Taxpayers can reduce their taxable income by claiming income tax deductions. Tax deductions are available for investments in Public Provident Funds (PPFs), Equity Linked Savings Schemes (ELSSs), National Pension Schemes (NPSs), etc. So, for example, if you make some investments and use the money for expenses like medical expenses and student loan interest, you can deduct the income tax. From 80C to 80U, taxpayers can claim various income tax deductions under Chapter VI-A. We will discuss all the deductions available to individuals and HUFs in this article. Additionally, we have created a summary table for income tax deductions so you can quickly check your eligibility. You can also read detailed guides about a particular income tax deduction if you are not sure.
Income tax Deductions (Quick Summary)
Here is a quick summary of income tax deductions in table format. This table allows you to quickly check income tax deduction eligibility, maximum deduction, and description. Please refer to the particular deduction heading for a more detailed explanation of the provisions of income tax deductions.
|Section||Description||Eligible Taxpayers||Maximum Deduction|
|80C||Deductions on Investments||Individuals and HUFs||Rs. 1.5 lakh|
|80CCC||Deduction of Pension Fund||Individuals||Rs. 1.5 Lakh|
|80CCD||Notified Pension Scheme||Individuals||Read Detail|
|80CCH||Agniveer Corpus Fund||Individuals||Contribution (Note Inserted vide Finance Bill 2023 w.e.f. 01-04-2023)|
|80D||Deduction for medical expenses||Individuals and HUFs||Rs. 25,000 (self, spouse, and children) + Rs. 50,000 (parents)|
|80DD||Deduction for medical treatment of dependents with disabilities||Individuals and HUFs||Rs. 75,000 (for disabilities other than severe) or Rs. 1,25,000 (for severe disabilities)|
|80DDB||Deduction for specified medical expenses||Individuals and HUFs||Rs. 40,000 (for taxpayers below 60 years of age) or Rs. 1,00,000 (for senior citizens)|
|80E||Deduction for the interest paid on education loans||Individuals and HUFs||The interest paid on education loans for a maximum of 8 consecutive years, starting from the year in which the interest repayment begins or until the interest is fully repaid, whichever is earlier|
|80EEA||Deduction for interest on home loan||Individuals who are first-time home buyers||Rs. 1,50,000|
|80G||Deduction for Donations to Funds and Charitable Institutions||Individuals and HUFs||100% of the donation (subject to certain conditions)|
|80GGB||Deduction for Contributions Given by Companies to Political Parties||Companies||100% of the contribution (subject to certain conditions)|
|80GG||Income Tax Deduction on House Rent Paid||Individuals who do not receive House Rent Allowance (HRA) from their employer and pay rent for their accommodation||The least of the following three amounts: a. Actual Rent Paid minus 10% of Adjusted Total Income; b. Rs. 5,000 per month; c. 25% of Adjusted Total Income|
|80GGB||Deduction for Contributions Given by Companies to Political Parties||Companies||100% of the contribution (subject to certain conditions)|
|80GGC||Deduction for Donations to Political Parties||Individuals||100% of the donation (subject to certain conditions)|
|80RRB||Deduction for Income via Royalty Income on Patents||Individuals who are residents of India and hold a patent||Entire income earned from royalties or up to Rs. 3 lakh, whichever is lower|
|80TTA||Interest on Savings Accounts||Individuals and HUFs||Rs. 10,000|
|80TTB||Interest From Deposits Held by Senior Citizens||Resident individuals who are 60 years of age or older||Rs. 50,000|
|80U||Deduction for persons with disabilities||Individuals and HUFs||Rs. 75,000 for disability of 40% to 80%, and Rs. 1,25,000 for severe disability (80% or more)|
|Notes||Restrictions on Aggregate of Deductions||
Under new tax regime, Chapter VI-A deductions are not allowed except.
Important Notes About Income Tax Deductions (From 80C to 80U)
There are certain deductions that can be claimed while calculating your taxable income under Section 80C to 80U of the Income Tax Act. However, the total amount of these deductions cannot be more than your gross total income minus any short-term capital gains from selling equity shares or any long-term capital gains.
It’s important to note that these deductions cannot be claimed against income derived from winnings from lotteries, crossword puzzles, card games, or other games.
Under the new tax regime, most Chapter VI-A deductions are not allowed except for a few specific ones:
1. Deduction for the employer’s contribution to the National Pension Scheme (NPS) under Section 80CCD(2).
2. Deduction for the Central Government’s contribution to your account under the Agineveer Corpus Fund, which falls under Section 80CCH(2).
