22/09/2019 Income Tax deductions and exemptions u/s 80 C for FY 2018-19, AY 2019-20

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Income Tax Deductions and Exemptions in India 2018

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Income Tax Update : Budget 2019-20
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No Income tax for individuals with Annual Taxable Income of upto Rs. 5 lakh. No change in Income Tax Slabs.
Surcharge increased by 3% for individuals with Income of Rs. 2-5 crores and by 7% for income more than Rs. 5
crores.
Aadhaar card can now be used interchangeably for PAN card. Thus, you no longer need PAN to le income tax
returns.
Additional deduction of Rs. 1.5 lakhs for interest on home loan availed for purchase of Affordable houses of up to
Rs. 40 lakh till March 2020. 
Income tax deduction of Rs. 1.5 lakhs for interest on loan taken to buy an electric vehicle.
The annual turnover limit for corporate tax of 25% increased to Rs. 400 crores.
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TDS of 2% on cash withdrawal of more than Rs. 1 crore in a year from a bank account to discourage business
payments in cash.
Excise Duty on fuel hiked by Re. 1.

Income Tax Slabs

Tax deduction is a reduction in tax obligation from your gross taxable income. Tax deductions are deducted from
taxable income which is also known as adjusted gross income. Tax deduction varies in amount as different incomes
are treated differently under various sections of income tax act.

Income Tax Deductions and Exemptions: Budget 2018-19 Highlights

All Salaried Individuals

Standard Deduction of Rs. 40,000 has been allowed for salaried taxpayers. Medical Allowance and Transport
Allowances has been discontinued.
Government to contribute 12% EPF contribution for new employees (with less than 3 years of employment) in all
sectors.
New women employees (with less than 3 years of employment) to contribute only 8% of salary for EPF contribution
as opposed to 12% earlier.

Senior Citizens

Tax deduction under Section 80 D for Health Insurance expenditure has been increased to Rs. 50,000 from Rs.
30,000 earlier.
Expense of up to Rs. 1 lakh incurred on critical illness has been exempted from tax under Section 80 DDB. Earlier
the exemption was Rs. 60,000 for senior citizens and Rs. 80,000 for very senior citizens.
Tax exempted interest income on deposits with banks has been increased from Rs. 10,000 to Rs. 50,000. Further,

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TDS will not be required to be deducted under section 194A and it has been extended to all FD and RD schemes.

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Income Credit Reportunder section 80C to 80U
Deductions
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Section Permissible limit Type of investment, Eligible claimants
expense or income

80C Maximum Rs. 1,50,000 (aggregate of 80C, PPF, EPF, Bank FD's, Individuals, HUFs
80CCC and 80CCD) NSC, LIC premium,
tuition fees
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22/09/2019 Income Tax deductions and exemptions u/s 80 C for FY 2018-19, AY 2019-20

80CCC Maximum Rs. 1,50,000 (aggregate of 80C, Pension funds Individuals

80CCC and 80CCD)

80CCD Maximum Rs. 1,50,000 (aggregate of 80C, Pension fund initiated Individuals
80CCC and 80CCD) by central government
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80TTA Up to Rs. 10,000 per year Interest on bank savings Individuals and HUFs
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80CCG 50% of amount invested subject maximum of Rs. Equity saving schemes Individuals
25,000

80CCF Up to Rs. 20, 000 Long term infrastructure Individuals and HUFs
bonds
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80D For individual taxpayers- Premium up to Rs. Medical insurance Individuals and HUFs
25,000 in case of individuals and up to Rs. premium and Health
30,000 for senior citizens check up
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For HUFs- Premium up to Rs. 25,000 and up to
Rs. 30,000 in case the member insured is a
senior citizen or super senior citizen

80E No limit de ned Interest on repayment of Individuals

Education loan

80EE Maximum Rs. 50,000 Interest on loan payable Individuals

for acquiring a
residential house
property

80G Differs with the amount of donation General donations of Individuals, HUF's,
any recognized society Companies, Firms

80GGA Depends on quantum of donation Donations to Scienti c Those who do not

Research or Rural have income from
development business or
profession

80GGB Depends on quantum of donation Donations to political Indian companies

parties

80GG Rs. 5000 per month or 25% of total income Rent paid if HRA is not Individuals not
whichever is less received receiving HRA

List of Income Tax deductions for FY 2018-19, AY 2019-20

Income tax deductions under Section 80C
Income tax section 80C replaced section 88 and became effective on 1st April, 2006. This section provides
provisions on number of payments. The eligible taxpayers can claim deductions of maximum amount up to Rs. 1.5

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lakh per year. Both individuals and HUFs are eligible for income tax deductions under 80C.

