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Deductions under chapter VI - A (Income Tax)

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( Author )
16 November 2009

I want to complete details of all deductions with allowable limits under this sections

Will anybody be able to provide the needful



Thanks in Advance

Tribhuvan Purohit


CA Ravi sisodia

( Expert )
16 November 2009

Deductions allowable under various sections of Chapter VIA of Income Tax Act :
Under section 80C (Various investments)
Under section 80CCC (Premium for Annuity plans)
Under section 80CCD (Contribution to Pension Account)
Under section 80D (Medical/ Health Insurance)
Under section 80DD (Rehabilitation of Handicapped Dependent Relative)
Under section 80DDB (Medical Expenditure on Self or Dependent Relative)
Under section 80E (Interest on Loan for Higher Studies)
Under section 80G (Various Donations)
Under section 80GG (House Rent Paid)
Under section 80U (Employee suffering from Physical Disability)
Under section 80RRB (Royalty of a Patent)
Section 80C:
This section has been introduced by the Finance Act 2005. Broadly speaking, this section provides deduction from total income in respect of various investments/ expenditures/payments in respect of which tax rebate u/s 88 was earlier available. The total deduction under this section (alongwith section 80CCC and 80CCD) is limited to Rs. 1 lakh only. The following investment/payments are eligible for deduction u/s 80C.
Insurance Premium For individual, policy must be in self or spouse’s or any child’s name. For HUF, it may be on Life of any member of HUF.
Sum paid under contract for deferred annuity For individual, on life of self, spouse or any child .
Sum deducted from salary payable to Govt. Servant for securing deferred annuity for self-spouse or child Payment limited to 20% of salary.
Contribution made under Employee’s Provident Fund Scheme.
Contribution to PPF For individual, can be in the name of self/spouse, any child & for HUF, it can be in the name of any member of the family.
Contribution by employee to a Recognised Provident Fund.
Sum deposited in 10 year/15 year account of Post Office Saving Bank
Subscription to any notified securities/notified deposits scheme. e.g. NSS
Subscription to any notified savings certificate, Unit Linked Savings certificates. e.g. NSC VIII issue.
Contribution to Unit Linked Insurance Plan of LIC Mutual Fund e.g. Dhanrakhsa 1989
Contribution to notified deposit scheme/Pension fund set up by the National Housing Scheme.
Certain payment made by way of instalment or part payment of loan taken for purchase/construction of residential house property.
Condition has been laid that in case the property is transferred before the expiry of 5 years from the end of the financial year in which possession of such property is obtained by him, the aggregate amount of deduction of income so allowed for various years shall be liable to tax in that year.
Contribution to notified annuity Plan of LIC(e.g. Jeevan Dhara) or Units of UTI/notified Mutual Fund. If in respect of such contribution, deduction u/s 80CCC has been availed of rebate u/s 88 would not be allowable.
Subscription to units of a Mutual Fund notified u/s 10(23D).
Subscription to deposit scheme of a public sector, company engaged in providing housing finance.
Subscription to equity shares/ debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions.
Tuition fees paid at the time of admission or otherwise to any school, college, university or other educational institution situated within India for the purpose of full time education of any two children. Available in respect of any two children
Section 80CCC: Deduction in respect of Premium Paid for Annuity Plan of LIC or Other Insurer
Payment of premium for annuity plan of LIC or any other insurer Deduction is available upto a maximum of Rs. 100,000/-. (This limit has been increased from Rs. 10,000/- w.e.f. 01.04.2007).
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.
Section 80CCD: Deduction in respect of Contribution to Pension Account
Deposit made by a Central government servant in his pension account to the extent of 10% of his salary. Where the Central Government makes any contribution to the pension account, deduction of such contribution to the extent of 10% of salary shall be allowed. Further, in any year where any amount is received from the pension account such amount shall be charged to tax as income of that previous year.
Note: The limit for maximum deduction available under Sections 80C, 80CCC and 80CCD (combined together) is Rs. 1,00,000/- (Rs. one lac only).
Section 80D: Deduction in respect of Medical Insurance
