SARANSH Deductions from Gross Total Income

DEDUCTIONS FROM GROSS TOTAL INCOME

Deductions from Gross Total Income

Deductions under Chapter Deduction under section

VI-A 10AA

Deductions in Deductions in Deductions in

Other
respect of respect of respect of other
Deductions
certain payments certain incomes incomes

DEDUCTIONS IN RESPECT OF CERTAIN PAYMENTS

Section Eligible Eligible Payments Permissible Deduction
Assessee
80C Individual or Contribution to PPF, Payment of Sum paid or deposited, subject to
HUF LIC premium, etc. a maximum of ` 1,50,000
Sums paid or deposited in the previous
year by way of
- Life insurance premium
- Contribution to PPF/SPF/RPF
and approved superannuation
fund
- Repayment of housing loan taken
from Govt., bank, LIC, specified
employer etc.
- 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

© ICAI BOS(A) 91
SARANSH Deductions from Gross Total Income

Section Eligible Eligible Payments Permissible Deduction

Assessee
- Senior Citizen’s Savings Scheme
Account etc.
- Contribution by Central
Government employee to
additional account (Tier II A/c)
of NPS referred to u/s 80CCD
80CCC Individual Contribution to certain pension Amount paid or deposited,
funds subject to a maximum of
Any amount paid or deposited to ` 1,50,000
keep in force a contract for any
annuity plan of LIC of India or any
other insurer for receiving pension
from the fund.
80CCD Individuals Contribution to Pension Scheme of Employee’s Contribution/
employed by Central Government Individual’s Contribution
the Central An individual employed by the In case of a salaried individual,
Government Central Government on or after deduction of own contribution u/s
or any other 1.1.2004 or any other employer or any 80CCD(1) is restricted to 10% of his
employer; other assessee, being an individual, salary.
Any other who has paid or deposited any In any other case, deduction u/s
individual amount in his account under a 80CCD(1) is restricted to 20% of
assessee notified pension scheme [to his gross total income.
individual pension account [Tier I Further, additional deduction of
A/c] under National Pension Scheme upto ` 50,000 is available u/s
& Atal Pension Yojana] 80CCD(1B).
Employer’s Contribution
The entire employer’s contribution
would be included in the salary of
the employee. The deduction of
employer’s contribution u/s
80CCD(2) would be restricted to
14% of salary, where the employer is
the Central Government or State
Government; and 10%, in case of
any other employer.
Note – As per section 80CCE, maximum permissible deduction u/s 80C, 80CCC & 80CCD(1) is
` 1,50,000. However, the limit ` 1,50,000 u/s 80CCE does not apply to deduction u/s 80CCD(2) and
80CCD(1B).

© ICAI BOS(A) 92
SARANSH Deductions from Gross Total Income

Section Eligible Eligible Payments Permissible Deduction

Assessee
80CCH Individual Contribution to Agniveer Corpus Individual’s Contribution
Fund Whole of the amount paid or
An individual enrolled in the deposited
Agnipath Scheme and subscribing to Central Government’s
the Agniveer Corpus Fund on or after Contribution
1.11.2022, who has paid or deposited The entire Central Government’s
any amount in his account in the contribution to the Agniveer
Agniveer Corpus Fund Corpus Fund would be included in
the salary of the assessee.
Thereafter, deduction u/s
80CCH(2) would be available for
the same.
80D Individual Medical Insurance Premium
and HUF (1) Any premium paid, otherwise
than by way of cash, to keep
inforce an insurance on the health
of–
in case of self, spouse and
Maximum ` 25,000
an dependent children
(` 50,000, in case the
individual
individual or his or her spouse
in case of family member is a senior citizen)
HUF
(2) In case of an individual,
contribution, otherwise than by
way of cash, to CGHS or any other
scheme as notified by Central
Government.
(3) Any premium paid, otherwise than Maximum ` 25,000
by way of cash, to keep in force an
(` 50,000, in case either or
insurance on the health of parents,
both of the parents are senior
whether or not dependent on the
citizen(s))
individual.
Notes:
(i) Any amount paid, otherwise than Amount paid subject to a cap of
by way of cash, on account of ` 50,000 (in case one parent is a
medical expenditure incurred on senior citizen, in respect of whom
the health of the assessee or his insurance premium is paid, and
family member or his parent, who the other is a senior citizen on
is a senior citizen and no amount whom medical expenditure is
has been paid to effect or to keep incurred, the total deduction

