Individual and HUF Benefits allowable

Individuals and HUFs constitute a large chunk of total taxpayers in India and their contribution in total tax collection is substantial. The document includes the list of various benefits available to an Individual or an HUF, such as exemptions and deductions.

Article explain in brief Provisions related to Individual and HUF  

  • Tax Rate and Relief available to Individual and HUF
  • Income Exempt from Tax of Individual and HUF
  • Deductions allowable from Taxable Income to Individual/ HUF,
  • benefits available for Individual and HUF  having Income from Business and Profession,
  • Deductions from Capital Gains, Receipt of Any sum of money or immovable property or movable property received on or after April 1, 2017 without consideration or for inadequate consideration from a relative or member of HUF
  • Deduction under section 80C, 80D, 80E, etc.  to Individual and HUF
  • TDS related relaxation to Individual and HUF

Benefits available only to Individuals & HUFs

A. Tax Rates and Relief applicable to Individuals & HUFs for AY 2019-20

S.N. Particulars Benefits Available to
1. Maximum amount of income which is not chargeable to Income-tax Rs. 2,50,000 Individual/ HUF
2. Maximum amount of income which is not chargeable to Income-tax in the hands of a resident senior citizen,

who is at least 60 Years of age at any time during the previous year but less than 80 Years of age on the last day of the previous year

Rs. 3,00,000 Resident Senior Citizen
3. Maximum amount of income which is not chargeable to Income-tax in the hands of a resident super senior citizen

who is at least 80 Years of age at any time during the previous year

Rs. 5,00,000 Resident Super Senior Citizen
4. Rebate to resident individual whose total income does not exceed Rs. 3,50,000 [Section 87A] Tax payable but subject to maximum of Rs. 2,500 Resident Individual
5. HUF is assessed to tax as a separate entity HUF is treated as a person distinct from Individual members or Karta. HUF

B. Income Exempt from Tax of Individuals & HUFs for AY 2019-20

S.N. Section Particulars Limit of exemption Available to
1. 10(2) Amount received by individual member from HUF. [Subject to the provisions of Section 64(2)] Entire amount Individual, being a member of an HUF
2. 10(2A) Share of profit received by partners from a partnership firm. Entire amount Partners in a partnership firm
3. 10(4)(ii) Interest on money standing to the credit in a Non-resident (External) account in India. Entire amount Person resident outside India (under FEMA Act) and person who has been permitted to maintain said account by RBI
4. 10(4B) Interest on notified savings certificates issued before 01-06-2002 by the Central Government and subscribed to in convertible foreign exchange. Entire Amount Individual, being a citizen of India or a person of Indian Origin, who is a non resident.
5. 10(5) Leave travel concession or assistance received by an employee (Subject to certain conditions and limited to amount actually spent)

Notes:

•  The amount should be received by employee from his employer or former employer for leave to any place in India during term of service or after retirement/termination;

•  Exemption shall be available for amount incurred in respect of fare for going anywhere in India by employee along with his family. The family means — her/his spouse and children, parents, brothers and sisters only when they are wholly or mainly dependent on the assessee.

•  The exemption can be availed for two journeys in a block of 4 calendar years.

•  Exemption shall be available for journey performed by a shortest route and by prescribed mode of transportations in prescribed situations.

Limited to amount actually spent and subject to maximum limits as specified Individual – Salaried Employee
6. 10(6)(ii) Remuneration received by Foreign Diplomats/Consulate and their staff (Subject to conditions) Entire Amount Individual (not being a citizen of India)
7. 10(6)(vi) Remuneration received by non-Indian citizen as employee of a foreign enterprise for services rendered in India, if:

a) Foreign enterprise is not engaged in any trade or business in India

b) His stay in India does not exceed in aggregate a period of 90 days in such previous year

c) Such remuneration is not liable to deducted from the income of employer chargeable under this Act

