2. INCOME UNDER HEAD – SALARIES “Doing JOB... Great......compute your income here” -By Taxation Team, Ahmedabad GHCLians… Welcome!

3. SALARY ALLOWANCES PERQUISITIES DEDUCTIONS Under Section 16 HOW TO COMPUTE SALARY & PRESENTATION ? Agenda/Topics to Be Covered

4. SALARY includes – –Wages –Any annuity or pension –Any Gratuity –Any fees, commission, perquisite or profit in lieu of salary or in addition to salary –Any Advance Salary –Leave Salary –Amount transferred to RPF to the extent is taxable. –Any other payment made or benefit extended due to the employer-employee relationship.

5. Encashment of leaves by surrendering leave standing to one’s credit is known as LEAVE SALARY. Leave Salary paid to legal heirs in the case of Death of the employee is not taxable. Leave Salary during the continuity of employment will be chargeable to tax for all. However, leave salary is encashed on retirement by a Government employee will fully exempt But for others it will be exempt up to a limit & balance shall be taxable. LEAVE SALARY

6. LEAVE SALARY... During the jobOn Retirement FULLY TAXABLE Govt. Employee FULLY EXEMPT OTHERS Least of the following shall be exempt :- a)Actual amount received b)` 3,00,000/- Salary means BASIC + DA+ Comm.

7. GRATUITY Govt. Employee Fully Exempt Other Employees Act Applicable 1.Amount Received 2. ` 1,000,000/- 3.15/26 * Last drawn Salary * no. of years of service in excess of 6 months 1.Amount Received 2. ` 1,000,000/- 3.15/30 * Avg. Salary of 10 months* No. of completed years LEAST OF THE ABOVE WILL BE EXEMPT AS THE CASE MAY BE Basic + DA

8. When the gratuity is received from more than one employer in the same previous year, the aggregate maximum amount exempt from tax cannot exceed ` 10,00,000/-. Any gratuity paid to an employee while he continues to remain in service not exempt in any case; except :- –On retirement –On Death –On Resignation –On Termination –On becoming incapacitated prior to such retirement GRATUITY....

9. PENSION Uncommuted i.e. in instalments Commutted i.e. Lump sum TAXABLE FOR ALL Govt. employee Other Employees FULLY EXEMPT S 1 = Compute 100% value of Commuted pension S 2 = If no Gratuity – ½ of S 1 = Exempt If along with Gratuity – 1/3 of S 1 = Exempt

10. Pension received by the family after death – Taxable in the hands of recipient under head Other Sources and Deduction of 1/3 rd OR ` 15,000/- shall be given. PENSION...

11. Compensation received at the time of voluntary retirement or separation is exempt from tax if following condition are satisfied :- –Employees of Central or State Government –Employee of P.S.U. or any other company –Statutory Corporation –Local authority, University –I.I.T. or notified institute of management. Least of the following shall be exempt : 1.Amount Received 2. ` 5,00,000/- 3.a) 3 months Salary * Every completed year of Service b) Salary of the balance months of service left before his normal retirement. VOLUNTARY RETIREMENT COMPENSATION If exemption is claimed in one A/Y... then exemption is not allowed in another A/Y...

12. Category #1 RECEIVED OR SPENT (whichever is less) Category #2 RECEIVED or LIMIT (whichever is less) Category #3 HOUSE RENT ALLOWANCE (H.R.A.)

13. 1.CONVEYANCE ALLOWANCES 2.ACADEMIC ALLOWANCES 3.TRAVELLING / TRANSFER ALLOWANCES 4.HELPER ALLOWANCES 5.UNIFORM ALLOWANCES 6.DAILY ALLOWANCES Category 1 : Received or Spent (whichever is less)

14.  CHILDERN EDUCATION ALLOWANCES : Exempted up to ` 100/- per month per child (up to maximum 2 children). HOSTEL EXPENDITURE ALLOWANCES : Exempted up to ` 300/- per month per child (up to maximum 2 children) TRANSPORT ALLOWANCES : Exempted up to ` 1,600/- per month. Category 2 : Received or Limit (whichever is less)

15. Least of the following shall be exempted : –Actual amount received –Rent paid less 10 % of the SALARY –50% of the Salary (if the house is located in Delhi/Mumbai/Kolkata/Chennai) –40% of the Salary (if the house is located elsewhere ) CATEGORY 3 : HOUSE RENT ALLOWANCE (H.R.A.)