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includes the following investments and expenses:
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Investment in PPF: You can claim a deduction for investment made in PPF account. You can invest maximum of Rs.
1.5 lakh in a year. Receipts on maturity and withdrawal are tax free.

Investment in National savings certi cate: National Savings Certi cate are eligible for deductions in the year they
are purchased. Interest accrued on such certi cates is eligible for tax deductions each year under section 80C, but
becomes taxable at the time of maturity.
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22/09/2019 Income Tax deductions and exemptions u/s 80 C for FY 2018-19, AY 2019-20

Investment in xed deposit: Interest earned on xed deposits with tenure of not less than ve years are eligible for
tax deduction under section 80C. For senior citizens, tax exempted interest income on deposits with banks has been
increased from Rs. 10,000 to Rs. 50,000. Further, TDS will not be required to be deducted under section 194A and it
has been extended to all FD and RD schemes

Premium on life insurance policy: You can claim a deduction under section 80C for the premium paid for a life
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insurance policy as per the income tax act.
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Contribution to employee provident fund: You can claim a tax deduction for the contribution made in employee
provident fund under section 80C. Government to contribute 12% of EPF contribution for new employees (with less
than 3 years of employment) in all sectors. New women employees (with less than 3 years of employment) to
contribute only 8% of salary as EPF contribution as opposed to 12% earlier.

Equity oriented mutual funds: You can claim a tax deduction for investment made in any unit of mutual funds
whether it is listed on stock exchange or not.
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Repayment of principal on housing loan: you can claim a tax deduction on the principal amount paid for Home loan 
under section 80C.

Tuition Fees: You can claim a tax deduction for the tuition fees paid under section 80C. However, deduction will only
be applicable in case the fees in paid by cheque.

Tax deductions under Section 80CCC and 80CCD for contribution to pension funds
You can claim a tax deduction under Section 80CCC and 80CCD for the contribution made to Pension Funds. If you
have contributed any amount in any insurance scheme to receive pension, then you can claim a tax deduction under
80CCC. However, if you have contributed in any pension scheme initiated by central government, up to 10% of your
salary such as National Pension Scheme than you can claim a tax deduction under section 80CCD.
Note: As per Income Tax Act, the maximum limit of Rs. 1.5 lakh is an aggregate of deduction that may be claimed
under section 80C, 80CCC and 80CCD. However, an exclusive tax bene t is available for NPS subscribers under
section 80CCD. As per income tax act, Tier 1 account holder gets an additional deduction for investment up to Rs.
50, 000 in NPS. This deduction is over and above the deduction of Rs. 1.5 lakh available under section 80C of IT Act,
1961.

Section 80TTA: Deductions for interest on savings account

You can claim a tax deduction under section 80TTA for interest earned on bank savings account. The deduction is
subject to maximum amount of Rs. 10,000. However, the income earned will be rst added under the head of
Income from other sources rst and after that the deduction can be claimed.

Section 80CCF: Deduction for investment made in long term infrastructure bonds
You can claim a tax deduction under section 80CCF for an investment made in long term infrastructure bonds
noti ed by government. You can claim a maximum deduction up to Rs. 20,000.

Section 80CCG: Deduction for investment made under an equity saving scheme
The deduction is also known as Rajiv Gandhi Equity Saving Scheme. You can claim a tax deduction for an
investment made in listed shares or mutual funds. However, the maximum deduction allowed is Rs. 25,000.

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Tax deduction under section 80D for payment of medical insurance premium and health check up
You can claim a tax deduction under this section for the payment of medical insurance premium for self, spouse or

Getany child.
Free In addition,
Credit Report any amount paid for health check up can also be claimed for tax deduction which shall not
exceed to Rs. 5,000.
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Section 80E: Income tax deduction for interest on Education Loan
You can claim a tax deduction under section 80E for interest paid on repayment of Education loan. The deduction
can only be claimed on the interest paid on repayment of loan and not on the principal amount.

Section 80EE: Deduction for interest payable on loan taken for acquisition of a residential house property

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22/09/2019 Income Tax deductions and exemptions u/s 80 C for FY 2018-19, AY 2019-20

You can claim a tax deduction under section 80EE for an interest payable for loan taken for acquisition of a
residential house property. The maximum deduction claimed is Rs. 50,000.

