Permissible deductions from gross total income

11-03-2018 sanjaydessai@gmail.com 1
PERMISSIBLE DEDUCTIONS FROM GROSS TOTAL
INCOME (CHAPTER VI A)
for B Com students
Assessment year 2017-18
Based on B. Com Syllabus of Goa University
Dr. Sanjay P Sawant Dessai
Associate Professor
VVMs Shree Damodar College Margao Goa

PERMISSIBLE DEDUCTIONS FROM GROSS TOTAL INCOME
(CHAPTER VI A)
• Section 80C TO 80 U:
1. Sec. 80C
2. 80CCC
3. 80CCD
4. 80CCE
5. 80CCG
6. 80D
7. 80DD
8. 80E
9. 80G
10. 80TTA
11. 80U.
11-03-2018 sanjaydessai@gmail.com

UNIT-II A
PERMISSIBLE DEDUCTIONS FROM GROSS TOTAL INCOME
CHAPTER VI A- U/S 80C TO 80 U: (15 Marks)
➢ Sec. 80C – Deductions in respect of Life insurance premium,
deferred annuity, contribution to provident fund,
subscription to certain equity shares or debentures etc.
➢ 80CCC – Deduction in respect of contribution to certain
pension fund
➢ 80CCD- Deduction in respect of contribution to a notified
pension schemes (NPS)
➢ 80CCE -The aggregate amount of deductions under section
80C, section 80CCC and section 80CCD shall not, in any case,
exceed one lakh fifty thousand rupees.
➢ 80CCG-Deduction in respect of investment made under an
equity savings scheme.

➢ 80D- Deduction in respect of medical insurance
premia
➢ 80DD Deduction in respect of maintenance including
medical treatment of dependent who is a person with
disability
➢ 80E- Deduction in respect of loan taken for higher
education
➢ 80G – Donation
➢ 80 TTA Interest on bank savings account
➢ 80U - Deduction in the case of person with disability

Sec. 80C
Deductions in respect of Life insurance premium, deferred annuity,
contribution to provident fund, subscription to certain equity shares or
debentures etc.
Total Deduction under section 80C, 80CCC and 80CCD(1) together cannot exceed Rs
1,50,000
Only an individual or a Hindu undivided family can claim deduction under section
80C.
Amount paid ---
1. Life Insurance premium to effect or keep in force insurance on life of (a) self,
spouse and any child in case of individual and (b) any member, in case of HUF.
Deduction limit: Deduction will be allowed only for premiums upto a maximum of 10%
of the sum assured for policy issued on or after April 1, 2012.
In case of policy issued before March 31, 2012, deduction will be allowed only for
premiums upto a maximum of 20% of the sum assured

2. To effect or keep in force a deferred annuity contract on life
of self, spouse and any child in case of individual.
3. By way of deduction from salary payable by or on behalf of
the Government to any individual for the purpose of
securing to him a deferred annuity or making provision for
his spouse or children. The sum so deducted does not
exceed 1/5th of the salary.
4. As contribution by an individual to Statutory Provident
Fund.

Deductions U/s 80 C
5. contribution to Public Provident Fund scheme, 1968, in the name of self, spouse
and any child in case of individual and any member in case of HUF up to Rs
1,50,000 .
6. contribution by an employee to a recognised provident fund.
7. contribution by an employee to an approved superannuation fund.
8. Any sum deposited in a 10 year or 15 year account under the Post Office Savings
Bank (CTD) Rules, 1959, in the name of self and as a guardian of minor in case
of individual and in the name of any member in case of HUF.
9. Subscription to the NSC (VIII issue).
10. Sukanya Samriddhi Account--Money to be deposited for 14 years in this account
11. . As a contribution to Unit-linked Insurance Plan (ULIP) of UTI or LIC Mutual Fund
(Dhanraksha plan) in the name of self, spouse and child in case of individual and
any member in case of HUF.
12. To effect or to keep in force a contract for such annuity plan of the LIC (i.e., Jeevan
Dhara, Jeevan Akshay and their upgradations) or any other insurer as referred to in
by the Central Government

