DIRECT TAX

What is an Assessment Year?

1. “Assessment year” means the period starting from April 1 and ending on March 31 of the next year. For instance,
the assessment year 2018-19 commenced on April 1, 2017 and will end on March 31, 2018.
Income of previous year of an assessee is taxed during the following assessment year at the rates prescribed by the
relevant Finance Act.

What is a previous Year?

2. Income earned in a year is taxable in the next year. The year in which income is earnedis known as previous year
and the next year in which income is taxable is known as assessment year.

2.1) Previous Year in the case of newly set-up business/profession –In case of a newly set-up business/profession or
in case of a new source of income, the previous year is determined as follows-

First previous year – The first previous year commences on the date of setting up of the business/profession (or, as the case
may be, the date on which the source of income newly comes into existence) and ends on immediately following
March31. Thus, in the case of a newly set-up business/profession or new source of income, the first previous year is a
period of 12 months or less than 12 months. It can never exceed 12 months.

Second and subsequent previous year – The second and the subsequent previous year are always financial year. The second
and subsequent previous years are always of 12 months each (i.e., April to March)

Who is regarded as assessee?

“Assessee” means a person by whom income-tax or any other sum of money is payable under the Act. It includes-

A person (i.e., an individual; a Hindu undivided family;

A company

A firm

An association of persons

Body of individuals whether incorporated or not

A local authority

Every artificial juridical person by whom any tax or any other sum of money (including interest and penalty) is payable under
the act (irrespective of the fact whether any proceeding under the act has been taken against him or not).

What is gross total income?

Income of a person is computed under the following five heads ;

1. Salaries
2. Income from house property.
3. Profits and gains of business or profession.
4. Capital gains.
5. Income from other sources.
The aggregate income under the heads is termed as “gross total income”. In the other words, gross total income completed in
accordance which the provisions of the Act before making any deduction under the sections 80C to 80U.

Rounding-off of income The taxable income shall be rounded off to the nearest multiple of ten rupees and for this purpose
any part of the rupee considering of paise shall be ignored and thereafter, if such amount is not a multiple of ten, then, if
the last figure is that amount is five or more, the amount shall be increased to the next higher amount which is a multiple
of ten and if the last figure is less than five, the amount shall be reduced to the next lower amount which is the multiple
of ten.

STATUS OF ASSESSEE IN INCOME TAX

1. Individual

2. Corporate ( Company )

3. Hindu Undivided Family ( HUF )

4. Partnership Firm

5. Association Of Person ( AOP )

6. Body Of Individual ( BOI )

7. Trust & Society

What is difference between exemption and deduction?

If an income is exempt from tax, it is not included in the computation of income. Exemption can never exceed the amount of
income. Deduction is generally given from income chargeable to tax. Deduction can be less than or equal to or more than
the amount of income. If the amount deductible is more than the amount of the income, the resulting amount will be taken
as loss.

Income Tax Slap For A.Y 2018-19 :

Individual and HUF :

General Senior Citizens (Men and Super Senior Citizens

Income Range ( Man and Women below Women 60 years of age), but (Men and Women age
60 Years of Age) below 80 years of 80 years and Above)

Upto Rs. 2,50,000 Nil Nil Nil

Rs. 2,50,001 to Rs. 3,00,000 5% Nil Nil

Rs. 2,50,001 to Rs. 5,00,000 5% 5% Nil

Rs. 5,00,001 to Rs. 10,00,000 20% 20% 20%

Above Rs. 10,00,000 30% 30% 30%

2. Partnership Firm :Flat rate of 30 % on Taxable Income

3. Foreign Company :Flat Rate of 40% on Taxable Income

4. Domestic Company:

1. Turnover of Previous Year is upto 50 Cr : 25%

2. Turnover of Previous Year is Above 50 Cr : 30%

5. Co-Operative Society : upto 10000 = 10%

Above 10000 – Upto 20000 = 20%

Above 20000 = 30%

Surcharge :

Income Individual Firm/Co- Corporate Foreign Company

operative/Local
Authority
Above 50 Lakh but 10% NIL NIL NIL
Upto 1Cr
1Cr – 10Cr 15% 12% 7% 2%
10Cr & above 15% 12% 12% 5%
* Surcharge is calculated on the Basic tax Amount

Education Cess : 2% on Tax Amount ( Basic + Surcharge)

Higher Education : 1% on Tax Amount ( Basic + Surcharge)

Capital Expenditure :

A capital expenditure is an amount spent to acquire or improve a long-term asset such as equipment or buildings. Usually
the cost is recorded in an account classified as Property, Plant and Equipment. The cost (except for the cost of land) will
then be charged to depreciation expense over the useful life of the asset.

