For Assessment Year 2026-27, Indian taxpayers can claim deductions under multiple heads of income. Salaried individuals and pensioners are eligible for standard deductions of up to ₹50,000 under the old tax regime and ₹75,000 under the new regime. Government employees may also claim entertainment allowance and employment taxes. Deductions from income from house property include municipal taxes, a standard 30% deduction on annual value, and interest on borrowed capital up to specified limits. Business and professional income allows deductions for expenses such as rent, repairs, insurance, depreciation of tangible and intangible assets, and additional depreciation for new plant and machinery. Certain sectors, including tea, coffee, rubber, petroleum, biotechnology, telecommunication, and specified infrastructure businesses, may claim targeted deductions under sections 33AB, 33ABA, 35 series, and 35AD. Capital expenditure on scientific research, rural development, skill development, agricultural extension, and preliminary expenses can also be deducted, subject to prescribed conditions. Expenditures for employee welfare, insurance premiums, contributions to provident and superannuation funds, bad debts, and specific provisions for banks and financial institutions are allowable under section 36.
Certain payments and expenses are either non-deductible or conditionally deductible. Non-deductible items include personal expenses, certain political donations, payments to non-residents without TDS, and unreasonable payments to relatives or interested parties. Taxpayers may claim deductions under 80C-80G for life insurance, provident fund contributions, tuition fees, savings schemes, residential property investments, pension funds, and donations to charitable or specified institutions. Additional limits exist for senior citizens, medical insurance premiums under section 80D, and contributions to the National Pension Scheme. Specific rules apply for eligible start-ups, long-term capital gains reinvestment, and housing projects. Amendments under the Finance Act, 2025, and prior amendments clarify deductions, limit cash payments, and provide guidance on new investment-linked exemptions. Collectively, these provisions define the scope and limits of allowable deductions to optimize tax liability while ensuring compliance with statutory requirements.
DEDUCTIONS*
[AY 2026-27]
| Section | Nature of deduction | Who can claim | |
| (1) | (2) | (3) | |
| Against ‘salaries’ | |||
| 16(ia) | Standard Deduction
(a) In case of normal tax regime – Rs. 50,000 or the amount of salary, whichever is lower; (b) In case of new tax regime under section 115BAC(1A)(ii) – Up to Rs. 75,000 or the amount of salary, whichever is lower |
Individual – Salaried Employee & Pensioners | |
| 16(ii) | Entertainment allowance [actual or at the rate of 1/5th of salary, whichever is less] [limited to Rs. 5,000] | Government employees | |
| 16(iii) | Employment tax | Salaried assessees | |
| Against ‘income from house properties’ | |||
| 23(1), first proviso | Taxes levied by local authority and borne by owner if paid in relevant previous year | All assessees | |
| 24(a) | Standard deduction [30% of the annual value (gross annual value less municipal taxes)] | All assessees | |
| 24(b) | Interest on borrowed capital (Rs. 30,000/Rs. 2,00,000, subject to specified conditions) | All assessees | |
| 25A(2) | Standard deduction of 30 per cent of arrears of rent or unrealised rent received | All assessees | |
| Against ‘profits and gains of business or profession’
A. Deductible items |
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| 30 | Rent, rates, taxes, repairs (excluding capital expenditure) and insurance for premises | All assessees | |
| 31 | Repairs (excluding capital expenditure) and insurance of machinery, plant and furniture | All assessees | |
| 32(1)(i) | Depreciation1 in respect of following assets shall be allowed at prescribed percentage on actual cost of an asset (i.e., Straight Line Method):
i. Tangible Assets (buildings, machinery, plant or furniture); ii. Intangible Assets (know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature not being goodwill of business or profession). However, if asset is acquired and put to use for less than 180 days during the previous year, the deduction shall be restricted to 50% of depreciation computed above. Note: Taxpayers engaged in business of generation or generation and distribution of power have the option to claim depreciation on written down value basis also |
Taxpayer engaged in business of generation or generation and distribution of power. | |
| 32(1)(ii) | Depreciation1 in respect of following assets shall be allowed at prescribed percentage on written down value of each block of asset (as per WDV method):
i. Tangible Assets (buildings, machinery, plant or furniture); ii. Intangible Assets (know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature not being goodwill of business or profession). However, if asset is acquired and put to use for less than 180 days during the previous year, the deduction shall be restricted to 50% of depreciation computed above. |
All assessees engaged in business or profession | |
| 32(1)(iia) | Additional depreciation shall be allowed at 20% of actual cost of new plant and machinery [other than ships, aircraft, office appliances, second hand plant or machinery, etc.] (Subject to certain conditions).