© ICAI BOS(A) 93
SARANSH Deductions from Gross Total Income

Section Eligible Eligible Payments Permissible Deduction

Assessee
in force an insurance on the cannot exceed ` 50,000)
health of such person.
(ii) Payment, including cash Amount paid subject to a cap of
payment, for preventive health ` 5,000, in aggregate (subject to the
check up of himself, spouse, overall individual limits of ` 25,000/
dependent children and parents. ` 50,000, as the case may be)
(4) In case where medical premium is Deduction for each of the relevant
paid lumpsum for more than one previous year = 1/number of relevnat
year previous year
Relevant previous year means
previous year in which such lumpsum
is paid and the subsequent previous
years during which the insurance
would be in force.
80DD Resident Maintenance including medical Flat deduction of ` 75,000.
Individual or treatment of a dependant disabled In case of severe disability (i.e.,
HUF Any amount incurred for the medical person with 80% or more
treatment (including nursing), disability) the flat deduction shall
training and rehabilitation of a be ` 1,25,000.
dependent disabled
and / or
Any amount paid or deposited under
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) (2)
In case of Dependant
An Spouse, children,
individual parents, brothers, sisters
A HUF 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.

© ICAI BOS(A) 94
SARANSH Deductions from Gross Total Income

Section Eligible Eligible Payments Permissible Deduction

Assessee
80DDB Resident Deduction for medical treatment of Actual sum paid or ` 40,000
Individual or specified diseases or ailments (` 1,00,000, if the payment is for
HUF Amount paid for specified diseases or medical treatment of a senior
ailment citizen), whichever is less,
Assessee Amount spent (-)
An For himself or his the amount received from the
individual dependant being spouse, insurance company or reimbursed
children, parents, by the employer.
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 higher The deduction is available for
education interest payment in the initial
Interest on loan taken from any assessment year (year of
financial institution or approved commencement of interest
charitable institution. payment) and seven assessment
Such loan is taken for pursuing his years immediately succeeding the
higher education or higher education initial assessment year
of his or her relative i.e., spouse or (or)
children of the individual or the until the interest is paid in full by
student for whom the individual is the assessee,
the legal guardian. whichever is earlier.
80EE Individual Deduction for interest on loan Deduction of upto ` 50,000 would
borrowed from any financial be allowed in respect of interest
institution [bank/housing finance on loan taken from a financial
company (HFC)] for acquisition of institution.
residential house property Conditions:
• Loan should be sanctioned
during P.Y.2016-17
• Loan sanctioned ≤ ` 35 lakhs
• Value of house ≤ ` 50 lakhs
• The assessee should not own
any residential house on the
date of sanction of loan.
80EEA Individual Deduction in respect of interest Deduction of upto ` 1,50,000
payable on loan taken from a would be allowed in respect of
financial institution (bank/HFC) for interest payable on loan taken

© ICAI BOS(A) 95
SARANSH Deductions from Gross Total Income

Section Eligible Eligible Payments Permissible Deduction

Assessee
acquisition of residential house from a financial institution for
property acquisition of house property.
Conditions:
• Loan should be sanctioned
during the period between
1.4.2019 to 31.3.2022.
• Stamp Duty Value of house ≤
` 45 lakhs
• The individual should not own
any residential house on the date
of sanction of loan.
• The individual should not be
eligible to claim deduction u/s
80EE.
80EEB Individual Deduction in respect of interest Deduction of upto ` 1,50,000
payable on loan taken from a would be allowed in respect of
financial institution (bank or interest payable on loan taken for
certain NBFCs) for purchase of purchase of electric vehicle.
electric vehicle Loan should be sanctioned during
the period from 1.4.2019 to
31.3.2023.
80G All assessees Donations to certain funds, charitable institutions etc.
There are four categories of deductions –
Category Donee
(I) 100% deduction of Prime Minister’s National Relief Fund,
amount donated, National Children’s Fund, Swachh
without any qualifying Bharat Kosh, National Defence Fund,
limit PM CARES Fund etc.
(II) 50% deduction of Prime Minister’s Drought Relief
amount donated, Fund.
without any qualifying
limit
(III) 100% deduction of Government or local authority,
amount donated, subject institution for promotion of family
to qualifying limit planning etc.
(IV) 50% deduction of Government or any local authority to
amount donated, be used for charitable purpose, other
subject to qualifying than promotion of family planning,
limit notified temple, church, gurudwara,
mosque etc.