16. In respective of all the perquisites whenever any concession is given or any amount is recovered from the employee, the value of the perquisite shall be calculated as follows:- Step 1 : Determine Value of the Perquisite as if nothing has been recovered from the employee Step 2 : Determine the amount recovered from the employee Step 3 : (Step 1 - Step 2) shall be the taxable value of the perquisite; if Positive. PERQUISITIES

17. a)GOVERNMENT EMPLOYEES : as per Government Rules (Licence Fees) b)Others – Value of RFA shall be :- 1. RENT FREE ACCOMODATION PopulationOwned by EmployerNot owned by Employer Up to 10 lakhs 7.5 % of the Salary*15% of the Salary* OR Actual Rent (whichever is LESS) 10 – 25 lakhs10% of the Salary* More than 25 lakhs 15% of the Salary*

18. c) ACCOMODATION IN HOTEL : 24% of Salary (OR) ACTUAL CHARGES {whichever is less} However nothing shall be taxable if the accommodation is provided for not more than 15 days + provided on transfer of employees from one place to other. For all Government and Non-Government employees. 1. RENT FREE ACCOMODATION....

19. d) FURNISHED HOUSE :- If furniture is also provided by the employer to their employee, then value of such furniture shall be 10% p.a. of the cost or Actual hire charges Any maintenance charges or repaired of the building incurred by employee shall be ignored. 1. RENT FREE ACCOMODATION....

20. f) CONCESSIONAL HOUSE :- The amount recovered from the employee shall be reduced from the value determined for such house. g) RENT FREE ACCOMODATION When house is located in a remote area and provided to an employee working at a mining site or on shore oil exploration site. 1. RENT FREE ACCOMODATION.... TAXABLE

21. Note: 1.Salary of all employees shall be taken. 2.Only current year’s monetary payment shall be taken. 3.Salary – Basic + DA + Bonus + Commission + Taxable portion of all allowances + all monetary payments but does not include Provident Fund. 1. RENT FREE ACCOMODATION....

22. Loan type = Any Rate = Rate charged by S.B.I. on 1 st day of relevant P/Y Interest shall be calculated on the outstanding balance for each loan as on the last day of each month. However nothing shall be taxable –If Loan in aggregate do not exceed ` 20,000/- OR –If the loan provided for the treatment of specified diseases. But if such loan has been reimbursed under any medical insurance scheme & the loan is not paid to the employer, it shall be taxable. Check only the last days balance & calculate interest thereon for the whole month. Transactions within the month shall be ignored & if no balance at the end of the month – No interest 2. VALUE OF INTEREST FREE LOAN

23. a)LAPTOP & COMPUTERS :NIL VALUE Actual Cost b)OTHER ASSETS : 10% p.a. of the Actual Cost OR Actual Hire Charges 3. USE OF MOVEABLE ASSETS

24. Value of the benefit shall be : each completed year –Actual Cost of the assets shall be reduced by the following percentage for each completed year; ignoring fractions from the date of purchase/put to use by the employer : –Computer & Electronic Items50% W.D.V. –Motor Car20% W.D.V. –Any other assets10% S.L.M. “Electronic items do not include household appliances” 4. TRANSFER OF MOVEABLE ASSETS

25. a)SWEEPER / GARDNER / WATCHMAN / PERSONAL ATTENDENT : Actual cost to the employer. b)GAS, ELECTRICITY, WATER : Own Source :manufacturing cost per unit. Other Source :amount paid to outside agency. 5. PERSONAL EXPENDITURE BENEFITS

26. C) CHILDREN EDUCATION :  If the education facility is owned by employer. OR  Free education is provided in any other educational institution by the reason of employee being in employment of that employer. FAIR MARKET VALUE OF SUCH SIMILAR EDUCATION. HOWEVER NOTHING SHALL BE TAXABLE IF VALUE PER CHILD DOESNOT EXCEED ` 1,000/- PER MONTH.  Other Cases : Actual expenditure incurred by employer. 5. PERSONAL EXPENDITURE BENEFITS

27. 6. LEAVE TRAVEL CONCESSION OTHER THAN BY AIR 1 st CLASS AC FARE 1 st Class Fare if Public transport exists. By AIR If the Journey is made National carrier Fare up to Economy Class

28. Exemption can be claimed for 2 journeys in a block of 4 years i.e. 2014-2017, 2018-2021. Exemption can be claimed only for 2 children LTC given to foreign citizen is chargeable to tax. L.T.C....