3. Deduction for the employment of new employees under Section 80JJAA.
Section 80C of the Income Tax Act allows individuals and Hindu Undivided Families (HUFs) to claim deductions from their taxable income by investing in specified financial instruments or making eligible expenditures. The maximum deduction allowed under Section 80C is Rs 1.5 lakh per year.
Here are some of the key investments and expenses that qualify for deduction under Section 80C:
- Life Insurance Premiums: Premiums paid towards life insurance policies (excluding policies issued on or after April 1, 2012, that do not meet certain conditions) for oneself, spouse, and children are eligible for deduction.
- Employee Provident Fund (EPF) and Voluntary Provident Fund (VPF): Contributions made by employees towards EPF or VPF are eligible for deduction. The deduction also covers contributions made by the employer.
- Public Provident Fund (PPF): Contributions made to a PPF account held with a post office or an authorized bank are eligible for deduction. The interest earned and the maturity amount are also tax-free.
- National Savings Certificates (NSC): Investments made in NSC are eligible for deduction. The interest accrued is taxable but qualifies for reinvestment.
- Tax-saving Fixed Deposits (FD): Investments made in specified bank FDs with a lock-in period of 5 years are eligible for deduction. The interest earned is taxable.
- Equity Linked Saving Schemes (ELSS): Investments made in ELSS, which are diversified equity mutual funds, are eligible for deduction. ELSS has a lock-in period of 3 years.
- Sukanya Samriddhi Yojana (SSY): Contributions made to an SSY account for a girl child are eligible for deduction. The interest earned and the maturity amount are tax-free.
- Senior Citizen Savings Scheme (SCSS): Investments made in SCSS for senior citizens are eligible for deduction. The interest earned is taxable.
- Repayment of Home Loan Principal: The principal component of the Equated Monthly Installment (EMI) paid towards a home loan is eligible for deduction.
- Tuition Fees: Payments made towards the tuition fees of up to two children for full-time education in any school, college, university, or educational institution in India are eligible for deduction.
- National Pension Scheme (NPS): Contributions made to NPS by individuals (self-employed or employees who are not covered by any pension scheme) and employers’ contributions (up to 10% of salary) are eligible for deduction.
It’s important to note that the overall limit for deduction under Section 80C, including all eligible investments and expenses, is Rs 1.5 lakh. Additionally, some investments have specific lock-in periods and conditions. It is advisable to consult a tax professional or refer to the Income Tax Act for detailed information on each investment option and its requirements for claiming deductions.
Who is Eligible: Any individual taxpayer who pays or deposits an amount from their taxable income to maintain or establish an annuity plan offered by the Life Insurance Corporation of India (LIC) is eligible for this deduction.
Specified Scheme: The deduction is applicable to contributions made to the annuity plans offered by LIC, specifically to the fund mentioned in clause (23AAB) of section 10. These plans are designed to provide individuals with a regular pension income after retirement.
Amount of Deduction: Maximum Rs. 50,000/-.
Allowable to: Individuals contributing to the National Pension Scheme (NPS) or the Atal Pension Yojana (APY), as well as employers contributing to the NPS.
Amount of Deduction:
|80CCD (1)||10% of salary (in case of an employee)
20% of his gross total income (in case of any other individual)
|80CCD (1B)||An additional deduction of Rs 50,000 is available for contributions to the NPS|
|80CDD (2)||Employers can contribute to the NPS on behalf of their employees, and the deduction limit is 14% of the salary (basic + DA) contributed by the Central Government or State Government,
and 10% of the salary (basic + DA) contributed by other employers. There is no maximum limit for deductions under this section.
- Section 80CCD deductions are available to both salaried and self-employed individuals.
- The age range for eligibility is 18 to 60 years.
- Deductions under Section 80CCD cannot exceed Rs 2 lakhs, including the additional deduction under Section 80CCD (1B).
The deductions claimed under Section 80CCD cannot be claimed again under Section 80C.
- Withdrawals from the NPS are subject to taxation.
- Proof of payment must be provided when filing income tax returns to claim the deductions.
Eligibility: The deduction under section 80D is available to individuals and Hindu Undivided Families (HUFs). It applies to medical insurance premiums paid for the individual, their spouse, children, and parents. This means that both individuals and HUFs can claim deductions for health insurance premiums paid for themselves and their family members.
