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Chapter VI A of the Income Tax Act, 1961 provides for various deductions that are available from the total income of an assessee while computing the taxable income. The assessees are normally aware of certain common deductions such as deduction u/s 80C in respect to contribution made towards LIC, provident fund, deduction u/s 80D for mediclaim premium paid etc. However, there are certain deductions that are not commonly known to the assesees, but benefits can be availed. In this article I will list & explain these deductions for individual assessees.

Before, discussing the deductions it is important to know that a deduction from the total income can be claimed only by way of filing a return of income (Original/revised/ in response to a notice) .

Income Tax Return

1. Deduction under section 80CCF:

A deduction of upto Rs.20,000/- can be availed u/s 80CCF in respect of an amount paid towards subscription of long-term infrastructure bonds notified by the central government. Eg. Infra Bonds issued by IFCI, LIC

2. Deduction under Section 80DD– Maintenance and medical treatment of a person with  disability:

Any expenditure incurred by a resident individual on the medical treatment, nursing, training and rehabilitation of a dependent person (spouse, children, parents, or siblings) with a disability, shall be allowed a deduction of upto Rs.75,000/-. If the disability is of severe nature (80% or more), a deduction of Rs.100,000/- shall be allowed instead of Rs.75,000/-.

Deduction in respect of any of the following disabilities of more than 40% suffered by the dependent person shall be allowed

  • Blindness
  • Low vision
  • Leprosy-cured
  • Hearing impairment
  • Locomotor disability
  • Mental retardation
  • Mental illness;
  • Autism
  • Cerebral Palsy
  • Multiple disability

3. Deduction under Section 80DDB- Medical treatment of certain diseases:

A deduction of up to Rs.40,000/- (Rs.100,000 in case of a senior citizen) paid by a resident individual in respect of the medical treatment of a dependent person in respect of the following diseases shall be allowed :

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

a. Dementia,

b. Dystonia Musculorum Deformans

c. Motor Neuron Disease

d. Ataxia

e. Chorea

f. Hemiballismus

g. Aphasia

h. Parkinsons Disease

  • Malignant Cancer
  • AIDS
  • Chronic renal failure
  • Hemophilia
  • Thalassaemia

4. Deduction under Section 80E- Interest on higher education loan:

Interest paid on loan taken from a financial institution or an approved charitable institution from the higher education (Above Senior secondary) of self, spouse, children or person of whom assessee is a legal guardian shall be allowed as a deduction while computing the taxable income.

5. Deduction under Section 80EE- Interest on housing loan:

Interest on a housing loan of up to Rs.35 lacs sanctioned between 01/04/2016 to 31/03/2017 for a residential property whose value does not exceed Rs.50 lacs shall be allowed as a deduction. The maximum deduction available under this section is Rs.50,000/-. The only condition for availing this deduction is that the assessee should not own any other residential house as on the date of sanction of loan.

6. Deduction under Section 80EEA- Interest on housing loan:

Where an assessee is ineligible to claim deduction under section 80EE, he/she can resort

to claiming a deduction under section 80EEA.

Interest on housing loan sanctioned between 01/04/2019 to 31/03/2020, where the stamp value of the property does not exceed Rs.45lacs shall be allowed as a deduction. The maximum deduction available under this section is Rs.1,50,000/-. This section also consists of a pre-condition that the assessee should not own any other residential house as on the date of sanction of the loan.

7. Deduction under Section 80EEB- Interest on loan taken for purchase of electric vehicle:

A deduction of up to Rs.1,50,000/- can be availed on interest payment on loan taken for purchase of electric vehicle. The loan should be sanctioned between 01/04/2019 to 31/03/2023.

8. Deduction under Section 80GG-Rent paid:

This deduction is available to individuals not having income under the head salary in form of HRA. A deduction in respect of rent paid is available in case the rent paid is in excess of 10% of his/her total income subject to the condition that such excess expenditure does not exceed Rs.5000/- per month or 25% of his/her total annual income whichever is less.

However no deduction under this section shall be available in case a residential accomodation is owned by the assessee his/her self, spouse, minor child or the HUF of which the assessee is a part at the place where the assesee resides or carries the duties of his/her business or profession.

9. Deduction under Section 80GGC – Donation to political parties:

A deduction of any amount donated (in ways other than cash) to a political party registered under section 29A of the Representation of the People Act, 1951 is available while computing the taxable income of an individual.

Author Bio

CA Nupur Gupta is a Chartered Accountant (ACA) working in the field of domestic and international taxation. She is actively involved in handling income tax assessments and representing clients before the CIT(A). She also acts as a briefing counsel on cases argued before the ITAT and High Court. She View Full Profile

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May 2024