Entire Amount Individual – Salaried Employee (not being a citizen of India)
8. 10(6)(viii) Salary received by a non-resident, for services rendered in connection with his employment on a foreign ship if his total stay in India does not exceed 90 days in the previous year. Entire Amount Non-resident Individual – Salaried Employee (not being a citizen of India)
9. 10(6)(xi) Remuneration received by an Individual, who is not a citizen of India, as an employee of the Government of a foreign state during his stay in India in connection with his training in any Government Office/Statutory Undertaking, etc. Entire Amount Individual – Salaried Employee (not being a citizen of India)
10. 10(7) Foreign allowances or perquisites paid or allowed by Government to its employees posted outside India Entire Amount Individual- Salaried Employee (being a citizen of India)
11. 10(8) Foreign income and remuneration received from Foreign Government in connection with any co-operative technical assistance programme and projects in accordance with agreement entered into by Central Government and Foreign Government (Subject to certain conditions). Entire Amount Individual
12. 10(8A) Foreign income and remuneration received by consultant (agreement relating to his engagement must be approved) out of funds made available to an international organization (agency) under a technical assistance grant agreement between that agency and the Government of a foreign State (Subject to certain conditions). Entire Amount Individual, being a:

a) A non-resident engaged by the agency for rendering technical services in India;

b) Non-Indian citizen; or

c) Indian citizen who is not ordinarily resident in India

13. 10(8B) Foreign income and remuneration received by an employee off the consultant as referred to in Section 10(8A) (contract of service must be approved by the prescribed authority before commencement of service). Entire Amount Individual, being a:

a)  Non-Indian citizen; or

b) Indian citizen who is not ordinarily resident in India

14. 10(9) Income of any member of family of any individual [referred to in section 10(8), 10(8A) or 10(8B)] which accrues or arises outside India and is not deemed to accrue or arise in India and which is subject to tax in that foreign country Entire Amount Individual
15. 10(10) Death-cum-Retirement Gratuity received by:

(i) Government employees

Entire Amount Individual – Salaried Employee
(ii) Other employees who are covered under Gratuity Act, 1972 Least of following amount is exempt from tax:

1. (*15/26) X Last drawn salary** X completed year of service or part thereof in excess of 6 months.

2. Rs. 20,00,000#

3. Gratuity actually received.

*7 days in case of employee of seasonal establishment.

** Salary = Last drawn salary including DA but excluding any bonus, commission, HRA, overtime and any other allowance, benefits or perquisite

(iii) Other employees who are not covered under Gratuity Act, 1972 Least of following amount is exempt from tax:

1. 1/2 X Average Salary* X Completed years of service

2. Rs. 10,00,000

3. Gratuity actually received.

*Average salary = Average Salary of last 10 months immediately preceding the month of retirement

**Salary = Basic Pay + Dearness Allowance (to the extent it forms part of retirement benefits)+ turnover based commission

16. 10(10A) Commuted value of pension received by:

a) Government employee

Entire Amount Individual – Salaried Employee
b) Other employees 1. 1/3rd of full value of commuted pension, if gratuity is received by the employee

2. 1/2 of full value of commuted pension, if gratuity is not received by the employee

18. 10(10AA) Encashment of unutilized earned leave at the time of retirement by:

a) Government employee;

Entire Amount Individual – Salaried Employee
b) Other employees Least of the following shall be exempt from tax:

a) Amount actually received

b) Unutilized earned leave* X Average monthly salary

c) 10 months Average Salary**

d) Rs. 3,00,000

*While computing unutilized earned leave, earned leave entitlements cannot exceed 30 days for each year of service rendered to the current employer

**Average salary = Average Salary*** of last 10 months immediately preceding the retirement

***Salary = Basic Pay + Dearness Allowance (to the extent it forms part of retirement benefits)+ turnover based commission

19. 10(10B) Retrenchment Compensation received by a workman under the Industrial Dispute Act, 1947. (Subject to certain conditions) Least of the following shall be exempt from tax:

a) An amount calculated as per section 25F(b) of the Industrial Disputes Act, 1947;

b) Rs. 5,00,000; or

c) Amount actually received.