RevenueExpenditure:
Revenue expenditure is an amount that is expensed immediately—thereby being matched with revenues of the current
accounting period. Routine repairs are revenue expenditures because they are charged directly to an account such as
Repairs and Maintenance Expense. Even significant repairs that do not extend the life of the asset or do not improve the
asset (the repairs merely return the asset back to its previous condition) are revenue expenditures.

Definition of Capital Receipt

Capital receipts are the income received by the company which is non-recurring in nature. They are generally part of
financing and investing activities rather than operating activities. The capital receipts either reduce an asset or increases a
liability. The receipts can be generated from the following sources:

 Issue of Shares
 Issue of debt instruments such as debentures.
  Loan taken from a bank or financial institution.
 Government grants.
 Insurance Claim.
 Additional capital introduced by the proprietor.

Definition of Revenue Receipt

Revenue Receipts are the receipts which arise through the core business activities. These receipts are a part of normal
business operations that is why they occur again and again however its benefit can be enjoyed only in the current
accounting year as its effect is short term. The income received from the day to day activities of business includes all the
operations that bring cash into the business like:

 Revenue generated from the sale of inventory

 Services Rendered
 Discount Received from the creditors or suppliers
 Sale of waste material/scrap.
 Interest Received
 Receipt in the form of dividend
 Rent Received

Due Dates of Return Filling

Audit Assessee:

In Case Where account of Assessee are required to be audited under any law: 30 th September of Relevant Assessment
Year

Where Assessee is a working partner in a firm whose account are required to be audited under any law :30 th September of
Relevant Assessment Year

Non Audit Assessee:

In any Other Case: 31st July of Relevant Assessment Year

*Turnover: For Audit Purpose turnover is gross receipt including taxes during the previous year.

1.Mandatory Return & Voluntary Return: 139(1)

A ‘mandatory return’ is required to be filed by the following:

a. Every company (whether domestic or foreign, public or private)

b. Every firm (it includes unlimited liability partnership firm as well as LLP)

c. Every other person if his/its total income* for the relevant financial year exceeds the basis exemption limit.

*The term total income means total income computed before allowing the benefit of provisions of chapter VI-A and
10A/10B/10BA. Where a person files his/its return of income even where he/it is not required to file a mandatory return,
such return can be said to be a ‘voluntary return’. It may be noted that a voluntary return is also a valid return.
2. Loss Return : 139(3)

If an assessee has income under the head ‘profits & gains of business or profession’ or under the head ‘capital gains’ he/it
shall be required to file its return of income any time before the expiry of the time limit of section 139(1). If he/it does not
do so the right of carry forward of relevant loss shall not be available however set-off benefit still does not hamper. A
reading of section 139(3) also reveals that losses under the head house property as well as unabsorbed expenses like
section 32(2) does not effect on account of delayed filing of return of income.

3. Belated Return : 139(4)

Where an assessee could not file a return within the time limit provided under section 139(1), he can file a belated return
within 1 year from the end of relevant assessment year or before completion of the assessment whichever is earlier.

4. Revised Return : 139(5)

Where an original return filed by the assessee under section 139(1) or 142(1)(i) has certain ‘omission’ or ‘wrong
statement’ in it, the assessee can certainly file a revised return any-time before The Expiry of 1 year from the end of
relevant assessment year or before completion of assessment whichever is earlier. From A.Y 2017-18 Even a Belated
Return submitted under section 139(4) can be Revised

5. Defective Return : 139 (9)

A defective return is a return which contains certain defect mentioned in the Explanation to section 139(9). A return of
income shall be regarded as defective unless the following conditions are fulfilled:

a. The annexure, statement and columns in the return have been duly filled in.

b. The tax together with interest, if any. Payable has been paid on or before the date of furnishing return. Where the
Assessing Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to
the assessee and give him an opportunity to rectify the defect. If the assessee rectifies the defect within the permitted or
extended period the return shall be treated as valid otherwise it will become invalid.

