For financial year 2014-15 (with changes listed for FY
2015-16)
Deductions on Section 80C, 80CCC &
80CCD
Section 80C
The deduction under
section 80C is allowed from your Gross Total Income. These are available to an Individual
or a HUF. The deduction is allowed for various investments, expenses and
payments.
Total Deduction under
section 80C, 80CCC and 80CCD(1) together cannot exceed Rs 1,50,000 for the
financial year 2014-15 (assessment year 2015-16). The limit for financial year
2015-16 is also Rs 1,50,000.
- Investments
in PPF – Under the PPF scheme, Rs
1,50,000 is allowed to be invested in one financial year. The minimum
investment required is Rs 500. Interest earned on PPF account is tax free.
The PPF account matures after 15 years. Receipts on Maturity or
withdrawals are tax free. Money is allowed to be withdrawn after 5 years.
Contribution to PPF for individual can be in the name of the assessee, the
spouse or any child. For a HUF, it can be in the name of any member of the
family
- Employee's
share of PF Contribution – Amount deducted from your
salary as your contribution in Employee's Provident Fund Scheme or
Recognized Provident Fund.
- Purchase
of NSCs – National Savings Certificate
e.g. NSC VIII issue and IX issue are eligible for deduction in the year of
purchase. These can be bought from designated Post Office. Accrued
Interest (which is considered reinvested) qualifies for deduction during
the term of the NSCs (except the last year).
- Life
Insurance Premium Payment - The policy must be in the
assessee's or spouse's or any child's name (child may be dependent/independent,
minor/major, or married/unmarried). For a HUF, it may be on life of any
member of HUF. The 80C deduction is valid on insurance policies purchased
after 1st April, 2012 only if the premium is less than 10% of sum assured.
Benefits for existing purchased policies continue. The deduction is also
allowed on payments made by Government employees to Central Govt Employees
Insurance Scheme.
- Children's
Tuition Fee Payment - Tuition fees paid to any
school, college, university or other educational institution situated
within India for the purpose of full time education of any two children
(including payments for play school, pre nursery and nursery).
- Principal
Repayments on Loan for purchase of House Property - Payments of installments or
part payments or repayment of loan taken for buying or constructing
residential house property. Also allowed for stamp duty, registration fees
and other expenses for purpose of transfer of such property to the
assessee. However, if the property is transferred before the expiry of 5
years from the end of the financial year in which possession of such
property is obtained by him, the aggregate amount of deduction of income
so allowed for various years shall be liable to tax in that year.
- Investment
in Sukanya Samridhi account - A maximum of Rs 1,50,000 can be
deposited in the Sukanya Samridhi Account for a girl child. The amount
deposited shall earn an interest of 9.1% (for financial year 2014-15).
This interest is fully exempt from tax. A minimum of Rs 1,000 must be
deposited in a year. Receipts on maturity from the account are tax free.
- ULIPS
or Unit Linked Insurance Plan – ULIPS sold with life insurance
cover for deduction under section 80C. Includes Contribution to Unit
Linked Insurance Plan of LIC Mutual Fund e.g. Dhanraksha 1989 and
contribution to Other Unit Linked Insurance Plan of UTI.
- Investment
in ELSS - ELSS or Equity Linked Savings
Scheme is an Equity Fund. ELSS funds are eligible to be claimed as a
deduction under section 80C. These funds have a 3 year lock in period.
- Sum
paid for securing Deferred Annuity - Sum paid under non commutable
deferred annuity for an individual on the life of the assessee, spouse or
any child. Also allowed on sum deducted from salary payable to Govt.
Servant for securing deferred annuity for self-spouse or child. Payment
limited to 20% of salary.
- Sum
deposited in Five Year Deposit Scheme in Post Office.
- Amount
deposited under Senior Citizens Saving Scheme.
- Subscription
to any notified securities/notified deposits scheme. e.g. NSS
- Contribution
to notified Pension Fund set up by Mutual Fund or UTI.
