2 PROJECT REPORT ENTITLED DEDUCTIONS ON GROSS TOTAL INCOME
3 INTRODUCTIONDeductions available under section 80C to 80U are of special nature and are allowed to certain specified categories of taxpayers. Deductions under section 80C to 80GGC are in relation to various investments and payments Purpose of deductions is to encourage savings, industrialization and to assist the taxpayers in meeting their essential expenditures. These deductions have to be made from the gross total income in order to arrive at net income.
4 GENERAL DEDUCTIONSThese deductions are allowed from GTI(from sec 80C to 80U).The total of these deductions cannot exceed GTI.If any such deduction u/s 80G, 80GGA, 80GGC, 80IA, 80IB 80JJ has been allowed to an AOP or BOI, then the same shall not be allowed to the members.These deductions are not allowed from LTCG, STCG computed u/s 111-A and casual incomes.Assessee should claim these deductions
6 DEDUCTIONS TO BE MADE IN COMPUTING TOTAL INCOME FROM 80 C TO 80 GGC
7 DEDUCTION U/S 80CDeduction in respect of life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc.
8 DEDUCTION U/S.80CDeduction is available for the amount paid or deposited towards:Life Insurance Premium,PF, PPF, Superannuation fundUnit Linked Insurance Plan Contribution,NSC, NSS,, Subscription to Units of Mutual Fund referred to u/s.10(23D),Contribution to any Pension Fund set up by Mutual Fund referred to u/s.10(23D),Tuition Fees (excluding development fees, donation etc),Repayment towards Principal amount of Housing Loan,Term Deposit for a fixed period of not less than five years with a Scheduled Bank etc. to the extent of Rs.1,00,000 .Home deposit scheme of national housing bank with Nationalized bank
9 Deduction in respect of contribution to certain DEDUCTION U/S 80CCCDeduction in respect of contribution to certainpension funds.
10 DEDUCTION U/S.80CCCAny individual who makes a contribution for any annuity plan of the Life Insurance Corporation of India or any other insurer is eligible for a deduction of the amount paid or Rs. 1,00,000, whichever is less. When an individual or his nominee receives any amount under the following circumstances it will be taxed as the income of the individual or his nominee, in the year of withdrawal or the year in which the pension is received:On the surrender of the annuity plan orAs pension received from the annuity plan.
11 DEDUCTION U/S 80CCDDeduction in respect of contribution to pension scheme of Central Government.
12 DEDUCTION U/S.80CCDThe deduction for contributions to a pension scheme of the Central Government is available only to those individual who have been employed by the central government on or after 1st January 2004, and will be allowed for any amount deposited in such a pension scheme. But, in this case, deduction of more than 10 per cent of the employee's salary shall not be allowed. The contributions to the fund are also made by the Central Government. Deduction will be available for any contribution which is made by the Central Government or 10 per cent of the employee's salary, whichever is less. When the individual or his nominee receives any amount out of the scheme which meets the following descriptions, it shall be taxed in the hands of the recipient.On closure/ opting out of the pension scheme; orAs pension received from the annuity plan.The term 'salary' here includes Dearness Allowance (if considered for retirement benefits), but it excludes other allowances and perquisites. The aggregate deduction under the Sections 80C, 80CCC and 80CCD cannot exceed Rs 1 lakh as whole.
13 DEDUCTION U/S 80DDeduction in respect of medical insurance premia
14 DEDUCTION U/S.80DAny Premium which is paid for medical insurance that has been taken on the health of the assessee, his spouse, dependent parents or dependent children, is allowed as a deduction, subject to a ceiling of Rs 15,000. Where any premium is paid for medical insurance for a senior citizen, an enhanced deduction of Rs 20,000 is allowed. The deduction is available only if the premium is paid by cheque.
15 DEDUCTION U/S 80DDDeduction in respect of maintenance including medical treatment of a dependant who is a person with disability.
16 DEDUCTION U/S.80DDDeduction under this section is available to an individual who:Incurs any expenditure for the medical treatment, training and rehabilitation of a disabled dependant; orDeposits any amount in schemes like Life Insurance Corporation for the maintenance of a disabled dependant. An annuity or a lump sum amount is paid to the dependant or to a nominee for the benefit of the dependant in the event of the death of the individual depositing the money, from the said scheme,A deduction of Rs 50,000 is available. Where the dependant is with a severe disability, a deduction of Rs 75,000 is allowed. If the death of the dependant occurs before that of the assessee, the amount in the scheme is returned to the individual and is taxable in his hands in the year that it is received. An individual should furnish a copy of the issued certificate by the medical board constituted either by the Central government or a state government in the prescribed form, along with the return of income of the year for which the deduction is claimed. The term 'dependent' here refers to the spouse, children, parents and siblings of the assessee who are dependant on him for maintenance and who themselves haven't claimed a deduction for the disability in computing their total incomes. This deduction is also available to Hindu Undivided Families (HUF).