Individual – Salaried Workmen
20. 10(10BC) Compensation received for any disaster from Government/ Local Authority (Subject to certain conditions) Entire amount except for the amount allowed as deduction under this Act on account of loss caused by such disaster. Individual or his Legal heir
21. 10(10C) Amount received on Voluntary Retirement or Voluntary Separation (Subject to certain conditions). Least of the following is exempt from tax:

1) Actual amount received as per the guidelines i.e. least of the following

a) 3 months salary for each completed year of services

b) Salary at the time of retirement X No. of months of services left for retirement; or

2) Rs. 5,00,000

Individual – Salaried Employee
22. 10(10CC) Tax paid by the employer on perquisites (not provided for by way of monetary payments) given to employee Entire Amount Individual – Salaried Employee
23. 10(10D) Any sum received under a Life Insurance Policy including bonus (excluding Keyman Insurance Policy) (Subject to certain conditions) Entire Amount Any Assessee
24. 10(11) Payment from Public Provident Fund or Statutory Provident Fund Entire Amount Individual and HUF
24A. 10(11A) Any payment from an account, opened in accordance with the Sukanya Samriddhi Account Rules, 2014 Entire amount (including interest accrued on the deposit made in such account) shall be exempt from tax Individual (who deposited the amount in accordance with Sukanya Samriddhi Account Rules, 2014)
25. 10(12) Accumulated balance payable to employee participating in recognized PF (subject to certain conditions). To the extent provided in Rule 8 of Part A of the Fourth Schedule of the Income-Tax Act. Individual – Salaried Employee
25A 10(12A) Sum received from the National Pension System Trust by an assessee on account of closure or opting out of the pension scheme referred to in section 80CCD. Exempt up to 40% of amount due at the time of closure or opting out of the scheme. Assessee
25B 10(12B) Partial withdrawal from National Pension System Trust (section 80CCD) Exempt up to 25% of amount of contributions made by the employee Employee
26. 10(13) Payment from Approved Superannuation Fund on death or retirement of employee, etc. (Subject to certain conditions)

W.e.f assessment year 2017-18, any amount transferred from superannuation fund to the notified pension scheme referred to in Section 80CCD shall also be exempt from tax.

Exempt subject to certain limits Individual – Salaried Employee
27. 10(13A) House Rent Allowance Least of the following is exempt from tax:

(i) 50% of salary* for metro cities** and 40% of salary for other cities

(ii) Actual HRA received

(iii) Excess of rent paid over 10% of salary*

* Salary = Aggregate of basic salary, DA (to the extent it forms part of retirement benefits) and turnover based commission

** Delhi, Mumbai, Kolkata, Chennai

Individual – Salaried Employee
28. 10(14) Prescribed allowances for performance of official duties. To the extent allowance actually incurred for the performance of official duties. Individual – Salaried Employee
29. 10(15)(iib) Interest on Notified Capital Investment Bonds notified prior to 01-06-2002. Interest Amount Individual and HUF
10(15)(iic) Interest on notified Relief Bonds. Interest Amount Individual and HUF
10(15)(iid) Interest on notified bonds (notified prior to 01-06-2002) purchased in foreign exchange (subject to certain conditions) Interest Amount Individual, being a:

a) NRI or nominee or survivor of NRI;

b) Individual to whom bonds have been gifted by NRI.

10(15)(iv)(fa) Interest payable by scheduled bank on deposits in foreign currency where acceptance of such deposits by the bank  is duly approved by RBI. Interest Amount a) Non-resident

b) Individual or HUF being a resident but not ordinary resident

10(15)(iv)(i) Interest received from Government on deposits in notified scheme out of moneys due on account of retirement. Interest Amount Individual, being an employee of Central and State Government or Public Sector Company.
10(15)(viii) Interest on deposits made on or after 01.04.2005 is an offshore banking unit referred to in Section 2(u) of the Special Economic Zones Act, 2005. Interest Amount Person who is a non-resident or not ordinarily resident.
30. 10(16) Scholarships granted to meet the cost of education. Entire Amount Individual
31. 10(17)(i) Daily Allowances received by members of Parliament. Entire Amount Individual – Member of Parliament or State Legislature or any Committee thereof.
10(17)(ii) Any Allowance received by MP under Member of Parliament (Constituency Allowance) Rules, 1986. Entire Amount Individual – Member of Parliament
10(17)(iii) Any Constituency Allowance received. Entire Amount Individual – Member of State Legislature
32. 10(18) Pension received by an individual who has won specified/notified gallantry awards and family pension received by any family member of such individual Entire Amount Individual – Central or State Government Employees or his family member
33. 10(19) Family pension received by the widow, children or nominated heirs of a member of the armed forces (including paramilitary forces) where death of such member has occurred in the course of operational duties (subject to prescribed conditions and circumstances) Entire Amount Individual – Widow or children or nominated heirs of members of the armed forces.
34. 10(19A) Notional annual value of any one palace occupied by former Ruler. Entire amount Individual
34A 10(23FBB) Any income received by a unit holder from an investment fund [being of the same nature as income chargeable under the head PGBP] That proportion of distributed income which is of the same nature as income chargeable under the head PGBP. Unit holder of an investment fund specified under Section 115UB
34B 10(23FD) Any income received by a unit holder from business trust, not being that proportion of the income of business trust which is in the nature of:

a) interest received or receivable from a SPV; or

b) any income from renting or leasing or letting out any real estate asset owned directly by such business trust (REIT)

Any income (except interest received from a SPV or any rental income) distributed by business trust to its unit holders Unit holder of a business trust.
35. 10(26) Specified income of a member of Specified Scheduled Tribes residing in Specified Areas. Entire Amount Individual being a member of Scheduled Tribe
36. 10(26AAA) Income from any source in the State of Sikkim or income by way of dividend or interest on securities (Subject to certain conditions). Entire Amount Individual, being a Sikkimese (other than Sikkimese Woman who, after 31-03-2008, marries non-Sikkimese)
37. 10(32) Income of minor child clubbed under Section 64(1A) with parent’s income. Rs. 1,500 per child or Income of Minor, whichever is lower Individual
38. 10(37) Capital gains arising on compulsory acquisition of urban agriculture land, if:

a) Compensation is received after 31-03-2004; and

b) Agriculture land was used by taxpayer or his parents for agricultural purpose during last two years

(Subject to certain conditions)

Entire Amount of capital gains Individual and HUF
38A 10(37A) Capital Gains arising on transfer of land under Land Pooling Scheme under the Andhra Pradesh Capital City Land Pooling Scheme (Formulation and Implementation) Rules, 2015. Entire amount of capital gains Individual and HUF
39. 10(43) Amount received by an Individual as a loan under reverse mortgage scheme referred to in Section 47(xvi) Entire Amount Individual
40. 10(45) Any notified allowance/ perquisite paid to the Chairman/retired Chairman or any other member/ retired member of UPSC Entire Amount Individual – Chairman/ Retired Chairman or any other member/ retired member of UPSC

*For detailed conditions refer Income Tax Act, 1961

# The Govt. has increased amount of gratuity payable to an employee under the payment of Gratuity Act, 1972, from Rs. 10 lakh to Rs. 20 lakh vide Notification No. 50/420(E), dated 29-3-2018

C. Deductions allowable from Taxable Income to Individual/ HUF for AY 2019-20

S.N. Section Particulars Limit of exemption Available to
I. Deduction from Salaries
1. 16(ia) Standard Deduction Rs. 40,000 or the amount of the salary whichever is less Individual – Salaried Employee
2. 16 (ii) Entertainment Allowance Least of the following is exempt from tax:

a) Rs 5,000

b) 1/5th of salary (excluding any allowance, benefits or other perquisite)

c) Actual entertainment allowance received

Individual – Government Employee
3. 16 (iii) Employment Tax/Professional Tax. Amount actually paid during the year Individual – Salaried Employee
4. Lump-sum payment made gratuitously or by way of compensation or otherwise to widow or other legal heirs of an employee who dies while still in active service [Circular No. 573, dated 21-08-1990] Enter amount paid in lump-sum Individual – Widow or other legal heirs of employee.
5. Ex-gratia payment to a person (or legal heirs) by Central or State Government, Local Authority or Public Sector Undertaking consequent upon injury to the person or death of family member while on duty [Circular No. 776, dated 08-06-1999] Enter amount paid as ex-gratia Individual or legal heirs.
6. 89 Any portion of salary received in arrears or in advance or profit received in lieu of salary [Subject to certain conditions and circumstances] Relief to the extent computed in accordance with Section 89 Individual – Salaried Employee
7. Allowances (Subject to certain conditions and circumstances) Various allowances allowed to an employee are exempt from to tax up to certain limit*.