Max Deduction: The maximum deduction limits depend on the age of the insured individuals and the type of coverage. Here are the details:
1. Self, Spouse, and Children:
– If the insured individuals and family members are below 60 years of age, a maximum deduction of up to Rs. 25,000 can be claimed.
– If any of the insured individuals or family members are senior citizens (60 years of age or above), the maximum deduction increases to Rs. 50,000.
– An additional deduction of up to Rs. 25,000 can be claimed for medical insurance premiums paid for parents who are below 60 years of age.
– If the parents are senior citizens, the maximum deduction limit increases to Rs. 50,000.
Eligible Amount: The eligible amount for deduction under section 80D refers to the medical insurance premiums paid. It includes premiums paid for health insurance policies taken from insurance companies or policies provided by the General Insurance Corporation of India or any other insurer approved by the IRDAI.
In Case of Individual: For individual taxpayers, the deduction can be claimed for health insurance premiums paid for themselves, their spouse, children, and parents. The maximum deduction limits based on age and coverage mentioned earlier apply in the case of individuals.
In Case of HUF: For HUF taxpayers, the deduction can be claimed for health insurance premiums paid for any member of the HUF, including the HUF itself. The maximum deduction limits based on age and coverage mentioned earlier also apply in the case of HUFs.
Conditions and Notes:
– The premiums must be paid by any mode other than cash to be eligible for the deduction.
– The deduction is available on the actual amount paid as premiums and not on any additional charges like service tax.
– Any reimbursement received from the insurance company or employer for medical expenses reduces the deduction amount.
– Contributions made to the Central Government Health Scheme (CGHS) are not eligible for deduction under section 80D.
The deduction under section 80DD is allowable to individual taxpayers and Hindu Undivided Families (HUFs) who are residents in India.
- Allowable Expenditure or Payment: The deduction can be claimed for the following types of expenditure or payment:
- Medical treatment (including nursing) expenses incurred for a dependant with a disability.
- Expenses related to the training and rehabilitation of a dependant with a disability.
- Payments made or deposited under an approved scheme for the maintenance of a dependant with a disability.
- Amount of Deduction:
For the previous year, taxpayers can claim a deduction of up to Rs. 75,000 from their gross total income for the allowable expenditure or payment mentioned above. However, if the dependant has a severe disability, the deduction limit increases to Rs. 1,25,000.
Dependent Means: In the case of an individual taxpayer, the term “dependent” refers to the spouse, children, parents, brothers, or sisters of the individual or any of them. For HUF taxpayers, it includes any member of the Hindu Undivided Family who depends wholly or mainly on the individual or HUF for support and maintenance. It is important to note that the dependent should not have claimed any deduction under section 80U while computing their total income.
Disability: The term “disability” has the meaning assigned to it in the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995, and includes conditions such as autism, cerebral palsy, and multiple disabilities.
Conditions: To be eligible for the deduction under section 80DD, the following conditions must be fulfilled:
- In the case of payments made or deposited under an approved scheme, the scheme must provide for the payment of an annuity or lump sum amount for the benefit of the dependant with a disability.
- The taxpayer must nominate either the dependant with a disability or any other person or trust to receive the payment on their behalf, specifically for the benefit of the dependant.
- It is important to note that if the dependant with a disability predeceases the individual or the HUF, the amount paid or deposited under the scheme will be treated as the taxpayer’s income in the year it is received, and it will be subject to tax.
Medical expenses can be quite costly, especially when dealing with specific diseases or ailments. To provide relief to taxpayers, the Income Tax Act allows to get an income tax deduction under Section 80DDB. Here’s what you need to know:
Eligibility: The deduction is available to individual taxpayers who are residents of India and Hindu Undivided Families (HUFs).
The taxpayer must have actually paid for the medical treatment of a specified disease or ailment as determined by the rules set by the Income Tax Board.
Amount of Deduction: The deduction is limited to the actual amount paid or Rs. 40,000, whichever is less, during the previous year in which the payment was made. If the patient is a senior citizen (60 years or above), the limit is increased to Rs. 1,00,000.
Prescription Requirement: To claim the deduction, the taxpayer must obtain a prescription for the medical treatment from a specialist as prescribed by the rules. The specialist should be a neurologist, oncologist, urologist, haematologist, immunologist, or another specialist specified in the rules.