- Sum
paid as subscription to Home Loan Account Scheme of the National Housing
Bank or contribution to any notified deposit scheme/pension fund set up by
National Housing Bank.
- Subscription
to deposit scheme of a public sector, company engaged in providing housing
finance (public deposit scheme of HUDCO).
- Contribution
to notified annuity Plan of LIC (e.g. Jeevan Dhara and Jeevan Akshay) or
Units of UTI / notified Mutual Funds.
- Subscription
to equity shares/ debentures forming part of any approved eligible issue
of capital made by a public company or public financial institutions.
- Subscription
to any notified bonds of NABARD (National Bank for Agriculture and Rural
Development).
Section 80CCC: Deduction
in respect of Premium Paid for Annuity Plan of LIC or Other Insurer
This section provides
deduction to an Individual for any amount paid or deposited in any annuity plan
of LIC or any other insurer for receiving pension from a fund referred to in
Section 10(23AAB).
In case the annuity
is surrendered before the date of its maturity, the surrender value is taxable
in the year of receipt.
Section 80CCD: Deduction
in respect of Contribution to Pension Account
For
FY 2014-15 (assessment year 2015-16)
Total
Deduction under Section 80C, 80CCC and 80CCD(1) cannot exceed Rs 1,50,000.
For FY
2015-16 (assessment year 2016-17)
A new
section 80CCD(1B) has been introduced to provide for additional deduction for
amount contributed to NPS of up to Rs 50,000.
Therefore
for financial year 2015-16, Total Deduction under Section 80C, 80CCC, 80CCD(1)
and 80 CCD(1B) cannot exceed Rs 2,00,000.
From
assessment year 2012-13, employer's contribution under section 80CCD(2) towards
NPS is outside the monetary ceiling mentioned above.
Deductions on Savings Bank Account
Section 80 TTA: Deduction
from gross total income with respect to any Income by way of Interest on
Savings account
Deduction from gross
total income of an individual or HUF, up to a maximum of Rs. 10,000/-, in
respect of interest on deposits in savings account with a bank, co-operative
society or post office. Section 80TTA deduction is not available on interest
income from fixed deposits.
Deductions on House Rent
Section 80GG: Deduction
with respect to House Rent Paid
- This
deduction is available for rent paid when HRA is not received. Assessee or
his spouse or minor child should not own residential accommodation at the
place of employment.
- Assessee
should not be in receipt of house rent allowance.
- He
should not have self occupied residential premises in any other place.
Deduction available
is the least of
- Rent
paid minus 10% of total income
- Rs.
2000/- per month
- 25%
of total income
Deductions on Loan for Higher Studies
Section 80E: Deduction
with respect to Interest on Loan for Higher Studies
Deduction in respect
of interest on loan taken for pursuing higher education. This loan is taken for
higher education for the assessee, spouse or children or for a student for whom
the assessee is a legal guardian.
Deduction for First Time Home Owners
Section 80EE: Deductions
on Home Loan Interest for First Time Home Owners
This section provided
deduction on the Home Loan Interest paid and is valid for financial years
2013-14 & 2014-15 (Assessment year 2014-15 and 2015-16) only. The deduction
under this section is available only to Individuals for first house purchased
where the value of the house is Rs 40lakhs or less and loan taken for the house
is Rs 25lakhs or less. And the Loan has been sanctioned between 01.04.2013 to
31.03.2014. The total deduction allowed under this section is Rs 1,00,000.
Deductions on Rajiv Gandhi Equity Saving
Scheme (RGESS)
Section 80CCG: Rajiv
Gandhi Equity Saving Scheme (RGESS)
The Rajiv Gandhi
Equity Saving Scheme (RGESS) was launched after the 2012 Budget. Investors
whose gross total income is less than Rs. 12 lakhs can invest in this scheme.
Upon fulfillment of conditions laid down in the section, the deduction is lower
of - 50% of amount invested in equity shares or Rs 25,000.