However, if an asset is acquired and put to use for less than 180 days during the previous year, 50% of additional depreciation shall be allowed in year of acquisition and balance 50% would be allowed in the next year. |
All taxpayers engaged in:
a) manufacture or production of any article or thing; or b) generation, transmission or distribution of power (if taxpayer is not claiming depreciation on straight line basis ). |
|
| 33AB | Tea/Coffee/Rubber Development Account – Amount deposited in account with National Bank (Special Account) or in Deposit Account of Tea Board, Coffee Board or Rubber Board in accordance with approved scheme or 40% of profits of business, whichever is less (subject to certain conditions) | Assessees engaged in business of growing and manufacturing Tea/Coffee/Rubber in India | |
| 33ABA | Amount deposited in Special Account with SBI/Site Restoration Account or 20 per cent of profits, whichever is less (subject to certain conditions) | Assessee carrying on business of prospecting for, or extraction or production of, petroleum or natural gas or both in India | |
| 35(1)(i) | Revenue expenditure on scientific research pertaining to business of assessee is allowed as deduction (Subject to certain conditions).
Note: Expenditure on scientific research incurred within 3 years before commencement of business (in the nature of purchase of materials and salary of employees other than perquisite) is allowed as deduction in the year of commencement of business to the extent certified by prescribed authority. |
All assessee | |
| 35(1)(ii)26 | 100% of contribution made to approved research association, university, college or other institution to be used for scientific research shall be allowed as deduction (Subject to certain conditions) | All assessee | |
| 35(1)(iia) | 100% of contribution made to an approved company registered in India to be used for the purpose of scientific research is allowed as deduction (Subject to certain conditions) | All assessee | |
| 35(1)(iii) | 100% of contribution made to approved research association, university, college or other institution with objects of undertaking statistical research or research in social sciences shall be allowed as deduction (Subject to certain conditions) | All assessee | |
| 35(1)(iv) read with 35(2) | Capital expenditure incurred during the year on scientific research relating to the business carried on by the assessee is allowed as deduction (Subject to certain conditions)
Capital expenditure incurred within 3 years before commencement of business is allowed as deduction in the year of commencement of business. Note: i. Capital expenditure excludes acquisition of land and acquisition of any interest in land; ii. No depreciation shall be allowed on the assets acquired with the capital expenditure deductible under this provision.. |
All assessee | |
| 35(2AA)26 | 100% of payment made to a National Laboratory or University or an Indian Institute of Technology or a specified person is allowed as deduction (Subject to certain conditions).
The payment should be made with the specified direction that the sum shall be used in scientific research undertaken under an approved programme. |
All assessee | |
| 35(2AB)26 | 100% of any expenditure incurred by a company on scientific research (including capital expenditure other than on land and building) on in-house scientific research and development facilities as approved by the prescribed authorities shall be allowed as deduction (Subject to certain conditions).
Note: Company should enter into an agreement with the prescribed authority for co-operation in such research and development and fulfils such conditions with regard to maintenance of accounts and audit thereof and furnishing of reports in such manner as may be prescribed; |
Company engaged in business of bio-technology or in any business of manufacturing or production of eligible articles or things | |
| 35ABA | Capital expenditure incurred and actually paid for acquiring any right to use spectrum for telecommunication services shall be allowed as deduction over the useful life of the spectrum in equal instalments | All Assessee engaged in telecommunication services | |
| 35ABB | Expenditure incurred for obtaining licence to operate telecommunication services either before commencement of such business or thereafter at any time during any previous year | All assessees | |
| 35AD | Capital expenditure incurred, wholly and exclusively, for the purpose of any specified business [setting up and operating a cold chain facility; setting up and operating a warehousing facility for storage of agricultural produce; laying and operating a cross-country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of such network; building and operating, anywhere in India, a hotel of two-star or above category as classified by the Central Government; building and operating, anywhere in India, a hospital with at least one hundred beds for patients; developing and building a notified housing project under a scheme for slum redevelopment or rehabilitation framed by the Government, as the case may be, in accordance with prescribed guidelines; developing and building a notified housing project under a scheme for affordable housing framed by the Government, as the case may be, in accordance with prescribed guidelines; production of fertilizer in India; setting up and operating an inland container depot or a container freight station which is approved/notified under the Customs Act, 1962; bee-keeping and production of honey and beeswax; and setting up and operating a warehousing facility for storage of sugar. Lying and operating a slurry pipeline for the transportation of iron ore; setting-up and operating a notified semi-conductor wafer fabrication manufacturing unit; developing or maintaining and operating or developing, maintaining and operating a new infrastructure facility4, carried on by the assessee during the previous year in which such expenditure is incurred (subject to certain conditions)
Note: No deduction of any capital expenditure above Rs 10,000 shall be allowed where such expenditure is incurred otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed. |
All assessees
Note: Such deduction is available to Indian company in case of following business, namely;- i) Business of laying and operating a cross-country natural gas or crude or petroleum oil pipeline network. ii) Developing or maintaining and operating or developing, maintaining and operating a new infrastructure facility. |
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| 35CCA | Payment to associations/institutions for carrying out rural development programmes (subject to certain conditions) | All assessees | |
