Final ppt_grp no 5

8/7/2019 Final ppt_grp no 5

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Deductions from

Gross TotalIncomeGroup 5 MMS B

Assessment Year 2010-11Previous Year 2009-2010 1


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Basic RulesRule 1

The aggregate amount of deductions under

sections 80C to 80U cannot exceed grosstotal income.

Rule 2

These deductions are to be allowed only ifthe assessee claims these and gives theproof of such investments/ expenditure/income.

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Categories of Deductions

1. To encourage savings

2.For certain personal expenditure

3.For socially desirable activities

4.For physically disabled persons4


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Deduction u/s 80C

From AY 2007-08 onwards.

Applicable only to Individual & HUF.

This section provides for deduction in

respect of certain expenditure/investments paid or deposited by theassessee in the previous year.

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The gross qualifying amount under this section refer tothe payment/investment under some of the following

schemes:-Life Insurance Premium Paid.

Deferred Annuity Contract.

Statutory Provident Fund and Recognized Provident

Fund.15 Year Public Provident Fund.

Approved Superannuation Fund.

National Savings Certificates.

Unit-linked Insurance Plan (Ulip).Dhanraksha Plan of LIC Mutual Fund.

Jeevan Dhara, Jeevan Akshay, New Jeevan Dhara.

Notified Units of Mutual Fund or UTI.

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Amount of Deduction

100% of the amount invested or Rs. 1,00,000/-whichever is lower.

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Deduction u/s 80CCC

Deduction in respect of Contribution to

Certain Pension Funds.

Individual

Eligible Amount amount paid/depositedunder an annuity plan of the Life InsuranceCorporation of India or any other insurer forreceiving pension.

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ConditionsTaxable income.

This must not be allowed as deduction u/s80C.Any amount withdrawn or pension receivedfrom the plan is taxable in the hands of

the assessee or nominee in the year ofreceipt.

Amount of DeductionAmount paid or Rs. 1,00,000/- whichever islower.

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Deduction u/s 80CC

DDeduction in Respect of Contribution toPension Scheme of Central Government.

Individual who is an employee of CentralGovernment on or after 1.1.2004.

Eligible Amount Deposit made under apension scheme notified by the CentralGovernment.

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ConditionsNo deduction must have been claimed u/s

80C.Any amount received from the scheme, istaxable in the hands of the assess in thatyear or receipt.

Salary for the purpose of this sectionincludes dearness allowance if under theterms of employment.

Amount of DeductionAggregate of amount deposited by theemployee and the Central government, or 10%of the salary, whichever is lower.

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The aggregate amount of deductions under80C, 80CCC and 80CCD put together

cannot exceed

Rs.1,00,00012


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Deduction u/s 80D

Deduction in respect of Medical InsurancePremia.

Individuals/HUF.

Eligible Amount - Insurance premium paid in

accordance with the scheme framed by theGeneral Insurance Corporation of India andapproved by the Central Government.

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ConditionsThe amount should be paid by cheque out ofthe taxable income.The policy is taken on the health of theassessee, on the health of spouse, dependentparents or dependent children of the assessee.In case of HUF on the health of any member of

the family.

Amount of Deduction100% of premium paid subject to a maximumof:

Rs. 20,000 in case of senior citizens (above65 years)Rs. 15,000 in case of others.

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Deduction u/s 80DD

Deduction in respect of dependent relative.

Individuals/HUF who is a Resident of India.

Eligible Amount expenditure incurred onmedical treatment OR/AND amount paid or

deposited under any scheme framed by theLIC of India or any other insurer for thepayment of an annuity or a lump sum amountfor the benefit of such dependent

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Conditions

The assess shall have to furnish a certificatein the prescribed form.

Dependant means the spouse, children,parents and siblings in case of individuals, orany member of the family in case of HUF.

Person with severe disabilities means a personsuffering from 80% or more of one or moredisabilities.

Amount of Deduction

Rs. 50,000 in case of normal disabilities andRs. 1,00,000 in case of severe disabilities.

This is irrespective of the amount expended.16


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Deduction u/s 80DDB

Deduction In Respect Of Medical Treatment

Individuals/HUF who is a Resident of India.

Eligible amount expenditure incurred for themedical treatment of such diseases specified inRule 11D(e.g. Parkinson's disease, malignantcancers, full blown AIDS, chronic renal failure,etc) for self or dependant individual.

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Conditions

The concerned assessee must attach a copy of

certificate in the prescribed Form no. 10-1along with the return of income.

Dependant again means the spouse, children,parents and siblings in case of individuals, orany member of the family in case of HUF.