29. WITHIN INDIA :- FULLY EXEMPT Health Insurance Premium incurred or reimbursed for insurance on the health of employee or any member of his family is FULLY EXEMPT. REIMBURSEMENT BY EMPLOYER of any amount actually spent by the employee for obtaining his or his family member’s treatment in any hospital, nursing home or a clinic up to maximum ` 15,000/- for P/Y. 7. MEDICAL PERQUISITE...

30. Spouse & Children of the employee (Whether dependent or not). Dependent : –Parents –Brother –Sister of the employee FAMILY FOR THE VALUATION OF MEDICAL FACILITIES & LTC

31. 8. VALUATION OF MOTAR CAR WHEN CAR IS OWNED OR HIRED BY EMPLOYER WHEN CAR IS OWNED AND USED BY THE EMPLOYEE 1.Exclusively for OFFICIAL purpose 2.Exclusively for PERSONAL purpose 3.Partly OFFICIAL Partly PERSONAL purpose

32. 1.EXCLUSIVELY FOR OFFICIAL PURPOSE NIL OR 2.EXCLUSIVELY PERSONAL PURPOSEActual Running & Maintenance + Actual Chauffeur Expenses + wear & tear @ 10% of Cost OR Actual HIRE CHARGES When car is owned or hired by EMPLOYER and used for :

33. 3. PARTLY OFFICIAL & PARTLY PERSONAL PURPOSE : –Running & Maintenance Expenditure is borne by EMPLOYER up to 1.6 Litres CC ` 1,800 p.m. Exceeding 1.6 Litres CC ` 2,400 p.m. –Running & Maintenance Expenditure is borne by EMPLOYEE up to 1.6 Litres CC ` 600 pm Exceeding 1.6 Litres CC ` 900 pm –Add : ` 900 per month of Chauffeur ` 900 pm (BOTH CASES) When car is owned or hired by EMPLOYER and used for :

34. 1.Exclusively for Official Purpose:NIL 2.Exclusively for Personal Purpose :Actual Expenditure incurred by employer 3.Partly Official Partly Personal : Up to 1.6 Litres CC ` 1,800 p.m. Exceeding 1.6 Litres CC ` 2,400 p.m. WHEN CAR IS OWNED BY EMPLOYEE AND USED :

35. STEP 1:Find out the actual expenditure incurred by the Employer. STEP 2 :Less : ` 1,800 / 2,400 per month ` 900 per month for Chauffer STEP 3 :Less :Any amount recovered from employee BALANCE.... If positive then TAXABLE WHEN CAR IS OWNED BY EMPLOYEE AND USED...

36. 5,000/- If the amount of Gift exceeds ` 5,000/- in aggregate during the previous year, then such excess amount shall be taxable. However if the gift is by way of Cash or by way of Cheque, then the entire amount shall be taxable 9. VALUATION OF PERQUISITE IN RESPECT OF GIFTS, VOUCHER OR TOKEN

37. STEP 1 :Find out the expenditure incurred by the employer in respect of credit card used by the employee or any member of his household. STEP 2 :Less : Expenditure incurred for only official Purpose STEP 3 :Less : Amount recovered from employee BALANCE IF POSITIVE = TAXABLE 10. VALUATION OF CREDIT CARD

38. STEP 1 :Expenditure incurred by employer in respect of club expenditure. STEP 2 :Less : Amount incurred for official purpose Less : Amount recovered from employee BALANCE IF POSITIVE WILL BE TAXABLE Note : Health Club, Sports facilities etc. provided uniformly to all classes of employees by the employer shall be EXEMPTED. Note :Initial deposit / Fees for Corporate or institutional membership, where benefit doesn’t remain with the particular employee after the cessation of employment are exempt. 11. VALUATION OF PERQUISITE : CLUB EXPENDITURE