| 35CCC | 100% of expenditure on notified agricultural extension project (subject to certain conditions) | All assessees | |
| 35CCD | 100% of expenditure on notified skill development project (subject to certain conditions) | A company | |
| 35D | Amortisation of certain preliminary expenses [deductible in 5 equal annual instalments] (subject to certain conditions) | Indian companies and resident non-corporate assessees | |
| 35DD | Amortisation of expenditure incurred after 31-3-1999 in case of amalgamation or demerger in the hands of an Indian company (one-fifth of such expenditure for 5 successive previous years) (subject to certain conditions) | Indian Company | |
| 35DDA | Amortisation of expenditure incurred under voluntary retirement scheme in 5 equal annual instalments starting with the year when the expenditure is incurred | All assessees | |
| 35E | Expenditure on prospecting, etc., for certain minerals [deductible in ten equal annual instalments] (subject to certain conditions) | Indian companies and resident non-corporate assessees engaged in prospecting, etc., for minerals | |
| 36(1)(i) | Insurance premium covering risk of damage or destruction of stocks/stores | All assessees | |
| 36(1)(ia) | Insurance premium covering life of cattle owned by a member of co-operative society engaged in supplying milk to federal milk co-operative society | Federal milk co-operative societies | |
| 36(1)(ib) | Medical insurance premium paid by any mode other than cash, to insure employee’s health under (a) scheme framed by GIC of India and approved by Central Government; or (b) scheme framed by any other insurer and approved by IRDA | All assessees as employers | |
| 36(1)(ii) | Bonus or commission paid to employees | All assessees | |
| 36(1)(iii) | Interest on borrowed capital2 | All assessees | |
| 36(1)(iiia) | Pro rata amount of discount on a zero coupon bond based on tenure of such bond and calculated in prescribed manner | All assessees | |
| 36(1)(iv) | Contributions to recognised provident fund and approved superannuation fund [subject to certain limits and conditions] | All assessees as employers | |
| 36(1)(iva) | Any sum paid by assessee-employer by way of contribution towards a pension scheme, as referred to in section 80CCD, on account of an employee to the extent it does not exceed 14 per cent of the employee’s salary in the previous year. | All assessees as employers | |
| 36(1)(v) | Contributions to approved gratuity fund [subject to certain limits and conditions] | All assessees as employers | |
| 36(1)(va) | Contributions to any provident fund or superannuation fund or any fund set up under Employees’ State Insurance Act, 1948 or any other fund for welfare of such employees, received from employees if the same are credited to the employee’s account in relevant fund or funds before due date | All assessees as employers | |
| 36(1)(vi) | Allowance in respect of animals which have died or become permanently useless [subject to certain conditions] | All assessees | |
| 36(1)(vii)3 | Bad debts which have been written off as irrecoverable [subject to limitation in the case of banks and financial institutions] | All assessees | |
| 36(1)(viia) | Provision for bad and doubtful debts | ||
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Certain scheduled banks, non-scheduled banks (but other than foreign banks) and co-operative bank (other than primary agricultural credit society or primary co-operative agricultural and rural development bank) | ||
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Foreign banks/Public financial institutions/State financial corporations/State industrial investment corporations. Non-Banking Financial Company | ||
| 36(1)(viii) | Amounts transferred to special reserve [subject to certain conditions and maxi-mum of 20 per cent of profits derived from eligible business] | Specified entities, namely, financial corporations/financial corporation which is a public sector company/banking company/co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank/housing finance company/any other financial corporation including a public company | |
| 36(1)(ix) | Expenditure for promoting family planning amongst employees (deductible in 5 equal annual instalments in case of capital expenditure) | Companies | |
| 36(1)(xii) | Any expenditure (not being in the nature of capital expenditure) incurred by a notified corporation or body corporate, by whatever name called, constituted or established by a Central, State or Provincial Act, for the objects and purposes authorised by the Act under which such corporation or body corporate was constituted or established | Notified corporation or body corporate, by whatever name called, constituted or established by a Central, State or Provincial Act | |
| 36(1)(xiv) | Contribution to notified credit guarantee trust fund for small industries | Public financial institution | |
| 36(1)(xv) | Securities Transaction Tax paid if corresponding income is included as income under the head ‘Profits and gains of business or profession’ | All assessees | |
| 36(1)(xvi) | Amount equal to commodities transaction tax paid by an assessee in respect of taxable commodities transactions entered into in the course of his business during the previous year, if the income arising from such transactions is included in the income computed under the head “Profits and gains of business or profession” | All assessees | |
| 36(1)(xvii) | Amount of expenditure incurred by a co-operative society for purchase of sugarcane shall be allowed as deduction to the extent of lower of following:
a) Actual purchase price of sugarcane; or b) Price of sugarcane fixed or approved by the Government |
Co-operative society engaged in business of manufacturing sugar | |
| 36(1)(xviii) | Marked to market loss or other expected loss as computed in accordance with the ICDS notified under section 145(2) | All Assessees | |
| 37(1) | Any other expenditure [not being personal or capital expenditure and expenditure mentioned in sections 30 to 36] laid out wholly and exclusively for purposes of business or profession5 | All assessees | |
| B. Non-deductible items | |||
| 37(2B) | Advertisement in souvenir, brochure, tract, pamphlet, etc., of political party | All assessees | |