The deduction shall be reduced by the amountreceived, if any, under an insurance from an

insurer for the medical treatment of personmentioned in this section or reimbursed by theemployer.

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Amount of Deduction

100% of the expenses incurred subject toa maximum of

Rs. 60,000 in the case of expenses

incurred for senior citizens (above 65years)

Rs. 40,000 in the case of others.

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Deduction u/s 80EDeduction in respect of repayment of loantaken for higher education.

Individual

Eligible Amount any amount paid by way of

interest on loan taken from any financialinstitution or any approved charitableinstitution for higher education.

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Conditions

Amount is paid out of his income chargeable to tax.

Deduction under section 80E of the Income-tax Actallowed in respect of interest on loans taken forpursuing higher education in specified fields ofstudy to be extended to cover all fields of study,including vocational studies, pursued after

completion of schooling. This amendment will takeeffect from 1st day of April, 2009 (financial year).

the deduction shall be allowed for the previous yearin which the assessee starts repaying the loan or

interest thereon and seven previous yearsimmediately succeeding it or until the loan togetherwith interest thereon is paid by the assessee in full,whichever is earlier.

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Financial institution means banking companyor financial institution notified by the

central government.Approved Charitable Institutions means aninstitution referred u/s 10(23C) of the act.

The deduction forintereston loanu/s.80E for

highereducation has been extendedtoany

course ofstudy pursuedafterClass XII.

Amount of DeductionActual interest paid or Rs. 40,000 whicheveris lower.

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Deduction u/s 80 GThe amount donated towards charity attracts deduction

under section 80G of the Income Tax Act, 1961. Section80G has been in the law book since financial year 1967-68.

Any person or assessee who makes an eligible donation isentitled to get tax deductions subject to conditions. Thissection does not restrict the deduction to individuals,

companies or any specific category of taxpayer.You cannot claim deduction for donations made to politicalparties for any reason, including paying for brochures,souvenirs or pamphlets brought out by such parties.

Only donation made to made to prescribed funds andinstitutions qualify for deduction

Maximum allowable deduction:- If aggregate of the sumsdonated exceed 10% of the adjusted gross total income,the amount in excess of 10% ceases to be entitled for tax

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Section 80 G

Deduction amount U/s. 80G:- Donations paid to specifiedinstitutions qualify for tax deduction under section 80Gbut is subject to certain ceiling limits. Based on limits, wecan broadly divide all eligible donations under section 80Ginto four categories:

a) 100% deduction without any qualifying limit (e.g., PrimeMinisters National Relief Fund).

b) 50% deduction without any qualifying limit (e.g., IndiraGandhi Memorial Trust).

c) 100% deduction subject to qualifying limit (e.g., an

approved institution for promoting family planning).d) 50% deduction subject to qualifying limit (e.g., anapproved institution for charitable purpose other thanpromoting family planning).

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Deduction u/s 80GG

Deduction in respect of amount of rent

paid.

Any assessee other than assessee havingincome allowance consisting HRA.

Eligible Amount Any expenditure incurredby him on payment of rent in excess of 10%

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ConditionsThe assessee files a declaration in Form

No. 10BA regarding the payment of rent.Such accommodation is occupied by him forhis own residence.Deduction under this section can be

claimed even if accommodation atconcessional rent is provided by theemployer.Adjusted Gross Total income( Adj.GTI) for

this purpose means his gross total incomeminus long-term capital gain, short termcapital gain taxable u/s 111A, and alldeductions u/s 80CCC to 80U except anydeduction under this section.

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Amount of Deduction

The amount of deduction under this sectionwill be the least of the following-

excess of actual rent paid over 10% of

adjusted gross total income:25% of his adjusted gross total income;and

Rs. 2,000 p.m.

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Deduction u/s 80U

Deduction in case of person with disability.

Individual resident of India.

Eligible amount Flat deduction to a personwith disability.

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Conditions

He is certified by the medical authority to be a

person with disability, at any time during theprevious year.

He furnishes a certificate issued by themedical authority in the prescribed form alongthe return of income.

Amount of Deduction

A fixed deduction ofRs. 50,000 in case of a person with disability

Rs. 75,000 in case of a person with severedisability.( having any disability over 80%)

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ConclusionUnder the income tax act first of all income undereach head is computed.

The aggregate of income under each head is knownas Gross Total Income.

Out of this gross total income certain deductionsare allowed.

The income after such deductions is called TotalIncome

The total deductions from section 80 C - 80 Ucannot exceed the total income.

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