17 DEDUCTION IN RESPECT OF MEDICAL DEDUCTION U/S.80DDBDEDUCTION IN RESPECT OF MEDICALTREATMENT ETC.
18 DEDUCTION U/S.80DDBAn individual, resident in India spending any amount for the medical treatment of specified diseases affecting him or his spouse, children, parents, brothers and sisters and who are dependant on him, will be eligible for a deduction of the amount actually spent or Rs 40,000, whichever is less. Note:- For the complete list of disease specified, refer to Rule 11DD of the Income Tax Rules. For any amount spent on the treatment of a dependent senior citizen an individual is eligible for a deduction of the amount spent or Rs 60,000, whichever is less is available. The individual should furnish a certificate in Form 10-I with the return of income issued by a specialist working in a government hospital. If any amount of medical expenditure is borne by the employer or is reimbursed under an insurance scheme, the eligibility of the deduction is the reduction to that extent. This deduction is also available to Hindu Undivided Families (HUF).
19 DEDUCTION U/S.80EDEDUCTION IN RESPECT OF INTEREST ON LOAN TAKEN FOR HIGHER EDUCATION.
20 DEDUCTION U/S.80EUnder this section, deduction is available for payment of interest on a loan taken for higher education from any financial institution or an approved charitable institution. The loan should be taken for either pursuing a full-time graduate or post-graduate course in engineering, medicine or management, or a post-graduate course in applied science or pure science. The deduction is available for the first year when the interest is paid and for the subsequent seven years. Up to March 2005, deduction was available for the repayment of principal and interest aggregating to Rs 40,000 a year.
21 Conclusion Section Product to Invest Amount to Invest Other Details Product to InvestAmount toInvestOther Details80C NSC, notified ban deposits and post office time deposits,EPF and PPF, ELSS, life insurance plans,deferred pension plans.Cannot exceed Rs.1lakhMandatory requirements - Payment has to be made before 31 March2008.Who can avail the deduction -Individuals and HUF (both resident and non-resident).80CCCPension plans of life insurers.Limit of Section80C(upto to Rs.1lakh)Mandatory requirements - Payment has to be made before 31 March 2008.Who can avail the deduction - Individuals80DMedical insurance policies taken for self, spouse,dependent parents or ohildren,or any member of HUF.Upto Rs.15,000; senior citizens can claim up to Rs.20,000Mandatory requirements :-Premium should be paid through a cheque out of income chargeable to tax Who can avail the deduction - Individuals and HUF.80DDExpenses on the medical treatment of a dependent whois a person with a disability.Upto Rs.50,000, or uptoRs.75,000 if the dependent is a person with severe disabilityMandatory requirements - Certification by a medical authority Who can avail the deduction - Resident individual or HUF.
22 Section Product to Invest Amount to Invest Other Details Product to InvestAmount toInvestOther Details80DDBExpenses on the medical treatment of a specified disease (cancer,AIDS,neurological diseases,chronic renal failure and moreRs.40,000 (if the person treated upon is less than 65 years of age),or Rs 60,000 (if the age of the person treated is 65 years or more )Mandatory requirements - Certificate in Form No.10-l to be submitted along with the income tax is available if the amount is actually paid for treatment. Who can avail the deduction - Resident individual or HUF80EPayment of interest on loan taken for higher studies Deduction available on the total interest portion of education loan the principal repayment gets no tax advantageMandatory requirements -Deduction is available in the year in which repayment starts and only for eight immediately succeeding assessment years.Who can avail the deduction - Individual.
