“A STUDY OF AWARENESS ABOUT DEDUCTION

AVAILABLE UNDER SECTION 80DDB OF INCOME

TAX ACT AMONG CITIZENS IN MUMBAI REGION”

A Project Submitted to
University of Mumbai for partial completion of the degree of
Masters in Commerce (Accounting)
Under the Faculty of Commerce

By
MS. HARSAHALI RAMDAS POL
Roll No.54 (Accountancy)
Under the Guidance of
Mr. Swapnil Shenvi

M. L. Dahanukar College of commerce,

Dixit Road, Vile Parle (East) Mumbai - 57

JANUARY 2023
 Declaration by learner

I the undersigned Ms. HARSHALI RAMDAS POL here by, declare that the
work embodied in this project work titled “A STUDY OF AWARENESS ABOUT
DEDUCTION AVAILABLE UNDER SECTION 80DDB OF INCOME TAX
ACT AMONG CITIZENS IN MUMBAI REGION” forms my own contribution to
the research work carried out under the guidance of Mr. SWAPNIL SHENVI is a
result of my own research work and has not been previously submitted to any other
University for any other Degree/ Diploma to this or any other University.

Wherever reference has been made to previous works of others, it has been
clearly indicated as such and included in the bibliography.

I, here by further declare that all information of this document has been
obtained and presented in accordance with academic rules and ethical conduct.

Name and Signature of learner

Certified by
Name and Signature of the Guiding Teacher
 Acknowledgement

To list who all have helped me is difficult because they are so numerous and the
depth is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to
do this project.

I would like to thank my Principal, Dr. D.M. DOKE for providing the necessary
facilities required for completion of this project.

I take this opportunity to thank our Co-ordinator Dr. SAMRAT ASHOK

GANGURDE, for her moral support and guidance.

I would also like to express my sincere gratitude towards my project

Mr. SWAPNIL SHENVI, whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference
books and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly
helped me in the completion of the project especially my Parents and Swapnil
sir, Peers who supported me throughout my project.
 Index
Chapter Title of chapter Page No.
No.

Extract Summary -
1. Introduction 1-24
1.1 What is Income Tax?
1.2 Applicability of Income Tax Act,1961.
1.3 Slab rates Under Income Tax.
1.4 What is Deduction?
1.5 Standard Vs Itemized Deduction.
1.6 Deduction Vs Exemption
1.7 Eliminated Deduction
1.8 Section 80DDB
1.9 Who can claim deduction under Sec.80DDB?
1.10 Maximum amount that can be claim under Sec.80DDB.
1.11 Illustration
1.12 List of Diseases covered under Sec.80DDB
1.13 From whom to take medical certificate?
1.14 Format of certificate of disease under Sec.80DDB
1.15 How to claim Deduction Under Sec.80C To 80U.
1.16 Advantages of Deduction

2. Review of Literature 25-40

3. Research Methodology 41-44

3.1 Significance of study
3.2 Objectives
3.3 Hypothesis
3.4 Scope of the study
3.5 Sample size
3.6 Data collection
3.7 Techniques and tools to be used
3.8 Limitation of the study

4 Other important topics 45-59

4.1 History
4.2 Other types of Deduction of Income Tax
 4.3 Ways to maximize Tax Deduction
4.4 Technical terms
5. Data Analysis and Interpretations 60-72
5.1 Analysis and interpretation
5.2 Hypothesis Testing
6. Conclusion and Suggestions 73-76
6.1 Finding of the study
6.2 Suggestion
6.3 conclusion
7. Bibliography & Appendix 77-80
8. Abbreviation 81

EXECUTIVE SUMMARY
Government plays an important role in most modern economies. In the Indian States,
the role of the government extends from providing for national defence to providing
social security and Medicare to the elderly. In order to provide for these program and
services, the government needs revenues. The sources of the revenues come from
taxes that are paid by the households. In order to collect taxes from people
government has made it mandatory to file income tax return from the individuals
whose annual income exceeds the slab rate of Income Tax which is decided by the
government of India.
While filling income tax return tax payer needs to pay the taxes to the government
which creates a burden on them and indirectly reduces their personal income. But
government has also made some relaxation to the taxpayer by way of providing
exemption of certain special incomes and by way of providing deduction for some
investments or expenses made by tax payer. Such deduction helps them to reduce
their taxable liability but for that taxpayers must be need to know that in the current
environment, there are a variety of ways to increase income while still operating
within the limits imposed by the law. Government has provided deduction under
chapter VI of income tax these deductions are available from 80C to 80U. for
clamming those deduction taxpayer needs to comply all the rules and regulation frame
by government.
To save tax under the frame work of government tax payer need to do tax planning
with help of getting knowledge of such deduction or with help of tax consultant. As
Tax reduction is a crucial idea because it enables taxpayers to take advantage of
Section 80 DDB and other deductions.
This research study assists in identifying the various deduction options listed under
Section 80 DDB of the Income Tax Act 1961 that one can use to benefit from the
Indian tax system. The main objective of the study is to know the awareness among
the taxpayers related to section 80DDB. Because many of the researchers have
conducted research about other section such as 80C as it is most popular way to
deduct tax liability. It is seen that most of taxpayers are not aware about the benefits
of section 80DDB. This study is conducted to make people aware of section 80DDB
and to make able to the taxpayers for clamming deduction under this section. This
section provides up to Rs. 1,00,000 as amount of deduction. This section provided
deduction against medical expenses made for certain specific disease.
The study's primary goal was to determine the respondents' understanding about
Section 80DDB of income tax. And it also helps to determine tax planning and tax
deductions, the reference of that knowledge, and the basis for their preference for
investments among the taxpayers. Tax planning facilitates in the utilisation of the
various reliefs, deductions, exemptions, and rebates provided for in the IT Act, 1961,
which in turn aids in the reduction of the tax amount.
Also, this research aims at knowing the most preferred tax saving instrument and the
reason for its selection based on the mentioned criteria.
For the purpose of knowing the amount of awareness in the taxpayer or individuals I
have conducted this research mainly in the area of Mumbai region.
In the research methodology a sample size of 101 respondents has been taken through
the way of creating Goggle form questionnaire. For the study I have collected both
primary data as well as secondary data. Finally, the whole research was carried out in
a systematic way to reach at exact result. The whole research and findings were based
on the objectives. And the objective is that to inform or to convey every people should
go for clamming deduction available under section 80DDB which helps them to
reduce their taxable liability.
The overall findings of the study reveal that people are not much aware of deductions
available under section 80DDB as most people preferred to claim deduction under
section 80C. This is because of lack of knowledge of taxpayers.
The paper demonstrates that tax saving awareness is lacking, and most individuals
rely on agents to complete their tax work.
And from the research it is clearly seen that there is much need to spread awareness
among the taxpayers by way on conducting seminars or through advertisement for the
purpose of gaining profit with the help of section 80DDB.

Key words – Deductions Sec.80DDB, Income tax return, tax liability, Tax Planning.
 CHAPTER -1
INTRODUCTION
The Income Tax Act of 1961 governs income taxation. generated within India, as well
as income earned by Indians overseas. This research aims to present a clear yet simple
explanation. understanding of an individual's income taxation structure in India for
the fiscal year 2021-22. The Income Tax Act of 1961 is the foundation for all of the
content in this report, as well as the tax saving advice provided here is the result of an
analysis of options available on the market today Everyone should be aware of the tax
planning in order to take advantage of all of the incentives provided by the
Government of India, in various forms, is legal. Project covers the fundamentals of
the Income Tax Act of 1961 and, more broadly, explains the complexities of prudent
tax planning and tax savings options available. any other horrific means Avoiding or
evading taxes is a punishable offence under Indian law. The constitution and all
citizens should forbid such acts.
The proper means or a legal way of reducing tax is nothing but tax deductions
available under income tax under chapter VI. Deduction helps taxpayer to lower their
taxable income. For which tax planning is most required.

1.1 What is Income tax?

India is a developing country, and taxes play an important role in the development of
government policy. For India to become a developed country, the government
requires funds, and one of the major sources of government funds comes from taxes
(direct and indirect). Direct taxes are governed by the CBDT (central board of direct
tax).
Income tax is a direct tax that a government levies on the income of its citizens. The
Income Tax Act, 1961, mandates that the central government collect this tax. The
government can change the income slabs and tax rates every year in its Union Budget.
Income does not only mean money earned in the form of salary.
To fill the treasury, the first Income-tax Act was introduced in February 1860 by Sir
James Wilson (British India's first finance minister). The act received the assent of the
governor-general on 24 July 1860, and came into effect immediately. It was divided
into 21 parts, with 259 sections.

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Income-tax Act, 1961 came into existence w.e.f. 1-4-1962. Revenue Audit introduced
for the first time in the Department. New system for evaluation of work done by
Income-tax Officers introduced.
In simple words, Income tax is a type of tax that government impose on income
generated by businesses and individuals within their jurisdiction. Income tax is used
to fund public services, pay government obligations, and provide goods for citizen.
Income tax is a tax on Income, earned by a person. Any person, who is having the
Income in excess of non-taxable limit, is required to pay tax.
The term Income is well defined under the Income Tax Act. Law has taken proper
care to cover all sorts of income and receipts of gains in hands of person chargeable to
tax.
It also defines the term person in such a fashion that each and every sort of entity is
covered. It also states clearly what income is not chargeable to tax. There is certain
income which are exempt up to certain limit and there after chargeable to tax.
Thus, the technique of computation of Income depends upon the classification of
Income under different head of Income. Deduction have also been specified under
each respective head of Income to ascertain the Income chargeable to tax under each
respective head. Over and above there are certain admissible deduction which have
been stated to be deducted from the Gross Total Income. so as to arrive at the net
taxable income.
Having derived the Net Taxable Income, a person calculates his gross tax liability.
Then he considers whether there is any tax deduction at source (TDS). After Reducing
the TDS from Gros Tax liability, he arrives at the final Net Tax liability.
Apart from this, the act also describes various tax Authorities, procedure of
assessment collection and recoveries interest and penalties appeal and revisions,
offences and prosecutions etc. These all are well dealt with in the 298 sections of The
Income tax Act, 1961 as amended update. There are hundreds of sub section, clauses,
sub-clauses, explanations and proviso to these sections.
Along with-it que good number of circulars are issued by the department to clarify
various provisions of the Act This act as been amended very frequently and
drastically too. these amendments are affected through the Finance bill introduced in
the Parliament by the finance minister. Once the finance bill is approved by the
Parliament and gets the assent of the Parliament becomes the Finance Act. Thus, the

2
Finance Act makes the amendment in the form of omission insertions and
substitutions in the Income Tax Act.
One finds a very difficult to trace the correct privations of law as it is applicable as on
particular day though a is not impossible. The Act provides for determination of Total
income of the assessee. It does not provide for rate of tax. The rate of tax on the total
Income is decided every year by passing the Finance Ac.

1.2 Applicability of the Income tax act, 1961

According to section 1 of the Income tax act, the act is to be called as the Income Tax
Act 1961 and it is extended to the whole of the India and came into force from 1st
April, 1962 (i.e., A.Y. 1962-63).

1.3 Slab rates under income tax

Tax legal guidelines divide taxpayers into unique grouping as consistent with their
taxable profits and levy income-tax at different rates. These grouping are called
income-tax slabs.
The calculation of earnings tax is primarily based on profits tax slab rates wherein,
distinct tax charges are relevant based totally on the sort of tax payer and the income
earned for the duration of the relevant economic 12 months. In easy terms, it means
which you pay taxes based on your earnings.
In recent Finance Minister of India has updated the new Tax Slabs in the union
Budget 2020, following is updated Income Tax Slab
Income Tax Slab New Regime Income Tax Slab Rates FY 2021-22
Rs 0.0 – Rs 2.5 Lakh NIL
Rs 2.5 lakh – Rs 3.00 Lakh 5% (tax rebate u/s 87a is available)
Rs 3.00 lakh – Rs 5.00 5% (tax rebate u/s 87a is available)
Lakh
Rs 5.00 – Rs 7.5 Lakh 10%
Rs 7.5 lakh – Rs 10.00 15%
Lakh
Rs 10.00 lakh – Rs 12.5 20%
Lakh
Rs 12.5 lakh – Rs 15.00 25%

3
Lakh
More than Rs 15.00 Lakh 30%

4
1.4 What is deduction?
Deduction is that type of expense that can be reduced from the taxpayer’s income
which is taxable in order to reduce ultimate tax rates. Thus, deduction helps to
decrease the overall tax liability of the taxpayer. This is that type of benefit which
helps taxpayer to save their tax. Whereas the amount of tax that one can save is
depends upon the type of tax benefit they claim.
There are numerous kinds of income tax deductions that can be used to reduce the
taxable income. In India there are 19 ways in which tax deductions can be claimed.
Chapter VI A of the Income Tax Act, 1961 provides for certain deductions to be made
in computing the total income. The deductions are to be made from gross total
income. The deductions are in respect of various payments or incomes of the tax
payer. The basic purpose of the deduction is to encourage savings and increase
contribution to national fund which is utilized for the national cause.
Deduction under section 80C to 80U are allowed from gross total income to arrive at
net taxable income. The aggregate number of deductions under these sections cannot
exceed the gross total income of the assessee. Deductions under sections 80C to
80GGC are in relation to various investments and payments, whereas sections 80 IA
to 80U covers the deduction in respect of certain income.