Deduction is available upto Rs. 15,000/- for senior citizens and upto Rs. 10,000/ for others.(This limit has been increased to Rs. 20,000/- for senior citizens and to Rs. 15,000/- for others w.e.f. A. Y. 2008-09). 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 insurance Regulatory & Development authority. The premium should be paid in respect of health insurance of the assessee or his family members.
Section 80DD: Deduction in respect of Rehabilitation of Handicapped Dependent Relative
Deduction of Rs. 50,000/- w.e.f. 01.04.2004 in respect of
1. Expenditure incurred on medical treatment, (including nursing), training and rehabilitation of handicapped dependent relative.
2. Payment or deposit to specified scheme for maintenance of dependant handicapped relative.
Further, if the dependant is a person with severe disability a deduction of Rs. 75,000/- (enhanced to Rs. 1,00,000/- from Financial Year 2009-10) shall be available under this section. The handicapped dependent should be a dependent relative suffering from a permanent disability (including blindness) or mentally retarded, as certified by a specified physician or psychiatrist. Note: A person with “severe disability means a person with 80% or more of one or more disabilities as outlined in section 56(4) of the “Persons with disabilities (Equal opportunities, protection of rights and full participation)” Act.
Section 80DDB: Deduction in respect of Medical Expenditure on Self or Dependent Relative
A deduction to the extent of Rs. 40,000/- or the amount actually paid, whichever is less is available for expenditure actually incurred by resident assessee on himself or dependent relative for medical treatment of specified disease or ailment. The diseases have been specified in Rule 11DD. A certificate in form 10 I is to be furnished by the assessee from any Registered Doctor.
Section 80E: Deduction in respect of Interest on Loan for Higher Studies
This section has been amended by the Finance Act,2005 and w.e.f. 01.04.2006, deduction shall be allowed only in respect of interest on loan taken for pursuing higher education and the ceiling of Rs. 40,000/- has been removed. (The deduction will also be available for the purpose of higher education of a relative w.e.f. A.Y. 2008-09.)
Section 80G: Deduction in respect of Various Donations
The various donations specified in Sec. 80G are eligible for deduction upto either 100% or 50% with or without restriction as provided in Sec. 80G
Section 80GG:Deduction in respect of House Rent Paid
Deduction available is the least of
1. Rent paid less 10% of total income
2. Rs. 2000/- per month
3. 25% of total income, provided
• Assessee or his spouse or minor child should not own residential accommodation at the place of employment.
• He should not be in receipt of house rent allowance.
• He should not have self occupied residential premises in any other place.
Section 80U: Deduction in respect of Employee suffering from Physical Disability
Deduction of Rs. 50,000/- to an individual who suffers from a physical disability(including blindness) or mental retardation. Further, if the individual is a person with severe disability, deduction of Rs. 75,000/- shall be available u/s 80U. Certificate should be obtained from a Govt. Doctor. The relevant rule is Rule 11D.
Section 80RRB: Deduction in respect of any Income by way of Royalty of a Patent
Deduction in respect of any income by way of royalty is respect of a patent registered on or after 01.04.2003 under the Patents Act 1970 shall be available upto Rs. 3 lacs or the income received, whichever is less. The assessee must be an individual resident is India who is a patentee. The assessee must furnish a certificate is the prescribed form duly signed by the prescribed authority.


TRIBHUVAN PUROHIT

( Author )
11 December 2009

Dear Sir,
I have received following reply but need more clarification for the same.
Section 80DDB: Deduction in respect of Medical Expenditure on Self or Dependent Relative
A deduction to the extent of Rs. 40,000/- or the amount actually paid, whichever is less is available for expenditure actually incurred by resident assessee on himself or dependent relative for medical treatment of specified disease or ailment. The diseases have been specified in Rule 11DD. A certificate in form 10 I is to be furnished by the assessee from any Registered Doctor.

1- I want to claim expenses of hospitalization of my mother, The person for whom we are claiming expenses required to be just relative or assessee please explain.

2- What type of illness covered under rule 11dd please explain


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