- VIKAS ABAHNG
- | Income Tax - Articles |
- 27 Dec 2020
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- 4 comments
Deductions from Gross Total Income
This Article covers the common deductions which can be claimed while filing Income Tax Return.
Most Common Deductions are classified in the following Categories for easy understanding-
1. Income Based Deductions
2. Standard Amount of Deductions
3. Investment Based Deductions
4. Expenses Based Deductions
Before going to any Specific Deductions, Lets see the Basic Rules for claiming Deductions
Section 80A– Basic Rules of Deductions
1. Deductions has to be claimed from Gross Total Income after giving effect to Set off & Clubbing Provisions
2. Deductions cannot exceed Gross Total Income
3. Any Unabsorbed Deductions cannot carry forward to next AY
4. Deductions are not available from the Following Income
- LTCG u/s 112
- STCG u/s 111A
- Specified Business Income u/s 35AD
- Casual Income
Page Contents
- 1. INCOME BASED DEDUCTION
- 2. STANDARD AMOUNT OF DEDUCTION
- 3. INVESTMENT BASED DEDUCTION
- Section 80C- Deduction of Various Investments
- Illustrative list of Investment to be made under 80C
- Section 80CCC- Contribution to certain Pension Funds
- Section 80CCD- Contribution to Pension Scheme of Central Government
- (A) How much to Claim under 80CCD
- Section 80CCE– Limit on Amount of Deduction of 80C, 80CCD & 80CCC
- 4. EXPENSES BASED DEDUCTION
1. INCOME BASED DEDUCTION
Section 80TTA- Interest On Savings Bank Account
| Who can Claim | Individual (Other than Senior Citizen) or HUF |
| On what Income | Interest received on Savings Bank Account |
| How much to Claim | Actual Interest Received or 10,000 which ever is lower |
| What Conditions to Fulfilled | Savings Bank Account should be in Bank, Co-Op Bank, Post office |
Section 80TTB– Interest On Deposits
| Who can Claim | Individual (Senior Citizen) |
| On what Income | Interest on Savings Bank Account or Fixed Deposit Income |
| How much to Claim | Actual Interest Received or 50,000 whichever is Lower |
| What Conditions to Fulfilled | Savings Bank Account or F.D. should be in Bank, Co-Op Bank, Post office |
2. STANDARD AMOUNT OF DEDUCTION
Section 80U- Person with Disability
| Who can Claim | Individual (Resident) |
| How much to Claim | Standard Deduction- Severe Disability- 1,25,000 Non-Severe- 75,000 |
| What Conditions to Fulfilled | Certificate of Disability is Required |
Section 80DD- Maintenance/ Medical Treatment of Disabled Dependent
| Who can Claim | Individual or HUF (Resident) |
| How much to Claim | Standard Deduction- Severe Disability- 1,25,000 Non-Severe- 75,000 Note- Amount must be spent for Medical Treatment of Dependent or can be deposited in Scheme. However standard Deduction is allowed irrespective of Amount Expended. |
| What Conditions to Fulfilled | 1. In case of Individual Assessee-Dependent can be Parents, Brother, Sister, Spouse, Childrens In case of HUF- Any Member of HUF 2. Dependent should not claim the deduction in 80C in their ROI |
3. INVESTMENT BASED DEDUCTION
Section 80C- Deduction of Various Investments
| Who can Claim | Individual or HUF (Resident) |
| On what Investment | Refer Illustrative List given Below |
| How much to Claim | Rs 1,50,000 or Actual whichever is lower (Limit is Including Section 80CCD & 80CCC) |
| What Conditions to Fulfilled | 1. Payment to be made to Approved Schemes 2. Exemption is available on payment basis only |
Illustrative list of Investment to be made under 80C
- Investment in PPF
- Employee’s share of PF contribution
- NSCs
- Life Insurance Premium payment
- Tuition Fee of Children
- Repayment of Principal home loan
- Investment in Sukanya Samrudhi Account
- ULIPS
- ELSS
- Sum paid to purchase deferred annuity
- Subscription to notified securities/notified deposits scheme
- Contribution to notified Pension Fund set up by Mutual Fund or UTI.