| 40(a)(i) | Interest, royalty, fees for technical services or other chargeable sum payable outside India, or in India to a non-resident or foreign company, on which tax has not been deducted or after deduction, has not been paid on or before the due date of filing of return under section 139(1). Where in respect of any such sum, tax has been deducted in any subsequent year or, has been deducted in the previous year but paid in any subsequent year after the expiry of the time prescribed under sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid However, where deductor has failed to deduct the tax and he is not deemed to be an assessee in default under first proviso to section 201(1), then it shall be deemed that the deductor has deducted and paid the tax on the date on which the payee has furnished his return of Income. |
All assessees | |
| 40(a)(ia) | 30% of any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in sub-section (1) of section 139. | All assessees | |
| However, where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid. However, where deductor has failed to deduct the tax and he is not deemed to be an assessee in default under first proviso to section 201(1), then it shall be deemed that the deductor has deducted and paid the tax on the date on which the payee has furnished his return of Income. |
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| 40(a)(ib) | Any sum paid or payable to a non-resident which is subject to a deduction of Equalisation levy would attract disallowance if such sum was paid without deduction of such levy or if it was deducted but not deposited with the Central Government till the due date of filing of return. | All assessees | |
| However, where in respect of any such sum, Equalisation levy is deducted or deposited in subsequent year, as the case may be, the expenditure so disallowed shall be allowed as deduction in that year. | |||
| 40(a)(ii) | Rate or tax (including surcharge or cess) levied on the profits or gains of any business or profession | All assessees | |
| 40(a)(iib) | Amount paid by way of royalty, licence fee, service fee, privilege fee, service charge or any other fee or charge, by whatever name called, which is levied exclusively on, or any amount which is appropriated, whether directly or indirectly, from a State Government undertaking by the State Government | State Govt. undertakings | |
| 40(a)(iii) | Salaries payable outside India, or in India to a non-resident, on which tax has not been paid/deducted at source | All assessees as employers | |
| 40(a)(iv) | Payments to provident fund/other funds for employee’s benefit for which no effective arrangements are made to secure that tax is deducted at source on payments made from such funds which are chargeable to tax as ‘salaries’ | All assessees as employers | |
| 40(a)(v) | Tax actually paid by an employer referred to in section 10(10CC) | All assessees as employers | |
| 40(b) | Interest, salary, bonus, commission or remuneration paid to partners (subject to certain conditions and limits) | Firms | |
| 40(ba) | Interest, salary, bonus, commission or remuneration paid to members (subject to certain conditions and limits) | Association of persons or body of individuals (except a company or a co-operative society, society registered under Societies Registration Act, etc.) | |
| 40A(2) | Expenditure involving payment to relative/director/partner/substantially interested person, etc., which, in the opinion of the Assessing Officer, is excessive or unreasonable | All assessees | |
| 40A(3) | 100% of payments exceeding Rs. 10,000 (Rs. 35,000 in case of payment made for plying, hiring or leasing goods carriages) made to a person in a day otherwise than by account payee cheque/bank draft or use of electronic clearing system through a bank account or through such other electric mode as may be prescribed (subject to certain conditions) | All assessees | |
| 40A(7) | Any provision for payment of gratuity to employees, other than a provision made for purposes of contribution to approved gratuity fund or for payment of gratuity that has become payable during the year (subject to specified conditions) | All assessees as employers | |
| 40A(9) | Any sum paid for setting up or formation of, or as contribution to, any fund, trust, company, AOP, BOI, Society or other institution, other than recognised provident fund/approved superannuation fund/pension scheme referred to in section 80CCD/approved gratuity fund | All assessees as employers | |
| 40(A)(13) | No deduction shall be allowed in respect of marked to market loss or other unexpected loss except as allowable under section 36(1)(xviii) | All assessee | |
| C. Other deductible items | |||
| 42(1) | Allowances specified in agreement entered into by Central Government with any person (subject to certain conditions and terms of agreement) | Assessees engaged in prospecting for or extraction or production of mineral oils | |
| 42(2) | Expenditure remaining unclaimed as reduced by proceeds of transfer | Assessee whose business consists of prospecting for or extraction or production of petroleum and natural gas and who transfers any interest in such business | |
| 43B | Any sum which is actually paid, relating to (i) tax/duty/cess/fee levied under any law, (ii) contribution to provident fund/superannuation fund/gratuity fund/any fund for employees’ welfare, (iii) bonus/commission to employees, (iv) interest on loan/borrowing from any public financial institution, State Financial Corporation or State Industrial Investment Corporation (v)interest payments to scheduled banks/Co-operative banks (other than a primary agricultural and development bank)/primary co-operative agricultural and rural development bank on loans or advances, (vi) interest on loan or borrowings from NBFC, (vii) sum payable by employers by way of leave encashment to employees, (viii) sum payable to the Indian Railways for the use of railway assets, and (ix) sum payable to a micro or small enterprise beyond the time limit specified in section 15 of MSME Act. Deduction will not be allowed in year in which liability to pay is incurred unless actual payment is made in that year or before the due date of furnishing of return of income for that year Note: However, payment made to micro or small enterprise beyond the time limit shall be allowed as deduction only on actual payment. |
All assessees | |
| 44A | Expenditure in excess of subscription, etc., received from members (subject to certain conditions and limits) | Trade, professional or similar association | |
| 44C | Head office expenditure (subject to certain conditions and limits) | Non-resident | |
| Against ‘capital gains’ | |||
| 48(i) | Expenditure incurred wholly and exclusively in connection with transfer of capital asset | All assessees | |
| 48(ii) | Cost of acquisition of capital asset and of any improvement thereto (indexed cost of acquisition and indexed cost of improvement, in case of long-term capital assets).
