Section *80* Deduction Undr Income Tax Rules

Deductions on Section 80C, 80CCC & 80CCD

Section 80C

This section has been introduced by the Finance Act 2005. Broadly speaking, this section provides deduction from total income in respect of various investments / expenditures / payments.
                                      

1. Life Insurance Premium for individuals. The policy must be in the assesse's or spouse's or any child's name. 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.
2. Sum paid under contract for deferred annuity for an individual on the life of the assesse, spouse or any child.
3. Sum deducted from salary payable to Govt. Servant for securing deferred annuity for self-spouse or child Payment limited to 20% of salary.
4. Contribution made under Employee's Provident Fund Scheme.
5. Contribution to PPF for individual can be in the name of the assesse, the spouse or any child. For a HUF, it can be in the name of any member of the family.
6. Contribution by employee to a Recognised Provident Fund.
7. Sum deposited in 10/15 year account of Post Office Saving Bank
8. Subscription to any notified securities/notified deposits scheme. e.g. NSS
9. Subscription to any notified savings certificate, Unit Linked Savings certificates. e.g. NSC VIII issue.
10. Contribution to Unit Linked Insurance Plan of LIC Mutual Fund e.g. Dhanrakhsa 1989
11. Contribution to notified deposit scheme/Pension fund set up by the National Housing Scheme.
12. Payments of instalments or part payments of loan taken for buying or constructing residential house property. 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.
13. Contribution to notified annuity Plan of LIC (e.g. Jeevan Dhara) or Units of UTI / notified Mutual Funds.
    Note if in case of such contributions the deduction under Section 80CCC has already been availed, the rebate under Section 88 would not be allowable.
14. Subscription to units of a Mutual Fund notified u/s 10(23D).
15. Subscription to deposit scheme of a public sector, company engaged in providing housing finance.
16. Subscription to equity shares/ debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions.
17. 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.
18. An additional deduction upto a maximum of Rs. 20,000/- will be available from Assessment Year 2011-12 (FY 2010-11) for investment in Infrastructure Bonds.

Section 80CCC: Deduction in respect of Premium Paid for Annuity Plan of LIC or Other Insurer

Payment of premium for annuity plan of LIC or any other insurer Deduction is available upto a maximum of Rs. 100,000. The premium must be deposited to keep in force a contract for an annuity plan of the LIC or any other insurer for receiving pension from the fund.

Section 80CCD: Deduction in respect of Contribution to Pension Account

                                      

Deductions to the extent of 10% of one's salary are available on deposits made by a Central government servant in one's pension account.
If the Central Government makes any contribution to the pension account, deduction of such contribution to the extent of 10% of salary shall be allowed. Further, in any year where any amount is received from the pension account such amount shall be charged to tax as income of that previous year.

Remember: The limit for maximum deduction available under Sections 80C, 80CCC and 80CCD (combined together) is Rs. 1,00,000/- (Rs. one lac only).

Deductions on Savings Bank Account

Section 80 TTA: Deduction from gross total income in respect of any Income by way of Interest on Savings account

Deduction from gross total income of an individual or HUF, upto a maximum of Rs. 10,000/-, in respect of interest on deposits in savings account ( not time deposits ) with a bank, co-operative society or post office, is allowable w.e.f. 1st April 2012 (Assessment Year 2013-14).

Deductions on House Rent

Section 80GG: Deduction in respect of House Rent Paid

Deduction available is the least of

1. Rent paid minus 10% of total income
2. Rs. 2000/- per month
3. 25% of total income, provided
• Assessee or his spouse or minor child should not own residential accommodation at the place of employment.
• He should not be in receipt of house rent allowance.
• He should not have self occupied residential premises in any other place.

Deductions on Loan for Higher Studies

Section 80E: Deduction in respect of Interest on Loan for Higher Studies

Deduction in respect of interest on loan taken for pursuing higher education. The deduction is also available for the purpose of higher education of a relative w.e.f. A.Y. 2008-09.

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 annual income is less than Rs. 10 lakhs can invest in this scheme (up to Rs. 50,000) and get a deduction of 50% of the investment.
So, if you invest Rs. 50,000 (maximum amount eligible for income tax rebate is Rs. 50,000), you can claim a tax deduction of Rs. 25,000 (50% of Rs. 50,000).

Deductions on Medical Insurance

Section 80D: Deduction in respect of Medical Insurance

Deduction is available up to Rs. 20,000/- for senior citizens and upto Rs. 15,000/ in other cases for insurance of self, spouse and dependent children. Additionally, a deduction for insurance of parents (father or mother or both) is available to the extent of Rs. 20,000/- if parents are senior Citizen and Rs. 15,000/- in other cases. 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 upto Rs. 5,000 for preventive health check-up is available.

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.

Deductions on Medical Expenditure for a Handicapped Relative

Section 80DD: Deduction in respect of Rehabilitation of Handicapped Dependent Relative

Deduction of Rs. 50,000/- is available on:

1. expenditure incurred on medical treatment, (including nursing), training and rehabilitation of handicapped dependent relative.
2. Payment or deposit to specified scheme for maintenance of dependent handicapped relative.

Further, if the dependant is a person with severe disability, a deduction of Rs. 100,000/- is also available under this section. The handicapped dependent should be a dependent relative suffering from a permanent disability (including blindness) or mentally retarded, as certified by a specified physician or psychiatrist.
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.

Deductions on Person suffering from Physical Disability

Section 80U: Deduction in respect of 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.

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 upto 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
• Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund in respect of 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

Donations with 50% deduction without any qualifying limit.

• Jawaharlal Nehru Memorial Fund
• Prime Minister’s Drought Relief Fund
• National Children’s 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 Income by way of Royalty of a Patent

Section 80RRB: Deduction in respect of 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 upto 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 anymore

Investments in Long Term Infrastructure Bonds issued by Industrial Finance Corporation of India, LIC, Infrastructure Development Finance Company Limited or a Non-Banking Finance Company classified as an Infrastructure Finance Company by RBI with a minimum tenure of 10 years and Lock in period of 5 years. Maximum amount of deduction available is Rs. 20,000/- The deduction is over and above the combined deduction of Rs. 100,000/- available under section 80C, 80CCC and 80DDD. The benefits under this section were extended by one year in the Budget 2011 but the same has not been done in this Budget. Therefore, the deduction under this section shall not be available for AY 2013-14.
Source LInk