LESSON 10 DEDUCTIONS

Deductions in respect of certain payments

Section Eligible Assessee Eligible Payments Permissible Deduction
80C Individual or HUF Contribution to
PPF, Payment of
LIC premium, etc.
Sums paid or
deposited in the
previous year by way Sum paid or deposited subject to a
of maximum of Rs. 1,50,000
- Life insurance premium [ Deduction would be available only if
- Contribution to PPF/ the individual /HUF exercises the
SPF/ RPF and approved option of shifting out of the default
superannuation fund tax regime provided u/s 115BAC(1A)
-Repayment of housing loan
-Tuition fees to any Indian
university, college, school for
full-time education of any
two children
-Term deposit for a fixed
period of not less than 5 years
with schedule bank
-Subscription to notified
bonds of NABARD
-Five year post office time
deposit
-Senior Citizen’s Savings
Scheme Account etc.

80CCC Individual Contribution to certain Amount paid deposited, subject to a

pension funds maximum of Rs. 1,50,000
Any amount paid or [Deduction would be available only if
deposited to keep in force a the Individual exercises the option of
contract for any annuity plan shifting out of the default tax regime
of LIC of India or any other provided u/s 115BAC(1A)
insurer for receiving pension
from the fund
80CCD Individual Contribution to pension Employee's Contribution/ Individual
employed by the Scheme of Central Contribution
Central Govt or Government In case of a salaried individual,
any other An individual employed by the deduction of own contribution u/s
employer; Central Government on or 80CCD (1) is restricted to 10% of his
Any other after 1.1.2004 or any other salary.
individual employer or any other In any other case, deduction u/s
assessee. assessee, being an individual, 80CCD (1) is restricted to 20% of
who has paid or deposited any gross total income.
amount in his account under a Further, additional deduction of upto
notified pension scheme [to Rs. 50,000 is available u/s
his individual pension account 80CCD(1B). [Deduction u/s80CCD(1)
under National Pension and 80CCD(1B) would be available
Scheme & Atal Pension only if the individual exercises the
Yojana] option of shifting out of the default tax
regime
provided u/s 115BAC(1A)]
Employer's Contribution
The entire employer's contribution
would be included in the salary of the
employee. The deduction of
employer's contribution under section
80CCD(2) would be restricted to 14%
of salary, where the employer is the
Central Government or State
Government; and 10% of salary (14%
under default tax regime), in case of
any other employer. [Deduction u/s
80CCD(2) would be available
irrespective of the regime under
which he pays tax.]
Note-As per section 80CCE, maximum permissible deduction u/s 80C, 80CCC & 80CCD (1) is Rs. 1,50,000.
However, the limit Rs.1.50 lakh under section 80CCE does not apply to deduction under section 80CCD (2)
and 80CCD(1B).
80CCH Individual Contribution to Agniveer Individual’ Contribution
Corpus Fund Whole of the amount paid or
An individual enrolled in to the deposited
Agnipath Scheme and [ Deduction would be available only If
subscribing to the Agniveer the individual exercises the option of
Corpus Fund on or after shifting out of the default tax regime
1.11.2022, who has paid or provided under section 115BAC(1A)]
deposited any amount in his
Central Contribution
account in the Agniveer
Government's The entire Central
corpus Fund
Government's contribution to the
Agniveer Corpus Fund would be
included in the salary of the assessee.
Thereafter, deduction u/s
80CCH(2)would be Available for the
same
[Deduction u/s80CCH(2) would be
available irrespective of the regime
under which he pays tax]
80D Individual and Medical insurance Premium
HUF (1) Any premium paid,
otherwise than by way of
cash, to keep in force an
insurance on the health
of-

In case of Self, spouse Maximum Rs. 25,000 (Rs. 50,000, in

an and case the individual or his or her
individual dependent spouse is a senior citizen
children
In case of Family
HUF member,