Impact of Insurance or Employer Reimbursement: The deduction will be reduced by the amount received from insurance coverage or reimbursed by the employer for the medical treatment.
Specified Diseases and Ailments: The eligible diseases or ailments for the deduction are listed in the rules.
Some examples include neurological diseases, malignant cancers, chronic renal failure, and hematological disorders such as hemophilia and thalassemia.
Specialist Prescription: The prescription for the specific diseases or ailments should be issued by the corresponding specialist mentioned in the rules. The specialist must hold the required degrees recognized by the Medical Council of India.
Government Hospital Treatment: In the case of treatment received in a government hospital, the prescription can be issued by a specialist working full-time in that hospital. Remember to keep the prescription and necessary documents related to the medical treatment expenses for record-keeping purposes and to claim the deduction accurately.
Allowable to: Section 80E of the Indian Income Tax Act applies to individuals who have taken out loans for higher education. It’s applicable if the individual is the one pursuing higher education or if the loan was taken out for the higher education of the individual’s spouse, child, or a student for whom they are the legal guardian.
Max Deduction Amount: Under Section 80E, there is no predefined upper limit for the deduction amount. The entire amount of interest paid on the education loan during a financial year can be claimed as a deduction. However, the principal amount repaid does not qualify for this deduction.
Conditions: There are several conditions that must be met in order to claim a deduction under Section 80E. Firstly, the loan must have been taken from a financial institution or an approved charitable institution. Secondly, the loan must be used for higher education. Finally, the deduction can be claimed for a maximum of 8 years starting from the year in which the individual starts repaying the loan interest, or until the interest is fully repaid, whichever happens first.
Higher Education Means: In the context of Section 80E of the Indian Income Tax Act, “higher education” refers to any course of study pursued after the completion of the 12th standard. This includes both vocational as well as full-time courses in India or abroad.
Relative Means: In the context of Section 80E, a relative refers to an individual’s spouse or children. It also includes any student for whom the individual is a legal guardian. The individual taxpayer could take the loan for any of these people’s higher education and still be eligible for the Section 80E deduction on the interest paid on the loan.
Section 80E of the Income Tax Act provides an income tax deduction for the interest paid on education loans. Here’s an example to help you understand how this deduction works:
Let’s say Mr. Verma has taken an education loan to pursue higher studies for his daughter. The loan carries an interest rate of 8% per annum, and the repayment period is 7 years. During the financial year, Mr. Verma paid an interest amount of Rs 50,000 on the education loan.
- To calculate the deduction under Section 80E, the following points should be considered:
- The deduction is available only on the interest portion of the education loan, and not on the principal repayment.
- The deduction is available for a maximum of 8 consecutive years, starting from the year in which the interest repayment begins or until the interest is fully repaid, whichever is earlier.
- The deduction is available for loans taken for higher education, including vocational courses pursued after completing senior secondary education or its equivalent.
- In this case, since Mr. Verma has paid Rs 50,000 as interest during the financial year, he can claim a deduction of the entire interest amount under Section 80E.
- It’s important to note that there is no maximum limit on the deduction amount for interest on education loans. However, keep in mind that this deduction is available only to individual taxpayers and not to Hindu Undivided Families (HUFs) or any other entities.
- Remember to maintain the necessary documentation and proof of the education loan and interest paid to claim this deduction while filing your income tax return.
Under this provision of deduction 80EEA, eligible taxpayers can claim an income tax deduction of up to Rs. 1.5 lakhs for the interest paid on home loans taken for purchasing or constructing an affordable house. This deduction is over and above the existing deductions available, thereby providing extra financial relief to first-time homebuyers.
Eligibility Criteria: To avail the benefits of Section 80EEA, certain eligibility criteria must be met. Here are the key requirements:
Loan from a registered financial institution: The home loan must be taken from a financial institution registered with the Reserve Bank of India (RBI). This ensures that the loan is obtained from a recognized and reliable source, adding credibility to the deduction claim.
Property located in India: The house for which the loan is taken must be situated in India. This requirement emphasizes the focus on promoting homeownership within the country and stimulating the real estate sector.
Stamp duty value and carpet area limits: To qualify for the income tax deduction, the stamp duty value of the house property should not exceed Rs. 45 lakhs. Additionally, the carpet area of the residential unit should not exceed 60 square meters in metropolitan cities or 90 square meters in other cities. These limits ensure that the deduction is targeted towards affordable housing options.