1.5 Standard Deductions vs. Itemized Deductions

A taxpayer can get the benefit of deduction either by the standard deduction or by the
itemize deduction under the Schedule A of income tax. It is a free choice of taxpayer
either to choose to itemize their deduction or take the standard deduction, depending
upon which type of deduction reduces more tax liability.
If the value of deduction of itemize cost is more than the standard deduction then one
can go for itemized deduction.
U.S. Taxpayers pick to itemize their deductions or take the standard deduction,
relying on which maximum reduces their taxable profits. Still, most taxpayers enjoy
the popular deduction because the TCJA almost doubled the same old deduction and
eliminated (or capped) many itemized deductions.
If taxpayer want to itemize, then they have to keep receipts for eligible charges at
some point of the throughout the year and need to organize them into categories. At
tax time,

5
taxpayer have to tally and report the expenses on a Schedule A—and preserve onto
the receipts in case taxpayers’ income get audited.
The difference between standardize deduction vs itemized deduction is explained
below with the help of example: -
If tax payer chooses to itemize their deduction-
If taxpayer has paid Rs. 20000 for medical insurance premium and Rs. 5000 in respect
of contribution to certain person funds then according to deduction available under
section 80D and 80CCC respectively taxpayer will get the deduction of Rs.25000 as
deductible expenses such expense will reduce the taxable income of the taxpayer vice
versa tax liability.
In above case taxpayer will report total Rs. 25000 in deduction as whole. Below it is
explained in tabulation form
Total income RS. 3,00,000
(-) Deduction (-) RS. 25,000
Gross total income RS. 2,75,000
(-) Tax rate @5% (-) Rs. 13,750
Net taxable income Rs. 2,61,250

It can be seen that taxpayer have to pay Rs. 13,750 as a tax to the government if he is
choosing an option of itemized deduction otherwise, he has to pay tax on Rs. 300000
Which would give him tax liability of Rs.15,000. it is seen that after taking a
deduction taxable income gets reduced which leads to the benefit of taxpayer.
If the Taxpayer chooses the Standard Deduction -
The standard deduction for a single tax filer is Rs. 50,000 in total for the FY 2021-22
Applicable to certain to the salaried person or pensioner person. By the time
deduction amount get changed it can be observed from following table.
Particulars Until AY Until AY Until AY
2018-19 2019-20 2020-21
Gross salary 8,00,000 8,00,000 8,00,000
(-) Transport allowance 19,200 Not applicable Not applicable
(-) Medical allowance 15,000 Not applicable Not applicable
(-) Standard deduction Not applicable 40,000 50,000
Net salary 7,65,800 7,60,000 7,50,000

6
From the above table it is evident that taxable income has come down on the account
of standard deduction.
It is completely a choice of taxpayer either to opt for standard deduction or itemized
deduction as per the amount available for deduction.

1.6 Deduction v/s Exemption

It becomes necessary to understand the distinction between the deductions and
income exempt from tax. Income exempt from tax does not form part of total income
Whereas deductions are allowed from gross total income in order so arrive at the
taxable income.
Deductions means subtraction that is an amount eligible to reduced taxable income.
Deduction is like concession. deduction is allowed to specific person that qualify the
particular criteria. The objective of providing deduction is to encourage saving and
investments in certain instruments. Deductions are first added to Gross Total Income
and then deducted from it. Deductions are provided under chapter VI and section 80C
to 80U.
Exemption means exclusion, i.e., if certain income is exempt from tax, then it will
not contribute to the total income of the person. It is a kind of relaxation which
government provides to reduced total taxable income of tax payer and it is allowed to
all the person. it is unconditional applicable to all. It is provided by the government to
help the weaker section of society. Exemptions are provided under section 10 and 54
of Income Tax Act 1961.
At the first instance, the assessee is required to classify and compute his income under
the different heads of income as discussed earlier. The net income chargeable to tax
under the different heads of income must be ascertained taking into consideration the
items of income under that particular head and deducting therefrom certain amounts
which are allowed to be deducted under the relevant heads. Thus, the net income
chargeable to tax is ascertained under the different heads of income and when such
ascertained incomes are aggregated, the total is known as GROSS TOTAL INCOME.
This gross total income does not include the incomes which are totally exempted from
tax at discussed under section 10 in this book in Chapter 4.
After the gross total income is ascertained, the assessee has to determine the NET
TOTAL INCOME CHARGEABLE TO TAX For the purpose of ascertaining net

7
taxable income, one has so taken into consideration the deductions which are
specified under chapter VIA which are allowable as deductions from gross total
income. The assessee is required to pay the tax on such ne taxable income.

1.7 Deductions which were eliminated in the year 2018

In 2018 according to the Tax Cuts and Jobs Act 2017 (TCJA) some common tax
deductions were got eliminated from the income tax. By this act no tax diductor can
deduct tax on the basis of such deductions which got expired at least until 2025 when
the act is due to expired. One cannot deduct for the following deductions:
 Home equity loan interest (until the loan amount is not used for the
improvisation of home)
 Mortgage interest on more than $750,000 of secured mortgage debt
 Unreimbursed work expenses
 State and local taxes above $5,000 (or $10,000 for a couple)
 Dues for professional societies
 Moving expenses (except for military personnel)
 Casualty and theft losses (except in federally declared disaster areas)
 The personal exemption
 Tax preparation fees
 Alimony payments
 "Miscellaneous" itemized deductions

1.8 Deduction in respect of medical treatment: - 80DDB

Under section 80DDB of Income Tax Act, 1961, Resident taxpayers can claim
deduction for medical treatment of certain specified ailments (Disease) for self or
dependent. That means any person who is filling income tax return for specific
financial year he can reduce his taxable income by way of deducting his or his
dependent medical expenses which is incurred during that specific financial year,
which will result in the reduction of his tax liability.
 The assessee is either an individual who is resident in India or a Hindu
undivided family who is resident of India.

8
 The assessee has, during the previous year, actually paid any amount for the
medical treatment of specified disease or ailment prescribed in rules of the
Income-tax Rules:
 Such payment on specified disease or ailment should have been paid:

a) in the case of an individual, for himself or a dependent, or

b) in the case of Hindu undivided family, for any member of the said Hindu
undivided family.

 The assessee is required to furnish with the return of income, a certificate in

prescribed from a neurologist, an oncologist, a urologist, a hematologist, an
immunologist or such other specialist. as is prescribed in rule working in a
government hospital.

1 Where the amount actually paid referred to in condition: -

a) does not exceed 40,000 < whole of such amount is deductible.

b) exceeds Rs. 40,000 > Rs. 40000 is deductible only.

2 Where the amount actually paid is in respect of the assessee or his dependent
or any member of a HUF of the assessee and who is a senior citizen, the
ceiling limit of deduction is Rs. 60,000 instead of Rs. 40000.
3 Where the amount actually paid is in respect of the assessee or his dependent
or any member of a HUF of the assessee and who is a very senior citizen, the
ceiling limit of deduction is 80,000. instead of 60.000.

 The amount actually paid is to be reduced by the amount received if any,

under an insurance from an insurer, or reimbursed by an employer, for the
medical treatment of the person referred to in condition (3) above. The net
amount (i.e., amount actually paid less insurance claim received/ reimbursed
by the employer) is eligible for deduction to celling limit of 40,000 or, as the
case may bet 60,000.
 "Dependent" means (a) in the case of an individual, the spouse, children,
parents, brothers and sisters of the individual or any of them; and (b) in the

9
 case of HUF, a member of the HUF dependent wholly or mainly on such
individual or HUF for his support and maintenance.
 Government hospital includes a departmental dispensary whether full-time or
part-time established and run by a Department of the Government for the
medical attendance and treatment of a local authority and any other hospital
with which arrangements have been made by the Government for the
treatment of Government servants.
 "Senior citizen" is defined to men an individual resident in India who is of the
age of 60 year or more at any time during the relevant previous year and very
senior citizen is of the age of 8 years and above.

80DDB is very important deduction of income tax return which provided under
chapter V1-A for the payment made towards medical treatments of a taxpayer
(resident individual and HUF member) or dependent of taxpayer (spouse, children,
parents and siblings) who is suffering from any specific disease which are specifically
covered under this section. A curtain conditions are applicable to get the deduction.
That there is need to keep evidence of such payments which will indicate that this
payment is actually made for the medical treatment means prescription from doctor is
mandatory.

1.9 Who can claim deduction under section 80DDB?

The following individuals may claim the deduction under Section 80DDB for the
costs of medical treatment for the listed diseases:
 Resident individual: - Any person who is resident of India or leaving in India
during that particular period of time for the 182 days or more than that is
eligible to claim deduction under section 80DDB. he can also take deduction
on behalf of his depended family member.
 Member of HUF: - Any person who is a member of Hindu Undivided Family
can claim the deduction of 80DDB.
Therefore, a person's eligibility for a deduction under Section 80DDB is determined
by their residential status.
The deductions cannot be used to offset long- or short-term capital gains covered by
Section 111A, earnings from lotteries or horse races, or other prizes of a similar
nature.

10
1.10 Maximum amount that can be claimed under section 80DDB: -
Amount which is deductible as a deduction is purely depend on the two basic
components of a taxpayer.
The sum is covered at the:
1. genuine sum being paid for the treatment.
2. or on the other hand the amount of Rs. 40,000/ - (on the off chance that the
patient is Ordinary resident)
3. whichever sum is less.
4. For the situation that the individual patient is a senior resident then the most
extreme measure of derivation is Rs.1lakh.

If it's not too much trouble, note the accompanying focuses in this unique
circumstance-
1. In a strict manner amount of deduction is depends on the age of an individual
profiting the clinical treatment and not on the age of the individual asserting
the allowance.
2. The deductions are constantly guaranteed as for the genuine costs brought
about during the pertinent monetary year.
3. For the situation when the dependent is guaranteed by any back up plan or
organization and some installment is gotten either from the safety net provider
or via repayment from his manager the protection sum should be deducted
from the derivation suitable. For instance, assuming you are qualified for Rs. 1
lakh and you got Rs. 40,000 from the Insurance Agency then you are qualified
for Rs. 60,000 as a deduction under this part.
Segment 80DDB allowance limits

Particulars Amount in (Rs)

Citizen (Age 0-60 year) Rs. 40,000 or the amount actually paid,
whichever is lesser.
Senior citizen (Age 60-80 year) Rs. 60,000 or the amount actually paid,
whichever is lesser.
Super senior citizen (Age of 80 & Rs. 1,00,000 or the amount actually

11
 above) paid, whichever is lesser.
It can be understood by the following example,
If Mr. A (age of 52) is filling income tax return for A.Y.2021-22 and his taxable
income is Rs.3,00,000 and during the financial year he incurred some medical
expenses of Rs.35,000 then he will be eligible to get the deduction of Rs. 35,000
instead of Rs.40,000 as his actual payment of medical expenses is lesser than the
actual i.e., (RS.35,000 < Rs.40,0000). Then his taxable income will be Rs. 2,65,000.
Which will turn into deduction in taxable income of Mr. A, ultimately reduction in tax
amount.
Particulars Amount in Rs.
Gross Salary 3,00,000
(-) deduction under section 80DDB (35,000)
Net Salary 2,65,000
If Mr. A won’t opt for deduction under section 80DDB than he would have pay to tax
on Rs.3,00,000 instead of Rs.2,65,000. Hance it is always advisable to taxpayer to get
the proper claim of their available deductions.
Note; -
1. Deduction allowed when taxpayer has spent money on treatment of self or the
dependent.
2. In case the dependent is insured and some payment is also received from an
insurer or reimbursed from an employer, such insurance or reimbursement
received shall be subtracted from the deduction.

Explain provision in relation to deduction in respect of Medical

Treatment u/s 80DDB: - Illustration 1: -
Miss Madhavi's net taxable income under the head income from house property was
1,62,000 Particulars of her other incomes and payments are as follows:
Particulars Amount in Rs.
Interest on State Government Securities 3,000
Dividend from foreign Companies 9,750
Interest on Deposits in P.P.F. A/c 4,080
Income from units of U.T. I 12,000
Income from Interest on Fix Deposit with Bank of India 20,000

12
 Income from Interest on saving bank account with bank of 5,000
India
Repayment of Principal component of loan taken from 60,000
Scheduled Bank for SOHP
Investment in NSC 70,000
Madhavi paid 55,000 for medical treatment of a dependent relative for specified
disease.
Compute her taxable income for the assessment year 2016-17

Solution: -
Name of the assessee: - Miss Madhavi

Assessment Year: 2016-17 Previous Year: FY 2015-16

Legal status: Individual Residential Status: R. & O.

R

Computation of Total Income

Particulars Rs. Rs.
I. Income from house property: (Net Taxable) 1,62,000
II. Income from Other Sources:
Interest on State Government Securities 3,000
Dividend from foreign companies 9,750
Income from UTI (Exempt u/s 10(35) NIL
Income from Interest on F.D. 20,000
SB Account Interest with Bank of India 5,000
NIL 37,750
Gross Total Income 1,99,750
Less- Deduction under chapter VI-A of the Act
u/s 80C: Deduction for LIP, Annuity etc. (W. Note 1) 1,50,000
80DDB: Deduction for Medical Treatment of
dependent relative 40,000 (1,90,000)

13
 Net Taxable Income 9,750

Points to be noted: -
Interest on deposit in P.P.F. A/c is exempted U/S 10(11)

Working note: - Sec 80C

Qualifying Amount
Principle repayment of Housing loan 60,000
Investment in NSC 70,000
Tuition fees (any 2 children * 20,000 each) 40,000
1,70,000
Restricted to Rs. 1,50,000

1.12 LIST OF DISEASE COVERED UNDER 80DDB SECTION: -

Taxpayers can get deduction under section 80DDB against particular disease only
which is mention under section 80DDB. He cannot claim for every single disease.
Specific diseases that covered under Section 80DDB are defined in Income Tax Rule
11DD.
The following are the medical conditions/diseases for which one can claim treatment-
related to their medical expenses. These are highly specific diseases that require the
prescription of the respective specialists to confirm them.
Neurological Diseases/ (with disability level certified 40% and above)
1. Chorea

14
 Chorea is an abnormal involuntary movement disorder that is part of a group
of neurological disorders known as dyskinesias. It is caused by an excess of
the neurotransmitter dopamine in the areas of the brain that control movement.
 If taxpayer or his dependent is suffering from such kinds of disease then he
will be eligible to get the deduction of medical expenses.
 Prescription of such diseases must be issued by neurologist who is having
qualified degree.