Deductions on Medical Insurance
Section 80D: Deduction in
respect of Medical Insurance
For financial year
2014-15 - Deduction is available up to Rs. 15,000/- to an assessee for
insurance of self, spouse and dependent children. If individual or spouse is
more than 60 years old the deduction available is Rs 20,000. An additional
deduction for insurance of parents (father or mother or both) is available to
the extent of Rs. 15,000/- if less than 60 years old and Rs 20,000 if parents
are more than 60 years old. Therefore, the maximum deduction available under
this section is to the extent of Rs. 40,000/-. (From AY 2013-14, within the
existing limit a deduction of up to Rs. 5,000 for preventive health check-up is
available).
For financial year
2015-16 – Deduction is raised from Rs 15,000 to Rs 25,000. The deduction for
senior citizens is raised from Rs 20,000 to Rs 30,000. For uninsured super
senior citizens (more than 80 years old) medical expenditure incurred up to Rs
30,000 shall be allowed as a deduction under section 80D. However, total
deduction for health insurance premium and medical expenses for parents shall
be limited to Rs 30,000.
Deductions on Medical Expenditure for a
Handicapped Relative
Section 80DD: Deduction in
respect of Rehabilitation of Handicapped Dependent Relative
Deduction is
available on:
- expenditure
incurred on medical treatment, (including nursing), training and
rehabilitation of handicapped dependent relative
- Payment
or deposit to specified scheme for maintenance of dependent handicapped
relative.
Where disability is
40% or more but less than 80% - fixed deduction of Rs 50,000. Where there is
severe disability (disability is 80% or more) – fixed deduction of Rs
1,00,000.A certificate of disability is required from prescribed medical
authority.
Note: A person with
'severe disability' means a person with 80% or more of one or more disabilities
as outlined in section 56(4) of the 'Persons with disabilities (Equal
opportunities, protection of rights and full participation)' Act.
For financial year
2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs
1,00,000 has been raised to Rs 1,25,000.
Deductions on Medical Expenditure on Self
or Dependent Relative
Section 80DDB: Deduction
in respect of Medical Expenditure on Self or Dependent Relative
A deduction to the
extent of Rs. 40,000/- or the amount actually paid, whichever is less is
available for expenditure actually incurred by resident assessee on himself or
dependent relative for medical treatment of specified disease or ailment. The
diseases have been specified in Rule 11DD. A certificate in form 10 I is to be
furnished by the assessee from any Registered Doctor.
In case of senior
citizen the deduction can be claimed up to Rs 60,000 or amount actually paid,
whichever is less.
For financial year
2015-16 – for very senior citizens Rs 80,000 is the maximum deduction that can
be claimed.
Deductions on Person suffering from
Physical Disability
Section 80U: Deduction
with respect to Person suffering from Physical Disability
Deduction of Rs.
50,000/- to an individual who suffers from a physical disability (including
blindness) or mental retardation. Further, if the individual is a person with
severe disability, deduction of Rs. 100,000/- shall be available u/s 80U.
Certificate should be obtained from a Govt. Doctor. The relevant rule is Rule
11D.
For financial year 2015-16
– The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000
has been raised to Rs 1,25,000.
Deduction for donations towards Social
Causes
Section 80G: Deduction for
donations towards Social Causes
The various donations
specified in Sec. 80G are eligible for deduction up to either 100% or 50% with
or without restriction as provided in Sec. 80G. 80G deduction not applicable in
case donation is done in form of cash for amount over Rs 10,000.