39. ESOPs benefits form a part of the employee’s salary income and are taxable as a perquisite. The perquisite value is computed as the excess of the fair-market value (FMV) of the share on the date of exercise over the exercise price. There are specific valuation rules prescribed for listed and unlisted companies to determine the FMV. The employer is required to withhold tax at source in respect of such a perquisite. Value of such Equity Share shall be :- –When the share is listed on a Recognized Stock Exchange : Average Price of opening & closing price of the share – on date of exercise of option. 12. ESOPs

40. The amount of any contribution to an approved superannuation fund by the employer in respect of the assessee (employer), to the extent it exceeds ` 1,00,000/-. It is taxable in the year in which contribution is made. 13. EMPLOYER’s CONTRIBUTION TOWARDS APPROVED SUPERANNUATION FUND :-

41. RESIDUAL HEAD... WHICH COVERS THOSE BENEFITS, AMMENITY, SERVICE, RIGHTS OR PRIVILAGE PROVIDED BY AN EMPLOYER WHICH IS NOT COVERED BEFORE ( IN 1 to 13 ). Mobile / Telephone as perquisite is not taxable anywhere in the Salary head or any other head. Any other benefit shall be valued @ Cost to employer. 14) etc.....

42. PROFESSIONAL TAX / TAX ON EMPLOYMENT : –Deduction is only available on the year of actual payment. –If professional tax is paid by the employer, then it is first included and then deducted from the Gross Salary. –There is no monetary ceiling on the amount of deduction... Only condition it should have been actually paid. –e.g. : ` 2,400/- is the Professional Tax p.a. DEDUCTION FROM SALARY INCOME UNDER SECTION 16

43. Under this scheme, a stipulated sum is deducted from the salary of the employee as contribution towards the fund and generally the employer also contributes the same amount as contributed by the employee. = RETIREMENT BENEFIT SCHEME EMPLOYEES PROVIDENT FUND = RETIREMENT BENEFIT SCHEME

44. Interest is earned on such investment which gets credited to the Employee’s Provident fund scheme A/C. Such Interest includes both the interest earned on Employer’s & Employee’s contribution. The accumulated amount of the scheme (i.e. Credit balance of the scheme) is paid to employee on his retirement or to the family members in the case of death EMPLOYEES PROVIDENT FUND....

45. If any individual receives any portion of his salary in arrears or in advance or receives profit in lieu of salary, he can claim relief in terms of section 89 :- STEP 1 : Calculate tax payable of the P/Y in which the arrears / advance salary is received. a)TAX on total income INCLUSIVE of additional salary b)TAX on total income EXCLUDING additional salary (A) RELIEF UNDER SECTION 89

46. STEP 2 : Calculate tax payable of that previous year to which the additional salary relates to. a)TAX on total income of that year INCLUDING additional Salary b)TAX on total income of that year EXCLUDING additional Salary (B) Step 3 : [A-B] PositiveNegative Relief YES NO

47. 2009-2010 Up to 150,000 nil 150,000 -300,00010% 300,000-500,00020% 5,00,000 & above30% E.g. Salary of Raju for P/Y 2008-09 was ` 20,000 per month. On 01-04-2009 his Salary was increased to ` 25,000 per month ; w.e.f. 01-04-2008. Calculate relief u/s 89(1) ?

