Commerce

Lecture No.- 05
- For CA Intermediate

Subject Name
Income Tax

Deductions From Gross Total Income

Jasmeet Singh
Deductions from Gross Total Income
Deduction is allowed from Gross Total Income. If GTI is less than deduction then, No Deduction is allowed from STCG u/s 111A , LTCG u/s 112, LTCG u/s 112A and
deduction is restricted to the amount of GTI. casual income.

Section 80 C Deduction In Respect of Certain Payments / Investments Deduction in respect of contribution to Pension Scheme of Central Government
Assesee Individual / HUF Section 80CCD
Deduction Amount Invested or Rs. 1.5 lacs – Whichever is lower Assessee Individual
Payment Is Made Towards EE’s Contribution (80CCD(1)) Amount Contributed
a) Life Insurance Policy for self, spouse & child. Subject to a maximum of 10% (Assessee Contribution) (Max = 10% of retirement benefit salary)
of the actual capital sum assured.(15% for person who is a person with ER Contribution 1. Amount contributed by ER is Added to Gross Salary
disability as referred to in section 80U or suffering from disease as 80CCD(2) 2. Also Deduction is allowed equals to 10% of retirement
specified in section 80DDB) benefit salary
In respect of policy issued before 01.04.2012, 10% shall be taken as 20% In Case of Self Employed ((Assessee Contribution)
b) Contribution made in Unit Linked insurance Plan (ULIP) of UTI or mutual Deduction shall be allowed for such contribution but maximum to the extent of
fund registered in India (self, spouse and any child or any member of HUF) 20% of gross total income.
c) Investment in fixed deposit for a period of 5 years or more Additional An additional deduction of upto ₹ 50,000 over and above ₹
d) Invested in five year post office time deposit account Deduction 1,50,000 is allowed to an individual
e) Contribution by individual to SPF / RPF. 80CCD(1B)
f) Contribution made by individual or HUF to 15-year PPF
(self, spouse and any child or any member of HUF)
g) Deduction shall be allowed if amount has been invested in National Saving S. 80 CCE
Certificate (NSC). Maximum deduction allowed under section 80C + 80CCC + 80CCD(1) shall be
Interest accrued shall be income under the head other sources also Rs.1,50,000
deduction is allowed for such interest u/s 80C. However, no deduction shal Note: ER Contribution u/s 80CCD(2) and Additional Deduction u/s 80CCD(1B) is
be allowed for Interest accrued in last year. not covered u/s 80CCE. In other words, these are allowed separately to assessee.
h) Repayment of Housing Loan
i) Payment of tuition fees (maximum two children and it should be whole time Deduction In Respect of Family Insurance Premium S. 80D
education) Assessee Individual / HUF
j) Senior Citizens Savings Scheme. Payment Made For 1. Health insurance premium
k) Investment in Sukanya Samridhi Account. 2. Contribution in Central Govt. Health Scheme
l) Contribution to any notified pension fund set up by the National Housing 3. Preventive Health Checkup (PHC)
Bank or Mutual fund or UTI Deduction
Self / Spouse/ Amount paid Subject to max 25,000.(Including PHC)
dependant Children (In case of Resident Senior Citizen max ₹ 50,000)
Section 80 CCC Deduction in respect of contribution to certain pension Parents (dependent / Amount paid Subject to max 25,000.(Including PHC)
Funds Not dependent) (In case of Resident Senior Citizen max ₹ 50,000)
Assesee Individual In case of Resident senior citizen, Deduction of ₹ 50,000 is allowed in case of
1. Deposit is to be made in any medical expenditure even if no insurance premium is paid
(a) Pension plan of Life Insurance Corporation (LIC) also known as annuity Maximum Deduction for Preventive Health-Check up of Family & Parents is Rs.
scheme; or 5,000 which is included in overall limit of Rs.25,000 / Rs. 50,000
(b) Pension Plan of any other Private Insurer as approved by Controller of No Deduction is allowed for the payment of premium made in cash. PHC
Insurance. payment can be made by any mode.
2. Maximum Deduction allowed under this section is Rs. 1,50,000.