EXEMPTIONS & EXCLUSIONS U/S. 10:

1. Agrciultural Income u/s. 10(1)

2. Receipts by a member, from a HUF u/s. 10(2)

3. Share of Profit from partnership firm u./s. 10(2A)

4. Leave Travel Concession in India u/s. 10(5)

5. Gratuity u/s. 10(10)

6. Compensation received at the time of Voluntary Retirement u/s. 10(10C)

7. Amount received under Life Insurance Policy u/s 10(10D)

8. Payment received from Provident Fund u/s. 10 (11), (12)

9. Payment received from an Approved Superannuation Fund u/s. 10(13)

10. House Rent Allowance u/s. 10 (13A).

 11. Special Allowance u/s. 10 (14): Transport Allowance, Conveyance Allowance, Daily Allowance, Uniform
Allowance, Helper Allowance, Research Allowance, Children Education Allowance, Children’s Hostel Expenditure
Allowance.

12. Interest on Securities u/s. 10(15)

13. Educational Scholarships u/s. 10(16)

14. Income of a minor child u/s 10 (32)

15. Receipts by a member, from a HUF u/s. 10(2)

16. Share of Profit from partnership firm u/s 10(2A)

17. Amount received under Life Insurance Policy u/s 10(10D)

18. Income by way of dividends 10(34)

AGRICULTURAL INCOME

The Income which received from Agriculture source is called Agricultural Income

Definition U/S 2(IA) :Agricultural Income Is Fully Exempted as per Income Tax Act 1961 U/S 10(1)

Agricultural Income includes the following

(a).Any Rent or Revenue derived fromAgricultural Land situated in India

(b) Any Income From

(i) Cultivation of Agricultural Land

(ii) a process carried on to make the produce or rent in kind marketable.

(iii) From sale of Agricultural produce

(c) Income From Agricultural House Property

TESTS TO DETERMINE AGRI INCOME

 Income Derived From Land

 Land Must be used for Agriculture Purpose
 Land must be situated in INDIA

Agricultural Incomes

 (a) Income from sale of replanted trees.

 (b) Rent received for agricultural land.

 (c) Income from growing flowers and creepers.

 (d) Share of profit of a partner from a firmengaged in agricultural operations.

 (e) Interest on capital received by a partner from a firm engaged in agricultural operations.
  (f) Income derived from sale of seeds.

Non Agricultural Incomes

 (a) Income from poultry farming.

 (b) Income from bee hiving.

 (c) Income from sale of spontaneously grown trees.

 (d) Income from dairy farming.

 (e) Purchase of standing crop.

 (f) Dividend paid by a company out of its agriculture income.

 (g) Income of salt produced by flooding the land with sea water.

 (h) Royalty income from mines.

 (i) Income from butter and cheese making.

 (j) Receipts from TV serial shooting in farm house is not agriculture income

Integration of Agricultural Income

 Meaning: Clubbing of Agricultural Income with Non Agricultural Income for the Computation of Tax Liability is
known as Integration of Agricultural income.

When to Integrate

 If Agricultural Income exceeds Rs.5000 in the relevant Previous year

 If Non Agricultural Income Exceeds Basic Exemption Limits of Rs.2,50,000/3,00,000/5,00,000 in the relevant
Previous year

How to Integrate

 Step 1 : Add Agriculture Income with Non agriculture income

 Step 2 : Calculate Tax on the (Step 1) total as per the current Tax Rates

 Step 3 : Add Agriculture income with Basic exempted limit

 Step 4 : Calculate Tax on the (Step 3) total as per the current Tax Rates

 Step 5 : Tax calculated at step 4 is deducted from tax calculated at step 2

 Step 6 : Add Education Cess 3%

 Step 7 : Total is tax payable

 SALARY

Salary :Salary is defined to include the following:

1. Wages;
2. Any annuity or person;
3. Any fees or commission, perquisities or profit in lieu of or in addition to salary or wages;
4. Any advance of salary;
5. Any payment received by an employee in respect of any period of leave not availed by him ;
6. The portion of annual accretion in any previous year to the balance at the credit of an employee participating in a
recognized provident fund to the extent it is taxable;
7. The contribution made by the Central Government or any other employer to the account of an employee under an
notified pension scheme.
ALLOWANCE

HOUSE RENT ALLOWANCE—Exemption in respect of house rent allowance is regulated by rule 2A. It is based upon
the following—

1 An amount equal to 50% of salary, where residential house is situated in

Bombay, Calcutta, Delhi or Madras and an amount equal to 40% of salary
where residential house is situated at any other place.

2 House rent allowance received by the employee in respect of the period

during which rental accommodation is occupied by the employee during the
previous year.

3 The excess of rent paid over 10 per cent of salary

ENTERTAINMENT ALLOWANCE: - Entertainment allowance is first included in salary income under the head
“salaries” and thereafter a deduction is given on the basis enumerated in the following paragraphs –
In the case of a Government employee (i.e. a Central Government or a State Government employee), the least of the
following is deductible:
a. RS. 5, 000;
b. 20 per cent of the basic salary; or
c. Amount of entertainment allowance granted the previous year.

In case of Non- Government employee (including employees of statutory corporation and local authority), entertainment
allowance is not deductible.

OTHER ALLOWANCE:

Name of allowance Exemption as specified in rule 2BB

Special compensatory (Hill

Area) Allowance Amount exempt from tax varies from RS. 300 per month
to RS. 7, 000 per month

Border area allowance The amount of exemption varies from RS. 200 per month
to RS. 1, 300 per month
Tribal areas/scheduled areas RS 200 per month
allowance

Transport allowance It is exempt up to RS. 1600 per month

Children education allowance The amount exempt is limited to RS. 100 per month per
child up to a maximum of two children.

Hostel expenditure allowance It is exempt from tax to the extent of RS. 300 per month
per child up to a maximum of two children.

Compensatory field area Exemption is limited to RS. 2, 600 per month in some
allowance. cases

Medical Allowance Actual amount Spend upto Maximum 1250 Per Month

PERQUISITIES
• In respective of all the perquisites whenever any concession is given or any amount is recovered from the
employee, the value of the perquisite shall be calculated as follows:-
• Step 1 : Determine Value of the Perquisite as if nothing has been recovered from the employee
• Step 2 : Determine the amount recovered from the employee
• Step 3 : (Step 1 - Step 2) shall be the taxable value of the perquisite; if Positive.

Who is a Specified Employee ?

• The following employees are called specified employees :-

• Director

• An employee who is drawing a salary in excess of ₹50,000/-

• Employee who has Substantial interest in the employer company

Having 20% or more voting power or equity shared in the employer company

1. RENT FREE ACCOMODATION

a) GOVERNMENT EMPLOYEES : as per Government Rules (Licence Fees)
b) Others – Value of RFA shall be :-

Population Owned By Employer Not Owned By Owner

Upto 10 Lakh 7.50% of the Salary 15% of the Salary or AR
10-25 Lakh 10.00% of the Salary 15% of the Salary or AR
Morethan 25 Lakh 15.00% of the Salary 15% of the Salary or AR
c) ACCOMODATION IN HOTEL :

24% of Salary (OR) ACTUAL CHARGES {whichever is less}

However nothing shall be taxable if the accommodation is provided for not more than 15 days + provided on transfer of
employees from one place to other. For all Government and Non-Government employees.

d) FURNISHED HOUSE :-
If furniture is also provided by the employer to their employee, then value of such furniture shall be
10% p.a. of the cost
or
Actual hire charges
Any maintenance charges or repaired of the building incurred by employee shall be ignored.

e) TWO HOUSES ON TRANSFER :-

In case of transfer from one place to another , and if employee is provided house at the new place and the employee also
retains the old house, then value of such houses shall be taken on follows :-
Up to 90 days of transfer : Value of one house whichever is lower shall be taxable.
Post 90 days : Value of both the houses shall be taxable.