48. Income of 2009-10 ` 25,000 * 12 = ` 3,00,000/- Income of 2008-09 now due ` 5,000 * 12 = ` 60,000 /- Income of 2008-09 ` 20,000 * 12 = ` 240,000/- Income received in 2009 of 2008 ` 5,000* 12 = ` 60,000/- P/Yincome is received STEP 1 : Calculation of Tax of the P/Y in which the income is received a) 3,00,000 + 60,000 = 3,60,000- TAX 15,000 + 12,000 = 27,000 b) 3,00,000 + 0 = 3,00,000- TAX 15,000 (15,000) A 12,000

49. P/Yadditional salary relates (2008-09) STEP 2 : Calculation of Tax of that P/Y to which the additional salary relates (2008-09) a) 2,40,000 + 60,000 = 3,00,000- TAX 15,000 = 15,000 b) 2,40,000 + 0 = 2,40,000- TAX 9,000 = (9,000) B 6,000 STEP 3 : [A-B] (12,000 – 6,000) 6,000/- Since the amount is Positive ; Relief u/s 89(1) will be granted

50. METHOD OF COMPUTATION INCOME UNDER HEAD “SALARIES” 1Basic Salary ( ` ______ X months)XXXXX 2Dearness AllowancesXXXXX 3Allowances: a)House Rent Allowances (Note no. #) ReceivedXXXX Less : Exempt(xxxx) XXXX 4Perquisites (Note #) a)__________ b)__________ xxxx XXXXX 5Retirement Benefits: (Note #) Received Less : Exempt xxx XXXXX

51. METHOD OF COMPUTATION INCOME UNDER HEAD “SALARIES” 6GROSS SALARY ( 1+2+3+4+5)XXXXX 7Less : Deduction u/s 16 a) Professional Taxxxxx b) Entertainment TaxxxxxXXXXX 8INCOME UNDER HEAD SALARIES (6-7)XXXXX

52. DEDUCTIONS U/S 80C TO 80U

53. DEDUCTION IN RESPECT OF LIFE INSURANCE PREMIA, ETC. (SEC. 80C) The following payments/investments qualify for deduction under this section. The total amount of investments made during the P.Y. under these below mentioned schemes is known as Gross Qualifying Amount ( GQA ) 1.Life Insurance premium paid on a policy taken on his own life, life of the spouse or any child (child may be dependent/ independent ). In the case of a Hindu undivided family, policy may be taken on the life of any member of the family. The premium paid should be maximum of 20% of sum assured. 2. Any sum deducted from salary payable to a Government employee for the purpose of securing him a deferred annuity (subject to a maximum of 20% of salary) 3. Contribution towards statutory provident fund and recognized provident fund. 4. Contribution towards 15 year public provident fund (maximum of Rs 1,50,000). 5. Contribution towards an approved superannuation fund 6. Subscription to National Savings Certificates, VIII Issue. 7. Contribution for participating in the Unit-Linked Insurance Plan (ULIP) of Unit Trust of India..

54. 8. Contribution for participating in the unit-linked insurance plan (ULIP) of LIC Mutual Fund (i.e. Dhanraksha plan of LIC Mutual Fund) 9.Payment for notified annuity plan of LIC (i.e. Jeevan Dhara, Jeevan Akshay New Jeevan Dhara,etc ) or any other insurer. 10. Subscription towards notified units of Mutual Fund or UTI 11. Contribution to notified pension fund set up by Mutual Fund or UTI. 12. Any sum paid (including stamp duty) as subscription to Home Loan Account Scheme of the National Housing Bank 13. Any sum paid as tuition fees to any university/college/educational institution in India for full time education.

55. Amount of deduction We add the amounts invested / spent in above mentioned schemes and this amount is known as Gross qualifying amount. The amount deductible is a) Gross qualifying amount; or b) Rs 1,50,000 Whichever is less Note:-The maximum deduction under sections 80C, 80CCC and 80CCD(1) is Rs 1,50,000.

56. SECTION 80CCC – PAYMENT IN RESPECT OF PENSION FUND

57. DEDUCTION IN RESPECT OF PENSION FUND (SEC. 80CCC) If the following conditions are fulfilled an assessee may claim deduction under this section The taxpayer is an individual During the previous year, he has paid/deposited a sum under an annuity plan of the Life Insurance Corporation of India or any other insurer for receiving pension. If deduction has not been claimed under section 80C.

