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DEDUCTIONS UNDER CHAPTER VI-A

30 Apr

DEDUCTIONS UNDER CHAPTER VI-A

The Income Tax Act provides for allowability of certain deductions from the gross totalincome of the assessee. These deductions are given inChapter VIA of the Income Tax Act. For the purpose of TDS, the employer/ DDOmay allow some of these deductions to the employee on furnishing of therequired particulars. The deductions allowable by the DDO/employer are beingdescribed .

Section Nature of Deduction Remarks
80CCC Payment of premia for annuity The premium must plan of LIC or any other insurer, be deposited to keep Deduction is available upto a in force a contract for maximum of Rs. 10,000 The premium must be deposited to keep in force a contract for an annuity plan of the LIC or any other insurer for receiving pension from the fund.
80D Payment of medical insurance premia. Deduction is available upto Rs. 10,000 The premium is to be paid by cheque and the insurance scheme should be framed by the General Insurance Corporation of India & approved by the Central Govt. or any other insurer and approved by the regulatory authority & Development authority.Thepremium should be paid in respect of health insurance of the assessee or his family members
80DD Deduction of Rs. 40,000 in respect of a) expenditure incurred on medical treatment, (including nursing), training and rehabi­litation of a handicapped dependent relative. The handicapped dependent should be a dependent relative suffering a perma­nent disability (including blindness) or mentally retarded, as certified by a specified physician or psychiatrist.
b) Payment or deposit to specified scheme for maintenance of dependent handicapped relative Note : The new section 80DD replace the earlier sections of 80DD and 80DDA which are now clubbed together under the new section.
80DDB Deduction of Rs. 40,000 in respect of medical expenditure incurred Expenditure must be actually incurred by residentassessee on himself or dependant relative for medical treatment of specified disease or ailment. The diseases have been specified in Rule HDD. A certificate in form 101 is to be furnished by the assesseefrom any registered doctor
80E Deduction in respect of repayment of loan taken
upto Rs. 40,000 per year.
This provision has beenintroducedto provide relief to students taking loans for higher studies. The repayment of the principal amount of loan and interest thereon will be allowed as deduction upto Rs. 3.2lakhs over a period of 8 years.
80G Donations to certain funds,charitableinstitutions etc. The various donations specified in Sec.80G are eligible for deduction uptoeither 100% or 50% with or without restriction as provided in Sec 80G
80GG Deduction available is the least of

(i) Rent paid less 10% of total income
(ii) Rs. 2,000 per month
(iii) 25% of total income

1) Assessee or his total spouse or minor child should not own residential accommodation at the place of employment.
2) He should not be
in receipt of house
rent allowance.
3) He should not
have a self occupied
residential premises in any other place
80L Interest/Dividend/Income from :
a) any Govt. Security (Central or
State)

b) NSC, VI, VII & VIII issues

c) Notified debentures of public
sector undertakings, cooperative
societies/Land mortgage bank or
land development bank.

d) Notified National Deposit
Scheme

e) Any other deposit Scheme framed
by Central Govt. and notified.

f) Deposit under Post Office
Monthly Income Account rules,
1987.

g) deposits with banking companies,
banking co-op, societies, land
mortgage or land development
bank.

h) deposits with banks established under any law made by Parliament.

i) Deposits with financial corporations approved by Central Government

j) Deposits with any authority constituted in India under any law forplanning,development or improvement of cities, towns and villages etc.

k) Deposits with co-op. Societies.

1) Deposits, with any public companies providing long term finance for construction or purchase of houses.

m) Income from U.T.I.

n) Income from Units of Mutual Fund specified under clause (23D) of Sec. 10.

Rs. 9000 plus an addition deduction of Rs. 3000 allowed in respect of interest on any Central/State Govt. Securities
80U Deduction of Rs. 40,000/- to an individual who suffers from a physical disability (including blindness) or mental retardation Certificate should be obtained from a Govt. Doctor. The relevant rule is Rule 11D.

In respect of section 80G, no deductionshould be allowed by the employer/DDO, from the salary income in respect of anydonations made for charitable purposes. The tax relief on such donations asadmissible u/s 80G will have to be claimed by the taxpayer in the return ofincome. However, DDOs, on due verification, may allowdonations to the following bodies to the extent of 50% of the contribution:

a) The Jawaharlal Nehru MemorialFund;

b) The Prime Minister’s DroughtRelief Fund;

c) The National Children’s Fund;

d) The IndiraGandhi Memorial Trust;

e) The RajivGandhi Foundation, and to the following bodies to the extent of 100% of thecontribution:

1) The National Defence Fund or the Prime Minister’s NationalRelief Fund;

2) The Prime Minister’s ArmeniaEarthquake Relief Fund;

3) The Africa(Public Contribution-India) Fund;

4) The National Foundation for Communal Harmony;

5) The Chief Minister’s EarthquakeRelief Fund, Maharashtra;

6) The National Blood TransfusionCouncil;

7) The State Blood Transfusion Council;

8) The Army Central Welfare Fund;

9) The Indian Naval Benevolent Fund;

10) The Air Force Central Welfare Fund;

11) The Andhra Pradesh Chief Minister’sCyclone Relief Fund, 1996;

(12) The National Illness AssistanceFund;

(13) The Chief Minister’s Relief Fundor Lieutenant Governor’s Relief Fund, in respect of any State or Union Territory,as the case may be, subject to certain conditions;

(14) The University oreducational institution of national eminence approvedby the prescribed authority;

(15) The National Sports Fund to be setup by the Central Government;

(16) The National Cultural Fund set upby the Central Government;

(17) The Fund for TechnologyDevelopment and Application set up by the Central Government;

(18) The national trust for welfare ofpersons with autism, cerebral palsy mental retardation and multipledisabilities.

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