Tax By: CA Jasmeet Singh

S. 80DD Deduction in respect of maintenance of disabled dependant S. 80QQB Deduction in respect of royalty income, etc., of authors of
Assessee Resident individual / HUF certain books other than text books
Deduction Rs.75,000 irrespective of the expenditure Assessee Resident individual
(Rs. 1,25,000 in case of severe disability) Deduction Royalty income or Rs.3,00,000 whichever is less.
Dependant For Individual However, Royalty received in excess of 15% of the value of
Spouse, children, parents, brothers and sisters who are books sold during the previous year shall be ignored
dependant on the individual Royalty from Foreign Country: Deduction allowed if Royalty brought to India
For HUF - Any member of the Hindu Undivided Family within 6 Months from the end of previous year

S. 80DDB Medical treatment of specified disease S. 80RRB Deduction in respect of royalty on patents
Assessee Resident individual / HUF Assessee Resident individual
Expenditure Treatment of disease specified in the rule 11DD Deduction Royalty income or Rs.3,00,000 whichever is less.
Incurred On For Individual - Himself or a Dependant person. Royalty from Foreign Country: Deduction allowed if Royalty brought to India
For HUF- Any member dependant on the Hindu Undivided Family within 6 Months from the end of previous year
Deduction Amount incurred or Rs.40,000 whichever is less.
For senior citizen - Amount incurred or Rs.40,000 whichever is S.80TTA Deduction in respect of interest on deposits in savings account
less.
Assessee Individual / HUF
S.80E Payment of interest on loan taken for Higher Education Deduction 1. interest income on saving bank accounts with any bank/
Assessee Individual Post Office.
Deduction Payment of interest on loan taken by him from any financial 2. Deduction is allowed to the extent of Rs.10,000.
institutions for pursuing higher education 3. No deduction is allowed from interest on time deposit/ fixed
Education of self or spouse or children or any person for whom the assessee deposit.
is legal guardian As per section 10(15), Interest on Post Office Savings Bank Account to the
No deduction shall be allowed for repayment of the principal loan amount extent of Rs.3,500 per year shall be exempt from income tax and in the case of
Deduction is allowed for a maximum period of 8 years starting from the year in joint account, exemption shall be allowed upto Rs.7,000 per year.
which first payment of interest was given
S.80TTB Deduction in respect of interest on deposits
S.80EEA Deduction in respect of interest on loan taken for certain house Assessee Senior Citizen
property. Deduction Interest Income subject to maximum Rs. 50,000
Assessee Individual Deposit Saving, fixed, time, recurring or any other deposit.
Deduction Interest payable on loan taken from any financial institution for
acquisition of a residential house property. S. 80GG Deduction in case of payment of rent
(Max deduction = 1.5 Lacs) Assessee Individual (Must Not be receiving HRA/RFAC)
Conditions 1. Loan has been sanctioned during 1/4/19 – 31/3/21 Deduction Lower Of Following
2. SDV ≤ 45 Lakh. 1. Rs. 5,000 Per Month 2. 25% of Adjusted GTI
3. Assessee doesn’t own any RHP on the date of loan
sanction
3. Rent paid - 10% of Adjusted GTI Means GTI as
Adjusted GTI reduced by LTCG & STCG u/s
111A & All Deductions except
S.80EEB Deduction in respect of interest on loan taken for purchase of 80GG
electric vehicle Conditions  Individual should not have any house in his name or
Assessee Individual spouse name or minor child name or in the name of HUF of
Deduction Interest payable on loan taken from any financial institution for which he is a member, at a place where he ordinarily
purchase of electric vehicle. resides or performs duties of his office or carries on his
(Max deduction = 1.5 Lacs) business or profession
Conditions Loan has been sanctioned during 1/4/2019 – 31/3/2023  assessee may have house at any other place but it should
not be self occupied i.e. it may be let out or vacant