23 Section 80GDeduction in respect of donations to certain funds, charitable institutions etc.
24 Section 80G 80G For all assessees 1. To PM National Relief Fund. A. No. limit donations:1. To PM National ReliefFund.2. To Africa Fund.3. To Armenia Earthquake Relief Fund.4. To University or institution of National Eminence( so notified).5. To National Foundation for communal harmony.6. To the Chief Minister’s Earthquake Relief Fund Maharashtra.7. To Zila Saksharta Samiti.To National Blood Transfusion Council or State Blood Transfusion Council.To any fund set up by the State Govt. to provide medical relief to poor.Q.A.100%RATE
25 11. To National Illness Assistance Fund. To Army Central welfare Fund , Indian Naval Benevolent Fund or Air Force Central Welfare fund.11. To National Illness Assistance Fund.To Andhra Chief Minister Cyclone Relief Fund.To Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund.National Sports Fund.,National Cultural Fund.Technology Development and Application Fund.To National Defence Fund.Any fund set up by the State Govt. of Gujarat. Exclusively for providing relief to the victims of earthquake in Gujarat.100%100
26 To PM National Drought Relief Fund To National Children’s Fund Any sum paid by the assessee during the period beginning on 30 th day of Sep.2001 and ending on 30th day of Sep.2001 to any trust , institutions are fund to which these sections applies for providing relief to the vicitims of earthquake in Gujarat.To the National Trust for welfare of persons with autism cerebral Palsy, Mental Retardation and multiple disability.To PM National Drought Relief FundTo National Children’s FundTo Jawahar Lal Nehru Memorial Fund.To Indira Gandhi Memorial Trust.To Rajiv Gandhi Foundation.100%50%
27 To educational institutions To Charitable institutions. B_ With Limit Donations.To State Govt.To Local Authority.To educational institutionsTo Charitable institutions.To Sports InstitutionsTo a corporation set up to protect the interest of minority.To an authority constituted for development of housing and planning of cities and towns.To a place of art , public worship or historical importance( so notified).To an institutions or association engaged in promotion of family planning in India.,Actual of total of 1st 8 or 10% of adj. G.T.I whichever is less is Q.A.Out of Q.A. 100% of donation for F.P. +by a Co. to I.O.A.And bal.Q.A. 50%
28 G. TAX. I = GTI ( long term capital gain plus all other deductions u/s 80 + rebatable income if any.)Rebateable Income = Share of income from AOP provided total income of such AOP exceeds the exempted limit i.e. Rs 1,00,000/-.Any sum paid by t he assessee being a company, in the previous years as donation to the Indian Olympic Association or any other association or institutions as notified by the Central Govt.u/s 10( 23) forthe development of infrastructure for sports and gains in India or the sponsorship of sports and games in India
30 Section 80GG:This deduction is allowed to an individual Assessee only.If he stays in a rented house (furnished/ unfurnished) and pays rent.He should be a self-employed person or an employee who has not received any HRA, from his employer and nor any rent free accommodation.He or his spouse/children or the HUF of which he is the member must not own a residential house at that place, (let-out/self occupied) where he resides, performs the duties of his office/employment or carries on his business or profession.He must not own a self-employed house any where in India.If the assessee is staying in a house given to him at concessional rent, then he is eligible for this deduction.
31 The deduction is the least of the following amount: The assessee files a declaration in form no. 10BA regarding the expenditure incurred by him towards the payment of rent.The deduction is the least of the following amount:1. Rs. 2000p.m. or2. 25% of adjusted GTI, or3. The excess of actual rent paid over 10% of adjusted GTI.
32 Section 80 GGA:Deduction in respect of certain donations for scientific research or rural development.
33 The deduction would be 100% of the amount donated. This deduction is to be allowed to such an assessee who’s GTI does not include any income chargeable under head “ Profits and gains of business/professions”.He has paid or donated any amount to:-Any approved scientific research association or to any approved university / colleges or other institutions, for scientific research.PM’s National Rural Development Fund/ National Urban Property Eradication Fund .Any association/institutions for carrying out any Eligible Project identified by the National Committee.The deduction would be 100% of the amount donated.
34 Section 80 GGB Deduction in respect of contributions given by an Indian Company to political parties In computing the total income of an Indian Company any sum contributed by it in the P/Y to any registered political parties shall be allowed as deduction in full.
35 Section 80 GGC :Deduction in respect of contributions given by any person to political parties.In computing the total income of an assessee( except local authority and artificial judicial person wholly or partly funded by the Government) any amount contributed by him in the P/Y to an registered political party shall be allowed as deduction in full.