f) CONCESSIONAL HOUSE :-
The amount recovered from the employee shall be reduced from the value determined for such house.
g) RENT FREE ACCOMODATION NOT TAXABLE
When house is located in a remote area and provided to an employee working at a mining site or on shore oil exploration
site.
Salary – Basic + DA (UTOE) + Bonus + Commission + Taxable portion of all allowances + all monetary payments but
does not include Provident Fund

2. VALUE OF INTEREST FREE LOAN

• Loan type = Any
• Rate = Rate charged by S.B.I. on 1st day of relevant P/Y
• Interest shall be calculated on the outstanding balance for each loan as on the last day of each month.
• However nothing shall be taxable
– If Loan in aggregate do not exceed ₹20,000/- OR
– If the loan provided for the treatment of specified diseases.
• But if such loan has been reimbursed under any medical insurance scheme & the loan is not paid to the employer,
it shall be taxable.
• Check only the last days balance & calculate interest thereon for the whole month. Transactions within the month
shall be ignored & if no balance at the end of the month – No interest 

3. USE OF MOVEABLE ASSETS

a) LAPTOP & COMPUTERS : NIL VALUE

b) OTHER ASSETS : 10% p.a. of the Actual Cost

OR

Actual Hire Charges

5. PERSONAL EXPENDITURE BENEFITS

a) SWEEPER / DRIVER / WATCHMAN / PERSONAL ATTENDENT :

 Actual cost to the employer.

b) GAS, ELECTRICITY, WATER :

 Own Source : manufacturing cost per unit.

 Other Source : amount paid to outside agency.

c) CHILDREN EDUICATION :

 If the education facility is owned by employer.

OR
 Free education is provided in any other educational institution by the reason of employee being in employment of
that employer.
FAIR MARKET VALUE OF SUCH SIMILAR EDUCATION.

HOWEVER NOTHING SHALL BE TAXABLE IF VALUE PER CHILD DOESNOT EXCEED ₹1,000/-
PER MONTH.

 Other Cases :Actual expenditure incurred by employer.

6. LEAVE TRAVEL CONCESSION

By Air :Fare of Economy Class

By Train :Fare of 1st Class A.C

By Bus :1st Class Fare in Public Transport

• Exemption can be claimed for 2 journeys in a block of 4 years i.e. 2006-2009, 2010-2013, 2014-17

• Out of 2 journey, exemption of one journey can be claimed in the calendar year.

• Exemption can be claimed only for 2 children (who are born after year-1999)

• LTC given to foreign citizen is chargeable to tax.

7. MEDICAL PERQUISITE

WITHIN INDIA :-

• Expenditure incurred or reimbursed on any medical treatment provided to an employee or any member of his
family is FULLY EXEMPT without any limit for treatment in any hospital, dispensary, etc., if

– Maintained by the Employee

– Maintained by Government

– Maintained by any local authority

– Approved by Govt. for treatment of Government or other employees

– Approved for a specified disease only for treatment of specified disease.

 • Health Insurance Premium incurred or reimbursed for insurance on the health of employee or any member of his
family is FULLY EXEMPT.

• REIMBURSEMENT BY EMPLOYER of any amount actually spent by the employee for obtaining his or his
family member’s treatment in any hospital, nursing home or a clinic up to maximum ₹15,000/- for P/Y.

OUTSIDE INDIA:-

• Such medical expenses shall be tax-free to the extent permitted by R.B.I.

• Expenses on stay abroad of the employee or any member of his family for medical treatment with one attendant
who accompanies the patient in connection with such treatment to the extent permitted by R.B.I.

• TRAVEL EXPENSES of patient ( employee or his family member) and one attendant. . Who accompanies the
patient in connection with such treatment shall be exempt,

8. VALUATION OF PERQUISITE IN RESPECT OF GIFTS, VOUCHER OR TOKEN

• If the amount of Gift exceeds ₹5,000/- in aggregate during the previous year, then such excess amount shall be
taxable.

• However if the gift is by way of Cash or by way of Cheque,then the entire amount shall be taxable.

Retirement Benefit

Leave Salary

As per service rules, an employee gets different leaves. An employee has to earn leave in the first instance and only when
he has leave to his credit, he can apply for leave. If a leave (standing to his credit) is not taken within a year, as per the
service rules, it may lapse or it may be enchased or it may accumulated. The accumulated leaves standing to the credit of
an employee may be availed by the employee during his service time or, subject to service rules, such leaves may be
enchased at the time of retirement or leaving the job. Encashment of leave by surrendering leave standing to one’s credit
is known as “leave salary”.

