Deductions from

gross Total Income

Ashish Menon – 34 Rohan Pandya – 37
Dipal Modi – 35 Jay Parekh – 38
Prachiti N – 36 Shiroy Pavri – 39
Basic Governing Rules under sections
80C to 80U
• Deductible from gross total income
• Aggregate deductions not to exceed GTI
• Net Income
• Restrictions applicable in case to deduction under sections 10A, 10AA, 10B,
10BA and 80H to 80RRB
• Double deduction is not possible
• The aggregate deductions shall not exceed the profit and gains of the undertaking or unit or
eligible business
• No deductions shall be allowed if it has not been claimed in the return of income
• For the purpose of claiming deductions , the transfer price of goods and services between the
undertaking or business or enterprise of the assesse, shall be determined at the market value
 Section 80C

• Life insurance premier

• Deferred annuity
• Contributions to provident fund
• Subscription to certain equity shares or debentures etc.
 Salient Features of Section 80C
• It is available only to an individual or a Hindu undivided family
• It is made available on the basis of specified qualifying investments or
deposits made by the taxpayer during the previous year
• It is made available on the actual payment basis
• Maximum amount deductible is ₹1,00,000/-
• Amount invested in NSC VIII or IX issue is eligible for deduction within
the overall limit and the interest earned on the NSC is taxable annually on
accrual basis
• Minimum holding period of investments and deposits
 Section 80CCB
• Deduction is respect of investment made in accordance with the notified
Equity Linked Savings Scheme
• Any amount on which deduction has been allowed and is returned to the
assesse, it will be deemed to be his income for the previous year
• Also, where a Hindu undivided family has effected a partition after a
deduction has been allowed to it on the amount invested, such amount on
its return shall be deemed to the income of the recipient
• The difference between the repurchase price of the units and the amount
invested therein by the assesse shall be deemed to be the capital gains
and taxed accordingly
 Section 80CCC - Deduction in
respect of Pension Fund
• Available only to an Individual
• Amount should be paid under an annuity plan of LIC or any other issuer
for receiving pension and should be out of income chargeable to tax
• Maximum amount deductible is Rs. 1,00,000
• Aggregate amount of deduction under sections 80C, 80CCC, 80CCD(1)
cannot exceed Rs. 1,00,000
• If pension is received by the assessee it will be taxable
• In case assessee surrenders annuity before maturity, the surrender value
shall be taxable
 Section 80CCD - Deduction in
respect of contribution to a NPS
• National Pension Scheme(NPS) is a retirement benefit scheme applicable
for an employee who joins an employer after Jan 1, 2004
• Employers contribution to NPS is taxable as salary income in year of
contribution
• In case of both employee[80CCD(1)] and employer[80CCD(2)] contribution
amount is deductible in the hands of the employee. No deduction is
available if amount is more than 10% of salary of the employee
• Pension received would be taxable except if used for purchasing an
annuity in the PY
 Section 80CCF - Deduction in respect of
subscription to long term infrastructure bonds

• An investment of up to Rs. 20,000 made in certain

infrastructure bonds qualified for additional tax deduction
• Three long term infrastructure bonds were eligible – LIC,
IDFC, IFCI
• Discontinued from the AY 2013-14
 Section 80CCG - Deduction in respect of
investment made under any equity saving scheme

• New section w.e.f AY 2013-14

• Conditions:
• Assessee is a resident(ROR, RNOR)
• Gross total income does not exceed Rs. 12 lakh
• Has acquired listed shares with a notified scheme
• Is a new retail investor
• Investment locked in for a period of 3 years
• From AY 2014-15 deductions are for 3 consecutive years beginning with
AY relevant to the PY in which listed shares were acquired
 Deduction in respect of medical insurance
premium
[Section 80D]
Conditions:
• Taxpayer is an individual or HUF
• Mediclaim insurance is paid by the individual or HUF
• Payment should be made out of taxable income
• Payment should be made by any mode other than cash

Maximum amount of deduction:

Up to Rs. 15000 for individual as well as HUF
 Deduction in respect of maintenance including
medical treatment of a dependent being a person
with disability [Section 80DD]
• A resident individual or a resident HUF can claim deduction
• In the case of individual “dependant” means spouse, children, parents, brothers and
sisters
• In the case of HUF “dependant” means any member of the family who is wholly and
mainly dependent on the family
• “Person with disability” means a person who suffers 40 per cent or more of-
 Blindness
 Hearing impairment
 Mental retardation
 Locomotor disability, etc
• A fixed deduction of Rs. 50, 000 is available under this section
 Deduction in respect of payment of interest on
loan taken for higher education [Section 80E]

• Only an individual can claim deduction

• Loan can be taken from bank or financial institution for
individual’s own education or for the education of his
relatives (i.e. spouse, children)
• Entire interest is deductible in the year in which the
individual starts paying interest on loan and subsequent 7
years or until interest is paid in full.
80G – Deductions in respect of
donations
Step 1. Gross qualifying
Step 2. Net qualifying amount
income

Certain specified Lower of –

funds • Actual Donation
• 10% gross total
income

Step 3. Final Amount

deductible
 Deductions in respect of contribution given
to political parties or electoral trust

• Section 80GGC
• Section 80GGB
 Sec. 80-IAB - Deductions in respect of profits &
gains by company engaged in development of SEZ

• Conditions –
1. taxpayer should be developer of SEZ
2. Gains should be derived by company from any business of developing SEZ
3. Such SEZ is notified on or after April 1, 2005
4. Company’s books of accounts should be audited
5. Deductions should be claimed in return of income on or before due date of
submission

• 100% deduction
• Period of deduction
Deduction in respect of profits and gains of certain
undertaking in certain special category of states –
how to find out [Section 80-IC]
• Section 80-IC has been inserted from the assessment year 2004-05

• The following conditions has to be satisfied to claim deduction under section

80-IC :
 Not formed by splitting up or reconstruction of existing business
 Not formed by transfer of old plant and machines
 Industrial undertaking should be set up in certain special category of states
 Commencement
 Audit
 Return of income
Deduction in respect of profits from the business of
processing of bio-degradable waste

• Section 80JJA : Applicable where gross income of an assessee

includes any profits and gains derived from the business of collecting,
processing and treating of biodegradable waste for generating power or
producing bio-fertilizers, bio-pesticides etc.
Amount of Deduction : The whole of the profits and gains of the
these activities shall be deductible for a period of five years starting from
the previous year of the assessment year in which the business commences
Return of income : Deduction in Section 80JJA is not available unless
it is claimed in the return of income
 Deduction in respect of interest on deposits in
savings accounts – when available [Section –
80TTA]
• Section 80TTA has been inserted with effect from the assessment
year 2013-2014
• It provides a deduction up to Rs. 10000 in aggregate to an assessee ,
being an individual or a Hindu undivided family in respect of any
income by way of interest on deposits in a saving accounts with :
 A banking company,
 A co-operative society,
 A post office
 Deduction in respect of interest on deposits in
savings accounts – when available [Section –
80TTA]
(Continue)
Up to assessment year For the assessment For the assessment
2011-2012 year 2012-2013 year 2013-2014

Rs. Rs. Rs.

Interest on Post Office Full exemption, Exemption up to Rs. Exemption up to Rs.

Saving Bank nothing is taxable 3500 in single account 3500 in single account
[exemption under and Rs. 7000 in joint and Rs. 7000 in joint
section 10(15)(i)] account account

Interest on Savings No Deduction No Deduction Deduction up to Rs.

Account with a bank, 10000
Co-operative Bank and
Post Office (Deduction
under section 80TTA)