* Refer the document of ‘Allowance available for different category of taxpayers’

Individual – Salaried Employee
II. Income from Business and Profession
1. 44AD Computation of income from eligible business on presumptive basis under Section 44AD provided turnover of eligible business does not exceed Rs. 2 crore (Subject to certain conditions).

Note: If an assessee opts out of the presumptive taxation scheme, after a specified period, he cannot choose to revert back to the presumptive taxation scheme for a period of five assessment years thereafter. [Section 44AD(4)]

Presumptive income of eligible business shall be 8 % of gross receipt or total turnover.

Note: Presumptive income shall be calculated at rate of 6% in respect of total turnover or gross receipts which is received by an accountpayee cheque or draft or use of electronic clearing system.

Resident Individual, Resident HUF or Resident Partnership Firm (Other than LLP)
2. 44ADA Computation of income from specified profession on presumptive basis if the total gross receipts from such profession do not exceed fifty lakh rupees in a previous year.

(Subject to conditions)

Presumptive income of such profession shall be 50% of total gross receipt. Resident Assessee
III. Deductions from Capital Gains
1. 54 Investment of long-term capital gains, arising from sale of residential house or land appurtenant thereto, in purchase/construction of one new residential house (Subject to certain conditions and limits). Amount invested in one new house or capital gain, whichever is lower. Individual and HUF
2. 54B Investment of capital gains, arising from transfer of land used for agricultural purposes by an individual or his parents or a HUF, in other agricultural land (Subject to certain conditions and limits). Amount invested in agricultural land or capital gains, whichever is lower. Individual and HUF
3. 54F Investment of long-term capital gains, arising from transfer of any long term asset other than a residential house property, in one new residential house property, provided that on the date of transfer the assessee should not own more than one residential house property (Subject to certain conditions and limits). Amount invested in one new asset X capital gains/ et Consideration Individual and HUF
4. 54GB Investment of long-term capital gains arising from transfer of long-term capital asset, being a residential property, for subscribing the equity shares of an eligible company and such company has, within one year from the date of subscription, utilized this amount for purchase of specified new asset (subject to certain conditions and limits).

Note:

1.  W.e.f. April 1, 2017, eligible start-up is also included in definition of eligible company.

2.  Provisions of this section shall not apply to any transfer of residential property made after March 31, 2017. However, in case of an investment in eligible start-up, the residential property can be transferred up to March 31, 2019.

Amount invested in new asset by eligible Co. X Capital gains/Net Consideration Individual and HUF
IV. Deductions from Income from Other Sources
1. 56(2)(x) Any sum of money or immovable property or movable property received on or after April 1, 2017 without consideration or for inadequate consideration*** from a relative or member of HUF (subject to certain conditions and circumstances).

Note : *** With effect from April 1, 2019, in case of immovable property, ‘inadequate consideration’ shall mean difference between stamp duty value and actual consideration, if it exceeds Rs. 50,000 or amount equal to 5% of consideration, whichever is higher.

The whole amount received from specified relatives or in specified circumstances shall not be included in taxable income. Any person
V. General-Deductions related to certain payments
1. 80C 1. Life insurance premium for policy:

a) in case of individual, on life of assessee, assessee’s spouse and any child of assessee

b) in case of HUF, on life of any member of the HUF

2. Sum paid under a contract for a deferred annuity:

a) 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)

b) in case of HUF, on life of any member of the HUF

3. 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]

4. Contributions by an individual made under Employees’ Provident Fund Scheme

5. Contribution to Public Provident Fund Account in the name of:

a) in case of individual, such individual or his spouse or any child of such individual

b) in case of HUF, in the name of any member there of

6. Contribution by an employee to a recognized provident fund

7. Contribution by an employee to an approved superannuation fund

8. 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 21/1/2015. 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 in the name of her girl child or any girl child for whom such an individual is the legal guardian.