2. Parkinson

 Parkinson's disease is a progressive disorder that affects the nervous system

and the nerve-controlled parts of the body. The symptoms appear gradually.
The first symptom could be a slight tremor in only one hand. Although

15
 tremors are common, the disorder can also cause stiffness or slowing of
movement.
 If any of the taxpayer or dependent is surviving from such symptoms of
disease then the medical expenses of such disease are refundable up to the
amount of Rs. 1,00,000 depending upon the age of taxpayer.
 Prescription from neurologist is compulsory.

3. Dementia

 Dementia is a term used to portray a gathering of side effects influencing

memory, thinking and social capacities seriously enough to slow down
your day-to-day routine. It's anything but a particular sickness, yet a few
illnesses can cause dementia. However, dementia for the most part
includes memory loss.
 Dementia disease is also covered under section of 80DDB of income tax.
 Medical expenses proof is required from neurologist for getting deduction.

16
 4. Aphasia

 Aphasia is a communication disorder that affects how you communicate. It

can affect your speech, writing, and understanding of both spoken and written
language. Aphasia usually occurs suddenly following a stroke or a head injury.
 Expenses on such disease is considered under section 80DDB.
 Prescription against such expenses is mandatory to claim deduction

5. Dystonia musculorum deformans

17
 Dystonia musculorum deformans is also called as torsion spasm. It a syndrome
where children with twisted posture, muscle spasms, bizarre walking &
progression of symptom, leading to sustained fixed posture deformity.
 Dystonia musculorom deformans is also included in the disease list which are
deductible under Income Tax Act. for calming deduction against such disease
proper prescription or certificate is necessary from recognized neurologist.

6. Motor neuron disease (MND)

 Motor neuron disease (MND) is a rare neurological disorder that affects the
brain and nerves. It causes weakness, which worsens over time. MND has no
cure, but there are treatments to help reduce its impact on a person's daily life.
Some people have the condition for a long time.
 MND suffering member of taxpayer’s family can get deduction for their
medical expenses.

18
 It also requires certification from their neurologist who’s equally having
recognized degree.
7. Ataxia

 Ataxia is characterized by poor muscle control, resulting in clumsy voluntary

movements. It can make walking and balance difficult, as well as hand
coordination, speech and swallowing, and eye movements difficult. Ataxia is
typically caused by damage to the part of the brain that regulates muscle
coordination (cerebellum) or its connections.
 Ataxia affected person is also eligible to get deduction for his or her medical
expenses under Income Tax Return.
 For getting deduction against such medical expenses’ prescription from
neurologist is compulsory.

8. Hemiballismus
 Hemiballismus is characterized by involuntary motions of the extremities. The
movements are often violent and have large amplitudes of motion. They are
continuous and random, involving proximal or distal muscles on one side of
the body. In some cases, the facial muscles are also involved. It is common for
arms and legs to move together. The more a patient is active the more the
movements increase.
 This type of diseases also required certification from neurologist to claim
deduction.

19
 9. Malignant cancers
 Malignant tumors have cells that develop wildly and spread locally or
potentially to distant sites. Malignant tumors are cancerous (they attack
different sites) They spread too far off locales through the circulation system
or the lymphatic framework. This spread is called metastasis.
 This type of patient’s required prescription from Oncologist which must
contained the percentage of cancer spread.

10. Chronic Renal Failure

 Constant kidney sickness happens when an infection or condition disables

kidney capability, causing kidney harm to demolish north of a whole or years.
Illnesses and conditions that cause constant kidney sickness include: Type 1 or
type 2 diabetes. Hypertension.

20
 Penitent of such diseases need to have certification from Nephrologist or from
the Urologist having MCh in urology or equivalent degree to confirm their
medical expenses.
11. Hematologic

 Hematologic issues include the blood and incorporate issues with red platelets,
white platelets, platelets, bone marrow, lymph hubs, and spleen. Youngsters
can encounter various issues; some are hereditary while others are gained.
 To claim deduction under section 80DDB for such disease their certificates
must be issued by A specialist having degree in Hematology.
12. Full Blown Acquired Immune Deficiency Syndrome (AIDS)
 What Is AIDS? AIDS (Helps) is a disease brought about by human
immunodeficiency infection (HIV), which kills or harms the body's
invulnerable cells. The body can't battle diseases and certain tumors.
 Prescription from A Specialist having PG in general or internal medicine or
equivalent degree is mandatory to claim deduction under section 80DDB of
Income Tax.

13. Thalassemia
 Thalassemia is an acquired blood problem that makes your body have less
hemoglobin than ordinary. Hemoglobin empowers red platelets to convey
oxygen. Thalassemia can cause weakness, leaving you exhausted.
 Certification from Hematology specialist is required.

14. Hemophilia

21
  Hemophilia is typically an acquired bleeding problem in which the blood
doesn't clump as expected. This can prompt unconstrained draining as well as
draining from wounds or medical procedure. Blood contains numerous
proteins called thickening elements that can assist to stop bleeding.
 Such patients also required Certification from Hematology specialist.

This above are all the diseases which involved under section 80DDB which are
eligible to get claim for such disease. All the taxpayers or his family member can get
the medical expenses as a deduction with the proper medical certification from their
specialist in a proper format.

1.13 HOW AND FROM WHOM TO TAKE THIS CERTIFICATE: -

To claim deduction against expenses made for medical use or amount spend to cure
diseases on yourself or on dependent taxpayer must keep certificate of such diseases.
The retention of such certificate is mandatory on the behalf of taxpayer. This
certificate can be got by the following way….

 The certificate can be obtained from the Specialists of such Disease.

 Patients who receive treatment in a private hospital are not required to obtain a
certificate from a government hospital.
 Patients undergoing treatment in a government hospital must obtain a
certificate from any specialist working full-time in that facility. A

22
 postgraduate degree in General Medicine or an equivalent degree recognized
by the Medical Council of India is required for such a specialist (MCI).
 If the patient is receiving the treatment from government hospitals, it should
also have name and address of that government hospital.

1.14 FORMATE OF CERTIFICATE OF DISEASE UNDER SEC.

80DDB: -
Rule 11DD under Income Tax Return states the proper format of prescription related
to Neurological diseases or Hematological Disorder. Benefiter must require to fill the
FORM NO. 10-I.
Following is the format of FORM NO. 10-I.

23
1.15 How to claim deductions under sections 80C to 80U when filing
ITR1?

To claim deductions on your ITR 1, you must report the amount invested in Chapter
VI- A, as shown below.

24
1.16 Advantages of Deduction

 Tax deductions allow you to reduce your taxable income and save money.
 A lower taxable income allows you to save and invest in other areas.

25
 Deduction available under income tax leads to an increment in the number of
taxpayers.
 When you claim an income tax deduction, the amount of your income that is
subject to tax is reduced.
 Tax deduction reduces income subject to the highest tax brackets first. As a
result, you can claim a tax deduction for tuition, medical expenses, and
charitable contributions.
 Deduction for donation and charity under section 80G leads to increase in an
amount of donations made towards the needy people of the society.
 Claim under deduction section 80C gives more boost for the investor to invest
their money in market.
 Deduction under section 80E allows the youths parent to take educational loan
for their kids as interest against such educational loan is deductible.
 Deduction under section 80U allows the disable taxpayers to deduct their
taxable income which result to lower their taxable liability.
 Deduction under section 80DD offers tax benefit if an individual taxpayer
dependent (family member) is suffering from any kind of disability.
 Deduction under section 80GG provides the House Rent Allowance (HRA) to
an individual who pays rent for the stay.
 Deduction under section 80CCC leads to increment towards the contribution
of certain pension funds.
 By calming deduction under section 80D taxpayer can claim his medical
expenses on the health of senior citizen person.
 Deduction under section 80DDB allows to an individual or a member of HUF
to claim deduction under income tax for the person who is suffering from
specific disease.

CHAPTER -2
REVIEW OF LITERATURE

26
Pritam B. Bhawar & Shubham V. Shirsath (2018) in their research paper on the
“A Study of Tax Saving Schemes Adopted by Individual Assessee” they have
explained various tax saving schemes available to the taxpayers and individuals with
the help of deduction available under chapter VI of income tax from 80C to 80U.
The purpose of the paper "A study of tax saving schemes" is to individual assessee" is
to raise awareness about the significance of tax payment and the schemes available
for Individual taxpayers as defined by the Income Tax Act of 1961 Taxes are levied.
considered an unnecessary burden, and many people believe it is unjust to as their
income grows, they must pay more taxes. This paper discusses the advantages of
timely tax payment and the benefits that can be obtained to be enjoyed alongside its
Taxation is meant to be a helping hand. for the nation's overall development, the
project is conducted in shed light on various legal aspects that will aid in the reduction
of Misconceptions and fears about taxes.
In their research they have mainly focused on the various types of deduction and their
benefits to the tax payer. Which helps the taxpayer to make a good tax planning for
saving their tax payments.
The main objective of their study was to explain the saving schemes available for
individual to save income tax.
They have explained in depth information of all the deduction schemes from 80C to
80U of the income tax under their research paper which gives a brief glance about…
What is deduction?
How many deductions are covered under income tax?
How to invest income to reduce tax liability.
At the end they have concluded that, Individual tax strategies are influenced by their
age and income. Anyone who wants to be assessed income tax and do tax planning
and savings should first calculate total income, then compute income tax by deduction
and adjustment in total income according to tax table structure. The tax is paid in
access, and the refund is issued by the income tax department. The government is
constantly introducing new tax-saving schemes.
Suchitra & Vidhya (2019) had conducted research on the “A Study on the
Awareness of Tax Saving Instruments of Individual Tax Payers” in this research they
have explained about best tax saving scheme.
According to their research, the assessment of one's financial affairs without violating
the legal provisions of an act is referred to as tax planning. It diminishes an assessee's

27
tax burden by taking full advantage of the act's exemptions, deductions, rebates, and
relief provisions. The purpose of this study is to determine the most appropriate and
popular tax saving instrument used to save tax, as well as the amount saved by using
that instrument by assessees in Srikrishnapuram. The study's overall findings show
that the 80C deduction is the most commonly used tax saving instrument, followed by
the 80EE deduction.
They have said in the research, Tax planning enables a taxpayer to make the best use
of the various tax exemptions, deductions, and benefits in order to minimize their tax
liability over the course of a current financial year. Tax planning is an activity
undertaken to reduce income by making the best use of all available allowances,
deductions, exclusions, and exemptions. Tax management is a subset of tax planning.
It takes the necessary precautions to comply with the legal formalities in order to
obtain tax exemptions and deductions. By charging tax obligations on time, tax
management also protects an assessee from penalty and prosecution.
Objective of their study was to evaluate individuals' level of awareness of various tax
planning options available under the Income Tax Act To identify the best tax-saving
instrument. To figure out the amount saved by using a tax saving instrument.
According to the findings of this study the majority of respondents in
Sreekrishnapuram is aware of the tax saving instruments.
At the end they have concluded that there is much awareness about tax saving
instruments in Sreekrishnapuram. In their research they have suggested, in the near
future, researchers can attempt to study the tax planning of individual assessees in
respect of tax on fringe benefits, bank cash transactions, and securities transactions, as
well as the opinions of tax consultants, industrialists, and trade unions in respect of
tax planning options offered by the Government of India to various categories of
assessees.

Amit Kumar Arora, Pradeep Kumar Garg (2019) the study aimed to determine
higher education teachers' awareness and perceptions of various tax-saving
instruments available to them. The study was carried out to determine which tax-
saving investment options are preferred in order to save tax and what factors are

28
considered before making investment decisions. Descriptive statistics were used to
analyse the data collected from the 347 Ghaziabad respondents. According to the
findings of the study, the majority of higher education teachers take advantage of the
deduction of their wards' fees under Section 80 C. PPF investments and life insurance
premiums are also popular ways to take advantage of the 80 C deduction. Higher
education teachers are well aware of the various deductions, reliefs, and rebates
available under the Indian Income Tax Act. They prefer investment options with low
risk, high returns, and complete tax benefits. It has also been discovered that people
are not investing in NPS, despite the fact that there is an option to save extra tax by
investing up to Rs. 50,000. This is due to a lack of understanding about NPS. Medical
expenses are also underutilised. As a result, the study suggests that teachers of higher
education invest in NPS and increase their expenditure on health insurance in order to
reduce their tax liability.
The study aimed to determine higher education teachers' awareness and perceptions of
various tax-saving instruments available to them. According to the study, higher
education teachers are well aware of the various deductions, reliefs, and rebates
available under the Indian Income Tax Act. They prefer investment options with low
risk, high returns, and complete tax benefits. According to the findings of the study,
respondents believe that the taxation system is difficult and that they need the
assistance of experts to file their income tax returns. The government should try to
simplify the tax system so that anyone can understand and file their own return. It has
also been discovered that people are not investing in NPS, despite the fact that there is
an option to save extra tax by investing up to Rs. 50,000.
This is due to a lack of understanding about NPS. Medical expenses are also
underutilised. As a result, the study suggests that teachers of higher education invest
in NPS and increase their expenditure on health insurance in order to reduce their tax
liability.

