Various Tax Planning Instruments

The chart given below describes the deductions allowable under chapter VIA of the I.T. Act from the gross total income of the assessees having income from salaries

 

The following investments/payments are inter alia eligible for deduction u/s 80C:-

 

NATURE OF
INVESTMENT
REMARKS
Life Insurance Premium –    in case of individual, on life of assessee, assessee’s spouse and any child of assessee

–    in case of HUF, on life of any member of the HUF

Sum paid under contract for deferred annuity  in case of individual, on life of the individual, individual’s spouse and any child of the individual (however, contract should not contain an option to receive cash payment in lieu of annuity)
Sum deducted from salary payable to Govt. Servant for securing deferred annuity for self, spouse or child Payment limited to 20% of salary.
Contribution made under Employee’s Provident Fund Scheme
Contribution to PPF For individual, can be in the name of self/spouse, any child & for HUF, it can be in the name of any member of the family.
Contribution by employee to a Recognized Provident Fund or an approved superannuation fund.
Subscription to any notified securities/notified deposits scheme.
Subscription to any notified savings certificates. e.g. NSC VIII issue.
Contribution to Unit Linked Insurance Plan of LIC Mutual Fund e.g. Dhanrakhsa 1989
Contribution to notified deposit scheme/Pension fund set up by the National Housing Bank.
Certain payment made by way of installment or part payment of loan taken for purchase/ construction of residential house property. Condition has been laid that in case the property is transferred before the expiry of 5 years from the end of the financial year in which possession of such property is obtained by him, the aggregate amount of deduction of income so allowed for various years shall be liable to tax in that year.
Subscription to units of a Mutual Fund notified u/s 1 0(23D)
Subscription to deposit scheme of a public sector company engaged in providing housing finance.
Any subscription to Equity shares/ Debentures forming part of any eligible issue of capital by a Public company/ Public Financial Institution, wherein. i) Eligible issue of capital means capital issued by a public co./ Public financial institution for utilizing the proceeds wholly & exclusively towards purposes of any business referred in Sec. 80IA(4).
Tuition fees paid at the time of admission or otherwise to any school, college, university or other educational institution situated within India for the purpose of full time education. Available in respect of any two children.
Any term deposit for a fixed period of not less than five years with the scheduled bank. This has been included in Section 80C by the Finance Act 2006.
Subscription to notified bonds issued by NABARD This has been included in Section 80C by the Finance Act 2007 and has come into effect from 1.4.2008.
Payment made into an account under the Senior Citizens Savings Scheme Rules, 2004 This has been introduced by Finance Act, 2008 and shall come into effect from 1.4.2009.
Payment made as five year time deposit in an account under the Post Office Time Deposit Rules, 1981 This has been introduced by Finance Act, 2008 and shall come into effect from 1.4.2009.
Contribution to Sukanya Samriddhi Account Opened in the Name of Daughters –

Sukanya Samriddhi Account- Tax & Other benefits

This has been introduced vide Finance Act 2014 wef A.Y. 2015-16

The other deductions which are available as below:.

 

SECTION NATURE OF DEDUCTION REMARKS
80CCC Payment of premium for annuity plan of LIC or any other       insurer Deduction is available up to a  maximum of Rs. 1,00,000/- The premium must be deposited to keep in force a contract for an annuity plan of the LIC or any other insurer for receiving pension from the fund. The Finance Act 2015 has enhanced the ceiling of deduction under Section 80CCC from Rs.100,000 to Rs. 1,50,000 with effect from A.Y. 2016-17
80CCD Deposit made by an employee in his pension account to the extent of 10% of his salary. Where the Central Government makes any contribution to the pension account, deduction of such contribution to the extent of 10% of salary shall be allowed. Further, in any year where any amount is received from the pension account such amount shall be charged to tax as income of that previous year. The Finance Act, 2009 has extended benefit to any individual assesse, not being a Central Government employee.
80CCG Investment under Rajiv Gandhi Equity Savings Scheme, 2013 The deduction was 50 % of amount invested in such equity shares or ₹ 25,000, whichever is lower. The maximum Investment permissible for claiming deduction under RGESS is Rs. 50,000. The benefit is in addition to deduction available u/s Sec 80C.
80D Payment of medical insurance      premium. Deduction is available up to Rs.15,000/ for self/ family and also up to Rs. 15,000/- for insurance in respect   of  parent/ parents of the assessee. In case of senior citizens, a deduction              up to Rs.20,000/- shall be available under this Section. Insurance premiume of senior citizen parent/ parents of the assessee also eligible for enhanced deduction of Rs. 20000/- The premium is to be paid by any mode of payment other than cash and the insurance scheme should    be framed by the General Insurance Corporation of India & approved by the Central Govt. or Scheme framed by any other insurer and approved by the Insurance Regulatory & Development Authority. The premium should be paid in respect of health insurance of the assessee or his family members. The Finance Act 2008 has also provided deduction upto Rs. 15,000/- in respect of health insurance premium paid by the assessee towards his parent/parents. w.e.f. 01.04.2011, contributions made to the Central Government Health Scheme is also covered under this section.
80G Donation to certain funds,     charitable institutions etc. The various donations specified in Sec. 80G are          eligible    for
deduction upto either 100% or 50% with or without restriction as provided in Sec. 80G.
80GG Deduction available is the least of(i) Rent paid less 10% of total income. (ii) Rs.2000 per month. (iii) 25% of total income (1) Assessee          or his spouse    or minor child       should    not own        residential accommodation at the place of employment.(2) He should not be in receipt of house rent allowance.(3) He should not have a self-occupied residential premises in any other place
80TTA Deduction in respect of interest on deposits in savings account Section 80TTA is introduced wef A.Y. 2013-14 to provide deduction to an individual or a Hindu undivided family in respect of interest received on deposits (not being time deposits) in a savings account held with banks, cooperative banks and post office. The deduction is restricted to Rs 10,000 or actual interest whichever is lower.
87A Rebate Of Rs 2000 For Individuals Having Total Income Upto Rs 5 Lakh Finance Act 2013 has provided relief in the form of rebate to individual taxpayers, resident in India, who are in lower income bracket, i. e. having total income  not exceeding Rs 5,00,000/-. The amount of rebate is Rs 2000/- or the amount of tax payable, whichever is lower. WEF A.Y. 2014-15.

 It may be noted that the aggregate amount of deductions under sections 80C, 80CCC and 80CCD are subject to an overall ceiling of Rs. 1.50 lakh.

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