Note : (1) The cost of acquisition/improvement shall not include the deductions claimed on the amount of interest under Section 24(b) or Chapter VIA. [Subject to exceptions contained in Explanation 1 and 2 to Section 48(iii)]. (2) The benefit of indexed cost of acquisition and indexed cost of improvement shall be available if long-term capital gain arises from the transfer which takes place before 23-07-2024. |
All assessees | |
| 48(iii) | Deduction in respect of the capital gains charged to tax under section 45(4), which is attributable to the capital asset remaining with the firm | Firm, AOP or BOI | |
| 54 | Long-term capital gains on sale of residential house and land appurtenant thereto invested in purchase/construction of another residential house8 (subject to certain conditions and limits) | Individual/HUF | |
| 54B | Capital gains on transfer of land used for agricultural purposes, by an individual or his parents or a HUF, invested in other land for agricultural purposes (subject to certain conditions and limits) | Individual/HUF | |
| 54D | Capital gains on compulsory acquisition of land or building forming part of an industrial undertaking invested in purchase/construction of other land/building for shifting/re-establishing said undertaking or setting up new industrial undertaking (subject to certain conditions and limits) | Any assessee | |
| 54EC | Long-term capital gains arising from transfer of land or building. The exemption9 is allowed if the amount of capital gains is invested in bonds of NHAI, REC or any other notified bond. | Any assessee | |
| 54EE | Long-term capital gain invested in long-term specified assets being units of such fund as may be notified by Central Government to finance start-ups | All assesses | |
| 54F | Net consideration on transfer of long-term capital asset other than residential house invested in residential house10 (subject to certain conditions and limits) | Individual/HUF | |
| 54G | Capital gain on transfer of machinery, plant, land or building used for the purposes of the business of an industrial undertaking situate in an urban area (transfer being effected for shifting the undertaking to a non-urban area) invested in new machinery, plant, building or land, in the said non-urban area, expenses on shifting, etc. (subject to certain conditions and limits) | Any assessee | |
| 54GA | Exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area to any Special Economic Zone (subject to certain conditions and limits) | All assessees | |
| 54GB | Exemption in respect of capital gain arising from the transfer of a long-term capital asset, being a residential property (a house or a plot of land), owned by the eligible assessee, and such assessee before the due date of furnishing of return of income under sub-section (1) of section 139 utilises the net consideration for subscription in the equity shares of an eligible company and such company has, within one year from the date of subscription in equity shares by the assessee, utilised this amount for purchase of specified new asset (subject to certain conditions and limits). | Individual/HUF | |
| W.e.f. April 1, 2017, eligible start-up is also included in definition of eligible company. | |||
| Against ‘income from other sources’
A. Deductible items |
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| 57(i) | Deduction from dividend income on account of interest expense, which shall not exceed 20% of the dividend income. | All assessees | |
| 57(i) | Any reasonable sum paid by way of commission or remuneration for the purpose of realising interest on securities | All assessees | |
| 57(ia) | Contributions to any provident fund or superannuation fund or any fund set up under Employees’ State Insurance Act, 1948 or any other fund for welfare of employees, if the same are credited to employees’ accounts in relevant funds before due date | All assessees | |
| 57(ii) | Repairs, insurance, and depreciation of building, plant and machinery and furniture | Assessees engaged in business of letting out of machinery, plant and furniture and buildings on hire | |
| 57(iia) | In case of family pension, 331/3 per cent of such pension or Rs. 15,000, whichever is less
Note: the enhanced threshold of Rs. 25,000 shall be applicable if income-tax is computed under section 115BAC(1A)(ii). |
Assessees in receipt of family pension on death of employee being member of assessee’s family | |
| 57(iii) | Any other expenditure (not being capital expenditure) expended wholly and exclusively for earning such income | All assessees | |
| 57(iv) | In case of interest received on compensation or on enhanced compensation referred to in section 145A(2), a deduction of 50 per cent of such income (subject to certain conditions) | All assessees | |
| B. Non-deductible items | |||
| 58(1)(a)(i) | Personal expenses | All assessees | |
| 58(1)(a)(ii) | Interest chargeable to tax which is payable outside India on which tax has not been paid or deducted at source | All assessees | |
| 58(1)(a)(iii) | ‘Salaries’ payable outside India on which no tax is paid or deducted at source | All assessees | |
| 58(1A) | Disallowance due to TDS default
(Covered by section 40(a)(ia) and 40(a)(iia)) |
All assessees | |
| 58(2) | Expenditure of the nature specified in section 40A | All assessees | |
| 58(4) | Expenditure in connection with winnings from lotteries, crossword puzzles, races, games, gambling or betting | All assessees | |
| For certain payments | |||
| 80C |
– in case of individual, on life of assessee, assessee’s spouse and any child of assessee – in case of HUF, on life of any member of the HUF
– 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) – in case of HUF, on life of any member of the HUF
– in case of individual, such individual or his spouse or any child of such individual – in case of HUF, any member of HUF
– in case of an individual, in the name of the individual, his spouse or any child of such individual – in case of a HUF, in the name of any member thereof
– in the case of an individual, in the name of the individual, his spouse or any child of such individual – in the case of a HUF, in the name of any member thereof
|
Individual/HUF | |
1. Provisions of section 32 shall apply whether or not the assessee has claimed depreciation.
2. If sum is borrowed for acquiring a capital asset, interest thereon pertaining to the period before asset is first put to use shall not be allowed as deduction.