36 Section 801A :Deduction in respect of profits and gains from Industrial undertaking or enterprises engaged in infrastructural development:
37 Section 801A :The deduction under this section is available to any assessee whose GTI includes any profits and gains derived by:-Any enterprises carrying on the business of (a) developing or (b) maintaining an operating or (c) developing, maintaining and operating any infrastructure facility orAny undertaking which is engaged in the business of providing telecommunication services orAny undertaking which develops, maintains etc. an industrial park.Any industrial undertaking engaged in generation, transmission, distribution of powers etc.
38 Enterprises carrying on the business of Infrastructure Facility Such enterprise is owned ny an Indian Company of by ‘consortium’ of such companies.Such enterprise has entered into an agreement with (a) Central or State Government or (b) a Local Authority, or (c) a Statutory Body for(1) developing or (2) maintaining and operating, or (3), developing, maintaining and operating a new infrastructure facility which will however ultimately be transferred to the Government or ‘Such Authority ‘as the case may be within the period stipulated in the agreement.The enterprise has started operating and maintaining the Infrastructure Facilities’ on or after
39 The income tax return must be filed by the assessee otherwise the deduction shall not be allowed The “Infrastructure Facility” means:1 A road, bridge, airport, port, inland waterways, inland ports , rail system or any other public facility notified for the purpose,2A highway project including housing and other activities being an integral part of the highway project and3A water supply project, irrigation project, sanitation and sewerage system, water treatment system and solid waste management system.Period of deduction: It would be allowed for 10 consecutive assessment year out of 15 years beginning with the year opted by the assessee during the period in which the undertaking begins to operate any infrastructure facility/. providing telecommunication services/developing
40 B. Essential conditions for Telecommunication Undertakings: industrial parks or generation and distribution of powers, but not beyond 15 years. However, in case of high way project including housing or other activities being integral part of high way project, it would be ten consecutive A/Ys out of 20 years.Rate of deductions: 100 % of profits for 10 consecutive A/Ys . The deduction commence from A/Y assessment year specified by the assessee at his option 10 years period must end within given time.B. Essential conditions for Telecommunication Undertakings:Any assessee who is engaged in providing Telecommunication services (basic/cellular) including ratio paging, domestic satellite service or internet services electronic date interchange service at any time between to
41 Deductions would be for 10 consecutive assessment years( as opted by the assessee): 100% of profit for first 5 years and30% of profits for next 5 years for all assessee.
42 C: Any Assessee who is engaged in the business of developing and operating an industrial park or special economic Zone.: Notified by the Centre Govt. the industrial park must start operating during to and special economic zone on or after to The income tax return must be filed to claim the deduction.The deduction would be 100% of profits for 10 consecutive A/ys beginning with the initial assessment year as opted by the assesssee within 15 years. If the assessee has transferred the industrial park or the special economic zone to some other assessee the deduction for the remaining period shall be allowed to the transferee
43 D: New Industrial undertaking which is engaged in generation and distribution of power:- It begins to generate and distribute powers between to Alternatively, it starts transmissions or distributions by laying a network of new transmission or distributions lying at any time between and Or it undertakes substantial renovation and modernization of the existing transmission or distributions line at any time during the period to (means an increase of P & M by atleast 50% of the book value of such P & M as on ).
44 The other conditions are as follows:- 1. The plant and machinery must be new however, if it is imported then it may be second-hand provided that it was not used in India in any earlier year and no deduction for depreciation has been claimed on such assets in any earlier year in India.2. Such undertaking should not be formed by splitting up or reconstruction of a business already in existence, except u/s 33 B.% P & M may be old but 80 % must be new..4. The income tax return must be filed by the assesssee to claim this deduction.5. The deduction would be 100% of profits for 10 consecutive assessment years beginning with the initial assessment year ( as opted by the assessee within 15 years).
45 Section 80I AB:Deduction in respect of profits and gains by an undertaking of enterprise engaged in development of special economic zone:
46 Section 80I AB:It is a deduction allowed to the developers of SEZ from A/YThe following conditions should be satisfied:The tax payer is the developer of SEZ.The GTI of the tax payer includes profits and gains derived by an undertaking from any business of developing a SEZ.Such SEZ is notified on or afterThe books of accounts are properly audited.Income tax return must be filed on or before the due date to claim this deduction.6. If the developer of SEZ transfer the operation/ maintenance of such zone to another developer the deduction shall be allowed to the transferee for the remaining period.7. The deduction would be 100% of profits for 10 consecutive assessment year out of 15 years beginning from the year in which the SEZ has been notified by the Centre Govt.8. Double deduction is not to be allowed .The AO has the power to recomputed the profits of such undertakings.