9. Subscription to notified savings certificates [National Savings Certificates (VIII Issue)]

10. Contribution for participation in unit-linked Insurance Plan of UTI:

a) in case of an individual, in the name of the individual, his spouse or any child of such individual

b) in case of a HUF, in the name of any member thereof

11. Contribution to notified unit-linked insurance plan of LIC Mutual Fund:

a) in the case of an individual, in the name of the individual, his spouse or any child of such individual

b) in the case of a HUF, in the name of any member thereof

12. 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]

13. 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

14. Certain payments for purchase/construction of residential house property

15. 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

16. Sum paid towards notified annuity plan of LIC or other insurer

17. Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005)

18. 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)

19. Subscription to equity shares or debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions

20. 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.

21. Term deposits for a fixed period of not less than 5 years with a scheduled bank, and which is in accordance with a scheme framed and notified.

22. Subscription to notified bonds issued by the NABARD.

23. Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions)

24. 5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions)

Up to 1,50,000 (Subject to overall limit of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD) Individual and HUF
2. 80CCC Contribution to certain specified Pension Funds of LIC/other insurer (Subject to certain conditions). Up to 1,50,000 (Subject to overall limit of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD) Individual
3. 80CCD Contribution to Pension Scheme (NPS) notified by the Central Government (Subject to certain conditions).

Note:-

1. Deduction under section 80CCD(2) on account of contribution made by the employer to a pension scheme is not subject to ceiling limit of Rs. 1,50,000 as provided under section 80CCE.

2. Addition deduction of Rs. 50,000 shall not be allowed in respect of contribution which is considered for deduction under section 80CCD(1), i.e., limit of 10% of salary/gross total income

3. Any payment from NPS to an assessee because of closure or his opting out of the pension scheme is exempt to the extent of 40%. 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.

4. Any partial withdrawal from NPS shall be exempt to the extent of 25% of amount of contributions made by the employee.

Amount contributed to pension scheme or 10% 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 ceiling limit of Rs. 1,50,000 as provided under Section 80CCE.

Contribution made by employer shall also be allowed as deduction under section 80CCD(2) while computing total income of the employee. However, amount of deduction could not exceed 10% of salary of the employee.

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

Individual
4. 80 CCG Amount invested by specified resident individuals in listed shares or listed units in accordance with notified scheme for a lock-in period of 3 years (Subject to certain conditions).

Note: No deduction shall be allowed under this Section from Assessment Year 2018-19. However, an assessee who has claimed deduction under this Section earlier shall be allowed deduction till assessment year 2019-20.

Deduction of 50% of total investment subject to maximum of Rs. 25,000 is allowed for 3 consecutive assessment years, beginning with the assessment year relevant to the previous year in which the listed shares or list units of equity oriented funds are first acquired Specified Resident Individual
5. 80D 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.

* specified person means:

– In case of Individual – self, spouse, dependent children or parents

– In case of HUF – Any member thereof

Note:

1. Deduction for preventive health check-up shall not exceed in aggregate Rs. 5,000.

2. Payment on account of preventive health check-up may be made in cash.

3. Within overall limit, deduction shall also be allowed up to Rs. 50,000 towards medical expenditure incurred on the health of specified person provided such person is a senior citizen and no amount has been paid to effect or to keep in force an insurance on the health of such person.

4. ‘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.

In case of Individual, amount paid:

a) For self, spouse and dependent children: Up to Rs. 25,000 (Rs. 50,000 if specified person is a senior citizen)

b) For parents: additional deduction of Rs. 25,000 shall be allowed (Rs. 50,000 if parent is a senior citizen)

In case of HUF, up to Rs. 25,000 (Rs. 50,000 if specified person is a senior citizen).

Individual/HUF
6. 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” 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 HUF, any member thereof,

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.

Resident Individual and HUF
7. 80DDB Expenses actually paid for medical treatment of specified diseases and ailments for:

a) In case of Individual: Assessee himself or wholly dependent spouse, children, parents, brothers and sisters

b) In case of HUF: Any member of the family who is wholly dependent upon the family

(Subject to certain conditions).

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

With effect from assessment year 2016-17, the prescription for medical treatment may be obtained from any specialist doctor not necessarily from a doctor working in Government hospital only.

