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This is the last part of the article series related to Income Tax Benefits Available to Individuals and HUF.

We will now be discussing about the remaining deductions under Chapter VIA, TDS and advance tax provisions and about exemption from Filing of Income Tax Return

Income Tax Benefits Available to Individuals and HUF - Part 4

Deductions under Chapter VIA

In my previous article we had discussed the deductions under Chapter VIA upto section 80DDB.

  • To read the first part of the article, click here
  • To read the second part of the article, click here
  • To read the third part of the article, click here

The remaining deductions are given below-

Section

Particulars

Limit of exemption

Available to

80E

Amount paid out of income chargeable to tax by way of payment of interest on loan taken from a financial institution/approved charitable institution for pursuing higher education (Subject to certain conditions).

The amount of interest paid during the initial year and 7 immediately succeeding assessment years (or until the above interest is paid in full).

Individual

80EE

Interest payable on loan taken up to Rs. 35 lakhs by taxpayer from any financial institution, sanctioned during the FY 2016-17, for the purpose of acquisition of a residential house property whose value doesn't exceed Rs. 50 lakhs.

Note:

1. On the date of sanction of loan, taxpayer should not own any other residential house property.

2. The deduction is available from AY 2017-18 and subsequent assessment years.

Deduction of up to Rs. 50,000 towards interest on loan.

Individual

80EEA

Interest payable on loan taken by an individual, who is not eligible to claim deduction under section 80EE, from any financial institution during the period beginning from 01/04/2019 ending on 31/03/2022 for the purpose of acquisition of a residential house property whose stamp duty value doesn't exceed Rs. 45 lakhs

Deduction of up to Rs. 1,50,000 towards interest on loan

Individual

80EEB

Interest payable on loan taken by an individual from any financial institution during the period beginning from 01/04/2019 and ending on 31/03/2023 to purchase an electric vehicle.

Deduction of up to Rs. 1,50,000 towards interest on loan

Individual

80GG

Rent paid for furnished/ unfurnished residential accommodation (Subject to certain conditions)

Least of the following shall be exempt from tax:

a) Rent paid in excess of 10% of total income*;

b) 25% of the Total Income; or

c) Rs. 5,000 per month.

Total Income = Gross total income minus long term capital gains, short-term capital gains under section 111A, deductions under sections 80C to 80U (other than 80GG) and income under section 115A

Individual not receiving HRA

80QQB

Royalty income of authors of certain specified category of books other than textbooks

Least of the following shall be exempt from tax:

a) In case of Lump sum payment – Amount of royalty income subject to maximum of Rs. 3,00,000

b) In other cases - amount of such income subject to maximum of 15% of value of books sold during the previous year.

Resident Individual- Authors

80RRB

Royalty in respect of patents registered on or after 01.04.2003 (subject to certain conditions)

100% of royalty subject to maximum of Rs. 3,00,000

Resident Individual-Patentee

80TTA

Interest on deposits in savings account with a banking company, a post office, co-operative society engaged in banking business, etc. (Subject to certain conditions)

100% of amount of such income subject to maximum of Rs. 10,000

Individual and HUF (Other than Resident Senior Citizen)

80TTB

Interest on deposits with a banking company, a post office, co-operative society engaged in banking business, etc. (Subject to certain conditions)

100% of the amount of such income subject to the maximum amount of Rs. 50,000

Any senior citizen

80U

A resident individual who, at any time during the previous year, is certified by the medical authority to be a person with disability [as defined under Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995]

Rs. 75,000 (Rs. 1,25,000 in case of severe disability)

Resident Individual

TDS and Advance Tax as per Income Tax Act, 1961

S.N.

Section

Particulars

Nature of exemption

Available to

1

194C

Lower rate of TDS under Section 194C in case of payments to a contractor or sub-contractor

Tax is required to be deducted only if sum paid exceeds Rs. 30,000 or aggregate of sum paid during the financial year exceeds Rs. 1,00,000.

Deduction of tax at source at 1% if recipient is an Individual or HUF

Individual or HUF

1A.

193

No TDS from interest paid on 4.25% National Defence Bonds, 1972, 4.25% National Defence Loan, 1968, or 4.75% National Defence Loan, 1972, Government Securities [Other than 8% Savings (Taxable) Bonds, 2003 and 7.75% Saving (Taxable) Bonds, 2018]

No TDS from interest

Resident Individual

2

193

No TDS from interest paid on debentures issued by a company in which the public are substantially interested. Provided interest is paid by account payee cheque.

