deductions final

7/29/2019 Deductions Final

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Deductions

from

Gross Total Income

Presented to: Presented by:

Prof. Aradhana Tiwari Atul Madne

Preeti LikhmaniSachin Sargar

Amit Singh


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Tax Slabs

Income tax slabs (in Rs.) 2012-2013General Women Senior Citizen Very Senior Citizen Tax Applicable

0 - 2,00,000 0-2,00,000 0 To 2,50,000 0 To 5,00,000 No Tax2,00,001-

5,00,000 2,00,001-5,00,000 2,50,001-5,00,000 - 10%5,00,001-

10,00,000 5,00,001-10,00,000 5,00,001-10,00,000 5,00,001-10,00,000 20%

Above 10,00,000 Above 10,00,000 Above 10,00,000 Above 10,00,000 30%


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Provided by the Income Tax Act, 1961.

Contained in Chapter VIA 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 totax.

Introduction


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Basic Rules

Rule 1:

The aggregate amount of deductions under sections 80Cto 80U cannot exceed gross total income.

Rule 2:

These deductions are to be allowed only if the assesseeclaims these and gives the proof of such investments/

expenditure/ income.


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Why Deductions?

To encourage savings

For socially desirable activities

For physically disabled persons


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Deduction u/s 80C

Applicable only to Individual & HUF.

This section provides for deduction in respect of

certain expenditure/ investments paid ordeposited by the assessee in the previous year.


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The gross qualifying amount under this section refer to the

payment/investment under some of the following schemes:-

Life Insurance Premium Paid.

Statutory Provident Fund and Recognized Provident Fund.

15 Year Public Provident Fund.

National Savings Certificates.

Unit-linked Insurance Plan (Ulip).

Dhanraksha Plan of LIC Mutual Fund.

Jeevan Dhara, Jeevan Akshay, New Jeevan Dhara. Notified Units of Mutual Fund or UTI.


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Amount of Deduction

100% of the amount invested or Rs. 1,00,000/-

whichever is lower.


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Deduction u/s 80CCC

Deduction in respect of Contribution to Certain Pension

Funds

Applicable to Individual

Eligible Amountamount paid/deposited under anannuity plan of the Life Insurance Corporation of India orany other insurer for receiving pension


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Conditions

Amount should be Taxable income.

This must not be allowed as deduction u/s 80C.

Any amount withdrawn or pension received from the plan is

taxable in the hands of the assessee or nominee in the year ofreceipt.

Amount of Deduction

Amount paid or Rs. 10,000/- whichever is lower.


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Deduction u/s 80CCD

Deduction in Respect of Contribution to Pension Scheme

of Central Government.

Individual who is an employee of Central Government.

Eligible AmountDeposit made under a pension schemenotified by the Central Government.


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Conditions

No deduction must have been claimed u/s 80C.

Any amount received from the scheme, is taxable in the hands

of the assessee in that year or receipt.

Amount of Deduction

Aggregate of amount deposited by the employee and theCentral government, or 10% of the salary, whichever is lower.


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The aggregate amount of deductions under 80C, 80CCC and

80CCD put together cannot exceed

Rs.1,00,000


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Deduction u/s 80D

Deduction in respect of Medical Insurance Premium.

Applicable to Individuals/HUF.

Eligible Amount - Insurance premium paid in accordancewith the scheme framed by the General InsuranceCorporation of India and approved by the CentralGovernment.


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Conditions

The amount should be paid by cheque out of the

taxable income. The policy is taken on the health of the assessee, on

the health of spouse, dependent parents or dependentchildren of the assessee. In case of HUF on the health

of any member of the family.

Amount of Deduction

100% of premium paid subject to a maximum of: Rs. 15,000 in case of senior citizens (above 60 years)

Rs. 10,000 in case of others.


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Deduction u/s 80DD

Deduction in respect of dependent relative.

Applicable to Individuals/HUF who is a Resident ofIndia.

Eligible Amountexpenditure incurred on medical

treatment OR/AND amount paid or deposited under anyscheme framed by the LIC of India or any other insurerfor the payment of an annuity or a lump sum amount forthe benefit of such dependent


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Conditions

The assess shall have to furnish a certificate in the prescribedform.

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.

Amount of Deduction Rs. 50,000 in case of normal disabilities and Rs. 75000 in case

of severe disabilities.


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Deduction u/s 80DDB

Deduction In Respect Of Medical Treatment

Applicable to Individuals/HUF who is a Resident ofIndia.

Eligible amountexpenditure incurred for the medical

treatment of such diseases specified in Rule 11D(e.g.Parkinson's disease, malignant cancers, full blown AIDS,chronic renal failure, etc.) for self or dependantindividual.


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Conditions 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 incase 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 theemployer.


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Amount of Deduction

100% of the expenses incurred subject to a maximum

of

Rs. 60,000 in the case of expenses incurred for senior citizens

(above 60 years)

Rs. 40,000 in the case of others.


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Deduction u/s 80E

Deduction in respect of repayment of loan taken for

higher education.

Applicable to Individuals.

Eligible Amountany amount paid by way of interest onloan taken from any financial institution or any approvedcharitable institution for higher education.


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Conditions

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 course in

applied science or pure sciences including

mathematics and statistics.


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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.

Amount of Deduction

Actual interest paid or Rs. 40,000 whichever is lower.


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Deduction u/s 80GG

Deduction in respect of amount of rent paid.

Any assessee other than assessee having income

allowance consisting HRA.

Eligible AmountAny expenditure incurred by him on

payment of rent in excess of 10% of his total income.


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Conditions

The assessee files a declaration in Form No. 10BAregarding the payment of rent.

Such accommodation is occupied by him for his ownresidence.

Deduction under this section can be claimed even ifaccommodation at concessional rent is provided by

the employer.


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Amount of Deduction

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

Rs. 2,000 p.m.


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Deduction u/s 80U

Deduction in case of person with disability.

Applicable to Individual resident of India.

Eligible amountFlat deduction to a person with

disability.


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Conditions

He is certified by the medical authority to be a person

with disability, at any time during the previous year.

He furnishes a certificate issued by the medical

authority in the prescribed form along the return of

income.

Amount of Deduction

A fixed deduction of

Rs. 50,000 in case of a person with normal disability

Rs. 75,000 in case of a person with severe disability.( having any

disability over 80%)


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Conclusion

Under the income tax act first of all income under eachhead is computed.

The aggregate of income under each head is known asGross Total Income.

Out of this gross total income certain deductions areallowed.

The income after such deductions is called TotalIncome.

The total deductions from section 80 C - 80 U cannotexceed the total income.


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deductions final

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