The broad tax treatment is given below---

Nature of leave encashment Status of employee Whether it is taxable

Leave encashment during continuity of Government/non-

employment Government employee
It is chargeable to tax.

leave encashment at the time of Government employee It is fully exempt from tax
retirement/leaving job

leave encashment at the time of It is fully or partly exempt

Non-Government job
retirement/leaving job from tax in some cases
NON-GOVERNMENT EMPLOYEES GETTING LEAVE ENCASHMENT AT THE TIME OF RETIREMENT
In the case of a non-government employee (including an employee of a local authority or public sector undertaking),
leave salary is exempt from tax on the basis of least of the following---

1
Period of earned leave (in numbers of months) to the credit of the employee at the time of
his retirement or leaving the job* X Average monthly salary.

2 10 X Average monthly salary

3 The amount specified by the Government [i.e., Rs. 3, 00, 000 applicable from April 1,
1998; for earlier period this amount was different]

4 Leave encashment actually received at the time of retirement.

*Period Of Earned Leave : Term Of Service ( Ignore Fraction )x Annual Leave Granted – Leave Taken till Date
30 Days

GRATUITY: Gratuity is a retirement benefit. It is generally payable at the time of cessation of employment on the basis
of duration of service. Tax treatment of gratuity is given below:

Status of employee Whether gratuity is taxable

Government employee It is fully exempt from tax under section 10

Non- government employee covered by the It is fully or partly exempt from tax under section 10
payment of gratuity Act, 1972

Non-Government employee not covered by the It is fully or partly exempt from tax under section 10
payment of gratuity Act, 1972.

IN THE CASE OF GOVERNMENT EMPLOYEES-Any death-cum-retirement gratuity received by the Government

employees (i.e., Central Government employees, State Government employees, employees of local authority but not
employees of a statutory corporation) is wholly exempt from tax.

IN THE CASE OF EMPLOYEES COVERED BY THE PAYMENT OF GRATUITY ACT, 1972-Any gratuity
received by an employee, covered by the payment of gratuity act, 1972 is exempt from tax on the following basis-----

15 days' salary (7 days' salary in the case of employees of seasonal

1 establishment) based on salary last drawn for each year of service (i.e. 15
days' salary X Length of service)

2 RS. 10, 00, 000;

3 Gratuity actually received
*15 Day’s Salary = Last Month Salary
X 15 Days
26 Days

*Length of Service = Round Off to the near Figure ( Eg. 15.4 years = 15 Years, 15.6 Years = 16years )
IN CASE OF ANY OTHER EMPLOYEE – Any other Gratuity received by an employee on retirement, death,
termination, or on his becoming incapacitated prior to the retirement, is exempt from tax on the following basis-

1 Half month's average salary for each

completed year of service

2 RS. 10, 00, 000

3 Gratuity actually received

*Half Month Salary = Last Month Salary

X 15 Days
30 Days

*Completed Year of Service = Ignore Fraction Of Year ( Eg. 15.4 years = 15 Years, 15.6 Years = 15 years )

PENSION :

UncommutedPension : Taxable for All

Commuted Pension :

GovtEmployee : Fully Exempted

Non- GovtEmployee : If Gratuity Received : ½ of Pension is Exempted

If Gratuity no Received : 1/3 of Pension is Exempted

• Pension received from UNO by the employee or his family member is not taxable.

• Pension received by the family after death –

Taxable in the hands of recipient under head Other Sources and Deduction of 1/3rd OR ₹15,000/- shall be given.

RETRENCHMENT COMPENSATION

• Compensation received by a workmen under the Industrial Dispute Act, 1947 or under any Act, Rule, Order,
Notification issued at the time of retrenchment, is exempt from tax to the extend of lower of the following :-

1. Amount Received

2. ₹ 5,00,000/- (amount specified by the Govt.)