Resident Individual and HUF
8. 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 initial year and 7 immediately succeeding assessment years (or until the above interest is paid in full). Individual
9. 80EE Interest payable on loan taken up to Rs. 35 lakhs by taxpayer from any financial institution, sanctioned during the FY 2016-17, for the purpose of acquisition of a residential house property whose value doesn’t exceed Rs. 50 lakhs.

Note:

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

2.  The deduction is available from AY 2017-18 and subsequent assessment years.

Deduction of up to Rs. 50,000 towards interest on loan. Individual
10. 80GG Rent paid for furnished/unfurnished residential accommodation (Subject to certain conditions) Least of the following shall be exempt from tax:

a) Rent paid in excess of 10% of total income*;

b) 25% of the Total Income; or

c) Rs. 5,000 per month.

Total Income = Gross total income minus long term capital gains, short-term capital gains under section 111A, deductions under sections 80C to 80U (other than 80GG) and income under section 115A

Individual not receiving HRA
11. 80QQB Royalty income of authors of certain specified category of books other than text books Least of the following shall be exempt from tax:

a) In case of Lump sum payment – Amount of royalty income subject to maximum of Rs. 3,00,000

b) In other cases — amount of such income subject to maximum of 15% of value of books sold during the previous year.

Resident Individual — Authors
12. 80RRB Royalty in respect of patents registered on or after 01.04.2003 (subject to certain conditions) 100% of royalty subject to maximum of Rs. 3,00,000 Resident Individual – Patentee
13. 80TTA Interest on deposits in saving account with a banking company, a post office, co-operative society engaged in banking business, etc. (Subject to certain conditions) 100% of amount of such income subject to maximum of Rs. 10,000 Individual and HUF (Other than Resident Senior Citizen)
14. 80TTB Interest on deposits with a banking company, a post office, 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 Any senior citizen
15. 80U 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] Rs. 75,000 (Rs. 1,25,000 in case of severe disability) Resident Individual

E. Tax Deducted at Source and Advance Tax

S.N. Section Particulars Nature of exemption Available to
1. 194C Lower rate of TDS under Section 194C in case of payments to a contractor or sub-contractor

Tax is required to be deducted only if sum paid exceeds Rs. 30,000 or aggregate of sum paid during the financial year exceeds 75,000 (Rs. 100,000 from 01.06.2016).

Deduction of tax at source at 1% if recipient is an Individual or HUF Individual or HUF
1A. 193 No TDS from interest paid on 4.25% National Defence Bonds, 1972, 4.25% National Defence Loan, 1968, or 4.75% National Defence Loan, 1972, Government Securities [Other than 8% Savings (Taxable) Bonds, 2003 and 7.75% Saving (Taxable) Bonds, 2018] No TDS from interest Resident Individual
2. 193 No TDS from interest paid on debentures issued by a company in which public are substantially interested. Provided interest is paid by account payee cheque. No TDS if interest during the financial year does not exceed Rs. 5,000 Resident Individual or HUF
2A 194A No TDS from interest paid or payable on time deposit:

a)  Up to Rs. 50,000 in case of resident senior citizen

b)  Up to Rs. 10,000 in case of other assessee

If payer is a banking company, co-operative bank or post office Resident Senior Citizen
3. No obligation to deduct tax at source under Section 194A, 194C, 194H, 194-I and 194J if an Individual or HUF carries on a business or profession and total sales, turnover or gross receipts from such business or profession does not exceed the monetary limit specified under Section 44AB during the financial year immediately preceding the financial year in which sum is to be credited or paid. Not liable to deduct tax at source Individual or HUF
4. 197A(1) No deduction of tax shall be made under Sections 194 and 194EE, if resident individual furnishes to the payer a written declaration in prescribed form that tax on his estimated total income of the previous year will be nil. No tax shall be deducted from specified payments if the sum paid does not exceed the maximum amount which is not chargeable to tax Resident Individual
5. 197A(1C) No deduction of tax shall be made under section 192A, 193, 194, 194A, 194DA, 194EE and 194K if resident senior citizen furnishes to the payer a written declaration in prescribed form that tax on his estimated total income of the previous year will be nil.