Tax deduction under section 80G, 80GGA, 80GGB and 80GGC for donations
You can claim a tax deduction under section 80G for a general donation made during a nancial year. Deductions
under section 80GGA can be claimed if donation is made for Scienti c Research or Rural development. Deductions
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under section 80GGB and 80GGC can be claimed if donation is made to any political party.
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Section 80GG: Tax deduction for rent paid for FY18
You can claim a tax deduction under section 80GG for the rent paid for house. However, you can claim deduction
under this section only incase when you have not received house rent allowance. If you are receiving HRA then you
are not entitled for deduction under this section. You can claim deduction under section 80GG when the rent paid by
you is more than 10% of your total income subject to maximum of Rs. 5000 per month or 25% of total income
whichever is less.
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Income tax exemption
As per chapter III of Income Tax act, 1961, there exists a provision of income tax exemption. There are few types of 
speci ed incomes on which you can get an exemption from paying tax. this means at the time of calculating income
tax certain incomes will not be added. The most common incomes that are exempted from income tax are listed
below:

House rent allowance - HRA tax exemption

Salaried individuals receive house rent allowance (HRA) from their employer. An exemption against HRA under
Chapter 10 of Income Tax Act is possible if the employee is living in a rented accommodation and pays rent to the
owner. The HRA exemption can also be claimed by submitting proof of rent paid to the employer or at the time of
ling ITR. The taxpayer just needs to nd out how much exemption he can avail and then recalculate the total
taxable income after adjusting the exemption.

HRA exemption is subject to the employee actually staying on rent. The amount of HTA exemption is the lower of:

HRA received from employer

Actual rent paid less 10% of basic monthly salary
40% of basic salary for those staying in any place except the metros cities of Delhi, Mumbai, Kolkata and Chennai.
In case of people staying in these four cities, exemption can be upto 50% of basic salary

Leave Travel Assistance - LTA tax exemption

Leave travel assistance (LTA) received from the employer towards cost of domestic travel to hometown or for
vacation once in two years by rail or by air for self and family members can be claimed as exempt income.

This deduction can only be claimed by a person from the employer directly. LTA is allowed to claim twice in the
block of four years. The current block is 2014-2018. However, employees are now allowed to carry one unclaimed
LTA to next year as well

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Income Tax Deduction, Exemptions

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TDS Slabs 2019

Tax Free Income

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Tax on Debt Mutual Funds
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Capital Gains Tax On Shares

TDS on Rent
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22/09/2019 Income Tax deductions and exemptions u/s 80 C for FY 2018-19, AY 2019-20

Tax on Equity Mutual Funds

Presumptive Tax Rate Scheme 44

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Income Tax Challan for Depositing Tax Online
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Income Tax Form 16 Online

Know Your Salary Breakup

How to Read Form 26AS 

National Pension Scheme, NPS

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Exemptions Under Section 10

Tax on Dividend Income in India 2019

New ITR Form

Our News - Sep 2019

2019-09-20 : Government reduces Corporate Tax

The Government has revised Income Tax laws for the corporate sector to promote investments and growth. As per the
revision, the Government slashed corporate tax for domestic companies and new manufacturing companies. The
existing companies get to pay income tax at 22%, and the new companies get to pay 15% tax.

2019-09-19 : Bank account validation required to get a tax refund

In a bid to get a tax refund, taxpayers need to meet a new requirement. Linking and validating the bank account with a
tax account is compulsory. This can be done by choosing the option Pre-Validate your Bank account under the Pro le
settings column. In case there is a mismatch, and the bank account is not validated, then users need to visit the bank
or to connect to the website of the tax department.

2019-09-12 : Revised format for FORM-16

As per the Income Tax Act of 1961, Form-16 is an important document required to ll the income tax returns. The
earlier version of the form was divided into parts A and B, that provided the personal details of the employee, and
aggregate of the income earned and tax deducted. However, the revised version of Form 16, will likely highlight a
detailed breakup of the tax deductions and salary, instead of the aggregate.

2019-09-06 : PSB online portal eases data accommodation for loans

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Online portal PSB loans In 59 minutes is an advanced digital portal launched to ease the loan process. The platform
runs on advanced algorithms and collects various sources in order to frame the customer loan application. These
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include banking statements and Income tax returns. Further, after collecting data and framing application, the portal
connects the customer with the bank and makes easy access to retail loans like home and personal loans. ↑

2019-09-03 : New Income Tax policies to attract TDS on payments above Rs 1 crore
With effect from September 1, 2019, excess withdrawals above Rs 1 crores will attract a TDS at 2 percent. This
provision is as per section 194N of income tax laws. The withdrawal of 1 crore subjected to TDS is the aggregate

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22/09/2019 Income Tax deductions and exemptions u/s 80 C for FY 2018-19, AY 2019-20

withdrawal made from banks, post of ces, or co-operative societies. The calculation of withdrawals will be counted
from April 1, 2019.

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