(2) In case of an individual,

contribution, otherwise
than by way of cash, to
CGHS or any other
scheme as notified by
Central Government. Maximum Rs. 25,000 (Rs. 50,000, in
(3) Any premium paid, case either or both of the parents
otherwise than by way of are senior citizen (s)
cash, to keep in force an
insurance on the health
of parents, whether or
not dependent on the
individual.
Notes: Amount paid subject to a cap of Rs.
(1) Any amount paid, 50,000 (in cash one parent is a
otherwise than by way of senior citizen, in respect of whom
cash, on account of medical insurance Premium is paid, and the
expenditure incurred on the other is a senior citizen on whom
health of the assessee or his medical expenditure is incurred, the
family member or his total deduction cannot exceed Rs.
parent, who is a senior 50,000)
citizen and no amount has
been paid to effect or to
keep in force an insurance
on the health of such Amount paid subject to a cap of Rs.
person. 5,000, in aggregate (subject to the
(ii) Payment, including cash overall individual limits of Rs.
payment, for preventive 25,000/ Rs. 50,000, as the case may
health check up of himself, be)
spouse, dependent children [Deduction would be available only
and parents. if the individual/HUF exercises the
option of shifting out of the default
tax regime provided u/s
115BAC(1A)]
80DD Resident Maintenance Flat deduction of Rs. 75,000.
Individual or HUF including medical In cash of severe disability (i.e. person
treatment of a with 80% or more disability) the flat
dependant disabled deduction shall be Rs. 1,25,000
Any amount incurred for the [ Deduction would be available only if
medical treatment (including the individual /HUF exercises the
nursing), training and option of shifting out of the default
rehabilitation of a dependent tax regime provided u/s 115BAC
disabled (1A)]
and/or
Any amount paid or deposited
under or the scheme framed in
this behalf by the LIC or any
other insurer or Administrator
or Specified Company and
approved by Board
Meaning of Dependant
(1)in case of (2)
Dependant
An individual Spouse,
children,
parents,
brothers,
Sisters
AHUF Any member
Persons mentioned in column
(2) should be wholly or mainly
dependant on the person
mentioned in corresponding
column (1) for support and
maintenance. Such persons
should not have claimed
deduction under section 80U
in computing total income of
that year.

80DDB Resident Deduction for medical Actual sum paid or

Individual or treatment of specified Rs.40,000(Rs.1,00,000,if the payment
HUF diseases or ailments is for medical treatment of a senior
Amount paid for specified citizen), whichever is less, minus
diseases or aliment
Assessee Amount the amount received from
Spent the insurance company or reimbursed
by the employer. [Deduction would
be available only if the
individual/HUF exercises the option
of shifting out of the default tax
regime provided
under section 115BAC(1A)]
 An For himself or
individual his
dependant
being spouse,
children,
parents,
brothers or
sisters wholly
or mainly
dependant on
the individual
for support
and
maintenance

A HUF For any

member

80E Individual Interest on loan taken for The deduction is available for interest
higher education payment in the initial assessment year
Interest on loan taken from (year of commencement of interest
any financial institution or payment) and seven assessment years
approved charitable immediately succeeding the initial
institution. assessment year
Such loan is taken for (or)
pursuing his higher until the interest is paid in full by the
education or higher assessee, whichever is earlier.
education of his or her [Deduction would be available only if
relative i.e., spouse or the individual exercises the option of
children of the individual or shifting out of the default tax regime
the student for whom the provided under section 115BAC(1A)]
individual is the legal
guardian