3. W.e.f. assessment year 2016-17, bad-debts shall be allowed as deduction even if they are not written-off from books of accounts. Such deduction shall be allowed if amount of debt or part thereof has been taken into account in computing income on the basis of Income Computation and Disclosure Standards notified under section 145(2) without recording the same in the accounts.
4. With effect from assessment year 2018-19 business of developing or maintaining and operating or developing, maintaining and operating a new infrastructure facility, has been included.
♦ Section 35AD was amended by Finance (No. 2) Act, 2014 with effect from assessment year 2015-16 :
With a view to ensure that the capital asset on which investment linked deduction has been claimed is used for the purposes of the specified business, sub-section (7A) has been inserted in section 35AD to provide that any asset in respect of which a deduction is claimed and allowed shall be used only for the specified business for a period of 8 years beginning with the previous year in which such asset is acquired or constructed. Moreover, if such asset is used for any purpose other than the specified business, the total amount of deduction so claimed and allowed in any previous year in respect of such asset (as reduced by the amount of depreciation allowable in accordance with the provisions of section 32 as if no deduction had been allowed), shall be deemed to be income of the assessee chargeable under the head “Profits and gains of business or profession” of the previous year in which the asset is so used. However, this provision will not apply to a company which has become a sick industrial company under section 17(1) of the Sick Industrial Companies (Special Provisions) Act within the time period of 8 years as stated above.
♦ Where any deduction under section 35AD has been availed of by the assessee on account of capital expenditure incurred for the purposes of specified business in any assessment year, no deduction under section 10AA shall be available to the assessee in the same or any other assessment year in respect of such specified business.
5. With effect from assessment year 2015-16 a new Explanation 2 has been inserted in section 37(1) to clarify that expenditure incurred by the assessee on Corporate Social Responsibility activities in accordance with section 135 of the Companies Act, 2013 will not be considered as expenditure incurred by the assessee for the purposes of the business or profession.
Further, with effect from assessment year 2022-23, a new Explanation 3 has been inserted in section 37(1) to clarify that expenditure incurred to provide perquisite, in whatever form to any person, irrespective of whether the recipient is engaged in any business or profession, where the acceptance of such benefit or perquisite is a violation of any rule, law or regulation, which governs the recipient, shall be deemed to have not been incurred for business or profession and accordingly, the deduction for the same shall not be available. Furthermore, the expenditure, whether constituting an offence as per the prevailing laws in India or outside India, or prohibited by any law in force – whether in India or outside India, shall not be eligible for deduction under section 37(1) .
8. One residential house in India with effect from assessment year 2015-16. With effect from Assessment Year 2020-21, a taxpayer has an option to make investment in two residential house properties in India. This option can be exercised by the taxpayer only once in his lifetime provided the amount of long-term capital gain does not exceed Rs. 2 crores. With effect from Assessment Year 2023-24, the exemption shall be limited to Rs. 10 crores.
10. One residential house in India with effect from assessment year 2015-16. With effect from Assessment Year 2023-24, the aggregate of amount invested in new house property and deposited in capital gain account scheme shall be considered as eligible investment to the extent of Rs. 10 crores.
11. See Bank Term Deposits Scheme, 2006.
12. with effect from assessment year 2015-16.
13. Where deduction is claimed under this section, deduction in relation to same amount cannot be claimed under section 80C.
14. section 80CCE provides that the aggregate amount of deductions under section 80C, section 80CCC and section 80CCD(1) shall not, in any case, exceed Rs. 1,50,000
With effect from assessment year 2015-16, amended sub-section (1) has clarified that a non-government employee can claim deduction under section 80CCD even if his date of joining is prior to January 1, 2004.
15. With effect from the assessment year 2012-13 section 80CCE is amended so as to provide that contribution made by the Central Government or any other employer to a pension scheme under sub-section (2) of section 80CCD shall not be included in the limit of deduction of Rs. 1,50,000 provided under section 80CCE.
With effect from assessment year 2016-17, sub-section (1A) of section 80CCD which laid down maximum deduction limit of Rs. 1,00,000 (under sub-section (1)) has been deleted.
Further, a new sub-section (1B) is inserted to provide for additional deduction to the extent of Rs. 50,000. The additional deduction is not subject to ceiling limit of Rs. 1,50,000 as provided under section 80CCE.
However, it is to be noted that additional deduction of Rs. 50,000 shall not be allowed in respect of contribution which is considered for deduction under section 80CCD(1), i.e., within limit of 10% of salary/gross total income
Any payment from NPS to an employee because of closure or his opting out of the pension scheme is chargeable to tax. 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.