Patel & Patel, (2012) concentrated their research on private-sector salaried

employees' investment plans. According to research, salaried individuals want to
maximise their tax benefits while earning a good return on their investments. Because

29
of their low interest rates, post office schemes and fixed deposits are not
recommended tools.

Ansari & Moid, (2013) investigated an individual investor's investment behaviour in

terms of the distribution of left-over income in various investment schemes.
According to the study, one of the most important factors that guides them when
investing is the risk factor associated with that tool. The primary goal of the
investment was to generate additional income, but income and age also play a role in
investment regardless of gender.

Patil & Nandawa, (2014) the study found that Investors are aware of investment
avenues available in India but still investors are preferred to invest in bank deposits,
real estate, metals. The study reveals that 39 percent believe safety is an area of prime
concern while doing investment and other second major categories consisting of 25
percentages of the respondents are investing their money in tax saving scheme to avail
tax benefits.

Sood & Kaur, (2015) investigated the saving and investment habits of salaried class
people and discovered that LIC and bank deposits are the most preferred investment
options, with high returns, tax benefits, and safety being the most important factors to
consider before investing. The researchers advise salaried people to improve their
saving and investing habits.

Sathiyamoorthy & Krishnamurth (2015) In their study on investment patterns and

level of awareness among salaried class investors in Tamil Nadu's Tiruvannamalai
district, they discovered that people still believe bank deposits are the safest way to
keep money for an uncertain future. They are concerned with the security of their
investment rather than the high returns. This type of safe investment is solely for
children's education, marriage, and retirement security.

Pathy, (2016) investigated public awareness of the various investment avenues

available to Cuttack residents and the factors they should consider before investing.

30
Before making an investment decision, a person considered factors such as the type of
return, tax benefits, and risk factors.

Barot, (2016) discovered that government and financial institutions educate people
about tax planning and tax-saving schemes in general. It is also suggested that more
awareness about the insurance sector be generated, which will help the country and
individual grow.

Thulasipriya, (2016) investigated the evidence that investors influence salaried

investors' investment behaviour and examined the investment preferences of salaried
investors. The analysis revealed that salaried investors prefer to have both long-term
and short-term investments for a secure future. To summarise, the salaried group,
regardless of age and annual income, as well as occupation and marital status, prefers
investment options that provide long-term benefits and highly secure and profitable
avenues.

Sundari & Vidhyapriya, (2016) investigated tax prevalence for individuals is to

invest in some avenues where the government has given relaxation for various tax
schemes.
Whereas tax instruments are chosen based on the income of the investors, such as
individuals paying higher taxes or those in a lower tax bracket. The study also reveals
that individuals are not always aware of all of the technical details about the
investment scheme they have chosen.

Ahammad & Lakshmanna, (2017) investigated the various investment options

available as well as the factors that play an important role in selecting the investment
tool with salaried employees. The study concludes that people are well aware of their
options, but they still prefer to invest in metals, bank deposits, chits, and real estate.
The study also discovered that safety and liquidity are the most important factors to
consider when investing. Employees want a more secure and consistent flow of funds
from previous investments.

Mehta & Sharma, (2017) discovered that people prefer to invest their money rather
than save it. Bank fixed deposits, provident funds, life insurance policies, and post

31
office saving schemes were more popular among all due to their safety and tax
benefits.

Arora & Rathi, (2018) investigated salaried employees' knowledge and perceptions
of various tax-saving options. The study used correlation analysis and discovered a
significant difference between men's and women's saving and investing habits.
Furthermore, risk, return, and tax savings were discovered to be the most important
factors for investment decisions. The study also concluded that the medical deduction
is underutilised and that the tax rate for the salaried class should be reduced.

Srinidhi &Lokesh Gautam, (2013) in their research of “Income Tax Planning: A

Study of Tax Saving Instruments” they have explained about Tax planning is an
important component of our financial planning. Efficient tax planning allows us to
keep our tax liability to a bare minimum. This is accomplished by taking advantage of
all tax breaks, deductions, rebates, and allowances while ensuring that your
investments are in line with your long-term objectives. The study's goal is to identify
the most appropriate and popular tax-saving instrument and to examine the amount
saved by using that instrument. Overall findings show that the most popular tax-
saving instrument is life insurance, which received the highest ranking in this study,
and the second most popular tax-saving instrument is provident funds.
The main objective of their studies is to determine the best tax-saving instrument to
use and to calculate the amount saved by using that instrument.
According to the findings of their study, respondents rank various tax saving
instruments in order of priority for tax savings. The most popular tax-saving
instrument is life insurance, which ranked first in this study. The second most popular
tax-saving tool is the Provident Fund. The third option is Tax Saving Fixed Deposits.
Following that, there are Home/Education Loans, National Saving Certificates, Unit
Linked Insurance Plans, Health Insurance Plans, and Equity Linked Saving Schemes.
Infrastructure Bonds, which ranked ninth in this study, are the least widely used tax-
saving instrument.

K.Saravanan & Dr.K.MuthuLakshmi (2017) they have conducted study on “Tax

Saving Instruments of Income Tax in India: A Study on Tax Assessee in Trichy
City” they have conducted research in Trichy for suggesting best tax saving

32
instrument. Main objective of the study is to investigate individual income tax
planning and individual income tax saving instruments. They have suggested that
taxpayer can plan ahead of time for their tax savings instrument by doing so.
According to them Tax planning is an important component of our financial planning.
Efficient tax planning allows us to keep our tax liability to a bare minimum. This is
accomplished by legitimately claiming all tax exemptions, deductions under Chapter
VIA, rebates, and allowances while ensuring that your investments are aligned with
their long-term objectives. The study's goal is to identify the most appropriate and
popular tax-saving instrument and to examine the amount saved by using that
instrument.
Overall findings show that the most commonly used tax saving tool is most
commonly used tax saving instrument is the Provident Fund, which received the
highest ranking in this study, and the second most commonly used tax saving
instrument is a life insurance policy.
At the end they have concluded that respondents rank various tax saving instruments
based on their priority of tax savings. The most widely used tax-saving instrument is
the Provident Fund, which ranked first in this study. The second most popular tax-
saving tool is a life insurance policy. Furthermore, the third option is Housing Loan
Interest and Payment of Housing Loan, and the fourth option is Children Tuition Fees.
Following that, there are Fixed Deposit, National Pension Scheme, National Saving
Certificates, Health Insurance Plans, Donation, and Equity Linked Saving Schemes.
According to them any individual who wants to assess income tax and do tax planning
and savings should first calculate total income, then compute income tax by deduction
and adjustment in total income according to the tax table.

VD Lall (1982), attempted to determine the economic implications of direct taxes on

individuals and businesses in his paper. His research revealed that both the average
tax rate and the marginal tax rate have an impact on the tax paper's mind set,
indicating the need for a professional review of the country's current tax system.

Peter et al. (2001), According to them taxation in its various forms affects an
individual's ability and willingness to work, save, and invest, but the effect varies
depending on the base of tax, rate of tax, and level of tax burden.

33
Ankita (2009), proposed in her study that a small attempt to centralise the personal
income tax structure can benefit both the government and the people in the form of I
an increase in the number of assesses (ii) greater compliance with tax laws (iii) a high
rate of GDP and (iv) improved individual well-being.

Nirmala Dorasamy, (2011) provided an overview of personal income tax

administration reforms as a mechanism to improve revenue collection on the one hand
and the availability of a larger pool of funds for public welfare on the other. The
author discovered that a comprehensive tax policy encourages individuals to comply
with tax law; otherwise, they will use unfair means to reduce their tax burden.

C. Sumitra Devi Prof. A. Sudhakar (2018), in their research of “A Study on

Awareness of Tax Saving Schemes Among Women Faculty of Degree Colleges of
Hyderabad District” they have explained about amount of awareness about various
tax scheme such as 80C, and 80D. As per their studies Investment is the exchange of
a certain present value for an unknown future reward. Investing is always exciting,
challenging, and rewarding. Investment entails selecting the appropriate instruments /
schemes with the goal of maximising returns. Individuals' risk-taking capabilities
influence the type of instrument/investment they choose. As risk-taking capability
varies from person to person depending on risk-taking nature, age, family and other
responsibilities and obligations, availability of surplus funds for investment, and so
on. Individuals will have a different set of investment options.
They have said that Tax planning is an important component of financial planning.
Efficient tax planning allows us to keep our tax liability to a bare minimum. This is
accomplished by legitimately taking advantage of all tax breaks, deductions, rebates,
and allowances while ensuring that the investments are consistent with their long-term
objectives. The goal of this paper is to determine the level of awareness of tax-saving
schemes and the preference for tax-saving schemes among women faculty at
Hyderabad's degree colleges.
At last, they have concluded in their research that the respondents have only basic
knowledge and awareness of various tax saving schemes under sections 80C and 80D
and prefer to invest in mutual funds because they have liquidity to meet their short
and medium-term goals and are also investing in house loans to meet their long-term
goals.

34
Arora and Garg (2019), conducted this study to learn about the teachers' awareness
and perceptions of the various tax saving instruments available to save taxes.
Teachers are well-versed in the various deductions, reliefs, and rebates provided by
the Indian Income Tax Act. They prefer investment options with low risk, high
returns, and complete tax benefits.

Varsha Singhania (2021), in the research of “A Study on Awareness of Investment in

Tax Saving Products” have provided rate of awareness of tax saving investment
among people. She has explained that Tax saving is an important concept because it
facilitates in obtaining deductions under Section 80 C and other deductions.
This research study assists in determining how one can benefit from Indian tax
systems by utilising various investment options listed under Section 80 C of the
Income Tax Act of 1961. This section allows for deductions of up to Rs. 1,50,000.
PPF, NSS, NPS, and ELSS are examples of these investments. The primary goal of
the study was to learn about the respondents' awareness of tax planning and
deductions, the source of that awareness, and the reason for their investment
preference. Tax planning aids in the reduction of tax liability and the utilisation of
various reliefs, deductions, exemptions, and rebates provided by the Income Tax Act
of 1961. The purpose of this research is to determine the most preferred tax saving
instrument and the reasons for its selection based on the aforementioned criteria.
The study's overall findings show that 80 C deductions are the most preferred.
From her studies it can be concluded that respondents have only basic knowledge and
awareness of various tax saving schemes under Section 80 C and prefer to invest in
the National Pension System and National Savings Certificate but are unaware of the
various Tax Savings Products that are eligible for deductions and benefits under
Section 80 CCD to 80 U are the remaining sections.

Dr. AbhishekJanvier Frederick1, Dr. Sebastian.T. Joseph2 and Mr. Jonathan

Joe Pereria3, (2017) in their study of “A comprehensive study among the working
woman towards the awareness of tax saving scheme in Allahabad” as per their
research, the government must play an important role in the overall development of
society and the country. Taxation is the primary means by which the government
generates revenue for public spending. In India, income tax accounts for up to 52.28%

35
of total government revenue (14-15 MOF). Because of the compulsion element, every
taxpayer is faced with the problem of determining the best ways to reduce their tax
liabilities. However, paying taxes is always a difficult task because it directly affects
the taxpayer's residual income. As a result, every individual strives to reduce their tax
liability by managing their financial affairs.
Tax planning is essential for all taxpayers in order to reduce their tax liability and stay
in compliance with the income tax rules. In order to reap the benefits of tax planning,
the assessee must be aware of the various provisions of tax savings schemes available
under the law. This paper investigates working women's awareness of tax benefit
schemes, as well as their investment patterns in tax benefit schemes in Allahabad.
In this they have recommend that….
Working women should be properly educated on financial terms.
The government should take the necessary steps to improve financial literacy among
working women.
It is necessary to establish knowledge centres for any questions regarding tax saving
schemes and investment options.

Prof.Gururaj S Barki1 Dr.M N Kaddipudi2 Dr. S G Vibhuti3 (2018), have done

extensive research on “Awareness of tax saving pattern of an Individual assessee – a
study of Haveri District” They discovered that in the current scenario, there are
numerous avenues available to earn and increase the existing level of income within
the framework of the law. Both the public and private sectors offer numerous
opportunities to earn more money and raise one's standard of living. Always,
opportunities threaten to be met with problems. The cost of living continues to rise
over time. The difficulties that middle-class people face in keeping their expenses
within their income level. Increases in income and adjusting expenditure within the
level of their income are also major challenges, but saving out of it for the future is a
major challenge. There are numerous opportunities for income enhancement and
growth for those who save money on a regular basis. In fact, a wide range of financial
products are currently available on the market to help people increase their savings. In
general, from an accounting standpoint, savings is a beneficial difference in income
and expenditure; however, another type of saving is popular, which is to be saved
with the help of proper tax planning adopted by the tax payer. Currently, the service
industry plays an important role in encouraging individuals to save money on their

36
taxes. Their study is limited to the second type of savings, namely the pattern of tax
savings by the general public in the study area.
The study concludes that, despite the fact that there are numerous obstacles in the
service industry and tax savings, tax payers are entitled to all of the government's
benefits. The contribution of each individual to the tax is critical. In fact, all service
industries contribute significantly to a country's economy.

David Wildasin and Robin Boadway (1995), The study is based on aggregate
savings behaviour, micro level savings analysis, and how taxation affects an
individual's savings. This paper also focused on the younger cohort's savings habits
and the impact on their way of life.

Geetha and Ramesh (2011), The author of a study on people's investment

preferences concluded that investment in insurance, NSC, EPFs, and bank deposits
are important to different age groups. The respondents' income level is also important
for the investment goal.