58. Amount of deduction If the aforesaid conditions are satisfied, then a) the amount deposited b) or Rs. 150000 whichever is lower, is deductible. Tax treatment of pension received The pension amount received by the assessee or his nominee as pension will be taxable in the year of the receipt. Note;-The aggregate deduction under sections 80C, 80CCC and 80CCD(1) cannot exceed Rs.1,50,000. If the aforesaid conditions are satisfied, then a) the amount deposited b) or Rs. 150000 whichever is lower, is deductible. Tax treatment of pension received The pension amount received by the assessee or his nominee as pension will be taxable in the year of the receipt. Note;-The aggregate deduction under sections 80C, 80CCC and 80CCD(1) cannot exceed Rs.1,50,000.

59. SECTION 80CCD – PAYMENT TO NEW PENSION SCHEME

60. DEDUCTION IN RESPECT OF CONTRIBUTION TO PENSION SCHEME OF CENTRAL GOVERNMENT (SEC. 80CCD) This section is for allowing deduction to new central Government employees, if the following conditions are satisfied: The taxpayer is an individual He is employed by the Central Government on or after January 1, 2004. He has in the previous year paid or deposited any amount in his account under a pension scheme notified by the Central Government.

61. Amount of Deduction The amount deductible is a) The total employee’s contribution and employer’s contribution to the notified pension scheme during the year. b) Or 10% of salary of the employee, Whichever is less NOTE: Salary means basic salary including dearness allowance if under the terms of employment. The aggregate amount of deduction under sections 80C, 80CC and 80CCD(1) cannot exceed Rs. 1,50,000. Additional deduction of Rs. 50,000 will be allowed under section 80CCD(1B) which is excluding limit of Rs. 1,50,000

62. SECTION 80CCE – LIMIT ON DEDUCTIONS

63. If an assessee is having/claiming deduction u/s 80C,80CCC, and 80CCD(1), then the provisions of Sec 80E is to be applied. According to this section the deduction is least of the following two amounts: Aggregates of the gross qualifying amount u/s 80C,80CCC, and 80CCD(1). Rs 1,50,000

64. DEDUCTIONS FOR CERTAIN PERSONAL EXPENDITURE Under Section 80-D, 80-DD,80-DDB 80-E and 80-GG ofIT Act 1961 some deductions are allowed in respect of personal expenditure such as Medical Insurance, Medical treatment of handicapped dependent, etc. These deductions are allowed to give impetus to threshold areas like education,health & housing. Let us now discuss them one by one.

65. SECTION 80D – MEDICAL INSURANCE PREMIUM

66. DEDUCTION IN RESPECT OF MEDICAL INSURANCE PREMIA SEC 80D If the following conditions are satisfied then an assessee may claim deduction under this section. The taxpayer is an individual or a Hindu undivided family. Insurance premium is paid by the taxpayer in accordance with the scheme framed in this behalf by the General Insurance Corporation of India and approved by the Central Government. The scheme is known as “mediclaim” insurance policy.( The amount deposited in a similar scheme of any other insurer who is approved by the Insurance Regulatory and Development Authority shall also be eligible for deduction.) The aforesaid premium is paid by cheque Mediclaim policy is taken on the health of the taxpayer, on the health of spouse, dependent parents or dependent children of the taxpayer. In case of HUF on the health of any member of the family

67. Health POLICY ANALYSIS Own/spouse/dependen t children (a) Actual amount paid (b) 25,000 Parents of the assessee(a) Actual amount paid (b) 25,000 If Parents are senior Citizen (a) Actual amount paid Additional Rs. 5,000 Expenditure on medical Treatment of super senior citizen (If no medi-claim taken) (a) Actual amount paid (b) 30,000

68. SECTION 80DD – MEDICAL TREATMENT AND MAINTENANCE

69. DEDUCTION IN RESPECT OF Handicapped DEPENDENT RELATIVE SECTION 80 DD Following are the provisions under this section: This deduction is available to only Individuals and HUF, who is resident in India. This deduction is given to the assessee if a person with disability is dependent upon him. A person with disability means disabilities like autism, cerebral palsy, mental retardation, etc. as specified in Persons with Disabilities Act 1995. The assessee has incurred expenditure by way of medical treatment (including nursing), training and rehabilitation of a disabled dependent: or/and He has paid or deposited any amount under any scheme framed by the LIC of India or any other insurer for the payment of an annuity or a lump sum amount for the benefit of such dependent in the event of the death of the assessee. For claiming the deduction the assessee shall have to furnish a certificate by the prescribed medical authority with the return of income.