First-time home buyer: The deduction under Section 80EEA is exclusively available to first-time home buyers. To be considered a first-time home buyer, an individual should not own any other residential property on the date of sanction of the loan. This requirement aims to support individuals who are taking their first steps into homeownership.
Claiming the Deduction: To claim the deduction under Section 80EEA, taxpayers need to provide specific details while filing their income tax returns. The following information must be provided:
Name of the financial institution: The name of the financial institution from which the home loan was obtained should be mentioned. This ensures transparency and enables the authorities to verify the loan’s authenticity.
Loan amount and interest paid: Taxpayers need to provide the loan amount and the interest paid during the financial year for which the deduction is being claimed. This information helps determine the eligible amount for the deduction.
Section 80G of the tax law allows individuals to deduct certain donations from their total income when calculating their taxable income. This income tax deduction is subject to specific conditions and provisions outlined in this section.
Types of Donations Eligible for Deduction
- The sums that can be deducted under this section include the following:
- Donations to funds established by the government:
- National Defence Fund
- Jawaharlal Nehru Memorial Fund
- Prime Minister’s Drought Relief Fund
- Prime Minister’s National Relief Fund (PMNRF) or PM CARES Fund
- Prime Minister’s Armenia Earthquake Relief Fund
- Africa (Public Contributions – India) Fund
- National Children’s Fund
- Indira Gandhi Memorial Trust
- Rajiv Gandhi Foundation
- National Foundation for Communal Harmony
- Approved universities or educational institutions of national eminence
- Maharashtra Chief Minister’s Relief Fund or Chief Minister’s Earthquake Relief Fund
- Fund set up by the State Government of Gujarat for earthquake relief
- Zila Saksharta Samiti for improving primary education and literacy
Donations to blood transfusion councils:
- National Blood Transfusion Council
- State Blood Transfusion Council
- Donations to funds for medical relief and welfare:
- Fund set up by a State Government for medical relief to the poor
- Army Central Welfare Fund, Indian Naval Benevolent Fund, or Air Force Central Welfare Fund
Donations to specific funds and institutions:
- Andhra Pradesh Chief Minister’s Cyclone Relief Fund
- National Illness Assistance Fund
- Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund of any State or Union territory
- National Sports Fund
- National Cultural Fund
- Fund for Technology Development and Application
- National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation, and Multiple Disabilities
- Swachh Bharat Kosh (excluding amounts spent under corporate social responsibility)
- Clean Ganga Fund (for residents, excluding amounts spent under corporate social responsibility)
- National Fund for Control of Drug Abuse
Donations to specified organizations and purposes:
- Any other fund or institution approved by the government
- Government or local authority for charitable purposes (excluding family planning)
- Authority for housing accommodation, city planning, development, or improvement
Donations by companies: Donations to the Indian Olympic Association or other specified sports development or sponsorship organizations
Donations for earthquake relief in Gujarat: Sums paid to trusts, institutions, or funds during a specific period for providing relief to Gujarat earthquake victims
Conditions for Deduction: To be eligible for the deduction, the institution or fund receiving the donation must fulfill the following conditions:
Exclusion of income from taxation: The institution or fund’s income should not be liable for inclusion in its total income under specified tax provisions, except for business profits.
- Use of donations: Donations should not be used, directly or indirectly, for the institution or fund’s business purposes if they generate business income.
- No provision for asset transfer: The institution or fund’s constitution or rules should not allow the transfer or application of income or assets for non-charitable purposes.
- Non-exclusive benefit: The institution or fund should not be intended solely for the benefit of a particular religious community or caste.
- Proper accounts: The institution or fund should maintain regular accounts of its receipts and expenditure.
- Legal recognition: The institution or fund should be a registered public charitable trust, society, university, or an educational institution
Section 80GG of the Income Tax Act provides a deduction for individuals who do not receive House Rent Allowance (HRA) from their employer and pay rent for their accommodation. Here are the key points to know about Section 80GG:
1. Eligibility: The income tax deduction under Section 80GG is available to individuals who are self-employed, salaried employees, or professionals. However, if you or your spouse own a residential property in the city or town where you reside, you are not eligible for this deduction.
2. Rent Paid: To claim the deduction, you must actually pay rent for the accommodation you occupy. The rent should be paid for a furnished or unfurnished residential property. It’s important to note that the property should not be owned by you or your spouse.
