taxpayer shall be required to obtain a prescription from a specialist doctor (not necessarily from a doctor working in a Government hospital) for availing this deduction.

19. Scope of ‘higher education’ is enlarged with effect from assessment year 2010-11 to cover any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, Board or university recognised by the Central Government or State Government or local authority or by any other authority authorized by the Central Government or State Government or local authority to do so.

With effect from 1-4-2010 the scope of expression ‘relative’ has also been enlarged to cover the student for whom the taxpayer is the legal guardian.

20. Donation of any sums paid by the assessee, being a company, in the previous year as donations to the Indian Olympic Association or to any other association or institution established in India, as the Central Government may, having regard to the prescribed guidelines, by notification in the Official Gazette, specify in this behalf for—

(i) the development of infrastructure for sports and games; or

(ii) the sponsorship of sports and games,

in India;

is eligible for the purpose of deduction under section 80G [this is in consequence of omission of section 10(23)].

21. Donation made to an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both is also eligible for the purpose of deduction under section 80G from the assessment year 2003-04 [this is in consequence of omission of section 10(20A)].

22. With effect from 1-4-2013 no deduction shall be allowed in respect of donation of any sum exceeding two thousand rupees unless such sum is paid by any mode other than cash.

23. With effect from 1-4-2013 no deduction shall be allowed under this section in respect of any sum exceeding ten thousand rupees unless such sum is paid by any mode other than cash.

24. With effect from 1-4-2014 deduction will not be allowed if sum is contributed in cash.

25. Time limits stated under section 80-IA(4)(iv) have been extended from 31-3-2014 to 31-3-2017.

26. 100% deduction shall be allowed from the AY beginning on or after the 1st day of April, 2021.

27. With effect from Assessment Year 2018-19:

i. ‘Eligible business’ means a business carried out by an eligible start up engaged in innovation, development or improvement of products or processes or services or a scalable business model with a high potential of employment generation or wealth creation.

ii. “Eligible start-up” means a company or a limited liability partnership engaged in eligible business which fulfils the following conditions, namely:

a. it is incorporated on or after the 1st day of April, 2016 but before the 1st day of April, 2025

b. the total turnover of its business does not exceed 100 crore rupees in the previous years in which deduction is claimed; and

c. it holds a certificate of eligible business from the Inter-Ministerial Board of Certification as notified in the Official Gazette by the Central Government

[As amended by Finance Act, 2025]

Tax Tutorials

Deductions/Allowances allowed to a salaried employee

‘Salary’ is the first head of income. The income taxable under this head shall be calculated on the due basis or the receipt basis, whichever occurs earlier. Taxable salary shall include taxable allowances, perquisites, retirement benefits, and profit in lieu of salary. Certain deductions are also allowed from salary income.

Taxability of Allowances

Allowances are additional components of salary that are regularly given to the employees to meet the expenditure for particular purposes. Allowances are generally fixed irrespective of actual expenditure and are taxable. Under the Act, it is taxable under Section 15 on a due or accrual basis, irrespective of whether it is paid in addition to or in lieu of salary. However, some exemptions are allowed by the Income-tax Act.

Types of Allowances

In accordance with the term of employment or condition of the workplace or statutory requirement, an employer may provide various allowances to the employees. An allowance is assumed to be taxable under the head ‘Salary’ unless it is specifically exempted from tax, fully or partly. The treatment of popular allowances shall be in accordance with the following provision.

Fully Taxable Allowances

*Allowance*	*Description*
Dearness Allowance	Dearness Allowance is provided to an employee to compensate for the effect of rising prices and inflation.
Overtime Allowance	Allowance given to employees for working overtime.
City Compensatory Allowance	City Compensatory Allowance is paid by employers to their employees to compensate them for the high cost of living in metro cities.
Transport Allowance to employee other than blind/ deaf and dumb/ orthopedically handicapped employee	Transport allowance granted to an employee to meet his expenditure for the purpose of commuting between the place of his residence and the place of his duty is fully taxable. However, in the case of blind/deaf and dumb/ orthopedically handicapped employees, an exemption of up to Rs. 3,200 per month is provided.
Medical Allowance, Tiffin Allowance, and Servant Allowance are also taxable under Section 15.