Tax By: CA Jasmeet Singh

S. 80GGB Deduction in respect of contributions given by companies to S. 80GGC Deduction in respect of contributions given by Any Person to
political parties political parties
Assessee Indian Company Assessee Any Person other than company
Deduction Sum contributed to political party other than through cash Deduction Sum contributed to political party other than through cash

Deduction in respect of donations to certain funds, charitable institutions etc. [Section 80G]
1. Deduction is available to all the assesses for donation made to eligible funds or institutions
2. Donations in kind shall not qualify for deduction.
3. No deduction shall be allowed in respect of donation of exceeding Rs. 2,000 unless such sum is paid by any mode other than cash.
4. Quantum of deduction:
There are four categories of deductions:
Category 1: Donation qualifying for 100% deduction, without any qualifying limit Category 3: Donation qualifying for 100% deduction, subject to qualifying
(1) The National Defence Fund set up by the Central Government limit
(2) Prime Minister’s National Relief Fund. (1) The Government or to any approved local authority, institution or
(3) Prime Minister’s Armenia Earthquake Relief Fund association for promotion of family planning
(4) The National Children’s Fund (2) Sum paid by a company as donation to the Indian Olympic Association
(5) The National Foundation for Communal Harmony or any other association/institution established in India.
(6) Approved University or educational institution of national eminence
(7) Chief Minister’s Earthquake Relief Fund, Maharashtra Category 4: Donation qualifying for 50% deduction, subject to qualifying
(8) Any Zila Saksharta Samiti limit.
(9) Any State Government Fund set up to provide medical relief to the poor (1) Any Institution or Fund established in India for charitable purposes
(10) The Army Central Welfare Fund or Indian Naval Benevolent Fund or Air Force (2) The Government or any local authority for utilisation for any charitable
Central Welfare Fund established by the armed forces of the Union for the purpose other than the purpose of promoting family planning
welfare of past and present members of such forces or their dependents. (3) An authority constituted in India by or under any other law enacted
(11) The National Illness Assistance Fund either for dealing with and satisfying the need for housing
(12) The Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund in respect accommodation or for the purpose of planning, development or
of any State or Union Territory improvement of cities, towns and villages, or both
(13) The National Sports Fund set up by the Central Government (4) Any Corporation established by the Central Government or any State
(14) The National Cultural Fund set up by the Central Government Government for promoting the interests of the members of a minority
(15) The Fund for Technology Development and Application set up by the Central community.
Government (5) for renovation or repair of Notified temple, mosque, gurdwara, church or
(16) The Swachh Bharat Kosh any other similar place
(17) The Clean Ganga Fund
(18) The National Fund for Control of Drug Abuse Qualifying limit: The eligible donations referred to in III and IV should be
aggregated and the sum total should be limited to 10% of the adjusted gross
Category 2: Donation qualifying for 50% deduction, without any qualifying limit total income
(1) The Jawaharlal Nehru Memorial Fund
(2) Prime Minister’s Drought Relief Fund Adjusted GTI Means GTI as reduced by LTCG & STCG u/s 111A & All
(3) Indira Gandhi Memorial Trust Deductions except 80G
(4) Rajiv Gandhi Foundation

Tax By: CA Jasmeet Singh

 S. 80JJAA Deduction in case of new employment
Assessee All Assessee’s whose accounts are required to be audited
Deduction equal to 30% of additional employee cost incurred. Deduction is allowed for 3 assessment years including the assessment year in which such
employment is provided.
Conditions 1. It should be a new business
2. Emoluments should be paid through account payee cheque, an account payee bank draft or by use of electronic clearing system
3. Additional employee” means an employee who has been employed during the previous year and whose employment has the effect of
increasing the total number of employees employed by the employer as on the last day of the preceding year, but does not include,—
(a) an employee whose total emoluments are more than twenty-five thousand rupees per month; or
(b) an employee employed for a period of less than two hundred and forty days during the previous year.
(c) an employee who does not participate in the recognised provident fund.
In the case of an assessee who is engaged in the business of manufacturing of apparel or footwear or leather products, 240 days shall be
taken as 150 days.

Tax By: CA Jasmeet Singh