Income Tax Deductions specified in Sections 80CCC to 80U, shall be allowed from his Gross Total Income of the assessee.[Section 80A(1)].
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"Gross Total Income" means the total income computed in accordance with the provisions of the Income-tax Act, before making any deduction under this Chapter. [Section 80B(5)].
The aggregate amount of deductions under this Chapter shall not, in any case, exceed the Gross Total Income of the assessee. [Section 80A(1)].
The Chapter VI-A, under the Act, is divided into three, viz.,
Deduction in respect of certain payments - Section 80C to Section 80GGC
Deductions in respect of certain incomes - Section 80IA to Section 80RRB
Other Deductions - Section 80U
Where any deduction is required to be allowed under any section under the head "Deductions in respect of certain incomes", i.e., Sections 80IA to 80RRB, then it shall be restricted to the extent of the amount of such income included in the "Gross Total Income". [Section 80AB].
If in computing the total income of an Association of Persons or a Body of Individuals, any deduction was allowed under sections 80G, 80GGA, 80GGC, 80IA or 80IB, then the same shall not be allowed in the hands of the members of AOP or BOI in relation to the share of such member in the income of the AOP or BOI. [Section 80A(3)].
The deduction under Chapter VI-A can be divided into five classifications, for our comprehensive understanding, viz.,
Income Tax Deductions in respect of certain Investments/Payments ' 80C to 80CCE
Deduction in respect of certain Expenses/Payments ' 80D to 80GGC
Deduction in relation to certain Industrial Undertakings ' 80IA to 80IC
Income Tax Deductions in respect of certain Incomes ' 80JJA to 80RRB
Other Deductions ' 80U
In the case of Individuals and HUFs, rebate was being given under section 88, in relation to any sum contributed by them towards certain investments and certain payments, from the tax liability.
Section 88 has been withdrawn and the contributions/payments are now allowed as deduction from the Total Income itself, under section 80C. The individual limits in most cases of contributions have been removed while doing so.
Income Tax Deductions under section 80C can be availed by Individual or HUF, in respect of certain contributions or payments in respect of certain persons (Persons Covered).
The following table provides for the qualifying amount, which shall not exceed Rs.1,00,000, to be invested or payments to be made: -
|S.No||Persons Covered||Nature of Payment or Deposited||Individual Limit|
|1||Individual||By way of deduction from the Salary payable, in accordance with the conditions of his service, by or on behalf of the Government, for the purpose of securing a Deferred Annuity or making provision to his spouse or children||1/5th of the Salary|
|As contribution to Provident Fund under Provident Funds Act, 1925 (Statutory Provident Fund)|
|As contribution to Recognised Provident Fund|
|As contribution to Approved Super Annuation Fund|
|As contribution to Pension Fund set up by Mutual Funds notified under section 10(23D) or UTI|
*Any two children
|Tuition Fees (not including
Development Fees, Donation, etc.) at the time of admission or
1. To any University, College, School or Other Educational Institution situated in India
2. For the purpose of Full Time Education
|To effect or to keep in force an Contract of Deferred Annuity (not being a plan with a option to receive the sum in cash by Insured and not covered by other clauses below) on Life.|
|To keep in force an insurance||20% of the Sum Assured|
|As contribution to Provident Fund set up by the Central Government and notified by the Central Government (Public Provident Fund)||-|
|As contribution for participation in Unit Linked Insurance Plan of UTI||-|
|As contribution for participation in Unit Linked Insurance Plan of ‘LIC Mutual Fund’ notified under section 10(23D)||-|
|5||Individual or HUF||As subscription to Central Government Security or Notified Deposits of Government (National Savings Scheme)|
|As subscription to NSC – VI & VII Issue (Closed)|
|As subscription to notified savings certificate (NSC VIII Issue)|
|To effect or keep in force a contract for Annuity Plan of LIC or any other Insurer|
|As subscription to any Notified Units of Mutual Funds notified under section 10(23D)|
|As subscription to Notified Deposit or Pension Fund of National Housing Bank|
|As subscription to any Deposit
Deductions are available for payments by way of: -
Payment does not include -
The above payments should be for purposes of
Purchase or construction of a residential house property the income from which is chargeable to tax under the head "Income from House Property" or
If it has not been used for assessee's own residence would have been chargeable under "Income from House Property".
As subscription to Units of any Mutual Fund notified under section 10(23D), approved on an application by such Mutual Fund to Board, which is applied for Eligible issue of CapitalNote
Eligible Issue means the issue where the entire proceeds is invested in a Public Limited Company or Public Financial Instituted formed for the purposes of business referred to in section 80IA() - Infrastructure Facility