© ICAI BOS(A) 96
SARANSH Deductions from Gross Total Income

Section Eligible Eligible Payments Permissible Deduction

Assessee
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. Capital gains taxable u/s 111A, 112 & 112A
Step 2: Calculate 10% of adjusted total income.
Step 3: Calculate the actual donation, which is subject to qualifying limit
Step 4: Lower of Step 2 or Step 3 is the maximum permissible deduction.
Step 5: The said deduction is adjusted first against donations 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 ` 2,000, if
paid in cash.
80GG Individual Rent paid for residential Least of the following is allowable
not in receipt accommodation as deduction:
of house rent (1) 25% of total income;
allowance (2) Rent paid – 10% of total
income
(3) ` 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.
80GGA Any assessee Donations for scientific research or Actual donation
not having rural development [No deduction shall be allowed for
income donation in excess of ` 2,000, if paid
chargeable in cash]
under the
head “Profits
and gains of
business or
profession”
80GGB Indian Contributions to political parties Actual contribution
company Any sum contributed by it to a (otherwise than by way of cash)
registered political party or an
electoral trust.

© ICAI BOS(A) 97
SARANSH Deductions from Gross Total Income

Section Eligible Eligible Payments Permissible Deduction

Assessee
80GGC Any person, Contributions to political parties Actual contribution
other than Amount contributed to a registered (otherwise than by way of cash)
local political party or an electoral trust.
authority and
an artificial
juridical
person
funded by the
Government

DEDUCTIONS IN RESPECT OF CERTAIN INCOMES

Section Eligible Eligible Income Permissible Deduction
Assessee
80JJAA An assessee to Deduction in respect of employment 30% of additional employee cost
whom section of new employees incurred in the previous year.
44AB applies, Deduction is allowable for 3
whose gross assessment years including
total income assessment year relevant to the
includes previous year in which such
profits and employment is provided.
gains derived
from business
80M A domestic Deduction in respect of inter- Amount of dividend received
company corporate dividend from other domestic company or
The gross total income of domestic foreign company or business trust
company includes in any P.Y., any or the amount of dividend
income by way of dividends from any distributed by such domestic
other domestic company or foreign company on or before the due
company or a business trust. date, whichever is less.
Due date means one month prior
to the date of furnishing return of
income u/s 139(1).
80QQB Resident Royalty income, etc., of authors of Income derived in the exercise of
individual, certain books other than text books profession or ` 3,00,000,
being an Consideration for assignment or whichever is less.
author grant of any of his interests in the In respect of royalty or copyright fee
copyright of any book, being a work received otherwise than by way of
of literary, artistic or scientific lumpsum, income to be restricted to
nature or royalty or copyright fee 15% of value of books sold during
received as lumpsum or otherwise the relevant previous year.

© ICAI BOS(A) 98
SARANSH Deductions from Gross Total Income

Section Eligible Eligible Income Permissible Deduction

Assessee
80RRB Resident Royalty on patents Whole of such income or
individual, Any income by way of royalty on ` 3,00,000, whichever is less.
being a patents registered on or after
patentee 1.4.2003
As per section 80AC, furnishing return of income on or before due date specified u/s 139(1) is
mandatory for claiming deduction in respect of certain incomes. Deductions u/s 80-IA to 80-IE are
discussed after this table.

DEDUCTIONS IN RESPECT OF CERTAIN INCOMES: SECTIONS 80-IA TO 80-IE

Section Eligible Business Year of Period of Quantum of Deduction
commencement Deduction
of eligible
business
80-IA (1) (i) Developing or On or after Infrastructure 100% of the profits and gains
(ii) Operating and 1.4.1995 but not Facility of derived from such business for 10
maintaining or later than road, or a consecutive assessment years
(iii) Developing, 1.4.2017 bridge or a rail
operating and system or a
maintaining any highway
infrastructure project or a
facility water supply
project: 10
consecutive
(2) Industrial parks Industrial parks:
assessment
Notified by the
years out of 20
Central
years
Government for
beginning from
the period on or
the year in
after 1.4.1997 &
which the
ending on
enterprise
31.3.2011
develops or
(3) Power Generation or begins to
undertakings Generation and operate the
distribution: Set eligible
up between business.
1.4.1993 &
31.3.2017
Other eligible
Transmission or businesses: 10
distribution: consecutive
Start transmission

© ICAI BOS(A) 99
SARANSH Deductions from Gross Total Income

Section Eligible Business Year of Period of Quantum of Deduction

commencement Deduction
of eligible
business
during the period assessment
from 1.4.1999 & years out of 15
31.3.2017 years
Renovation and beginning from
modernisation of the year in
existing network: which the
Undertakes enterprise
substantial develops or
renovation and begins to
modernisation operate the
during the period eligible
on or after business.
1.4.2004 & ending
on 31.3.2017
(4) Undertaking Company formed
owned by an on or before 30th
Indian Company November, 2005
set up for and begins to
Reconstruction or generate or
revival of a power transmit or
generating plant distribute power
before 31.3.2011
and notified
before 31.12.2005
by Central
Government
80-IAB Development of Develops SEZ, 10 consecutive 100% of the profits and gains
Special Economic notified on or AYs out of 15 derived from such business
Zones(SEZs) after 1st April 2005 years beginning
but before 1st from the year in
April 2017. SEZ has been
notified.
80-IAC A business carried out The company or 3 consecutive 100% of the profits and gains
by an eligible start-up LLP is AYs out of 10 derived from such business
engaged in Innovation, incorporated years beginning
Development or during the period from the year in
Improvement of which company
products or processes or