3. Deduction Calculation: The deduction under Section 80GG is calculated as the least of the following three amounts:
- a. Actual Rent Paid minus 10% of Adjusted Total Income: Adjusted Total Income refers to the total income after deducting all other eligible deductions under Chapter VI-A of the Income Tax Act.
- b. Rs 5,000 per month: This is the maximum deduction limit set under Section 80GG.
- c. 25% of Adjusted Total Income: This is calculated as 25% of your Adjusted Total Income. However, the maximum deduction cannot exceed Rs 5,000 per month.
4. Form 10BA: To claim the deduction, you need to file Form 10BA along with your income tax return. This form requires you to provide details about the property, landlord, and rent paid.
5. Other Conditions: It’s important to meet certain conditions to claim the deduction under Section 80GG. These include not owning a residential property in the city where you reside, not receiving HRA from your employer, and not claiming a deduction for rent paid under any other section of the Income Tax Act.
It’s advisable to maintain proper documentation, such as rent receipts and a rental agreement, to substantiate your claim for the deduction. Additionally, consulting a tax professional or referring to the Income Tax Act can provide further guidance and clarification.
When an Indian company calculates its total income for tax purposes, it can deduct any amount it has contributed to a political party or an electoral trust during the previous year. This deduction is covered under section 80GGB of the Income Tax Act.
No Deduction for Cash Contributions: It’s important to note that this deduction is not applicable for cash contributions made by the company. In other words, if a company gives money directly in cash to a political party, it cannot claim a deduction for that amount under this section.
Explanation of “Contribute”: To avoid any confusion, the term “contribute” used in this section has the same meaning as defined in section 293A80 of the Companies Act, 1956 (an older law). Essentially, it refers to the act of donating or providing financial support to a political party or an electoral trust.
In simpler terms, if an Indian company donates money to a political party or an electoral trust, it can deduct that amount from its total income when calculating its tax liability. However, this deduction is not available for cash contributions. The term “contribute” has the same meaning as defined in a specific section of the Companies Act, 1956.
Section 80GGC of the Income Tax Act, 1961, allows individuals to claim deductions on donations made to registered political parties. The deduction can be up to 100% of the taxpayer’s gross total income. Cash and cheque donations are eligible, but cash donations exceeding ₹2,000 are not. A certificate from the political party stating the donation amount is required for claiming the deduction. The deduction is only available to individuals and for donations made to registered Indian political parties
- Section 80RRB of the Income Tax Act, 1961 allows individuals who are residents of India and hold a patent to claim a deduction on the income they earn through patent royalties. The deduction can be either the entire income earned from royalties or up to ₹3 lakh, whichever is lower.
- To qualify for 80RRB income tax deduction, the patent must have been registered on or after 1st April 2003 under the Patents Act, 1970. If a compulsory license is granted for the patent, the deduction will be limited to the royalty amount specified in the license.
- If the royalty income is earned from a source outside India, it will only be considered for the deduction if it is brought into India within six months from the end of the previous year, or within a further period allowed by the competent authority.
- To claim the deduction, the taxpayer must provide a certificate in the prescribed form, signed by the prescribed authority, along with their income tax return. This certificate should include relevant details about the patent, royalty income, and source of income.
- It’s important to note that once a deduction is claimed under Section 80RRB for a specific income, no further deductions can be claimed for the same income under any other provision of the Income Tax Act.
- The section provides explanations for various terms such as “Controller,” “patentee,” “patent of addition,” “patented article,” and “royalty.”
- The prescribed authority for issuing the certificate required under Section 80RRB is the Controller mentioned in the Patents Act, 1970. The certificate should be furnished in Form No. 10CCE.
- Additionally, for certain other deductions, such as those under sections 80QQB, 80R, 80RR, and 80RRA, a certificate in Form No. 10H is required, and the prescribed authority is the Reserve Bank of India or any other authorized authority regulating foreign exchange transactions.
- It is advisable to consult with a tax advisor for specific guidance and clarification regarding deductions under Section 80RRB and related provisions.
Section 80TTA of the Income Tax Act provides a income tax deduction for interest earned on savings accounts. This deduction is available to individuals and Hindu Undivided Families (HUFs). Here are the key points to know about Section 80TTA:
Eligible Accounts: The deduction is applicable to interest earned on savings accounts held with banks, cooperative societies, and post offices in India. It does not include interest from fixed deposits or recurring deposits.
