deduction 80
TRANSCRIPT
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Provided by the Income Tax Act, 1961.
Contained in Chapter VI . A and in the form of deductions
from section 80C to 80U.
They are the permissible amount by which the gross total
income is reduced to arrive at the total income liable to tax.
They are intended to act as incentive to the assesses for
achieving certain economic objectives.
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Rule 1:
o The aggregate amount of deductions under sections
80C to 80U cannot exceed gross total income.
Rule 2:
o These deductions are to be allowed only if the assesses
claims these and gives the proof of such investments/
expenditure/ income.
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1. To encourage savings
2. For certain personal expenditure
3. For socially desirable activities
4. For physically disabled persons
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From AY 2007-08 onwards.
Applicable only to Individual & HUF.
This section provides for deduction in respect of
certain expenditure/ investments paid or
deposited by the assessee in the previous year.
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Life Insurance Premium Paid.
Deferred Annuity Contract.
Statutory Provident Fund and Recognized Provident Fund.
15 Year Public Provident Fund.
Approved Superannuation Fund.
National Savings Certificates.
Unit-linked Insurance Plan (Ulip).
Dhanraksha Plan ofLIC Mutual Fund.
Jeevan Dhara, Jeevan Akshay, New Jeevan Dhara.
Notified Units of Mutual Fund or UTI.
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100% of the amount invested or ` 100,000/- whichever is
lower.
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Deduction in respect of Contribution to CertainPension Funds.
Individual
Eligible Amount amount paid/deposited underan annuity plan of the Life Insurance Corporation ofIndia or any other insurer for receiving pension.
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Taxable income.
This must not be allowed as deduction u/s 80C.
Any amount withdrawn or pension received fromthe plan is taxable in the hands of the assessee ornominee in the year of receipt.
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Amount paid or ` 10,000/- whichever is lower.
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Deduction in Respect of Contribution to PensionScheme of Central Government.
Individual who is an employee of CentralGovernment on or after 1.1.2004.
Eligible Amount Deposit made under a pensionscheme notified by the Central Government.
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No deduction must have been claimed u/s 80C.
Any amount received from the scheme, is taxable
in the hands of the assess in that year or receipt.
Salary for the purpose of this section includesdearness allowance if under the terms of
employment.
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Aggregate of amount deposited by the employee and the
Central government, or 10% of the salary, whichever is
lower.
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The aggregate amount of deductions under 80C, 80CCC and80CCD put together cannot exceed
`1,00,000
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Deduction in respect of Medical InsurancePremium.
Individuals/HUF.
Eligible Amount - Insurance premium paid inaccordance with the scheme framed by theGeneral Insurance Corporation of India andapproved by the Central Government.
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The amount should be paid by cheque out of thetaxable income.
The policy is taken on the health of the assessee,on the health of spouse, dependent parents ordependent children of the assessee. In case ofHUF on the health of any member of the family.
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100% of premium paid subject to a maximum of:
o ` 15,000 in case of senior citizen. (Above 65 years)o ` 10,000 in case of others.
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Deduction in respect of dependent relative.
Individuals/HUF who is a Resident of India.
Eligible Amount expenditure incurred on medicaltreatment OR/AND amount paid or depositedunder any scheme framed by the LIC of India or anyother insurer for the payment of an annuity or alump sum amount for the benefit of suchdependent.
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The assess shall have to furnish a certificate in the
prescribed form.
Dependant means the spouse, children, parents
and siblings in case of individuals, or any member
of the family in case of HUF.
Person with severe disabilities means a person
suffering from 80% or more of one or more
disabilities.
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` 50,000 in case of normal disabilities.
` 75,000 in case of severe disabilities.
o This is irrespective of the amount expended.
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Deduction In Respect Of Medical Treatment
Individuals/HUF who is a Resident of India.
Eligible amount expenditure incurred for themedical treatment of such diseases specified inRule 11D(e.g. Parkinson's disease, malignantcancers, full blown AIDS, chronic renal failure, etc)for self or dependant individual.
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The concerned assessee must attach a copy of
certificate in the prescribed Form no. 10-1 along
with the return of income.
Dependant again means the spouse, children,
parents and siblings in case of individuals, or any
member of the family in case of HUF.
The deduction shall be reduced by the amount
received, if any, under an insurance from an
insurer for the medical treatment of person
mentioned in this section or reimbursed by the
employer.
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100% of the expenses incurred subject to a
maximum of :o ` 60,000 in the case of expenses incurred for senior citizens (above
65 years)o ` 40,000 in the case of others.
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Amount is paid out of his income chargeable to tax.
Higher education means full-time studies for any
graduate or post-graduate course in engineering,
medicine, management or for post-graduate coursein applied science or pure sciences including
mathematics and statistics.
The deduction shall be allowed for the previous year
in which the assessee starts repaying the loan or
interest thereon and seven previous years
immediately succeeding it or until the loan together
with interest thereon is paid by the assessee in full
,whichever is earlier.
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Financial institution means banking company or
financial institution notified by the central
government.
Approved Charitable Institutions means an
institution referred u/s 10(23C) of the act.
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Actual interest paid or `40,000 whichever is lower.
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Deduction in respect of amount of rent paid.
Any assessee other than assessee having income
allowance consisting HRA.
Eligible Amount Any expenditure incurred by himon payment of rent in excess of 10% of his total
income.
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The assessee files a declaration in Form No. 10BAregarding the payment of rent.
Such accommodation is occupied by him for his
own residence.Deduction under this section can be claimed evenif accommodation at concessional rent is providedby the employer.
Adjusted Gross Total income( Adj.GTI) for thispurpose means his gross total income minus long-term capital gain, short term capital gain taxableu/s 111A, and all deductions u/s 80CCC to 80Uexcept any deduction under this section.
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The amount of deduction under this section will be
the least of the following:
Excess of actual rent paid over 10% of adjusted gross total income:
25% of his adjusted gross total income; and` 2,000 p.m.
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Deduction in case of person with disability.
Individual resident of India.
Eligible amount Flat deduction to a person with
disability.
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A fixed deduction of :
o ` 50,000 in case of a person with disability
o ` 75,000 in case of a person with severe disability.( having anydisability over 80%)
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Under the income tax act first of all income under each
head is computed.
The aggregate of income under each head is known as
Gross Total Income. Out of this gross total income certain deductions are
allowed.
The income after such deductions is called Total Income
The total deductions from section 80 C - 80 U cannotexceed the total income.
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Monil Chiripal
Santosh Nair
Rinku Kumari