17
The deduction under Section 80Dwill be available as per the limit specified below:
| Individual | HUF |
| For self, spouse and dependent children : Rs. 25,000 (Rs. 50,000 if person insured is a senior citizen*); | Premium up to Rs. 25,000 (Rs. 50,000 if member insured is a senior citizen) paid to insure any member of the family. |
| For parents of the assessee : (Additional) Rs. 25,000 (Rs. 50,000 if person insured is a senior citizen) | NA |
| Medical expenditure if no amount is paid in respect of health insurance-Rs.50,000 (only in case of senior citizen) | Medical expenditure if no amount is paid in respect of health insurance-Rs.50,000 (only in case of senior citizen) |
| Aggregate amount of deduction cannot exceed Rs.1,00,000 in any case | Aggregate amount of deduction cannot exceed Rs.50,000 in any case. |
*‘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.
18. Maximum deduction is Rs. 40,000 (Rs. 1,00,000 where expenditure is incurred for a senior citizen [w.e.f assessment year 2019-20])
With effect from assessment year 2016-17, the taxpayer shall be required to obtain a prescription from a specialist doctor (not necessarily from a doctor working in a Government hospital) for availing this deduction.
19. Scope of ‘higher education’ is enlarged with effect from assessment year 2010-11 to cover any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, Board or university recognised by the Central Government or State Government or local authority or by any other authority authorized by the Central Government or State Government or local authority to do so.
With effect from 1-4-2010 the scope of expression ‘relative’ has also been enlarged to cover the student for whom the taxpayer is the legal guardian.
20. Donation of any sums paid by the assessee, being a company, in the previous year as donations to the Indian Olympic Association or to any other association or institution established in India, as the Central Government may, having regard to the prescribed guidelines, by notification in the Official Gazette, specify in this behalf for—
(i) the development of infrastructure for sports and games; or
(ii) the sponsorship of sports and games, in India;
is eligible for the purpose of deduction under section 80G [this is in consequence of omission of section 10(23)].
21. Donation made to an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both is also eligible for the purpose of deduction under section 80G from the assessment year 2003-04 [this is in consequence of omission of section 10(20A)].
22. With effect from 1-4-2013 no deduction shall be allowed in respect of donation of any sum exceeding two thousand rupees unless such sum is paid by any mode other than cash.
23. With effect from 1-4-2013 no deduction shall be allowed under this section in respect of any sum exceeding ten thousand rupees unless such sum is paid by any mode other than cash.
24. With effect from 1-4-2014 deduction will not be allowed if sum is contributed in cash.
25. Time limits stated under section 80-IA(4)(iv) have been extended from 31-3-2014 to 31-3-2017.
26. 100% deduction shall be allowed from the AY beginning on or after the 1st day of April, 2021.
27. With effect from Assessment Year 2018-19:
i. ‘Eligible business’ means a business carried out by an eligible start up engaged in innovation, development or improvement of products or processes or services or a scalable business model with a high potential of employment generation or wealth creation.
ii. “Eligible start-up” means a company or a limited liability partnership engaged in eligible business which fulfils the following conditions, namely:
a. it is incorporated on or after the 1st day of April, 2016 but before the 1st day of April, 2025
b. the total turnover of its business does not exceed 100 crore rupees in the previous years in which deduction is claimed; and
c. it holds a certificate of eligible business from the Inter-Ministerial Board of Certification as notified in the Official Gazette by the Central Government
[As amended by Finance Act, 2025]
Sir,Standard Deduction under Section 16(ia) Rs.50000/- or Rs 75000/-
Is the interest of personal loan taken for house renovations be claimed for tax exemption under section 24B?
Dear sir I am in army can I also claim 80ccd for nps.
After investment of 50000 a year.
Kindly reply as soon as possible
Jam a gov.pensioner,75 yr.lhave,taken on.loan Of rs.5lac,FM.SBI,to pay delopment,parts allotment etc.charges to j.d.a.,for my house and stamp duty,parts re gn,.fee.am I elligible for dedcn.u/s 80cfo E M IPAid to bank.?
My saving account interest is 11500. May I benifit 80 TTA??
Yes, As per section 80TTA/80TTB as applicable.
If you are not a senior citizen then deduction will be 10000 as per section 80TTA otherwise you can claim entire amount as deduction as per section 80TTB.
I am retired personall and have paid Rs. 60 lakh towards my wife’s (age 57 years) single life deferred annuity of LIC (New Jeevan Shanti) in F. Y. 2021-22 and paid Rs. 108000 towards GST.
What deduction I can avail in ITR-1 in current A. Y, 2022-23.
You can claim upto 1.5 lakh u/s 80c.
Kindly give idea how to save tax of Rs.200000
you can invest in mutual fund, lic etc.
arzoomd048@gmail.com
Sir,
State Goverment employee having MEDICALIM, can the individual reimburse the medical bill incurred duing the FY 2020-21 and if yes what will be the limit and conditions applicab;le
IS THERE ANY RELAXATION/EXCEMPTION/REBATE FOR BANK DEPOSIT UNDER TAX SAVING SCHEME FOR SENIOR CITIZENS IF SO WHICH SECTION
Hi,
I want to take benefit on Interest paid on home loan.