Maximum Deduction: The maximum deduction allowed under Section 80TTA is Rs 10,000 per financial year. If the total interest earned on savings accounts is less than Rs 10,000, the entire amount can be claimed as a deduction. If the interest earned exceeds Rs 10,000, only Rs 10,000 can be claimed as a deduction.
Individual and HUF: Both individuals and HUFs can claim this deduction. However, it is important to note that the deduction is not available to any other type of taxpayer, such as companies or partnerships.
Source of Income: The interest earned on savings accounts is considered as income from other sources. It is taxable under the head “Income from Other Sources” if it exceeds Rs 10,000 (the maximum deduction limit).
Reporting of Interest: Banks and other financial institutions are required to report the interest earned on savings accounts in the annual statement provided to their customers. This helps individuals and HUFs to accurately report their income from savings accounts and claim the deduction, if eligible.
It’s important to note that the deduction under Section 80TTA is separate from the deductions available under Section 80C. Therefore, you can claim both deductions if you meet the respective eligibility criteria. It is advisable to keep track of the interest earned on your savings accounts and consult a tax professional or refer to the Income Tax Act for any specific clarifications or changes in the tax laws.
Section 80TTB of the Income Tax Act provides an income tax deduction for interest income earned by senior citizens from specified deposits. This deduction is available to resident individuals who are 60 years of age or older. Here are the key points to know about Section 80TTB:
Eligible Senior Citizens: The income tax deduction under Section 80TTB is available to resident individuals who are 60 years of age or older during the relevant financial year. It is applicable to individuals and does not extend to Hindu Undivided Families (HUFs) or any other category of taxpayers.
Specified Deposits: The deduction applies to interest income earned from specified deposits. These deposits include savings accounts, fixed deposits, and recurring deposits with banks, cooperative societies, and post offices in India. The deduction does not apply to interest earned on other types of deposits like corporate deposits or mutual funds.
Maximum Deduction: The maximum deduction allowed under Section 80TTB is Rs 50,000 per financial year. This means that if the total interest income from specified deposits is less than or equal to Rs 50,000, the entire amount can be claimed as a deduction. If the interest income exceeds Rs 50,000, the deduction is capped at Rs 50,000.
Source of Income: The interest income from specified deposits is considered as income from other sources for taxation purposes. It is taxable under the head “Income from Other Sources” if it exceeds Rs 50,000 (the maximum deduction limit).
No Benefit under Section 80TTA: Senior citizens who are eligible for the deduction under Section 80TTB cannot claim a deduction under Section 80TTA. Section 80TTA provides a deduction for interest earned on savings accounts up to Rs 10,000, but this benefit is not available to senior citizens who qualify for Section 80TTB.
It’s important for senior citizens to keep track of their interest income from specified deposits and consult a tax professional or refer to the Income Tax Act for any specific clarifications or changes in the tax laws.
If you or a family member has a disability, you may be eligible for a deduction when calculating your income tax. Here’s what you need to know:
Eligibility: The deduction is available to individual taxpayers who are residents of India. The taxpayer must be certified by a medical authority as a person with a disability.
Amount of Deduction: Individuals with a disability can claim a deduction of Rs. 75,000 from their total income. For individuals with severe disability, the deduction is increased to Rs. 1,25,000. Certificate Requirement:
To claim the deduction, the taxpayer must provide a copy of the certificate issued by the medical authority. The certificate should be submitted along with the income tax return for the relevant assessment year.
Validity of the Certificate: If the extent of disability needs reassessment after a specific period mentioned in the certificate, a new certificate must be obtained. Without a valid certificate, no deduction can be claimed for assessment years beyond the expiry of the previous certificate.
Definition of Disability: The term “disability” refers to the definition provided in the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995. It includes conditions like autism, cerebral palsy, and multiple disabilities as defined in relevant legislation.
Medical Authority: The certificate must be issued by the medical authority specified in the relevant legislation. The Central Government may notify additional medical authorities for certifying disabilities.
Terms Explained: “Person with disability” refers to individuals as defined in the Persons with Disabilities Act or the National Trust Act.
“Person with severe disability” refers to individuals with a disability level of 80% or more or those specified in the National Trust Act.
It’s important to keep the certificate and relevant documents related to the disability for record-keeping and to claim the deduction correctly.
Please note that this is a simplified explanation. For accurate details and compliance with the deduction for persons with disabilities, You should visit the rules.