80G All assessees Donations to certain funds, charitable institutions etc. There are
four categories of deductions-
Categories Donee
(i) 100% deduction of Prime Minister's National
amount donated, without Relief Fund, National
any qualifying limit Children's Fund, Swachh
Bharat Kosh, National
Defence Fund, PM CARES
Fund etc.
(ii) 50% deduction of, Prime Minister's Drought
amount donated, without Relief Fund.
any qualifying
Limit
(iii) 100% deduction of Government or local
 amount donated, subject authority institution for
to qualifying limit promotion of family
planning etc
(iv) 50% deduction of Government or any local
amount donated, authority to be used for
subject, subject to charitable purpose, other
qualifying limit. than promotion of family
planning, notified temple,
church, gurudwara,
mosque etc.
Calculation of qualifying limit for Category III & IV donations.
Step 1: Compute adjusted total income. i.e the gross total income as
reduced by the following
1. Deductions under Chapter VI-A, except u/s 80G
2. Short term capital gains taxable u/s 111A
3. Long term capital gains taxable u/s 112 & 112A
Step2:Calculate10% of adjusted total income
Step3:Calculate the actual donation which Is subject qualifying limit to
Step1.4: Lower
Deductions
of Step 2under Chapter
or Step VI-A,
3 is the except u/s
maximum 80G
permissible
deduction.
2. Short term capital gains taxable u/s 111A
Step3.5: TheLong
saidterm
deduction is gains
capital adjusted first u/s
taxable against
112&donations
112A qualifying
for 100% deduction (i.e. Category III donations) Thereafter, 50% of
balance qualifies for deduction under section 80G
Note -No deduction shall be allowed for donation in excess of Rs.
2,000, if paid in cash.
[In case of individuals, HUF, AoP (other than a co- operative society) or
Bol or an artificial juridical person. deduction would be available only if
they exercise the option of shifting out of the default tax regime
provided under section 115BAC(1A)
80GG Individual not in Rent paid for residential Least of the following allowable as
receipt of house accommodation deduction:
rent allowance (1) 25% of total income
(2) Rent paid – 10% of total income
(3) Rs. 5,000 p.m.
No deduction if any residential
accommodation is owned by the
assessee/his spouse/minor child/HUF at the
place where he ordinarily resides or
performs the duties of his office or
employment or carries on his business or
profession.
[Deduction would be available only if be
the individual exercises the option of
shifting out of the default tax regime
provided undersection115BAC(1A)]

Deductions in respect of Certain Incomes

As per section 80AC, Furnishing return of income on or before due date is mandatory for claiming deduction
in respect of certain in comes
Section Eligible assessee Eligible Income Permissible Deduction
80JJAA An assessee to Deduction in respect of 30% of additional employee cost incurred
whom section employment of new in the previous year
44AB applies, employee Deduction is allowable for 3 assessment
whose Gross years including assessment year relevant
total income to the previous year in which such
includes profits employment is provided.
and gains derived [Deduction would be available
from business irrespective of the regime under which the
employer pays tax]
80QQB Resident Royalty income, etc., of Income derived in the exercise of
individual, authors of certain books profession or the Rs. 3,00,000, whichever
being an author other than text books is less.
Consideration for In respect of royalty or copyright fee
assignment or grant of received otherwise than by way of
any of his interests in the lumpsum, income to be restricted to 15%
copyright of any book, of value of books sold during the relevant
being a work of literary, previous year.
artistic or scientific nature [Deduction would be available only if the
or royalty or copyright fee individual exercises the option of shifting
received as lumpsum or out of the default tax regime provided
otherwise. under
section 115BAC(1A)]

80RRB Resident Royalty on patents Whole of such income or Rs.3.00,000,

individual being a Any income by way of which everisless... [Deduction would be
patentee royalty on patents available only if the individual exercises
registered on or after the option of shifting out of the default
1.4.2003 tax regime provided u/s 115BAC(1A)]
Deductions in respect of other income
Section Eligible Assessee Eligible Income Permissible Deduction
80TTA Individual or a Interest on deposits in Actual interest subject to a maximum of
HUF, other than a savings account. Rs. 10,000.
resident senior Interest on deposits in a
citizen savings account with a [Deduction would be available only if be
bank, a co-operative the individual/HUF exercises the option
society or a post office of shifting out of the default tax regime
(not being time deposits, provided u/s 115BAC(1A)]
which are repayable on
expiry of fixed periods)
80TTB Resident senior Interest on deposits Actual interest Rs.50,000, whichever is
citizen (i.e. an interest on deposits (both less.
individual of the fixed deposits and saving [Deduction would be available only if the
age of 60 years or accounts) with banking individual exercises the option of shifting
more at any time company, co- operative out of the default tax regime provided
during the society engaged in the 115BAC(1A)]
previous year) businesses of banking or
a post office.

Other Deductions
Section Eligible Assessee Condition for deduction Permissible Deduction
80U Resident Deduction in case of a Flat deduction of Rs. 75,000,
Individual person with disability in case of a person with disability. Flat
Any person, who is deduction of Rs. 1,25,000, in case of a
certified by the medical person with severe disability (80% or
authority to be a person more disability).
with disability [Deduction would be available only if
the individual exercises the option of
shifting out of the default tax regime
provided u/s 115BAC (1A)]