Partially Taxable Allowances

*Description*	*Exemption*
House Rent Allowance is paid by the employers to the employees to meet the cost of rented house taken by them. [Section 10(13A)] (See Note)	Minimum of the following three amounts: HRA Actually Received Actual house rent paid minus 10% of salary 50% of salary (if the residence is in Delhi, Mumbai, Kolkata, or Chennai), otherwise 40% of salary.
Transport Allowance granted to an employee working in any transport system to meet his personal expenditure during the performance of his duties for going from one place to another, provided he does not receive the daily allowance,	Lower of 70% of such transport allowance or Rs. 10,000 per month.
Children Education Allowance – Granted to meet the tuition fees of a maximum of two children.	Up to Rs. 100 per month per child for a maximum of 2 children
Hostel Allowance – Granted to meet the Hostel expenditure of a maximum of two children	Up to Rs. 300 per month per child for a maximum of 2 Children.
Office Duty Allowances Travelling allowance Conveyance allowance Daily allowance Helper allowance Research allowance Uniform allowance	These allowances are exempt to the extent of a minimum of actual allowance received or actual amount spent for the purpose of duties of employment.
Special Compensatory Allowance (Hilly Areas) (Subject to certain conditions and locations)	Varies from Rs. 300 per month to Rs. 7,000 per month.
Border Area Allowance, or Remote Locality Allowance, or Disturbed Area Allowance, or Difficult Area Allowance (Subject to certain conditions and locations)	Varies from Rs. 200 per month to Rs. 1,300 per month.
Tribal Area or Special Compensatory or Scheduled Area or Agency Area Allowance (Subject to certain locations)	Up to Rs. 200 per month
Compensatory Field Area Allowance. (Subject to certain conditions and locations)	Up to Rs. 2,600 per month
Compensatory Modified Field Area Allowance. (Subject to certain conditions and locations)	Up to Rs. 1,000 per month
Counter Insurgency Allowance granted to the members of armed forces operating in areas away from their permanent locations.	Up to Rs. 3,900 per month
Underground Allowance granted to employees working in uncongenial, unnatural climates in underground mines	Up to Rs. 800 per month
High Altitude Allowance granted to the armed forces operating in high-altitude areas	a) Up to Rs. 1,060 per month (for an altitude of 9,000 to 15,000 feet) b) Up to Rs. 1,600 per month (for an altitude above 15,000 feet)
Special Compensatory Highly Active Field Area Allowance granted to members of the armed forces	Up to Rs. 4,200 per month
Island Duty Allowance granted to members of the armed forces in Andaman and Nicobar and Lakshadweep group of Island	Up to Rs. 3,250 per month

Note: House Rent Allowance

The exemption for House Rent Allowance (‘HRA’) shall be allowed if the residential accommodation occupied by the employee is not owned by him and he actually pays rent in respect of such residential accommodation. Thus, no exemption is allowed if the employee stays in an accommodation owned by him or where he does not pay any rent in respect of the accommodation.

‘Salary’ for this purpose shall be the aggregate of basic salary, dearness allowance (if it forms part of salary for retirement benefits), and commission paid to the employee.

The exemption is allowed only for the period during which the rented house is occupied by the employee and not for any period after or before that. If rental expenditure is less than 10% of salary, no exemption shall be allowed to the employee for the HRA.

Deductions from Salary [Section 16]

Income-tax Act allows three deductions from the salary income, i.e., Standard Deduction, Deduction for Entertainment Allowance, and Deduction for Professional Tax. Standard Deduction is allowed to every employee whose income is taxable under the head salary. In contrast, the other two deductions are allowed subject to certain conditions.