47 Section80IB:Deduction for profits from industrial undertakings, ship or hotel
48 Section80IB: For all Assesseees: Only Indian Co. : A. 25% (For all) Industrial undertaking set up after but beforeIndustrial undertaking set up in industrially backward area during toIndustrial undertaking set up in small scale sector during toProfits from an undertaking engaged in the integrated business of handling storage and transportation of food grains [Section 80IB(11A)]Hospital in a rural area of at least 100 beds Oct.,2004 to 31st March 2008.B. Ship acquired after but beforeC. Business of Hotel set up in rural areas, hilly areas or place of pilgrime during to or between toD. Business of Hotel set up any where in India during to25% (For all)30%(only Co.) of profits of 10 years100%for 1st 5 years30% for next 5 year100% for 5 yrs30%50%(in all 10 yrs of profit for 12 yrs)
49 Section80IC:Deduction for setting up industrial undertakings, in special states
50 Section 80ICFor all assesseesProducing any article not included in 13th schedule, industry set up in the State of Sikkim during toProducing any article not included in 13th schedule, industry set up in State of Himachal and Utttanchal during toProducing any article not included in 13th schedule, industry set up in State of the North-Eastern States during toProducing any article not included in 14th schedule industry set up in State of Sikkim during toProducing any article not included in 13th schedule industry set up in state of Himachal and Utttanchal during toProducing any article not included in 13th schedule industry set up in state of North-Eastern during to100%(10 yrs)100%(5yrs)(5 yrs)
51 Deduction of profits and gains of biowaste. Section 80JJADeduction of profits and gains of biowaste.
52 Sec. 80JJA:Any Assessee engaged in the business of collecting and Processing of “Biodegradable Waste” for generating power, producing Bio-Gas or Bio-Fertilizers etc.: 100% profit and gains of such business would be allowed as deduction for first 5 years.
53 Section 80JJA: Deductions of any industrial undertaking which creates new jobs. All Co. assessees can claim for 3 yrs 30% of additional wages as deduction.
54 Section 80LA: Deduction for income of offshore fund: Indian scheduled bank can for any bankingincome from offshore banking unit inSEZclaim 100% for 5 assessment yrs and 50%for next 5 assessment yrs deductions.
55 Section 80P: Deduction for income of Coop. societies: A. Profits of Coop. societies fromBanking businessCottage industriesMarketing of Agri-productsAgriculture implements, etc.Processing are 100% allowed as deductionB. For other activity Rs is allowed as deduction.
56 Section 80 QQB:Deduction inrespect of royaltyincome of authors
57 Section 80QQB The deduction is allowed to a resident individual. He is an author or a joint author. The book written by him is work of literary , artistic or scientific nature.The taxpayer shall have to obtain a certificate in Form No.10 CCD from the person responsible for paying such income and furnish it alongwith the return.The deduction is Rs 3,00,000/-or the actual royalty income which ever is less.If such income is to be received from outside India, then it must be brought in India within six months from the end of the p/y., or within such an extended time as allowed by the RBI.Royalty income must not exceed 15% of the value of the book.Double deduction is not allowed
58 Section 80 RRB:Deduction inrespect of royaltyonpatents:-
59 Section 80 RRB:Deduction is to be allowed to a resident Indian assessee only.He is owner or co-owner of the patent.He is in receipt of any income by way of royalty in respect of the patent registered in his name after The assessee shall have to submit a certificate in Form No.10 CCE duly signed by prescribed authority, along with the return of income.The deduction is Rs 3,00,000 /- or the actual amount of royalty whichever is less.If it is received from outside India then the amount must be brought in India within six months from end of the P/Y in convertible foreign exchange or within such an extended period as allowed by RBIDouble deduction is not allowed.
60 Sec.80 U: Deduction in case of totally blind or physically handicapped persons:-
61 Sec.80 U: The assessee is residential Indian. Who suffers 40% or more physical disability ( including blindness) of the type prescribed under this section.The t ax payer must have to a copy of the certificate issued by the Notified Medical Authority along with return of income where the condition of disability requires reassessment a fresh certificate must be obtained from the medical authority after expiry of the period mentioned in the original certificate in order to continue the claim of deduction..A deduction of Rs 50,000/- (fixed amount) would be allowed a deduction Rs 75,000/- (fixed amount) would be allowed in case of severe disability of 80 % or more.