- Subscription to Home Loan Account scheme of the National Housing Bank
- Subscription to deposit scheme of a public sector or company engaged in providing housing finance
- Contribution to notified annuity Plan of LIC
- Subscription to equity shares/ debentures of an approved eligible issue
- Subscription to notified bonds of NABARD
Section 80CCC- Contribution to certain Pension Funds
| Who can Claim | Individual (Resident or Non Resident) |
| On what Investment | Investment in Annuity Plan for receiving Pension in Future |
| How much to Claim | Actual or 1,50,000 Note- 1,50,000 limit is inclusive of limit of Section 80C & 80CCD |
| What Conditions to Fulfilled | 1. Investment has to be made only from Taxable Income |
Section 80CCD- Contribution to Pension Scheme of Central Government
| Who can Claim | Individual- Employed or Self Employed |
| On what Investment | Investment in Pension Scheme |
| How much to Claim | Refer Below (A) Point |
| What After Closure of Scheme | 1. On Complete Closure- 60% of Amount is Exempt u/s 10(12A) 2. On Partial Closure- 25% of Amount is Exempt u/s 10(12A) |
(A) How much to Claim under 80CCD
- Own Contribution 80CCD(1)
- Employee- 10% of Salary
- Self Employed- 20% of Gross Total Income
- Additional Deduction on Own Contribution 80CCD(1B)
- Upto 50,000 (Over and above 80CCD(1)
- Employer’s Contribution 80CCD(2)
- Central Government Employee- 14% of Salary
- Other Employee- 10% of Salary
Note- Here Salary means Basic Salary plus Dearness Allowance
Section 80CCE– Limit on Amount of Deduction of 80C, 80CCD & 80CCC
This Section limit the overall Deduction of Section 80C, 80CCD & 80CCC to Rs. 1,50,000
4. EXPENSES BASED DEDUCTION
80GGB & 80GGC- Contribution to Political Party/ Electoral Trust
| Who can Claim | Section 80GGB- Indian Co. 80GGC- Any Assessee |
| On what | Contribution to Political Party/ Electoral Trust |
| How much to Claim | 100% |
| Conditions | Not to be made in cash |
Section 80DDB- Deduction w.r.t Medical Treatment of Specific Diseases
| Who can Claim | Individual or HUF (Resident) |
| On what Expenses | Medical Treatment for Specific Diseases for Self or Dependent |
| How much to Claim | If Dependent is Senior Citizen- Actual or 100000 whichever is lower Other Cases- Actual or 40000 whichever is higher |
| Conditions | In case of Individual- Dependent can be Individual himself, Parents, Brother, Sister, Spouse, Children’s In case of HUF- Any Member |
Specified Diseases covered include ataxia, dementia, aphasia, dystonia musculorum deformans, Parkinson’s, motor neuron disease, renal failure, cancers, hematological disorders and AIDS.
Section 80D– Medical Insurance
| Who can Claim | Individual or HUF (Resident) |
| On what Expenses | Refer Below (A) Point |
| How much to Claim | Refer Below (B) Point |
| Conditions | 1. Limit includes Amount paid for Preventive Health Checkup 2. If the Premium is paid for more than 1 year then, it should be apportioned between respect AY 3. Payment shall be made out of Income chargeable for Tax |
(A) On What Expenses
- Medical Insurance Premium
- Payment to Central Govt Approved Health Scheme
- Preventive Health Checkup
- Medical Expenses on Super Senior Citizens
(B) How much to Claim
(a) Medical Insurance Premium & Approved Health Scheme
| Paid for Assessee himself, Spouse and Dependent Children- | 25,000 or Actual whichever is lower |
| Paid for Parent (Non Senior Citizens)- | 25,000 or Actual whichever is lower |
| Paid for Any Person (Senior Citizen) | 50,000 or Actual whichever is lower |
(b) Preventive Health Checkup
Maximum 5,000 for whole Family
Note- Allowed as deduction even though payment is made in cash
(c) Medical Expenses for Super Senior Citizen
50000 or Actual Expenses- whichever is lower.
Section 80EEB- Tax Incentive for Electric Vehicle
| Who can Claim | Individual |
| On what Expenses | Interest on Loan taken for Purchase of Electric Vehicle |
| How much to Claim | Actual Interest Paid or 1,50,000 whichever is lower |
| Conditions | 1. Loan should be taken between 01/04/2019 to 31/03/2020 2. Loan should be taken from Bank, FI, NBFC 3. Assessee should not own any electric vehicle on date of Sanction |
Section 80E- Interest on Educational Loan
| Who can Claim | Individual |
| On what Expenses | Interest on Educational Loan taken for himself, Relative or as Guardian |
| How much to Claim | 100% up to 8 Assessment Years |
| Who are Relatives | Spouse and Children’s |
Tags: Income Tax Deductions, Section 80C, Section 80CCC, Section 80CCD, Section 80D, Section 80DD, Section 80DDB, Section 80E, Section 80TTA, Section 80TTB, Section 80U
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Author Bio
Name: VIKAS ABAHNG
Qualification: CA in Practice
Company: Vikas Abhang & Associates
Location: Navi Mumbai, Maharashtra, India
Member Since: 13 Dec 2020 | Total Posts: 7
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Hi Sir/Mam, I have gone through your post and I would like to inform you that we are a Certifying Authority under CCA. Capricorn CA is registered under CCA and it sells the Digital signature certificate’s PAN India.
Under SCSS scheme if invested 15 lakhs for 5 years, so how much we can claim under tax exemption every year
Under SCSS scheme if invested 15 lakhs for 5 years, so how much we can claim under tax exemption every year
ow much to Claim under 80CCD
Own Contribution 80CCD(1)
Employee- 10% of Salary
Self Employed- 20% of Gross Total Income
Additional Deduction on Own Contribution 80CCD(1B)
Upto 50,000 (Over and above 80CCD(1)
Employer’s Contribution 80CCD(2)
Central Government Employee- 14% of Salary
Other Employee- 10% of Salary
Sir, can an employee of state govt. avail the three contributions benefit i.e. including employer’s contribution in his return of income? We here avail the first two contributions i.e own contribution plus Rs. 50000 contribution only.