Gopalkrishnan and Mane (2013), investigated people's preferences for various tax-
saving schemes. The tax-saving schemes in which investors have invested, in order to
identify patterns of tax-saving scheme investment. Data is needed to determine the
historical growth of investment in various tax-saving schemes.

Thirumaran & Ganesh, (2012) discovered that insurance companies in India are
essential for saving. He conducted research to better understand consumer interest in
insurance products and the factors that influence insurance product selection.
According to the study, the beginning of insurance was looked at as a 'tax-benefits'
investment.

Gupta, (2012), Impact of Taxation on Saving and Investment: The study was
conducted to investigate the socioeconomic status and knowledge of tax saving
schemes among individuals and investors. to investigate whether these schemes instil
a saving habit in investors and to suggest appropriate measures for a better tax
structure The paper concluded that if an investor's liabilities are reduced, he will have
more income, which is often used for saving and investing.

37
The specified source is invalid. The notice and perception regarding various tax
saving instruments available too many to avoid wasting a lot of tax to the teachers of
higher education were studied.
The study was carried out to determine which tax-saving investment options are
preferred by many in order to avoid wasting a lot of tax and what factors are
considered before making investment decisions. The specified source is invalid. The
study discovered that lenders are aware of convenient investment avenues in India,
but investors still prefer to finance in bank deposits and real estate. According to the
study, 39 percent of respondents prioritise trust protection when investing, and the
second major category, comprising 25 percent of respondents, invests their funds in
tax-saving schemes to take advantage of tax breaks.

Savita & Gautam, (2013), Taxation Planning: “A Study of Tax Saving Instruments”
The purpose of this paper was to investigate the various options for tax-saving
investments. The goal of the research was to identify the most popular type of tax-
saving investment. It was discovered that the most popular type of investment was
premium obtained insurance, followed by provident fund contribution and glued
deposits savings. It also expresses that as income grows, so does investment for tax
savings, implying a direct relationship between income and investment.

Som Subhram Mahato (2021), “A Study on Efficient Tax Saving Management

through Different Tax Deduction in the Old Regime and Comparative Analysis
between “Old Tax Regime and New Tax Regime” in his study he explains us A
comparison of the old and new tax regimes in terms of different tax slabs and income
categories. The paper also demonstrates that saving and investing is an important part
of one's life because our government allows tax deductions and exemptions in the old
tax regime. As an investor, which tax regime will be beneficial to individuals based
on their income section and investment purpose has been examined in this paper. The
paper is analysed using secondary data collected from various government platforms,
as well as an analysis of 16 papers and 4 articles on the topic.
The research study demonstrates how one individual can take advantage of the Indian
tax system by investing in various tax saving schemes, as well as a comparative
analysis of the old tax regime and new tax regime with different income sections to
demonstrate which will save the individual the most.

38
The study's goal is to examine academicians' investment patterns as well as their level
of knowledge about the various tax planning schemes available to them.
He has suggested that, individuals who use deductions and exemptions in their tax
planning will continue to benefit under the current old regime for salaried individuals.
Individuals who use tax saving schemes to save money should stick with the old tax
system. Individual who values investments and Individuals who have no tax planning
and use none of the exemptions and deductions during tax payment will benefit from
the new tax regime because the slab rates have been reduced and the new regime
payable tax will be less than the old tax regime without the benefits of exemptions
and deductions. Individuals who have recently entered the tax payable zone and wish
to avoid the complexities of taxation should choose a new tax regime.

Mrs. R. Vasanthi, (2015) in her research of “A Study on Tax Planning Pattern of

Salaried Assessee” the main objective was to identify the study's selected respondents'
income and savings elements, to investigate the pattern of individual tax planning, to
make appropriate recommendations and draw appropriate conclusions.
Under her study It has been discovered that the overwhelming majority of salaried
employees have a favourable and very favourable opinion of the direct tax imposed. It
is concluded that salaried employees lower their tax liability.

Peter et al. (2012) According to him there is a strong correlation between the
Assesses' age and their awareness of tax planning; however, even though the
employees are aware of various tax planning strategies, they rarely put them into
practise. When it comes to effective tax planning, neither the Employer nor the Tax
Administration provide training or education to those who are paid a salary. Taxation
in all of its forms has an impact on a person's capacity and willingness to work, save
money, and invest, but the impact varies depending on the tax's base, rate, and level of
burden.

Sarkar, (2013) According to him the main goal of tax incentives in India is to
encourage taxpayers to save and invest more money. The study evaluated and
critically analysed the forgiving tax policy of various exemptions in an effort to speed
up economic growth.

39
James', (2014) As per his opinion, incentives should be as affordable as possible and
shouldn't interfere with government revenue sources.
Targeted—will lower revenue costs by helping the nation in ways that wouldn't have
been possible without incentives. Simple: The administration of the incentive scheme
should make it simple to access and determine eligibility. The investment incentives
should be periodically reviewed to assess their applicability and economic benefit in
comparison to their budgetary and other costs.

Ankita, (2015) recommended in her study that a moderate effort to rationalise the
personal income tax system could benefit the government as well as the populace
through (a) a rise in the number of assesses (b) a high rate of GDP (c) significantly
larger compliance with tax laws (d) and better individual wellbeing.

Dorasamy, (2016) gave an overview of changes to the way personal income taxes
are administered as a way to increase revenue collection while also making more
money available for the general public's welfare. He discovered that a thorough tax
policy encourages more people to respect the rules otherwise they use unethical
methods to lower their tax burden.

Gupta, (2017) According to her tax saving schemes are a tool for facilitating the habit
of saving and investing as well as a way to direct resources toward productive uses,
but they are not a very successful attempt because people don't save with the intention
of making productive investments rather than saving to lower their tax burden. She
continued by saying that a nation's tax system should be sensible and sound because it
influences how tax payers save and invest their money.

Rajitha et al., (2018) discovered that socio-economic status and gender are important
factors when deciding whether to save or pay taxes, with 62% of men preferring to do
so compared to 60% of women. They also discovered that age and gender are
important factors when deciding whether to save or pay taxes. Before deciding on any
tax-saving options, they advised tax payers to research the advantages of the available
plans, consider their personal situation, make their decision based on the risk-return
profile, and take liquidity and flexibility into account.

40
Dr J.A. Sarvaiya & Dr Rajesh P Ganatra (2019) in their research of “Examining
the perceptions of the tax payers with respect to Deduction under Section 80C to 80U
of Income tax Act in Ahmedabad City” they have explained that every taxpayer's
primary objective is to reduce their tax liability. Planning for taxes entails making
sure you take advantage of all the Act's provided exemptions, deductions, and rebates.
The Income Tax Law itself offers a number of tax planning strategies. It is typically
covered by exemptions under Section 10, deductions under Sections 80C to 80U, and
rebates and reliefs. This study aims to investigate taxpayers' attitudes and behavioural
patterns regarding the various deductions allowed by sections 80C-80U of the Income
Tax Act, including donations, rent, interest on savings accounts, PPF, LIC premiums,
PF, FDs, National Pension Scheme, Rajiv Gandhi Equity Linked Savings Scheme,
and Mediclaim. Additionally, the researcher attempts to determine whether there is a
statistically significant difference between taxpayers' perceptions of deductions under
sections 80C and 80U in relation to their demographic characteristics.
The goal of their study was to determine whether there are any appreciable
differences between tax payers' perceptions of deductions under Sections 80C to 80U
of the Income Tax Act and the demographic characteristics of those taxpayers who
are willing to invest in tax-saving strategies.
At the end they have concluded the customer's long-standing relationship with the
bank, financial institution, or insurance provider heavily influences their choice to
invest in various tax planning avenues. Additionally, it is much more economical to
push products through this channel.
Furthermore, the study demonstrates that demographic factors like age, income, and
occupation have a significant influence on tax payers' perceptions of the tax saving
programmes offered by banks, financial institutions, and insurance companies.
Therefore, when selling tax-saving products or schemes, banks, financial institutions,
or insurance firms must take into account the demographic characteristics of the tax
payers.
Bharathraj Shetty and M. Muthu Gopalakrishnan in (2013) An analysis of
investors' attitudes toward various tax-saving programmes was published in the
International Research Journal of Business and Management. The study examined
investor preferences for various tax-saving plans that were allowed by the Income Tax
Act of 1961. The Study looks at the investments that these investors have made as
well as investment patterns in tax-saving plans.

41
It was determined that people use tax-saving investments to lessen their tax liability
through tax planning. There are numerous plans for reducing taxes. There are some
tax savings investments that are better suited for people in higher tax brackets than
others, so not all investors will benefit equally from them. While investing, not
everyone is aware of all the advantages offered by a particular investment. Therefore,
investors must use all reasonable means to ensure that the investment terms are
known. The researcher also recommends that the government and financial
institutions & informing the community of various tax-savings plans and enticing
investment opportunities organise a programme for investor education.

Radha Gupta (2012) Impact of Income Tax on Saving and Investment: A Case Study
of Indian Journal of Applied Research, Jammu, Volume 2, Number 3, ISSN 2249-
555X The study was conducted to determine the socioeconomic status and investors'
and individuals' knowledge of tax-saving plans. to determine whether these schemes
encourage investors to save money and to recommend appropriate actions for a better
tax structure. According to the paper's conclusion, if an investor's tax liability is
reduced, he will have more disposable income that can be used for investing and
saving instead. A high tax burden brought on by a high tax rate may encourage tax
evasion, which may not be good for the country as a whole. Although tax savings
encourage the habit of saving, but it has a discouraging side because people tend to
save for burden reduction rather than for making productive investments.

CHAPTER -3
RESEARCH AND METHDOLOGY

3.1 SIGNIFICANCE OF STUDY

Clamming deduction under different sections of Income Tax helps the taxpayer in
multiple ways for that they must need to be aware of such deduction and thereby have

42
to make tax planning. This study helps the tax payer to get brief glance about various
types of deduction and tax saving instruments. Specially this study focuses to improve
knowledge of taxpayer about section 80DDB.
By help of this research tax payer will be in the position to file income tax return in
most beneficial manner. And through this study taxpayer can get maximum deduction
under income tax within the frame work of the government. He would be not
punishable under any Act of Income Tax.

3.2 OBJECTIVES OF THE STUDY

 To help tax payers to reduce their taxable income by way of calming
deductions available under Income Tax Return.
 To assess individuals' knowledge of various tax planning strategies available
under the Income Tax Act.
 To determine the best tax saving instrument to use in order to save money.
 To study specifically about the awareness of Deduction available Under
section 80DDB among citizens of Mumbai region.
 To know the Tax filers perception on the section 80DDB deduction.
 To make all information available related to section 80DDB deduction.
 To help individual for claiming deduction under section 80DDB.
 To research individual income tax planning.
 To investigate the various saving options available to individuals under
Income taxation.

3.3 HYPOTHESIS
H0: - There is no awareness about deduction available under section 80DDB of
income tax act among citizens of Mumbai region.
H1: - citizens are aware about the deduction available under section 80DDB of
income tax act in region of Mumbai.

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3.4 SCOPE OF THE STUDY
 This study is about the awareness of Deduction available under section
80DDB under the income tax act among citizens of ‘Mumbai region’.
 The taxpayer’s perspective on 80DDB deduction.
 The benefits of Deduction to the taxpayers.
 The way to claim 80ddb deduction.
 Taxation is regarded as a complicated issue that affects Individual income
tax assesses' financial planning The study's scope is limited to tax planning
measures. utilised by salaried income tax assessors.
 Saving practises, investment patterns, and tax planning measures taken
during the study period.

3.5 SAMPLE SIZE

Population: The study aimed to include the taxpayer and non-taxpayer citizens in
Mumbai region, to study the awareness of Deduction available under the section
80DDB of the income tax act among citizens of Mumbai.
Sample Size: A Sample size of 101 respondents will be taken for the current study
because it is not possible to cover the whole universe in the available time period. So,
it is necessary to take the sample size. In 101 respondents of Mumbai region. The
samples are the peoples of age group lying between eighteen to thirty years. The
sample will be taken in the form of strata based on age, sex, and income group.
Sampling technique: The sampling technique will be probabilistic sampling more
specifically the random convenient and judgmental sampling will be used. As in
probabilistic sampling the select unit for observation with known probabilities so that
statistically sound assumptions are supported from the sample to entire population so
that we had positive probability of being selected into the sample. I will go for
stratified random sampling as we are interested to study the 80DDB deduction so we
will make the strata on the basis of age, occupation, income level, gender.

3.6 DATA COLLECTION

I have used primary source of data that is structured questionnaire. As this deduction
introduced many years ago, so many researchers have done research on this topic, and
I used secondary data also and also use this data for the help of this research. So, this

44
research data has been collected from the primary source and secondary source. My
method of collecting the data is from the questionnaire that will be filled by the
respondent from the sample, it will be structured questionnaire.

3.7 TECHNIQUES AND TOOLS TO BE USED

3.7.1 Tools for Data Collection:

 Questionnaire

 Interview

3.7.2 Tools Data Analysis:

As no study could be successfully completed without proper tools

& Techniques, same with my project. For the better presentation and right
explanation, I used tools of statistics and computer very frequently and I am very
thankful to all those tools for helping me a lot. Basic tools which I used for project
are:

 PIE DIAGRAM

 TABLES

Bar charts and pie charts are very useful tools for every research to show the result in
a clear, simple way. Because I used bar charts and pie charts in my project for
showing data in a systematic way. So, I did not find it necessary for any observer to
read all the theoretical detail, simple on seeing the charts anybody that what is being
said.

3.8 LIMITATION OF THE STUDY

LIMITATIONS: Although best of the efforts were made to conduct a prefect survey
but still it faces certain limitation. Following is certain limitation of this project.
 The survey was conducted only on 101 respondents of Mumbai region.