With effect from assessment year 1-6-2016, the scope of section 197A has been extended to cover section 194-I (payment of rent)

No tax shall be deducted from specified payments Resident Individual — Senior Citizen and Super Senior Citizen
6. 207(2) Exemption from payment of advance tax by a resident senior citizen or resident super senior citizen not having any income from business or profession

(who is at least 60 Years of age at any time during the previous year)

Not liable to pay advance tax Resident Senior Citizen and Resident Super Senior Citizen
7. 44AD Assessee who has opted for presumptive taxation scheme under Section 44AD No need to pay advance tax in installments. Assessee can pay whole amount in one installment on or before 15th March of the financial year Resident individual, Resident HUF or Resident Partnership Firm (Other than LLP)
8. 44ADA Assessee who has opted for presumptive taxation scheme under section 44ADA No need to pay advance tax in installments. Assessee can pay whole amount in one installment on or before 15th March of the financial year Resident assessee who is engaged in a profession referred to in section 44AA(1)
 [Republished after considering amendment vide Finance Act, 2018- Source- Incometaxindia.gov.in]

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13 responses to “Income Tax Benefits for Individuals & HUFs for A.Y. 2019-20”

  1. PL Dahra says:

    Very educative and timely furnished information for concerned persons.

  2. G.selvaraj says:

    Sir,
    I have a query regarding the Standard Deduction of Rs.40000/- to be allowed u/s 16(ia); as the case of a Govt. employee if the Transport allowance paid is less than Rs.40000/- and the Medical Reimbursement amount is not taxable then how much standard deduction is to be allowed for both Tr. Allowance & Medical Reimbursement.

  3. Sharat Chandra says:

    Sir,
    I have a query regarding the Standard Deduction of Rs.40000/- to be allowed u/s 16(ia); as the case of a Govt. employee if the Transport allowance paid is less than Rs.40000/- and the Medical Reimbursement amount is not taxable then how much standard deduction is to be allowed for both Tr. Allowance & Medical Reimbursement.

  4. CA SANDEEP JAIN says:

    Regarding LIC Premium it is not allowable if paid by grand parents (for grand son/ daughter). But if it is paid by grandparent’s HUF than it is allowable u/s 80C as grand childeren are members of grand parent’s HUF.

  5. sudhirr aroraa says:

    very informative and practical and correct.

  6. Ripusudan Prasad Singh says:

    Excellent information benefits all individual paying income tax.
    Thanks

  7. GIRI says:

    Sir,
    When we files ITR last year in department website, the 26 A S TDS, AND refund and payable will be shown last year, but this year It is not showing in Department website?, what may be the problem from our side?

  8. chetan mehta says:

    Sir,
    I had availed loan on Rs 30 L for house property valued at Rs 38 L in Fy 11-12. Can I avail benefit under section 80EE?

  9. Kumar G Jetley says:

    dear
    I am having one doubt which is as under

    if a person who is nominated in the bank account of the pensioner and nominee gets the amount on account of death of that pensioner what will be the status of that amount will it be taxable or else

  10. U R K RAO says:

    Sir,

    You did not discuss anything about NRIs. For instance my income by way of indian pension exceeds 5 lac rupees per year (civil pension) and I am 78 years old. What is my deductible? 2.5 lacs or 3 lacs. Am I eligible for less than ten thousand rupees for my SB interest to be exempted from tax?
    Kindly clarify. I am an American citizen now.

    URKRao
    Saratoga,CA 95070
    Nov 1,2014
    ruppaluri@hotmail.com

  11. Makhan Jhaver says:

    For claiming under sec 80C – Is it permissible if Grandparent takes policy for Life Assured of GrandChild ( Son’s son / son’s daughter / daughter’s son / daughter’s daughter )- Is this exmption allowed within permissible total limits under Sec 80C —
    Pl also inform if the same exemption is eligible if paid by HUF ( members of HUF – all 4 catagiry ) – It is not clear in the above list

    • CA SANDEEP JAIN says:

      Regarding LIC Premium it is not allowable if paid by grand parents (for grand son/ daughter). But if it is paid by grandparent’s HUF than it is allowable u/s 80C as grand childeren are members of grand parent’s HUF.

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