Is it possible to get 80EE benefit if loan was approved in F.Y 2018 -2019?
YES.
guruswamyv924@gmail.com
Standard Deduction on salary will be available from AY 2019-20 and onwards only.
This is not for AY 2018-19.
If my taxable income is less than 350000(after all deduction) may I get 2500 rebate under 87a
Whether standard deduction of 40000/- provided for salried is also available to senior citizens pl?
max limitations for ELSS investment under 80C?
very informative and easily understandable if studied a bit seriously. thank you
I have filled form-1 for AY 16-17. I am a Pensioner and I Become Concessionary of Mother Dairy Milk Shop wef 01 oct 16. same has been surrendered on 10 May 17 due to loss and as per agreement with Mother Dairy. During note ban Period transaction of
an amount of Rs approx 5000000/- has been made through my account to pay the cost of mother dairy product. There was no extra income earned by me for sale/purchase and payment through electronically to Mother Dairy due to loss of products as well as after deduction of employees salary and residential rent and rent . What type of ITR required to be filled by me for AY 2017-18.
PLEASE INFORM (A) IF THERE IS ANY LIMIT FOR DONATIONS UNDER 80-g. (B) UNDER THE SAME SECTION SHOULD DONATION
BE PAID BY CHEQUE ONLY OR THE AMOUNT CAN BE PAID IN CASH ALSO.
kISHEN nARAYAN
what is section 10(10d) of income tax act
I am a pensioner. I have a house in my name in Lucknow. I have rented a portion of it at Rs10000/- per month. This rent is transferred online to my Savings Bank Account and I pay Income Tax on this rent as per rules. Remaining part of the house is in my possession and remains locked most of the time. Due to family reasons, I have moved to Gonda, UP (which is about 2hr by train from Lucknow). I have taken a house on rent in Awas Vikas Colony at Gonda and am paying Rs.12000/- rent monthly through internet banking into the owner’s account. A rent agreement to this effect has also been signed and I have a copy of this agreement. I would like to know if total/part of house rent being paid by me at Gonda is deductive from my income for the Assessment Year 2017-18 and under which Section. Secondly, what additional proof do I need to keep/submit for this deduction. Please let me know if you need any further details in this connection. I look forward to receiving your advice. Thanks.
Please inform me which investment for 80c available for NRI USA.
Dear Sir, it is excellent information to common man. pls. give more details on Section 80P deduction to co-operative housing society.
Tax department is disallowing the Interest earned by co-operative housing society on its surplus fund invested in fixed deposits with State Co-operative Banks.
Excellent !!
Really excellent job done by the author.
* Every student should draw inspiration from the above.
? once you start putting in a unique way of the subject you learn
………you can compare and contrast easy to understand the conflicting situations + problems very near to each point of view and whenever you have to advise a client
not literate in the subject – it will be very easy to convince them.
Had this been put in book form it would have cost few 100s of rupees (though worth much more than that)
Thank you.
Comprehensive excellent
150000
Sir, thanks for bringing out finer points of NPS.
Although I have few queries mainly due to the fact that probably I am unable understand clearly
1)Regarding Tax angle:
Suppose an self-employed individual who falls in highest tax bracket 30%
opts to invest in NPS Tier 1, what is the minimum amount he requires to invest
to obtain maximum tax benefit. Is it 10% of Gross income or 50000/- or one lakh, or what exactly?
2)At maturity 40% would be for annuity, while 60% can be withdrawn and will be taxed. Can we defer and withdraw it in installments over years as per requirement to reduce tax burden on each withdrawal, if yes is there a limit as to over how many years we can withdraw?
3) Also because after retirement there would be no other source of income, the amount may or may not fall in highest tax slab, and may even fall in lower slab. And is it not fair to assume that tax slabs would also move up over years?
I am 57 years old and want to get Rs.50000 tax benefits by making NPS tier-I from pension fund. Which is best NPS plan and best pension fund ? 2. How much amount I have to invest to get 50000 tax benefits for the AY 2022-23 ? What is Annual/Single premium for such NPS plan ?
Thank you very very very much Sir.
I WANT TO KNOW ..
I WORK IN GOVT DEPT AND NPS IS DEDUCTED FROM MY SALARY EVERY MONTH. SAME AMOUNT OF NPS IS ALSO CREDITED IN MY PRAN ACCOUNT.
CAN I GET BENEFIT OF NPS DEDUCTION ON MY SALARY IN INCOME TAX.
PLEASE GUIDE.
What should one do if Bank do not deduct T.D.S.from his/her Pension?
pl.specifed section 80ddb with details list of diseases .
I WANTED TO KNOW THE LIMITATION OF SECTION 35AC. AND ALSO IT COMES UNDER WHCIH SECTION PLEASE LET US KNOW.
Thank you
Thank you very much sir
What is the limit of deduction under section 80CC? Is it still 100000 or raised to 150000 for AY15-16?
We need full and final of current status of journal of income tax and advocates procurement
dear sir i request to you sir how to calculation pgpb income with example as per new rule and how to calculation deprection as per income tax rule with example i have some problem in this matter so sir send in this mail id.pjha0287@gmail.com
Very informative and produced in very good manner.