70. Amount of Deduction If the above mentioned conditions are satisfied the amount of deduction is fixed at Rs. 75,000 irrespective of actual expenditure. In case of a person with severe disability (over 80 %) a higher deduction of Rs. 1,25,000 shall be allowed irrespective of actual expenditure. Explanation: Dependent means i) In case of an individual, the spouse children, parents, brothers, sisters of the individual or any of them. ii) In case of HUF, a member of the HUF wholly or mainly dependent on such individual or HUF for support and maintenance.

71. SECTION 80DDB – MEDICAL EXPENSES OF DEPENDENT

72. DEDUCTION IN RESPECT OF MEDICAL TREATMENT SECTION 80DDB Deduction is available if following are satisfied Assessee is an individual or HUF resident in India. The assessee has actually paid for the medical treatment of specified disease or ailment, for himself or any dependent* or in case of HUF any member of the family. The assessee furnishes a certificate, in the prescribed form from prescribed authority, along with the return of income.

73. Amount of deduction i) a) The amount paid b)or Rs. 40,000 whichever is less; ii) Where the amount is paid in relation to a senior citizen the deduction shall be allowed for the amount paid or Rs. 60,000 whichever is less. iii)The deduction shall be reduced by the amount received, if any, under an insurance from an insurer for the medical treatment of person mentioned in this section or reimbursed by the employer. * The definition of ‘Dependent’ is the same as in the above section.

74. SECTION 80E – INTEREST ON HIGHER EDUCATION LOAN

75. DEDUCTION IN RESPECT OF REPAYMENT OF LOAN TAKEN FOR HIGHER EDUCATION – SECTION 80E Deduction is available if:- Assessee is an individual. He has taken a loan from any financial institution (bank) or an approved charitable institution. The loan is taken is for the purpose of pursuing his higher education. During the previous year he has repaid some amount as interest on such loan. Such amount is paid out of his income chargeable to tax.

76. Amount of deduction The entire amount paid by way of interest on such Period of Deduction Further, the deduction shall be allowed for the previous year in which the assessee starts repaying the loan or interest thereon and seven previous years immediately succeeding it or until the loan together with interest thereon is paid by the assessee in full,whichever is earlier. NOTE Higher education means full-time studies for any graduate or post-graduate course in engineering, medicine, management or for post-graduate course in applied science or pure sciences including mathematics and statistics.

77. SECTION 80G – DONATIONS

78. DONATION TO CERTAIN FUNDS, CHARITABLE INSTITUTION ETC. (SECTION 80G) A.Donations made to following are eligible for 100% deduction without any qualifying limit. 1.Prime Minister’s National Relief Fund 2.National Defense Fund 3.Prime Minister’s Armenia Earthquake Relief Fund 4.The Africa (Public Contribution - India) Fund 5.The National Foundation for Communal Harmony 6.Approved university or educational institution of national eminence 7.The Chief Minister’s Earthquake Relief Fund, Maharashtra 8.Donations made to Zila Saksharta Samitis. 9.The National Blood Transfusion Council or a State Blood Transfusion Council. 10.The Army Central Welfare Fund or the Indian Naval Benevolent Fund or The Air Force Central Welfare Fund.

79. Donations made to the following are eligible for 50% deduction without any qualifying limit. 1.Jawaharlal Nehru Memorial Fund 2.Prime Minister’s Drought Relief Fund 3.National Children’s Fund 4.Indira Gandhi Memorial Trust 5.The Rajiv Gandhi Foundation.