45
  Some of the respondents did not answer all the questions, which could hamper
the final results to a certain extent.
 The study confines itself to the respondents of ‘MUMBAI' region only. Hence
findings would not be relevant to other cities.
 It was difficult to obtain the data because people who file Income Tax Returns
were unwilling to provide it.
 The information given by the respondents might be biased because some of
them might not be interested in providing correct information
 The citizens supported us a lot but did not have sufficient time to clear all the
points elaborately.
 This research study was time bound and only certain criteria were taken up for
study.
 The research was carried out in a short period of time so. Therefore, the
sample size and other parameters were selected accordingly so as to finish the
work given time frame.
 Some of the respondents might have been biased in their responses as it
depends on their experience gained by them during claiming the deduction.
 Some people found it difficult to fill out the deductions they were entitled to
because their returns were filed by Chartered Accountants and others.

CHAPTER -4
OTHER IMPORATANT TOPICS
4.1 HISTORY

46
It is widely assumed that taxes on income and wealth are of recent origin, but there is
sufficient evidence to show that taxes on income were levied in some form or another
even in primitive and ancient communities. The term "tax" derives from the word
"taxation," which means an estimate. These were levied on the sale and purchase
of goods or livestock and were collected haphazardly from time to time. Ceaser
Augustus issued a decree nearly 2000 years ago mandating that all of the world be
taxed. In Greece, Germany, and the Roman Empires, taxes were levied on a variety of
grounds, including turnover and occupation. For many centuries, tax revenue went to
the Monarch. Taxes were levied on land and moveable property in Northern England,
such as the Saladin title in 1188. Later, poll taxes and indirect taxes known as
"Ancient Customs," which were duties on wool, leather, and hides, were introduced to
supplement these. These levies and taxes, in various forms and on various
commodities and professions, were imposed to meet the needs of governments to
meet their military and civil expenditures, as well as to meet the common needs of
citizens such as road maintenance, administration of justice, and other State functions.
The system of direct taxation, as it is known today, has existed in India in some form
or another since ancient times. A variety of tax measures are mentioned in both
Manu Smriti and Arthasastra. According to the Sastras, Manu, the ancient sage and
law-giver, stated that the king could levy taxes. The wise sage advised that taxes be
levied based on the subject's income and expenditure. He did, however, warn the king
against excessive taxation, stating that both extremes, namely complete absence of
taxes or exorbitant taxation, should be avoided. According to him, the king should
arrange for tax collection in such a way that the subjects do not feel the pinch of
having to pay taxes. He stipulated that traders and artisans pay 1/5th of their profits
in silver and gold, while farmers pay 1/6th, 1/8th, and 1/10th of their produce,
depending on their circumstances. Manu's detailed analysis on the subject clearly
demonstrates the existence of a well-planned taxation system, even in ancient times.
Furthermore, taxes were levied on various classes of people such as actors, dancers,
singers, and even dancing girls. Taxes were paid in the form of gold bullion, cattle,
grains, raw materials, and personal service.
However, it is Kautilya's Arthasastra that deals with the taxation system in a very
detailed and planned manner. This well-known treatise on statecrafts, written
sometime around 300 B.C., when the Mauryan Empire was on its glorious ascent, is

47
truly amazing, for its in-depth study of that time's civilization and the suggestions
given to guide a king in running the State in the most efficient and fruitful manner.
Kautilya discussed in detail the trade and commerce conducted with foreign countries,
as well as the Mauryan Empire's active interest in promoting such trade. Goods were
imported from China, Ceylon, and other countries, and a vartanam tax was levied on
all foreign commodities brought into the country. Another levy known as Dvarodaya
was levied on concerned businessmen for the import of foreign goods. In addition,
various ferry fees were imposed to supplement tax collection.
The collection of income tax was well organized, and it constituted a significant
portion of the State's revenue. The revenues collected in this manner were spent on
social services such as road construction, the establishment of educational institutions,
the establishment of new villages, and other activities beneficial to the community.
Kautilya also described the Mauryan Empire's tax administration system in great
detail. It is remarkable that the current tax system is similar in many ways to the
taxation system that was popular about 2300 years ago. Each tax was specific, and
there was no room for arbitrariness, according to the Arthasastra.
In general, it can be stated without fear of contradiction that Kautilya's Arthasastra
was the country's first authoritative text on public finance, administration, and fiscal
laws. His concept of tax revenue and on-tax revenue was a one-of-a-kind contribution
to tax administration. It was he who recognized the importance of tax revenues in the
administration of the state and their far-reaching contribution to the Empire's
prosperity and stability. It is truly a one-of-a-kind treatise. It defines the art of
statecraft, including economic and financial administration, in precise terms.
codification history of taxation in India
1860 -The Tax was introduced for the first time in India by sir James Wilson. It was
Introduced on 7 April, 1860 (pre- independence). Which was included income from
land property, profession & trades, securities, salaries and pensions.
Time by time this act was replaced by several taxes.
1886 – In this year separate Income Tax Act was passed. This Act remained in force
up to, with various Amendments from time to time. There were various heads of
income included which are salaries, pension or gratuities, Net profit of companies,
Interest on securities of the government of India, other sources of income.
1918 - New Income Tax Act was passed.

48
1922 - Again it was replaced. It was that Act which was first timely included with a
specific nomenclature to various Income Tax Authorities. Which had become veery
complicated in account. The government of India therefor referred it to the law
commission in 1956 with a view to simplify and prevent the evasion of tax.
1961 - Finally in this year Income Tax Act, 1961 was passed in India. Brought into
the force with 1st April 1962. which is applies to the whole of India (including Jammu
and Kashmir) Income Tax Act by the Union Budget every year which also contains
financial bill. After it is passed by the both houses of parliament and receives the
assent of president of India, it become the financial act.
At present, there are five heads of income: -
 Income from salaries - The payment made to an employee as compensation
for their services is known as income from salary. However, this sum is only
taken into account as income for tax purposes under the Income Tax Act if
there is an employment relationship between the payer and the payer of the
compensation.
 Income from house property - Income from House Property is defined as
"Rent Received or Receivable from House Properties Owned by a Person
Other Than Those Which are Occupied by Him for the Purpose of Any
Business or Profession Carried on by Him."
 Income from profit and gains of business or profession - Your profession
or business' profits and gains are deducted from any income you receive under
this heading. The difference between business operating credit receipts and
business expenses is the income subject to taxation.
 Income from capital gain - it is Any profit or gain realized from selling
investments-related capital assets will be subject to taxation under the "Income
from Capital Gain" heading. Any Long-Term Capital Asset or Short-Term
Capital Asset may yield the gain.
 Income from other sources - Any income, profits, or gains that are
chargeable under the head "Income from other sources" and that are included
in the assessee's total income but cannot be included under any of the
preceding heads of income.
4.2 OTHER IMPORTANT DEDCUTION UNDER INCOME TAX
FROM 80C TO 80U ALSO KNOWN AS CHAPTER VI A: -

49
 CHAPTER VI A
PART - A PART - B PART - C PART - CA PART - D
SECTION SECTION SECTION SECTION SECTION
80A 80C 80-IA 80TTA 80U
80AB 80CCC 80-IAB 80TTB
80AC 80CCD 80-IAC
80D 80-IB, IBA
80DD 80-IC
80DDB 80-ID
80E 80-IE
80EE 80JJA
80G 80JJAA
80GG 80LA, 80P
80GGA 80PPA
80GGB 80QQB
80GGC 80RRB

SECTION 80A = DEDUCTIONS TO BE MADE IN COMPUTING TOTAL

INCOME

In computing the total income of an assessee, the deductions specified under chapter
VI A in sections 80CCA to 80U shall be allowed from his gross total income in
accordance with and subject to the provisions discussed in this chapter.

 The aggregate amount of the deductions under this chapter shall not exceed
the gross to income under any circumstances.
 Where, in computing total income of a firm, associations of persons, any
deduction is admissible under section 80G, no deduction can be claimed in
respect of the same in computing the total income of a partner of the firm or as
the member of the AOP in relations to the share in income of such
partner/member.

50
  Where any deduction in respect of certain incomes is to be allowed, it will be
calculated with reference to the gross amount of income as reduced by any
allowable expenditure of this income (u/s 80AB).

SECTION 80C = DEDUCTION IN RESPECT OF LIFE INSURANCE

PREMIA DEFERRED ANNUITY CONTRIBUTION TO PROVIDENT FUND,
SUBSCRIPTION TO CERTAIN EQUITY SHARES OR DEBENTURES ETC.:
U/S 80C

Deduction under this section is available to

 An Individual or
 A Hindu Undivided family

SPECIFIED SAVINGS QUALIFYING FOR DEDUCTION U'S 80C

80C enumerates following sums paid or deposited in the previous year by the assessee

INVESTMENT AVERAGE LOCK IN RISK FACTOR

OPTION INTEREST PERIOD
NPS SCHEME 8% -10% 3 years High
PPF 7.10% 5 years Low
TAX SAVING FD 7% - 8% 5 years Low
ELSS FUND 12%- 15% 3 years High
SUKANYA 8.4% Till girl reaches 21 Low
SAMRIDDHI years of age
YOJANA
SENIOR 7.4% 5 years Low
CITIZEN
SAVING
SCHEME
NATIONAL 6.8% 5 years Low

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SECTION 80CCC = DEDUCTION IN RESPECT OF CONTRIBUTION TO
CERTAIN PENSION FUNDS.

 Deduction under this section is available to an individual only.

 Where an assessee has paid or deposited in the previous year any sum out of
his income chargeable to tax, under an annuity plan of Life Insurance
Corporation or any other insurer for receiving pension from the fund set up by
the said corporation, will be allowed as a deduction in the computation of his
total income.
 The amount of deduction is actual amount paid/deposited or 1,50,000/-
whichever is less.
 Where the assessee or his nominee surrenders the annuity before maturity date
of such annuity the surrender value together with interest or bonus accrued or
credited to assessee’s account shall be taxable in the hands of the assessee or
his nominee in the year of receipt.
 Any amount received as pension to the assessee or his nominee will be taxable
in the year of receipt.

SECTION 80D = DEDUCTION IN RESPECT OF MEDICAL INSURANCE

PREMIA

Deduction under this Section is available to:

1. An individual

2. An HUF

The deduction shall be allowed from the total income of the assessee in respect of the
amount paid by cheque or any other mode other than cash, out of his income
chargeable to tax in the previous years as stated below:

 Where the assessee is an Individual, any sum paid to effect or to keep in force
an urance on the health of the assessee or his family (family means the spouse
and dependent children of assessee) or contribution made to Central
Government Health scheme.

52
  Where the assessee in an Individual, any sums paid to effect or keep in force
an insurance on the health of the parent or parents of the assessee.
 Where the assessee is a Hindu undivided family, any sum paid to effect or to
keep in force an insurance on the health of any member of the family.

This deduction is allowed if insurance premium is paid in accordance of the scheme

framed behalf by the General Insurance Corporation of India and approved by the
Central Government other insurer approved by Insurance Regulatory and
Development Authority, or any such contribution by an individual to the Central
Government Health Scheme (CGHS).

SECTION 80DD = DEDUCTION IN RESPECT OF MANTENANCE

INCLUDING MEDICAL TREATMENT OF A DEPENDANT WHO IS A
PERSON WITH DISABILITY.

1. Deduction is available to

(i) Resident Individual (ii) HUF

2. Deduction is available for:

 The assessee who has incurred an expenditure for the medical treatment
including nursing, training and rehabilitation of a dependent being a
person of disability and/or
 The assessee has paid on deposited under any scheme framed in this
behalf by LIC or any other insurer, or administrator or specified company
and approved by board is this behalf. for maintenance of dependent, being
a person of with disability.

3. Amount of Deduction:

 A fixed amount of deduction of 75.000 is allowed irrespective of the

amount of expenditure incurred or deposited under the above-mentioned
point for a dependent person with disability.
 A higher deduction of 1.25.000 shall be allowed in place of 75,000 where
such dependent is a "Person with severe disability.

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4. For the purpose of this section:

a) "Dependent" means

(i) In the care of an individual, means spouse children parents, brothers and
sisters of the individual or any of them
(ii) In the care of HUF, means a member of HUF family
(iii) Such person is wholly or mainly dependent upon such individual or HUF
for support and maintenance and
(iv) Such person has claimed any deduction under section 80U in computing
his total income for the assessment year relating to the previous year.

b) Person with "disability shall have the meaning assigned to it in section 2(i)of
the persons with disabilities (equal opportunities, protection of rights and full
participation) Act. 1995
c) c) Person with severe disability means a person with 80% or more of one or
more disabilities as referred to in section 56 of the persons with disabilities
Act, 1995 and persons referred to in section 2 of National trust of welfare of
persons with autism, celebral palsy, mental Retardation and multiple
disabilities act, 1999.
d) For claiming the deduction, the assessee shall have to furnish a copy of the
certificate issued by the medical authority along with the return of income.
Where the condition requires reassessment a fresh certificate from medical
authority shall have to be obtained after the expiry of the period mentioned in
the original certificate in order to continue the claim of deduction.

5. Where the assessee has paid or deposited under any scheme framed by the LIC or
any similar authority, and the dependent with disability predeceases the
individual or the member of the HUF family referred to above, the above amount
shall be deemed to be the taxable income of the assessee for the previous year in
which such an amount is received by the assessee.

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SECTION 80E = DEDUCTION IN RESPECT OF INTEREST ON LOAN
TAKEN FOR HIGHER EDUCATION.