No TDS if interest during the financial year does not exceed Rs. 5,000

Resident Individual or HUF

2A.

194

No TDS from dividend paid by any mode other than cash to resident persons.

No TDS if the amount paid or payable during the financial year does not exceed Rs. 5,000.

Resident Individual

2B

194A

No TDS from interest paid or payable on time deposit:

a) Up to Rs. 50,000 in case of resident senior citizen

b) Up to Rs. 40,000 in case of other assessee

If payer is a banking company, co-operative bank or post office

Resident Individual or HUF

2C.

194-O

No TDS from payment to participants of e-commerce

No TDS if amount paid or payable during the financial year does not exceed Rs. 5 Lakhs

Resident Individual or HUF

2D.

No TDS from payment made to seller

No TDS if amount paid or payable to resident seller for purchase of goods during the Financial Year if aggregate value of goods doesn't exceed Rs. 50 lakhs

Resident individual or HUF

3

No obligation to deduct tax at source under Section 194A, 194C, 194H, 194-I and 194J if an Individual or HUF carries on a business or profession and total sales, turnover or gross receipts from such business or profession does not exceed the monetary limit specified under Section 44AB during the financial year immediately preceding the financial year in which sum is to be credited or paid.

Not liable to deduct tax at source

Individual or HUF

4

197A(1)

No deduction of tax shall be made under Sections 194 and 194EE, if resident individual furnishes to the payer a written declaration in prescribed form that tax on his estimated total income of the previous year will be nil.

No tax shall be deducted from specified payments if the sum paid does not exceed the maximum amount which is not chargeable to tax

Resident Individual

5

197A(1C)

No deduction of tax shall be made under section 192A, 193, 194, 194A, 194DA, 194EE and 194K if resident senior citizen furnishes to the payer a written declaration in prescribed form that tax on his estimated total income of the previous year will be nil.

With effect from assessment year 1-6-2016, the scope of section 197A has been extended to cover section 194-I (payment of rent)

No tax shall be deducted from specified payments

Resident Individual — Senior Citizen and Super Senior Citizen

6

207(2)

Exemption from payment of advance tax by a resident senior citizen or resident super senior citizen not having any income from business or profession

(who is at least 60 Years of age at any time during the previous year)

Not liable to pay advance tax

Resident Senior Citizen and Resident Super Senior Citizen

7

44AD

Assessee who has opted for presumptive taxation scheme under Section 44AD

No need to pay advance tax in installments. Assessee can pay whole amount in one installment on or before 15th March of the financial year

Resident individual, Resident HUF or Resident Partnership Firm (Other than LLP)

8

44ADA

Assessee who has opted for presumptive taxation scheme under section 44ADA

No need to pay advance tax in installments. Assessee can pay whole amount in one installment on or before 15th March of the financial year

Resident assessee being individual or partnership firm (other than LLP) who is engaged in a profession referred to in section 44AA(1)

Exemption from Filing of Return

Finance Act 2021 inserted a new section 194P which provided conditions for exempting senior citizens from filing Income Tax returns aged 75 years and above. New Section 194P will become applicable from 1st April 2021.

Section 139 of the Income Tax Act governs the filing of income tax returns by every individual with income above the basic exemption limit.

However, Union Budget 2021 in order to provide relief in terms of compliance burden for filing returns, exempted senior citizens above 75 years of age from filing the income tax return, subject to the following conditions:

  • Senior citizens should be of age 75 years or above.
  • Senior citizens should be 'Resident' in the previous year.
  • He has pension income and interest income only. Interest income accrued/ earned from the same specified bank in which he is receiving his pension.
  • The senior citizen will submit a declaration to its bank containing details of Chapter VI-A deductions, rebate allowable under 87A of the income tax and stating that they have not earned any other income except pension and interest income from the same bank.
  • The bank is a 'specified bank' as notified by the Central Government. Such banks will be responsible for the TDS deduction of senior citizens after considering the deductions under Chapter VI-A and rebate under 87A.
 

Once the specified bank, as mentioned above, deducts tax for senior citizens above 75 years of age, there will be no requirement to furnish income tax return by senior citizens.

 

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Category Income Tax, Other Articles by - Neethi V. Kannanth 



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