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DEDUCTIONS IN
INCOME TAX ACT
1961
ARPAN KHANNA
170MBAGEN017
WHY THERE IS DEDUCTION
 To promote savings in the economy.
 To reduce the taxable amount of lower income people.
 To promote investment into the economy.
 To promote donations.
 To help old aged people and differently abled people.
 To promote research.
Deductions in income tax act 1961
Deductions in income tax act 1961
DEDUCTIONS ON INVESTMENT 80-C
 A deduction of Rs. 1,50,000
can be claimed from your
total income.
 This deduction is allowed
to an INDIVIDUAL or a
HUF.
DEDUCTION FOR PREMIUM PAID FOR
ANNUITY PLAN OF LIC OR OTHER
INSURER 80-CCC
 Section 80CCC of Income Tax Act deals with the deductions and income in
respect of.
 Contributions to certain Pension funds by an individual assesse.
 Payment of premium for annuity plan of LIC or any other insurer.
 Deduction is available upto a maximum of Rs. 100,000.
 Amounts received on surrender (whole/part) of annuity plan, amounts
received as Pension is taxed as income.
 Only individuals and HUF are eligible to file deductions under Section.
 Interests or bonuses earned from this plan do not qualify for deductions.
 The amount received after the surrender of plan attracts tax.
 Pension amount received is taxable.
Deduction for Contribution to Pension
Account 80-CCD
 It deals with contributions made to two Government pension schemes:
 National Pension Scheme (NPS)
 Atal Pension Yojana (APY)
 There are two parts to this section:
 Section 80CCD (1): It deals with tax deductions for employees of Central
Government/Other/ Employer/Self-employed. Salaries employees enjoy a
maximum deduction of 10% of salary. Self-employed tax-payers see a deduction
of 10% of gross income.
 Section 80CCD (2): This section deals with the employer’s contribution towards
NPS. An employee can claim a deduction if his or her employer makes payment
to employee’s NPS account. The limit is 10% of employee’s salary.
 Section 80CCD (1B): An additional tax-benefit of Rs. 50,000 is possible under
Section 80CCD (1B) for investments made in the NPS. Thus, the total tax savings
can go up to Rs. 2,00,000.
Rajiv Gandhi Equity Saving Scheme
(RGESS) 80-CCG
 The deduction under this section is available to a resident individual.
 Investors whose gross total income is less than Rs. 12 lakhs.
 The following conditions should be met:
 The assesse should be a new retail investor
 The investment should be made in such listed investor as per the requirement
specified under the notified scheme.
 The minimum lock in period in respect of such investment is three years from
the date of acquisition.
 A deduction, which is lower of the following is allowed.
 50% of the amount invested in equity share.
 Rs 25,000 for three consecutive Assessment Years.
Rajiv Gandhi Equity Scheme has been discontinued starting from 1 April 2017.
Deduction with respect to any Income
by way of Royalty of a Patent 80-RRB
 The royalty received by an individual on his/her patent is eligible for tax
deductions under Section 80 RRB of the Income Tax Act.
 80 RRB deduction is aimed at encouraging innovation and patenting in India.
 ELIGIBILITY
 The individual claiming a deduction should be an Indian resident.
 Only patentees can claim this tax deduction.
 The patent under Section RRB in question should be registered under the
Patent Act of 1970
 Shall be available up to Rs. 3 lakhs or the income received (whichever is less)
Deduction for the premium paid for
Medical Insurance 80-D
 Deduction under this section is available to an individual or a
HUF.
 A deduction of Rs. 25,000 can be claimed for insurance of self,
spouse and dependent children.
 An additional deduction for insurance of parents is available to
the extent of Rs 25,000 if they are less than 60 years of age or Rs
50,000
 In case, a taxpayers age and parents age is 60 years or above
the maximum deduction available under this section is to the
extent of Rs. 100,000.
Deductions in income tax act 1961

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Deductions in income tax act 1961

  • 1. DEDUCTIONS IN INCOME TAX ACT 1961 ARPAN KHANNA 170MBAGEN017
  • 2. WHY THERE IS DEDUCTION  To promote savings in the economy.  To reduce the taxable amount of lower income people.  To promote investment into the economy.  To promote donations.  To help old aged people and differently abled people.  To promote research.
  • 5. DEDUCTIONS ON INVESTMENT 80-C  A deduction of Rs. 1,50,000 can be claimed from your total income.  This deduction is allowed to an INDIVIDUAL or a HUF.
  • 6. DEDUCTION FOR PREMIUM PAID FOR ANNUITY PLAN OF LIC OR OTHER INSURER 80-CCC  Section 80CCC of Income Tax Act deals with the deductions and income in respect of.  Contributions to certain Pension funds by an individual assesse.  Payment of premium for annuity plan of LIC or any other insurer.  Deduction is available upto a maximum of Rs. 100,000.  Amounts received on surrender (whole/part) of annuity plan, amounts received as Pension is taxed as income.  Only individuals and HUF are eligible to file deductions under Section.  Interests or bonuses earned from this plan do not qualify for deductions.  The amount received after the surrender of plan attracts tax.  Pension amount received is taxable.
  • 7. Deduction for Contribution to Pension Account 80-CCD  It deals with contributions made to two Government pension schemes:  National Pension Scheme (NPS)  Atal Pension Yojana (APY)  There are two parts to this section:  Section 80CCD (1): It deals with tax deductions for employees of Central Government/Other/ Employer/Self-employed. Salaries employees enjoy a maximum deduction of 10% of salary. Self-employed tax-payers see a deduction of 10% of gross income.  Section 80CCD (2): This section deals with the employer’s contribution towards NPS. An employee can claim a deduction if his or her employer makes payment to employee’s NPS account. The limit is 10% of employee’s salary.  Section 80CCD (1B): An additional tax-benefit of Rs. 50,000 is possible under Section 80CCD (1B) for investments made in the NPS. Thus, the total tax savings can go up to Rs. 2,00,000.
  • 8. Rajiv Gandhi Equity Saving Scheme (RGESS) 80-CCG  The deduction under this section is available to a resident individual.  Investors whose gross total income is less than Rs. 12 lakhs.  The following conditions should be met:  The assesse should be a new retail investor  The investment should be made in such listed investor as per the requirement specified under the notified scheme.  The minimum lock in period in respect of such investment is three years from the date of acquisition.  A deduction, which is lower of the following is allowed.  50% of the amount invested in equity share.  Rs 25,000 for three consecutive Assessment Years. Rajiv Gandhi Equity Scheme has been discontinued starting from 1 April 2017.
  • 9. Deduction with respect to any Income by way of Royalty of a Patent 80-RRB  The royalty received by an individual on his/her patent is eligible for tax deductions under Section 80 RRB of the Income Tax Act.  80 RRB deduction is aimed at encouraging innovation and patenting in India.  ELIGIBILITY  The individual claiming a deduction should be an Indian resident.  Only patentees can claim this tax deduction.  The patent under Section RRB in question should be registered under the Patent Act of 1970  Shall be available up to Rs. 3 lakhs or the income received (whichever is less)
  • 10. Deduction for the premium paid for Medical Insurance 80-D  Deduction under this section is available to an individual or a HUF.  A deduction of Rs. 25,000 can be claimed for insurance of self, spouse and dependent children.  An additional deduction for insurance of parents is available to the extent of Rs 25,000 if they are less than 60 years of age or Rs 50,000  In case, a taxpayers age and parents age is 60 years or above the maximum deduction available under this section is to the extent of Rs. 100,000.

Hinweis der Redaktion

  1. Equity link saving scheme