1. Deduction is available to an Individual assessee

2. Purpose of Loan

The loan is taken from financial institution for the purpose of his education or his
relatives (i.e., Spouse/Children or the student for whom the individual is the legal
guardian)

3. Amount of Deduction

a) An amount paid by the individual drawing the previous year by way of

"interest on loan", out his income chargeable to tax.
b) The above deduction is allowed,

(i) From the assessment year relevant to the previous year in which the
assessee starts paying the interest on the loan and immediately succeeding
7 assessment year. OR
(ii) Until the above interest is paid in full

(i) or ii) whichever is earlier.

4. a) financial institution here means a banking company or a notified financial

institution or an approved charitable institution under section 10(23C) or
section 80(2) (a)

b) Higher education here means Any course of study pursued after passing
the senior secondary examination or its equivalent from any school. board or
university recognized by the central government or state government or local
authority or by any authority authorized by the central government or state
government or local authority.

55
SECTION 80 TTB = DEDUCTION OF INTEREST ON DEPOSITS FOR
SENIOR CITIZENS.

 In Budget 2018, a new section 80TTB was introduced, allowing deductions

for interest income from deposits held by senior citizens. The deduction is
limited to Rs.50,000.

 There will be no further deductions under section 80TTA. Along with Section
80 TTB, Section 194A of the Act will be amended to raise the TDS threshold
limit on interest income payable to senior citizens. The previous limit was Rs
10,000, which was increased to Rs 50,000 in the most recent Budget.

SECTION 80 TTA = DEDUCTION FROM GROSS TOTAL INCOME FOR

INTEREST ON SAVING BANK ACCOUNT.

 If you are an individual or a HUF, you can deduct up to Rs 10,000 from the
interest income earned on your savings account with a bank, co-operative
society, or post office. Include interest from a savings account in your other
income.
 The Section 80TTA deduction does not apply to interest income from fixed
deposits, recurring deposits, or corporate bonds.

SECTION 80U = DEDUCTION IN THE CASE OF PERSON WITH

DISABILITY.

The deduction is allowed only to an individual 1.who will satisfy the following
conditions:

 The individual is a resident in India.

 Such an individual at the end of the previous year, is suffering from a
disability (i.e. action, cerebral palsy, multiple disability blindness, low vision,
leprosy cured, hearing impairment, locomotor disability, mental retardation
and mental illness) which is certified by a medical authority.
 Every individual claiming a deduction under this section shall furnish a copy
of the certificate issued by the medical authority, along with the return of
income, in respect of assessment year for which the deduction is claimed.

56
  An individual satisfying the above condition shall be allowed a deduction of
75,000. However, if such an individual is a person with SEVERE disability,
the amount of deduction would be 1,25,000.
 "Person with severe disability means a person with 80% or more of one or
more disability as referred to in Section 56(4) of the Person with Equal
Opportunity, Protect of Right and Full Participation Act, 1995 or a person with
severe disability referred to in Section 2(0) of Nation Trust for welfare of
person with Autism, Cerebral Palsy. Mental Retardation and multiple
disability Act. 1999.

4.3 WAYS TO MAXIMIZE TAX DEDUCTION

To identify tax deductions and credits that you may be eligible for, you'll need to do
some research and planning. It's a good idea to start planning ahead of time and to
incorporate tax considerations into your regular bookkeeping practices. Maintaining
basic small business bookkeeping records will help you maximize your deductions
and make tax season a little easier. Begin by keeping track of your itemized
deductions throughout the year. Don't wait until the end of the quarter or even the end
of the month to record a business expense. You'll save a lot of time and effort if you
record the expense right away. Remember to keep track of your receipts. These
practices will benefit your own record-keeping, but they will also be useful if you are
audited.
Tax deductions and credits frequently have a lot of fine print, so it can take some time
to fully understand what you might be eligible for. It's best to consult with a
professional to ensure you don't overlook any important details.
Here are seven pointers to help you to maximize your deductions this tax season:

 Make Charitable Contributions

Donating to a charitable organization will not only make you feel good about
supporting a worthy cause, but it will also help you with your taxes. If you're a
regular donor, some charities may send you an end-of-year statement, but it's
also a good idea to keep track of your donations yourself. Remember to
itemize your deductions if you want to reduce your adjusted gross income
through donations. Claiming a standard deduction for charitable contributions
has no effect on your tax return. In most cases, the deduction limit is 50% of

57
 your AGI, and the deduction must be made to a qualified organization. This
deduction is probably only worthwhile if you make significant contributions,
but it's always a good idea to double-check with a tax professional.

 Contribute to your 401(k) and HSA.

You should always understand the importance of saving for retirement,
regardless of your age. This crucial practice has two advantages: it increases
your savings and maximizes your tax deductions. However, keep in mind that
the IRS imposes annual limits on the amount of retirement contributions you
can deduct from your taxes. To reap the most benefits, try to contribute the
most money possible. These IRA deduction limits are determined by your
income level and 401(k) status. If you have an employer-sponsored retirement
plan, make sure to deduct the maximum amount of income that you can
comfortably afford.
A Traditional Ira, which is funded with after-tax income, is an alternative to a
401(k) plan. This implies that Roth IRA contributions are not eligible for
deduction from your taxes. Some citizens may also choose to contribute to a
health savings account (HSA), which is tax deductible. These contributions,
according to the IRS, are tax-free if used for qualified medical expenses.
Individuals can deduct up to $3,650 and families can deduct up to $7,300 in
2022, as stated on form Rev. Proc. 2021-25.

 Postpone Your income

taxes are based on the calendar year, and any expenses you deduct must have
occurred during that year. In other words, you cannot deduct an expense that
you intend to incur in 2023. You are also not required to pay taxes on income
that you have not yet received. This would provide you with a one-of-a-kind
opportunity to defer your income from one year to the next. Some people may
choose this option if their income fluctuates dramatically during the year.
Because you only pay taxes when you receive your earnings, you can
postpone your end-of-year payments until after December 31, 2022. This
income would then be factored into your 2023 tax return.

58
 This strategy does not relieve you of the obligation to pay taxes on deferred
income. It's simply a way to help reduce your current-year tax payments,
which can have a significant impact if you're on the cusp of a tax bracket.

 Pay Your Business Expenses As Soon As Possible

Small business tax deductions, like income, must be claimed in the same year
that they are paid for. You can maximize your deductions by charging
business expenses early, just as you can postpone your received income to the
following year.

Small business owners should be aware of tax-deductible business expenses

because they can provide additional benefits if they overlap with higher
income. Consider any last-minute business expenses you may incur before the
end of the fiscal year. Even if you don't receive the goods or services until the
following year, these expenses will still count towards 2022.

 Remember to Include Office Expenses

It's easy to overlook the various office expenses that are required to keep a
business running. Keep track of office supplies such as stationery and printer
toner, as well as rent and utilities if you work from home.

The specifics of these expenses can be complicated, so it's best to consult with
a professional before deducting them on your tax return.

 Consider your failed investments.

While it may not feel good to think about a failed investment, you may be able
to use that loss to your advantage and reduce your adjusted gross income.
Selling a losing investment can result in negative income, lowering your
taxable income.

Capital losses are limited to $3,000 per year, with any excess carried forward
to the following year. These losses may also be deducted from future capital
gains.

59
  Consult a Tax Advisor

You should not expect to be aware of every possible tax deduction and credit.
The federal and state tax systems are not the same. Contact a tax professional
to help you maximize your deductions and credits. You may already be
familiar with some fundamentals, but it's beneficial to get a second opinion
from someone who is actively working for you to maximizes deductions and
credits for your business. Tax returns necessitate a great deal of thought and
expertise. Trust the professionals at 1-800Accountant to provide
comprehensive tax services for your small business.

4.4 TECHNICAL TERMS

1. Taxpayer - Any person or business that must pay taxes to the federal, state, or
local government is considered to be a taxpayer.
2. Deduction - An option to lower taxable income is a tax deduction. A standard
deduction is a single, predetermined deduction. Higher-income taxpayers
frequently have significant deductible expenses, such as state and local taxes
paid, mortgage interest, and charitable contributions, which is why itemized
deductions are popular.
3. Tax liability - Liabilities are anything owed to others and are calculated by
applying the tax rate to the tax base. Tax liability is the amount of tax owed.
4. Tax Saving Schemes - Tax Saving Schemes is the best way to make
investments to save tax by claiming deductions available under the provisions
of the Income Tax Act, 1961. 
5. financial year - The 12-month period that is continuously used for accounting
purposes is referred to as the financial year or fiscal year. The financial
institutions of a nation are involved in tasks like accounting, budgeting,
reporting, planning, taxation, etc. during this time.
6. Tax planning - Meaning of Tax Planning means by using the tax deductions,
benefits, and exemptions, tax planning or analysis is a lawful way to lower
annual tax obligations.
7. Assessee - The term "Assessee" typically refers to a person who must pay
taxes. However, it's advisable to comprehend the term's full meaning as it is
described above in the Income Tax Act. Section 2 (7) Assessee: A person for

60
 whom any tax or other amount is due under this Act is referred to as an
assessee.
8. HUF - Hindu Undivided Family is known as HUF. By forming a family unit
and combining your assets into a HUF, you can reduce your tax burden. HUF
is taxed independently of its constituents. A HUF can be created by a group of
Hindu families. A HUF can be formed by Buddhists, Jains, or Sikhs as well.
HUF files tax returns independently of its members and has its own PAN.
9. Assessment year - The assessment year is the period (from 1 April to 31
March) during which the income you earn in a given financial year is subject
to tax. You must submit your income tax return during the applicable
assessment year.
10. gross salary - Before taxes and other deductions are taken into account, an
employee's gross salary is the amount they are paid. It is the employee's gross
monthly or yearly income. When a job is offered, the employer gets to decide
the gross salary.
11. Moving Expenses - Moving costs are not an itemized deduction but rather a
change to your income. Moving costs can help you qualify for other tax
benefits that have restrictions at higher income levels because they lower your
adjusted gross income. It can be difficult to understand moving costs if this is
your first move.
12. ITR 1 - One of the seven forms designated by the Income Tax Department to
classify taxpayers according to their earned income, category of taxpayer
(such as a company, individual, HUF, etc.), and source of income is the ITR-1.
Here, ITR-1, also known as Sahaj Form, is thoroughly explained. It's crucial to
understand that employees with salaries up to Rs. 50,000 are eligible to submit
an ITR form.

61
 CHAPTER: 5

5.1 DATA ANALYSIS AND INTERPRETATION

To know the people’s awareness regarding the deduction section 80DDB and other I
have created goggle form which contains the following questions.
By the way of Google form, I got around 101 respondents which clearly provide me a
brief idea about their awareness. So, let us have a look on their responses and my
interpretation for the same.

Q.1) Are you an Income Tax payer?

Opinion Percentage
Yes 39.6%
No 60.4%

62
Interpretation:
From the above diagram it is very clear that from 101 respondent’s most of the
population that is 60.4% of the people are not an income tax filer and 39.6% of the
population are an income tax filer.

Q.2) Have you ever file an Income Tax Return?

Opinion Percentage

Yes 38.6%

No 59.4%

Maybe 2%

63
Interpretation:

From the above diagram it is seen that most of the people that is 59.4% of population
haven’t file their income tax return under Income Tax Act. And only 38.6 percent of
the under taking population have filed their Income Tax Return. And 2% of
population are confused about the above question as they have marked the maybe as
their answer.

64
Q.3) Do you know about deduction available under Income Tax Act.

opinion Percentage

Yes 59.4%

No 35.6%

Maybe 5%

Interpretation:

From the above pie diagram, it is very clear that 59.4% of population are aware of
about different deduction available under Income Tax Act as they have given positive
reply as their answer. And 35.6% of the population are not aware about deduction
under income tax and rest 5% people are confused whether they know about
deductions or not.

65
Q.4) which sector provides better home loan schemes?

Opinion Percentage
Educational loan 6.9%
Interest on securities 25.7%
Against disability 1%
For medical expenses 6.9%
None 59.4%

Interpretation:
From the above primary data, it is seen that 59.4% of people haven’t claim any
deduction under Income tax. Most of the people that is 25.7% people have claim
deduction against interest on securities, 6.9% people have claim deduction for
medical expenses, 1% of under taking population have claim deduction for disability
and leftover 6.9% of population have taken claim against educational loan.

66
Q.5) Do you think deduction helps the taxpayer to reduce their tax liability?

Opinion Percentages
Yes 52.5%
No 13.9%
Maybe 33.7%

Interpretation:

52.5% of people strongly believe that tax deduction helps the taxpayer to reduce the
tax liability and 13.9% of population thinks deduction does not help the taxpayer to
reduce tax burden of taxpayer and rest 33.7% of respondents are not sure whether
deductions help the taxpayer to reduces tax burden or not as they have mark option
maybe in the google form this could be because of their lack of knowledge about
income tax.

67
Q.6) Do you know about deduction under section 80DDB?

Opinion Percentages
Yes 21.8%
No 78.2%

Interpretation:

From the above information 78.2% of public have no idea about deductions available
under income tax and only 28.8% people know about deduction so from above
response it is clear that many of the people are still not aware about deduction
available under income tax return n how does it help to reduce tax liability.

68
Q.7) Have you ever claimed deduction under section 80DDB?

Opinion Percentage
Yes 4%
No 96%

Interpretation:
From the above information it is very clear that many of the people that is 96% % of
population haven’t claim deduction under section 80DDB of income tax act and only
4% of taxpayers have claimed deduction against this section this clearly shows that
many of the people don’t know how to claim deduction against this section of income
tax act.