© ICAI BOS(A) 100

SARANSH Deductions from Gross Total Income

Section Eligible Business Year of Period of Quantum of Deduction

commencement Deduction
of eligible
business
services or a scalable 1.4.2016 - or LLP is
business model with a 31.3.2024 incorporated.
high potential of
employment generation
or wealth creation
80-IB Processing, Processing, 10 consecutive 100% of the profits and gains
preservation and preservation and AYs beginning derived from such business for 5
packaging of fruits or packaging of with the initial AYs beginning with the initial AY
vegetables or meat and meat or meat AY 25% (30% in case of company) for
meat products or products or remaining 5 years
poultry or marine or poultry or marine
dairy products or from or dairy
the integrated business products: On or
of handling, storage and after 1.4.2009
transportation of
foodgrains Other eligible
businesses: On or
after 1.4.2001
80-IBA Developing and Housing Project 100% of the profits and gains
building housing referred u/s 80- - derived from such housing project
projects or rental IBA(1) is
housing project approved after
1 June 2016 but
st

on or before 31st
March 2022
80-IE Undertaking begun or Between 1st April, 10 consecutive 100% of the profits and gains
begins, in any of the 2007 and ending AYs derived from such business
North-Eastern States before 1st April, commencing
(i.e., the States of 2017 with the initial
Arunachal Pradesh, AY
Assam, Manipur,
Meghalaya, Mizoram,
Nagaland, Sikkim and
Tripura) -
(1) to manufacture or
produce any eligible
article or thing;

© ICAI BOS(A) 101

SARANSH Deductions from Gross Total Income

Section Eligible Business Year of Period of Quantum of Deduction

commencement Deduction
of eligible
business
(2) to undertake
substantial
expansion to
manufacture or
produce any eligible
article or thing;
(3) to carry on any
eligible business.

DEDUCTIONS IN RESPECT OF OTHER INCOME

Section Eligible Eligible Income Permissible Deduction
Assessee
80TTA Individual, Interest on deposits in Actual interest subject to a maximum of
other than a savings account ` 10,000.
resident senior Interest on deposits in a
citizen or HUF savings account with a bank, a
co-operative society or a post
office (not being time
deposits, which are repayable
on expiry of fixed periods)
80TTB Resident Interest on deposits Actual interest or ` 50,000, whichever is
senior citizen Interest on deposits (both less.
(i.e., an fixed deposits and saving
individual of accounts) with banking
the age of 60 company, co-operative
years or more society engaged in the
at any time business of banking or a post
during the office
previous year)

OTHER DEDUCTIONS
Section Eligible Condition for deduction Permissible Deduction
Assessee
80U Resident Deduction in case of a Flat deduction of ` 75,000, in case of a
Individual person with disability person with disability.
Any person, who is certified Flat deduction of ` 1,25,000, in case of a
by the medical authority to person with severe disability (80% or more
be a person with disability disability).

© ICAI BOS(A) 102

SARANSH Deductions from Gross Total Income

DEDUCTION UNDER SECTION 10AA

Section Eligible Eligible Income Permissible Deduction
Assessee
10AA An assessee Profits derived from Deduction for 15 consecutive assessment
who derives exports of such articles or years
profits from an things or export of Amount of deduction =
under-taking, services (including Export turnover of Unit SEZ
being a Unit computer software). Profits of Unit in SEZ ×
Total turnover of Unit SEZ
established in Conditions for
SEZ, which deduction Years 1 to 5 - 100% of such profits would be
begins to 1. Proceeds to be received exempt in the first five years;
manufacture or in convertible foreign Years 6 to 10 - 50% of such profits in the
produce exchange within 6 next five years; and
articles or months from the end of Years 11 to 15 - In the last five years, 50% of
things or the P.Y. or such further such profits subject to transfer to SEZ Re-
provide any period as the investment Reserve Account.
service on or competent authority
after may allow in this
1.4.2005 but behalf.
before 1.4.2021 2. The report of
Chartered
Accountant certifying
that the deduction has
been correctly
claimed should be
furnished before the
date specified in
section 44AB.
3. Return of income to
be filed on or before
due date u/s 139(1).

© ICAI BOS(A) 103