Donations with 100%
deduction without any qualifying limit:
- National
Defence Fund set up by the Central Government
- Prime
Minister's National Relief Fund
- National
Foundation for Communal Harmony
- An
approved university/educational institution of National eminence
- Zila
Saksharta Samiti constituted in any district under the chairmanship of the
Collector of that district
- Fund
set up by a State Government for the medical relief to the poor
- National
Illness Assistance Fund
- National
Blood Transfusion Council or to any State Blood Transfusion Council
- National
Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental
Retardation and Multiple Disabilities
- National
Sports Fund
- National
Cultural Fund
- Fund
for Technology Development and Application
- National
Children's Fund
- Chief
Minister's Relief Fund or Lieutenant Governor's Relief Fund with respect
to any State or Union Territory
- the
Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air
Force Central Welfare Fund, Andhra Pradesh Chief Minister's Cyclone Relief
Fund, 1996
- The
Maharashtra Chief Minister's Relief Fund during October 1, 1993 and
October 6,1993
- Chief
Minister's Earthquake Relief Fund, Maharashtra
- Any
fund set up by the State Government of Gujarat exclusively for providing
relief to the victims of earthquake in Gujarat
- Any
trust, institution or fund to which Section 80G(5C) applies for providing
relief to the victims of earthquake in Gujarat (contribution made during
January 26, 2001 and September 30, 2001) or
- Prime
Minister's Armenia Earthquake Relief Fund
- Africa
(Public Contributions — India) Fund
- Swachh
Bharat Kosh (applicable from financial year 2014-15)
- Clean
Ganga Fund (applicable from financial year 2014-15)
- National
Fund for Control of Drug Abuse (applicable from financial year 2015-16)
Donations with 50%
deduction without any qualifying limit.
- Jawaharlal
Nehru Memorial Fund
- Prime
Minister's Drought Relief Fund
- Indira
Gandhi Memorial Trust
- The
Rajiv Gandhi Foundation
Donations to the following
are eligible for 100% deduction subject to 10% of adjusted gross total income
- Government
or any approved local authority, institution or association to be utilised
for the purpose of promoting family planning
- Donation
by a Company to the Indian Olympic Association or to any other notified
association or institution established in India for the development of
infrastructure for sports and games in India or the sponsorship of sports
and games in India.
Donations to the following
are eligible for 50% deduction subject to 10% of adjusted gross total income
- Any
other fund or any institution which satisfies conditions mentioned in
Section 80G(5)
- Government
or any local authority to be utilised for any charitable purpose other
than the purpose of promoting family planning
- Any
authority constituted in India for the purpose of dealing with and
satisfying the need for housing accommodation or for the purpose of
planning, development or improvement of cities, towns, villages or both
- Any
corporation referred in Section 10(26BB) for promoting interest of
minority community
- For
repairs or renovation of any notified temple, mosque, gurudwara, church or
other place.
Deductions on Contribution by Companies to
Political Parties
Section 80GGB: Deduction
in respect of contributions given by companies to Political Parties
Deduction is allowed
to an Indian company for amount contributed by it to any political party or an
electoral trust. Deduction is allowed for contribution done by any way other
than cash.
Political party means
any political party registered under section 29A of the Representation of the
People Act. Contribution is defined as per section 293A of the Companies Act,
1956.
Deductions on Contribution by Individuals
to Political Parties
Section 80GGC: Deduction
in respect of contributions given by any person to Political Parties
Deduction is allowed
to an assessee for any amount contributed to any political party or an
electoral trust. Deduction is allowed for contribution done by any way other
than cash.
Political party means
any political party registered under section 29A of the Representation of the
People Act.
Deductions on Income by way of Royalty of
a Patent
Section 80RRB: Deduction
with respect to any Income by way of Royalty of a Patent
Deduction in respect
of any income by way of royalty is respect of a patent registered on or after
01.04.2003 under the Patents Act 1970 shall be available up to Rs. 3 lacs or
the income received, whichever is less. The assessee must be an individual
resident of India who is a patentee. The assessee must furnish a certificate in
the prescribed form duly signed by the prescribed authority.
Deductions on Investment in Long Term
Infrastructure Bonds [REMOVED]
Section
80CCF: Investment in Long Term Infrastructure Bonds
This section is no
longer valid from AY 2012-13.
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