69
Q.8) Do you know about the disease covered under section 80DDB?

Opinion Percentage
Yes 79.8%
No 6.4%

Interpretation:
Sec 80DDB of income tax covers various types of diseases like Neurological Diseases
Malignant Cancer Ataxia and many other but from the above response it can be seen
that many of the people are not aware about what type of medical disease are covered
under income tax act. Only 12.9% of taxpayers are aware of those disease and rest
87.1% of people are not are about such diseases they may have no idea against which
disease the medical expenses can be claimed with the help pf 80DDB section.

70
Q.9) Do you feel that expenses for medical treatments should be deductible under
Income tax?

Opinion Percentage
Yes 28.7%
No 35.2%
Maybe 36.1%

Interpretation:

From the above available information, it is clear that 28.7% of population thinks that
medical expenses against disease should be deductible.36.1% of undertaking
population have marked their answer as maybe these diseases should cover under
income tax and 35.21% people think there is no need to cover medical expenses as a
deduction.

71
Q10) How much amount have you claimed under section 80DDB?

Opinion Percentage
Less than 40,000 3.9%
40,000 to 1,00,000 11.9%
None 84.2%

Interpretation:

From the above information it seems like most of the people haven’t claim any
deduction amount under section 80DDB that is 84.2% haven’t claim any single
amount under this deduction as claim. And 11.9% people have claimed amount under
bracket Rs.40,000 to Rs.1,00,000 as a deduction and 3.9% have claim amount of
deduction under this section is less than Rs. 40,000.

72
Q.11) Hoe do you find the procedure of calming deduction under section 80DDB?

Opinion Percentage
Easy 19.8%
Complicated 80.2%

Interpretation:

From a given responses it can it I clear that many of the taxpayers finds the procedure
of clamming deduction under section 80DDB is very much complicated as it involves
many of the conditions and documentation. Out of 101 responses 80.2 % people find
this procedure is difficult and only 19.8% of people find that this is an easy procedure.

73
Q.12) Do you feel there is a need to spread more awareness about deduction among
the people?

Opinion Percentage
Yes 83.2%
No 8.9%
Maybe 7.9%

Interpretation:
Out of the 101 respondents 83.2% of people thinks there is need to spread awareness
about deduction as this will help the taxpayer in many ways to reduces his tax liability
or tax burden. And 8.9% of the responses doesn’t feel any to spread awareness about
deduction and their benefits. And it seems like 7.9% of people are confused whether
there is an actual need to spread awareness or not.

74
5.2 HYPOTHESIS TESTING

ANALYSIS QUESTIONS IS JUSTIFYING THE HYPOTHESIS

1. Do you know about deduction under section 80DDB?

2. Have you ever claimed deduction under section 80DDB?
3. Do you know about the disease covered under section 80DDB?
4. Do you feel there is a need to spread more awareness about deduction among
the people?

Response Yes No Total

1 79 22 101
2 91 10 101
3 79 22 101
4 84 17 101
Total 333 71 404

Anova: Single Factor

Groups Count Sum Average Variance

Column 1 4 333 83.25 32.25
Column 2 4 71 17.75 32.25

ANOVA
Source of ss df MS F P- value F crit
variation
Between Groups 8580. 1 8580.5 266.0620155 3.3800606 5.987377607
5
Within Groups 193.5 6 32.25

Total 7

F = 5.987377607 > P 3.3800606

Critical value is more than p value thus then null hypothesis is rejected.

75
 CHAPTER – 6

SUGGESTION AND CONCLUSION

6.1 finding of study:

 Most of the people have lack of knowledge about deductions available under
Income Tax Return.
 The majority of the respondents wants to get more information related to their
claims under deductions.
 Claim availing procedure is very much difficult for the people who are eligible
to it. Some taxpayers do not have proper knowledge about different deduction
sections.
 Taxpayers require large formalities to be fulfilled.
 Respondents are agreeing on the statement that availability of easy procedure
of tax filing is an important factor for filing return on the income tax portal.
 According to the respondent’s clamming deduction ultimately helps them to
reduce their tax burden.
 People can get knowledge about various types of deduction from television,
internet, tax consultant, and from portal too.
 Taxpayer mostly tend to take more deduction as much as possible for reducing
their taxable income.
 Actually, taking claim of deduction is good option because of its various
benefits.
 In every year government come up with certain good changes in income tax
by the way of budget declaration which ultimately help taxpayers.
 Many of the people or taxpayers are in need to get right guidance of
investment to claim more deductions.
 Clamming deduction in the name of senior citizen is more beneficial then the
other as in income tax more provisions are given to senior citizen.
 respondents are agreeing on the statement that disease list under section
80DDB should include other more disease which are highly expensive in
nature.
 There is more deduction available under Income tax for the people who are
handicap or physically disable.

76
6.2 Suggestion:

 Every person should understand that it is our fundamental duty to pay tax
to the government if our income is falling under Income Tax bracket.
 Taxpayer should not hide their real income for the purpose of saving tax.
 Instead of hiding real income they should take advantage of available
deductions under income tax.
 Every tax payer needs to know about the ways of minimizing their tax
liability.
 They should collect the information related to such deductions which will
give them more return as a claim.
 To claim more deduction all individual or taxpayer must get proper
information related to all the deductions which is available on income tax
portal.
 For the purpose of reducing tax liability tax payer can invest their income
in LIC or in Government securities as interest on such income is
deductible under section 80C of income tax.
 All taxpayers must be aware about all the updates of Income Tax Portal.
 People needs to be always updated about the budgets declared by the
government by way news for every financial year.
 Govt should also introduce helpline desk dedicated to help people to
know about the methods of saving taxes.
 Government should introduce easy ways of filling return by not making
portal too much complicated. It should be user-friendly to every tax
payer.
 Many booklets and attractive advertisement should be provided to the
customer to spread awareness about benefits of deductions.
 At the time of claiming deduction or return taxpayers need to follow all
Income tax guidelines.
 Govt should encourage people to file ITR and claim deduction by giving
them points or coupons.

77
  The government should implement advertising strategy and should consider
more Media streams like T.V, Magazines and Trade Fair etc. for spreading
awareness.
 Govt should use the modern ways like social media to aware people about
the deductions.
 For the purpose of making people aware about their rights and duties
towards the government income tax department can also arrange campaign
in colleges or schools or at work places.
 Knowledge about the tax should be given to kids also by including this
topic into their syllabus by very young.

6.3 Conclusion:
Any taxpayer who wants to file income tax return in a beneficial manner then they
must have to Calculate their total income first, and then subtract any necessary
expenses and make adjustments to their total income in accordance with the tax
structure to determine their income tax. Tax planning is more than just a way to lower
your tax bill. Taxes can be reduced by promoting the purchase of government
securities. Tax planning not only minimises a person's tax liability but also makes
them feel good inside. Both the researcher and the assesses gain new insight into tax
planning thanks to this study. Both the researcher and the assesses become more
knowledgeable about tax planning as a result of this study.
By effectively utilising the various tax deduction sections of the Income Tax Act of
1961, tax planning can be advantageous. The tax burden will be reduced using this
strategy. By using tax planning, a taxpayer was able to minimise their tax liability for
the duration of a fiscal year by taking full advantage of all available tax exemptions,
deductions, and benefits. It is crucial to financial planning because tax planning
cannot be done without it. Tax management is an internal component of tax planning;
tax payers typically plan their tax liability only near the end of the fiscal year.
Although tax-saving tools are crucial for the nation, the majority of the papers I
reviewed show that more than 65% of people completely rely on their tax advisor to
find tax breaks and file their ITR returns, by depending on tax consultant many of
taxpayers are personally lacking knowledge about deduction available under income

78
tax return which will turn into highlighting a serious lack of public tax literacy. The
nation's citizens must be financially literate.
However, the real issue is that not everyone is aware of the various ways to save
taxes, so it is necessary to raise awareness of tax among the general public. It will be
useful to the taxpayer if any kind of awareness program is conducted for the use of
different kinds of tax saving instruments. By spreading such awareness taxpayer will
be in the position to file income tax return in an efficient manner. But the main cause
of the study only is that many of taxpayers are still not aware about the such tax
saving instruments. Specially section 80DDB.
From the research it can be that many of the taxpayers and individuals are interested
to get deduction under section 80C as it gives highest amount of deduction. People
are aware about only famous type of deduction such as 80C. and very few taxpayers
are aware about deduction section 80DDB of income tax.
From the study or by of conducting survey I can clearly conclude that null hypothesis
is proven that means there is no awareness about deduction available under section
80DDB of income tax act among citizens of Mumbai region. so, under such
circumstances it becomes very crucial to undertake research and spread awareness
about deduction section 80DDB of income tax.

79
 CHAPTER – 6

BIBILIOGRAPHY & APPENDIX

 Book: - Direct Tax, M.com. semester – III. Second addition

 https://incometaxindia.gov.in/
 Pritam B. Bhawar 1 Shubham V. Shirsath2 (2018), A Study of Tax
Saving Schemes Adopted by Individual Assessee, (ISSN) Volume-1,
Issue-10.
 Suchithra P1, Vidhya C2 (2019), A Study on the Awareness of Tax
Saving Instruments of Individual Taxpayers, volume 10, Issue 3.
 Amit Kumar Arora1, Pradeep Kumar Garg2 (2019), Awareness and
Perception Regarding Tax Saving Instruments among Teachers of Higher
Education, Volume-8 Issue-3.
 Neha Agarwal (2020), ‘A study on tax planning of salaried individual’,
International Multidisciplinary Conference in, Technology, Business,
Management & Liberal Arts, Vol. no. 9(5), 68-74. Available from URL:
https://ijcrt.org/download.php?file=IJCRT2104205.pdf
 CA Shilpa Vasant Bide (2013) 4: “A study of Awareness of Tax planning
among Salaried Assessee “, Vol 3, Issue No.12, ISSN2231-1009.
 Bindabel and Hamza (2021), ‘Relationship between saving and
investment pattern and orientation towards finance among working
women in the universities of Saudi Arabia’, Growing Science, Canada,
Vol. no. 7(1), 81. Available from- URL:
https://www.researchgate.net/publication/344879958.
 Mehta, K. & Sharma, R. (2017). Investors' Perception towards Tax
Saving Mutual Funds, International Journal of Engineering Technology,
Management, and Applied Sciences, 5(5), 512-522.
 Patel, Y. P. & Patel, C. Y. (2012). A study of investment perspective of
salaried people, Asia Pacific Journal of Marketing & Management
Review, 1(2),126-142.

80
 Arora, A. K. & Rathi, P. (2018). A Study of Awareness and Perception
Regarding Tax Saving Options Among Salaried People, Indian Journal of
Finance, 12(7), 57-66.
 Ahamad, D. & Lakshmana, B. C. (2017). A Study on Investment
Preferences among Employees concerning Kurnool City, Journal for
Studies in Management and Planning 3(1), 173-180.
 Savita and Lokesh Gautham (2013)3, “Income tax Planning: A Study of
Tax Saving Instruments. “Volume 2, No.5 ISSN :2319-4421.International
Journal of Management and Social sciences Research.
 http://www.ijresm.com/Vol_1_2018/Vol1_Iss10_October18/
IJRESM_V1_I10_63.pdf
 https://issuu.com/ijtsrd.com/docs/
158_tax_saving_instruments_of_income_tax_in_india_
 https://www.researchgate.net/publication/
325060456_Income_Tax_Planning_A_Study_of_Tax_Saving_Instrumen
ts
 https://www.researchgate.net/publication/344879958.
 https://www.researchgate.net/publication/
330933312_Tax_Saving_Instruments_of_Income_Tax_in_India_A_Stud
y_on_Tax_Assessee_in_Trichy_City
 https://www.researchgate.net/publication/
330933312_Tax_Saving_Instruments_of_Income_Tax_in_India_A_Stud
y_on_Tax_Assessee_in_Trichy_City
 http://dx.doi.org/10.21474/IJAR01/4330
 https://iiste.org/Journals/index.php/RJFA/article/view/19163/19693

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 APPENDIX

1. Are you an Income Tax Payer?

a. Yes
b. No
2. Have you ever file Income Tax Return?
a. Yes
b. No
c. Maybe
3. Do you know about deductions available under Income Tax Act? 
a. Yes
b. No
c. Maybe
4. Which of the following you have claimed deduction for?
a. Educational Loan
b. Interest on Securities
c. Against Disability
d. For medical expenses
e. None
5. Do you think deduction helps the taxpayer to reduce their tax liability?
a. Yes
b. No
c. Maybe
6. Do you know about deduction under Section 80DDB?
a. Yes
b. No
c. Maybe
7. Have you ever claimed deduction under section 80DDB?
a. Yes
b. No
c. Maybe
8. Do you know about the disease covered Under section 80DDB?   
a. Yes
b. No

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9. Do you feel that expenses for medical treatments should be deductible under income
tax?
a. Yes
b. No
c. Maybe
10. How much amount have you claimed under section 80DDB?
a. Less than 40,000
b. 40,000 to 1,00,000
c. None
11. How do you find the procedure of calming deduction Under Section 80DDB?
a. Easy
b. Complicated
12. Do you feel there is a need to spread more awareness about deductions among the
people? 
a. Yes
b. No
c. Maybe 

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 ABBREVIATION

ITR – Income Tax Return

HEL - A home equity loan

EMI - equated monthly instalment

HUF - Hindu Undivided Family

PAN – Personal Identification Number

LIC - Life Insurance Corporation of India

PPF - Public Provident Fund

NSS - National Service Scheme

NPS - National Pension Scheme

ELSS - Equity Linked Savings Scheme

RBI- Reserve Bank of India

NRI- Non-Resident of India

EWS - Economically weaker section

LIG - Low-income groups

TCJA - Tax Cuts and Jobs Act of 2017

MCI - Medical Council of India

NSC - National Security Council

U. T. I. - Unit Trust of India

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