3. 15/26 * Salary * Every completed year of Service in excess of 6 months

 DEDUCTIONS

Section 80C:

 Life 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.
 Investment in Senior Citizens Savings Scheme 2004 for 5 year by resident individuals.
 Contribution made under Employee's Provident Fund Scheme.
 Contribution to PPF For resident 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.
 Deposit in SukanyaSamriddhi Account as natural / legal guardian of girl child.
 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 (NSC), Unit Linked Savings certificates. e.g. NSC VIII issue.
 Contribution to Unit Linked Insurance Plan (ULIP) and Mutual Fund. Locking Period of 3 Years
 Certain payment made by way of instalment or part payment of loan taken for purchase/construction of residential
house property.
 Amount of Stamp duty Paid at time of registration of residential Property
 Investment in KVP and Tax Saving FDR
Section 80D: Deduction in respect of Medical Insurance
Deduction is available upto Rs. 30000 for senior citizens and upto Rs. 25,000/- in other cases for insurance of self, spouse
and dependent children. Additionally, a deduction for insurance of parents (father or mother or both) is available to the
extent of Rs. 30,000/- if parents are senior Citizen and Rs. 15,000/- in other cases. Therefore, the maximum deduction
available under this section is to the extent of Rs. 60,000/-.

Section 80 DD : DEDUCTION IN RESPECT OF DEPENDENT RELATIVE

Following are the provisions under this section:
• This deduction is available to only Individuals and HUF, who is resident in India.
• This deduction is given to the assessee if a person with disability is dependent upon him.
• A person with disability means disabilities like autism, cerebral palsy, mental retardation, etc. as specified in Persons
with Disabilities Act 1995.
• The assessee has incurred expenditure by way of medical treatment (including nursing), training and rehabilitation of a
disabled dependent: or/and
• He has paid or deposited any amount under any scheme framed by the LIC of India or any other insurer for the payment
of an annuity or a lump sum amount for the benefit of such dependent in the event of the death of the assessee.
• For claiming the deduction the assessee shall have to furnish a certificate by the prescribed medical authority with the
return of income.

Section 80DDB : DEDUCTION IN RESPECT OF MEDICAL TREATMENT

 Deduction is available if following are satisfied

• Assessee is an individual or HUF resident in India.

• The assessee has actually paid for the medical treatment of specified disease or ailment, for himself or any dependent*
or in case of HUF any member of the family.
• The assessee furnishes a certificate, in the prescribed form from prescribed authority, along with the return of income.

Section 80E: Deduction in respect of Interest on Loan for Higher Studies

Deduction in respect of interest on loan taken for pursuing higher education. The deduction is also available for the purpose
of higher education of a relative.

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

A. Donations made to following are eligible for 100% deduction without any qualifying limit.
1. Prime Minister’s National Relief Fund
2. National Defense Fund
3. Prime Minister’s Armenia Earthquake Relief Fund
4. The Africa (Public Contribution - India) Fund
5. The National Foundation for Communal Harmony
6. Approved university or educational institution of national eminence
7. The Chief Minister’s Earthquake Relief Fund, Maharashtra
8. Donations made to Zila Saksharta Samitis.
9. The National Blood Transfusion Council or a State Blood
Transfusion Council.
10. The Army Central Welfare Fund or the Indian Naval Benevolent Fund or The Air Force Central Welfare Fund.

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 i.e. Maximum Deduction available is 24,000/-
3. 25% of total income, provided

Section 80GGB: Deduction in respect of contributions given by any company to political parties

Section 80GGC: Deduction in respect of contributions given by any person to political parties

Section 80 TTA: Deduction from gross total income in respect of any Income by way of Interest on Savings
account

Deduction from gross total income of an individual or HUF, upto a maximum of Rs. 10,000/-, in respect of interest on
deposits in savings account ( not time deposits ) with a bank, co-operative society or post office, is allowable w.e.f.
01.04.2012 (Assessment Year 2013-14)
Section 80U: Deduction in respect of Person suffering from Physical Disability

Deduction of Rs. 50,000/- (enhanced to Rs. 75,000 w.e.f. 01.04.2015) to a resident 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. 100,000/-(enhanced to Rs. 1,25,000w.e.f. 01.04.2015) shall be available u/s 80U. Certificate should be
obtained from a Govt. Doctor.