Standard Deduction

This deduction is available to all employees drawing salary income, including retired employees drawing pension income. The Standard Deduction is absolute and unconditional, and the employee does not require to furnish any supporting evidence to claim this deduction. The deduction is the same for all employees with a ceiling of Rs. 50,000, irrespective of the salary drawn. However, with effect from 01-04-2025, the Finance (No. 2) Act, 2024 increased the amount of standard deduction from the existing Rs. 50,000 to Rs. 75,000 in a case where the assessee-employee computes the income tax under the new (default) tax regime prescribed under Section 115BAC(1A)(ii). Accordingly, this will apply to assessment year 2025-26.

Entertainment Allowance

The entertainment allowance received by an employee is a taxable allowance. If such entertainment allowance is received by a Government employee, a deduction is allowed to him while computing the taxable income under the head salary. However, no deduction is allowed under this provision to a taxpayer who is not an employee of any Central or State Government.

The amount of deduction allowable to the Govt. employee for the Entertainment Allowance shall be lower of the following:

Actual amount of entertainment allowance received during the previous year
20% of salary exclusive of any allowance, benefit, or other perquisites
Rs. 5,000

Professional tax

Professional tax paid by the employee, by way of deduction from his salary, is allowed as a deduction from the taxable salary income. Even if paid in advance, the professional tax paid during the year is deductible from the salary income.

If the employer pays the professional tax out of his pocket, without deducting it from the employee’s salary, then it shall be first included in the employee’s income as a perquisite. After that, a deduction on such professional tax is allowed from gross salary.

Deduction allowed to salaried employee [Chapter VI-A]

Section 80C

Common investments or expenditures for which the deduction under Section 80C is allowed are as under:

1. Payment for life insurance premium

2. Sum paid under a contract for a deferred annuity

3. Contributions to the Employees’ or Recognised Provident Fund

4. Contribution to Public Provident Fund Account

5. Contribution to an approved superannuation fund

6. Subscription to any notified security or notified deposit scheme (Sukanya Samriddhi Account Scheme)

7. Subscription to notified savings certificates

8. Contribution to notified unit-linked insurance plan

9. Tuition fees for the full-time education of any 2 children

10. Certain payments for the purchase/construction of residential house property

11. Notified annuity plan of LIC or other insurers

12. Investment in Equity Linked Saving Scheme

13. Term deposits for a fixed period of not less than 5 years with a scheduled bank

14. Deposit in Senior Citizen Savings Scheme

15. Contribution to Tier-II NPS account by central government’s employees.

Up to 1,50,000 (Subject to overall limit of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD(1))

Section 80CCC

Contribution to certain specified Pension Funds of LIC/other insurers (Subject to certain conditions).

Up to 1,50,000 (Subject to overall limit of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD )

Section 80CCD

Contribution to New Pension Scheme (NPS) notified by the Central Government (Subject to certain conditions).

– Amount contributed to a pension scheme or 10% or 14%, as the case may be, 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 a ceiling limit of Rs. 1,50,000 as provided under Section 80CCE.

– Contribution made by the employer shall also be allowed as a deduction under section 80CCD(2) while computing the total income of the employee. However, the amount of deduction could not exceed 14% of the salary in case of central/state Govt. employees and 10% or 14%, as the case may be, in any other employees.

*10% of salary in case of employees otherwise 20% of gross total income.

Note: The benefit of additional deduction of upto Rs. 50,000 under section 80CCD(1B) is also available to sum deposited to the account of minor by parent or guardian (effective from AY 2026-27)

Section 80CCH

Amount paid/deposited in Agniveer Corpus Fund by the assessee and contribution made by Central Government to such fund

Whole of the amount paid/deposited

Section 80D

Amount paid (in any mode other than cash) to LIC or other insurers to effect or keep in force an insurance on the health of a specified person (self, spouse, dependent children or parents). An individual can also make payment to the Central Government health scheme and/or on account of preventive health check-up.