80. Donations to the following are eligible for 100% deduction subject to qualifying limit (i.e. 10% of adjusted gross total income). 1.Donations to the Government or a local authority for the purpose of promoting family planning. 2.Sums paid by a company to Indian Olympic Association

81. Donations to the following are eligible for 50% deduction subject to the qualifying limit (i.e. 10% of adjusted gross total income). Donation to the Government or any local authority to be utilized by them for any charitable purposes other than the purpose of promoting family planning. Any authority set up for providing housing accommodation or for town planning Any notifies temple, mosque, gurudwara, church or other place for renovation and repairs Any other fund constituted under this section

82. Amount of deduction The quantum of deduction is as follows :- Category A- 100 % of amount donated Category B -50 % of the amount donated in the funds Category C – 100% of the amount donated in the funds subject to maximum limit of 10% of Adjusted GTI. Category D – 50% of the amount donated in the funds subject to maximum limit of 10% of Adjusted GTI. The total of these deductions under categories A,B,C, & D is the quantum of deduction under this section without any maximum amount. Adjusted gross Total income for this purpose means his gross total income minus long-term capital gain, short term capital gain taxable u/s 111A, and all deductions u/s 80CCC to 80U except any deduction under this section.

83. SECTION 80GGA – DONATIONS FOR SCIENTIFIC RESEARCH AND RURAL DEVELOPMENT Person should not have income from business and Profession No Limit of Donation Full amount of donation is deductible from income

84. SECTION 80GGC – DONATION TO POLITICAL PARTIES

85. DONATIONS TO POLITICAL PARTIES u/s 80GGC If donation is given to registered political party in India or donation to electoral trust is eligible then it is allowed as a deduction @ 100% Deduction = Actual amount donated

86. SECTION 80TTA – INTERST ON DEPOSITS IN SAVING ACCOUNT Benefit available to Individual and HUF Only Interest on Saving account Only (Not Time Deposit or Fixed Deposit) Interest Received from Bank, Banking Co-Op. Soc and Post Office Maximum Amount of Deduction – Rs. 10,000

87. SECTION 80U – HANDICAPPED RESIDENT PERSONS

88. To help a disabled person by reducing his tax burden, this section has been incorporated. Following are the provisions. The assessee is an individual being a resident He is a person with disability. He is certified by the medical authority to be a person with disability, at any time during the previous year. He furnishes a certificate issued by the medical authority in the prescribed form along the return of income DEDUCTION ALLOWED TO A PERSON WITH DISABILITY - SECTION 80U

89. A fixed deduction of Rs. 50,000 in case of a person with disability Rs. 1,00,000 in case of a person with severe disability.( having any disability over 80%) Amount of deduction

90. Self Occupied Interest Deduction – Rs. 2,00,000 (including interest paid upto date of possession) Let-Out 1.Standard Deduction – 30% of Rent Income 2.Municipal Tax Paid 3.Actual Interest on Borrowed Capital (interest on Pre-Construction is allowance in 5 equal yearly installments starting with the year of possession) Deduction of Interest on Housing Loan and Other Expenses under section 24

91. Self Occupied Interest Deduction – Rs. 2,00,000 (including interest paid upto date of possession) Let-Out 1.Standard Deduction – 30% of Rent Income 2.Municipal Tax Paid 3.Actual Interest on Borrowed Capital (interest on Pre-Construction is allowance in 5 equal yearly installments starting with the year of possession) Deduction of Interest on Housing Loan and Other Expenses under section 24

92. Additional deduction in respect of Interest on hosing loan of Rs. 50,000 is allowed: 1. Loan Sanctioned in FY 2016-17 2.Amount of loan does not exceeds Rs. 35 Lacs 3.Value of Residential Property does not exceeds Rs. 50 Lacs 4.Assessee does not have any residential property. Deduction of Additional Interest on Housing Loan for first home purchase

93. A Rebate (Deduction from Tax Payable) of Rs. 5,000/- is allowable to a person having taxable income upto Rs. 5,00,000/- Rebate Under Section 87A

94. LTA HRA INTEREST ON HOUSING LOAN RENT INCOME FROM HOUSE PROPERTY LEAVE ENCASHMENT GRATUITY GENERAL CONTRAVERCIES

95. Income Tax Return should be filed if Gross Total Income Exceeds Rs. 2,50,000 e.g. Gorss Total Income Rs. 4,00,000, investment u/s 80C Rs. 1,50,000 hence, net income Rs. 2,50,000 – Mandatory to File Return All income including exempted income should be disclosed Income Should be reconciled with Form 26AS (Statement of TDS Credit) All Assets and Liability should be disclosed where total income exceeds Rs. 50,00,000 EYE-CATCHERS