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Deductions allowed under the income tax act help you reduce your taxable income. You can avail the deductions only if you have made tax-saving investments or incurred eligible expenses. There are a number of deductions available under various sections that will bring down your taxable income. The most popular one is section 80C of Chapter VIA. Other preferred dedcutions under chapter VIA are 80D, 80E, 80G, 80DDB and so on. In this article, let us discuss some of the important deductions under chapter VIA that a taxpayer can claim.

Deductions under Chapter VIA

Sr.no

Section

Details

Limit

1.

80C

Payment towards Life Insurance Premium

Rs.150000

2.

Provident Fund

3.

Repayment of Housing Loan (Principal Component)

4.

National Savings Certificate (Accrued Interest)

5.

National Savings Certificate (New Deposits)

6.

Unit Linked Insurance Premium (ULIP)

7.

Cumulated Time Deposits

8.

Investments made in Debentures/Shares of Companies as approved by CBDT

9.

Educational Expenses (including payment of Educational fees for self, spouse and children)

10.

Equity Linked Savings Scheme or Mutual Funds approved by CBDT.

11.

80CCC

Deduction in respect of contribution to certain pension funds i.e contribution towards pension funds offered by Public or private sector Insurers.

12.

80CCD (1)

Deduction in respect of contribution to certain pension funds u/s i.e Contributions made to Pension plans offered by the Central Government are eligible for tax deductions which are manly National Pension Scheme and Atal Pension Yojana

10% of the salary (Basic + D.A) or 20% of the Gross Total Income (in case of Self Employed Professional). However this limit shall not exceed beyond Rs.150000 along with Section 80C and 80CCC.

13.

80CCD(1B)

Additional Deduction for National Pension System Contribution.

Rs.50000/- (This is over and above the limit of Rs.150000/-)

14.

80CCD(2)

Deduction in respect of employer contribution to pension scheme of Central Government u/s 80CCD(2)

10% of basic Salary plus Dear Allowance

15.

80D

Deduction in respect of Medical Insurance Premium

1.Rs.25000 (for self, Spouse and Children)

2.Rs.25000 (for parents less than 60 years of age); Rs.50000 (for parents more than 60 years of age)

16.

80DD

Deduction in respect of maintenance including medical treatment of handicapped dependent

1. Rs.75000 for person with disability and Rs.125000 for person with Severe disability.

17.

80DDB

Deduction toward Medical treatment etc.

1.Rs.40000 or amount actually paid whichever is less for taxpayers less than 60 years of age.

2.Rs.10000 or amount actually paid for Senior Citizens

18.

80E

Deduction in respect of interest on loan taken for higher education.

Deduction can be availed for a maximum period of 8 years. There is no maximum limit.

19.

80EE

Deduction in respect of interest on loan taken for residential house property

Rs.50000 per annum until the loan is repaid. This deduction is over and above the deduction of Rs.2 Lakhs u/s 24.

20.

80EEA

Deduction in respect of interest on loan taken for residential house property under affordable housing scheme purchased in the Financial Year 2019-20.

Rs.150000 per annum until the loan is repaid. This deduction is over and above the deduction of Rs.2 Lakhs u/s 24.

21.

80G

Deduction in respect of donation to certain funds, charitable institutions etc.

-

22.

80GG

Deduction in respect of rents paid

Deduction shall be least of:-

1.Actual Rent paid minus 10% of Adjusted Total Income

2.Rs.5000 per month

3.25% of Adjusted Total Income

23.

80GGA

Deduction in respect of certain donations for Scientific research or rural development.

Contributions made towards the organization or Institution or Colleges engaged in Scientific research and Rural Development. No Maximum limit applicable.

24.

80GGC

Deduction in respect of contributions given by any person to political parties.

No limit applicable

25.

80HH

Profits and Gains from newly established industrial undertaking or hotel business in backward areas

20% of the Profits or gains from the Business.

26.

80HHA

Profits and Gains from newly established small scale industrial undertaking areas

20% of the Profits or gains from the Business

27.

80HHBA

Profits and Gains from Housing Project

50% of the Profits or gains from the Business

28.

80JJAA

Employment of New Workmen

Assesse engaged in Tax Audit shall be eligible for additional 30% deduction of hire of new employees with certain prescribed conditions.

29.

80O

Royalties from Foreign Enterprises etc.

No Maximum Limit

30.

80P

Income of Cooperative Societies

100% deduction if engaged into certain specified activities.

31.

80QQB

Royalty Income etc. of Authors of certain books other than text books

Rs.300000 or original amount of royalty amount received whichever is less.

32.

80TTA

Deduction in respect of interest on deposits in savings account

Rs.10000

33.

80TTB

Deduction in respect of interest on all types of deposits in case of senior citizens

Rs.50000

34.

80U

Deduction in case of permanent physical disability

Rs.75000 for person with 80% disability and Rs.125000 with more than 80% disability.

 
 

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Category Income Tax, Other Articles by - Suyash Tripathi 



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