Note:

Deduction for preventive health check-up shall not exceed in aggregate Rs. 5,000.
Payment on account of preventive health check-up may be made in cash.
Within the overall limit, deduction shall also be allowed up to Rs. 50,000 towards medical expenditure incurred on the health of a specified person provided such person is a resident senior citizen and no amount has been paid to effect or to keep in force an insurance on the health of such person.

For self, spouse, and dependent children: Up to Rs. 25,000 (Rs. 50,000 if specified person is a senior citizen)
For parents: additional deduction of Rs. 25,000 shall be allowed (Rs. 50,000 if the parent is a senior citizen)

Section 80DD

(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).

Rs. 75,000 (Rs. 1,25,000 in case of severe disability)

Note:

Dependant of individual means the spouse, children, parents, brothers and sisters of the individual or any of them.

Section 80DDB

Expenses actually paid for medical treatment of specified diseases and ailments for the assessee himself or wholly dependent spouse, children, parents, brothers and sisters(Subject to certain conditions).

Up to Rs. 40,000 (Rs. 100,000 in case of senior citizen)

Section 80E

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).

The amount of interest paid during the initial year and 7 immediately succeeding assessment years (or until the above interest is paid in full).

Section 80EE

Interest payable on a loan taken up to Rs. 35 lakhs by the taxpayer from any financial institution, sanctioned during the FY 2016-17, for the purpose of acquisition of a residential house property whose value does not exceed Rs. 50 lakhs.

Note: On the date of sanction of loan, the taxpayer should not own any other residential house property.

Deduction of up to Rs. 50,000 towards interest on loan.

Section 80EEA

Interest payable on a loan taken by an individual, who is not eligible to claim deduction under section 80EE, from any financial institution during the period beginning from 01-04-2019 ending on 31-03-2022 for the purpose of acquisition of a residential house property whose stamp duty value does not exceed Rs. 45 lakhs.

Deduction of up to Rs. 1,50,000 towards interest on loan

Section 80EEB

Interest payable on a loan taken by an individual from any financial institution during the period beginning from 01-04-2019 and ending on 31/03/2023 to purchase an electric vehicle.

Deduction of up to Rs. 1,50,000 towards interest on loan

Section 80G

Donation to specified institutions or funds

Note: No deduction shall be allowed in respect of donation in cash over Rs. 2,000.

50% to 100% of donation made

Section 80GG

Rent paid for furnished/unfurnished residential accommodation (Subject to certain conditions)

Minimum of the following shall be allowed as deduction:

(a) Rent paid in excess of 10% of total income;

(b) 25% of the Total Income; or

Total Income = Gross total income minus long-term capital gains, short-term capital gains under section 111A, dductions under sections 80C to 80U (other than 80GG ) and income under Section 115A

Section 80GGA

Donation for scientific research or rural development

Note: No deduction shall be allowed in respect of cash contribution over Rs. 2,000.

100% of the donation made

Section 80GGC

Donation to a political party or an electoral trust

Note: The amount contributed in cash shall not be eligible for deduction.

100% of the donation made

Section 80TTA

Interest on deposits in saving account with a banking company, a post office, a co-operative society engaged in banking business, etc. (Subject to certain conditions)

100% of the amount of such income subject to maximum of Rs. 10,000

Section 80TTB

Interest on deposits with a banking company, a post office, a co-operative society engaged in banking business, etc. (Subject to certain conditions)

100% of the amount of such income subject to the maximum amount of Rs. 50,000

Section 80U

A resident individual who, at any time during the previous year, is certified by the medical authority to be a person with disability

Rs. 75,000 (Rs. 1,25,000 in case of severe disability)

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Deductions from gross total income under Chapter VI-A of Income-tax Act 1961

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