CA Dr. Suresh Surana

Given the economic scenario, very few reliefs particularly for lower and middle income groups are been provided.

♣ Basic Exemption Limits for Individuals

There has been no change in personal tax rates. With a view to replace Wealth tax, an additional surcharge of 2% is proposed in case wherein income exceeds Rs. 1 Crore

♣ Increase in the limit of deduction of Mediclaim

In view of continuous increase in medical expenditure, it is proposed to increase the limit of deduction under section 80D from Rs. 15,000 to Rs. 25,000. In case of senior citizens, the limit of deduction is proposed to be increased from Rs. 20,000 to Rs. 30,000.

As a welfare measure towards very senior citizens who are not covered under medical insurance, it is proposed to provide a deduction to the extent of any payment made on account of medical expenditure but restricted to Rs. 30,000 under section 80D.

The aggregate deduction available to any individual in respect of health insurance premium and the medical expenditure incurred would however be limited to Rs. 30,000.

♣ Clarification on investment in Sukanya Samriddhi Account Scheme under Section 80C

In order to promoter welfare of girl Child, Sukanya Samriddhi Account Scheme was launched as eligible instrument under Section 80C. further it is clarified that the interest accruing on deposits in, and withdrawals from this account will be tax exempt.

♣ Increase in limits of deduction under Section 80DD and 80U for disabled person

In view of the rising cost of medical care and special needs of a disabled person, it is proposed to amend section 80DD and section 80U so as to raise the limit of deduction in respect of a person with disability from Rs. 50,000 to Rs. 75,000. It is further proposed to raise the limit of deduction in respect of a person with severe disability from Rs. 1 lakh to Rs. 1.25 lakhs.

♣ Increase in limits of deduction under Section 80CCC and 80CCD

In order to promote social security, it is proposed to raise the limit of deduction for an amount paid or deposited for a contract for any annuity plan of LIC or any other insurer for receiving pension from a fund set up under a pension scheme, under section 80CCC from Rs. 1 lakh to Rs. 1.50 lakh.

With a view to encourage people to contribute towards National Pension Scheme, it is proposed that in addition to the limit of deduction under section 80CCD(1), an additional deduction in respect of any amount paid, of upto Rs. 50,000 for contributions made by any individual assessees under the NPS.

However, the overall limit of deductions under Section 80C, 80CCD and 80CCC cannot exceed Rs. 1.50 lakhs as per existing provisions of Section 80CCE

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  1. sunil says:

    The Query Is Regarding Tax Planning Using NPS.
    As NPS Contribution (Upto 10% Of Basic + DA) By Employer Is Not Included In Taxable Income Of Employee, Are There Any Companies Who Are Planning Such Sort Of Tax Planning Where NPS Contribution By Employer Is Made Part Of Employees Salary (I.E. It Is Made A Part Of CTC) . Any Special Conditions For Such Practice (Like Board Approval, Special Resolution, Revision Of Employees Compensation Letters Etc)

    Please Share The List Of Big Corporates, MNC’s & PSU’s Following Such Practice.

  2. Benny says:


    Appreciate the detailed notes, Can you help to understand the additional deduction available u/s80CCD (1B).

    Do the assessee needs to invest Rs.2 lakh to get the additional benefit, or the additional benefit can be availed with 1.5 lakh investment in any other fund eg.PPF) and 50K in NPS.

  3. Balwant Jain says:

    The overall limit of Rs. 1.5 specified under Section 80CCE covers only the amount of deduction under Section 80C, 80CCC and 80ccd(1). The implication of this is that the amount contributed by the employer is outside this limit. Moreover the additional deduction of Rs. 50,000/- is provided under Section 80CCD(1B)proposed to be inserted by finance bill 2015 will also be outside the limit of overall cap of Rs. 1.5 lacs.

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