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

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

  1. Own Contribution 80CCD(1)
    • Employee- 10% of Salary
    • Self Employed- 20% of Gross Total Income
  2.  Additional Deduction on Own Contribution 80CCD(1B)
    • Upto 50,000 (Over and above 80CCD(1)
  3. 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 80DMedical 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

  1. Medical Insurance Premium
  2. Payment to Central Govt Approved Health Scheme
  3. Preventive Health Checkup
  4. 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

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3 Comments

  1. G Mathiyazhagan says:

    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.

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