Deductions U/s 80 C
12. As subscription to any units of any Mutual Fund referred u/s. 10(23D) (Equity
Linked Saving Schemes).
13. As a contribution by an individual to any pension fund set up by any Mutual
Fund referred u/s 10(23D).
14. As subscription to any such deposit scheme of National Housing Bank (NHB), or
as a contribution to any such pension fund set up by NHB
15. As subscription to notified deposit schemes of (a) Public sector company
providing long-term finance for purchase/construction of residential houses in
India or (b) Any authority constituted in India for the purposes of housing or
planning, development or improvement of cities, towns and villages.
16. As tuition fees to any university, college, school or other educational institution
situated within India for the purpose of full-time education of any two children
of individual.

Deductions U/s 80 C
17. Repayment of housing loan – principal amount
18. As subscription to equity shares or debentures forming part of any eligible issue of
capital of public company or any public financial institution approved by Board.
19. As Term Deposit (Fixed Deposit) for 5 years or more with Scheduled Bank in
accordance with a scheme framed and notified by the Central Government.
20. As subscription to any notified bonds of National Bank for Agriculture and Rural
Development (NABARD).
21. In an account under the Senior Citizen Savings Schemes Rules, 2004.
22. As five year term deposit in an account under the Post Office Time deposit Rules,
1981.

Deductions U/s 80 C
• Extent of Deduction
• 100% of the amount invested or Rs. 1,50,000/-
whichever is less. However, as per Section 80CCE, the
total deduction the assessee can claim u/s 80C,
80CCC and 80CCD shall be restricted in aggregate to
Rs. 1,50,000/-.
•

80CCC – Deduction in respect of contribution to certain
pension fund
• Deduction in respect of Payment of premium for
annuity plan of LIC or any other insurer.
• Deduction is available upto a maximum of Rs.
150,000/-.
• 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.

80CCD
• 80CCD- Deduction in respect of contribution to a
notified pension schems (NPS)
• Employee contributing of maximum of 10 percent
of Salary or Rs 1,50,000 whichever is lower
• Employer contribution also available, maximum
10 percent of employees salary or Rs 1,50,000
whichever is lower
• Additional deduction of RS. 50,000 available u/s
80CCD(1B)

80 CCD(1)
• Employees contribution to NPS
• Deduction
• 10 percent of salary or Rs 1,50,000 whichever
is lower
• Aggregate amount of deduction under 80C,
80CCC 80 CCD1 cannot exceed Rs 2,00,000
•

80CCD(2)
• Employers contribution towards employees
NPS
• Maximum 10 percent of salary or Rs 1,50,000
which ever is lower
• Employers contribution towards NPS shall not
be considered for the overall ceiling of Rs
1,50,000

80CCG-Deduction in respect of investment made under an equity savings
scheme.
• Assessee is a resident individual
• Deduction allowed in the computation of his total income
• Fifty per cent of the amount invested in listed(notified ) equity
shares or units to the extent such deduction does not exceed
twenty-five thousand rupees.
• Deduction can be claimed for 3 consecutive years
• Gross total income does not exceed rupees 12 lakhs
• Investment is locked in for period of 3 years
• Its applicable for first time investor
• Only for three assessment years

80D- Deduction in respect of medical insurance premia
• Deduction in respect of Medical Insurance Premium and preventive health
check up for Self and family members.
• For Individual
• Mediclaim premium paid for Self, Spouse or dependant children.
• Preventive health check-up Rs 5,000
• Maximum deduction available is Rs 25,000.
• In case of senior citizen -deduction amount is enhanced to Rs. 30,000.
• Additional deduction:
• Mediclaim premium paid for parents.
• Maximum deduction Rs 25,000.
• In case any of the parents covered by the Med-claim policy is a senior
citizen, deduction amount is to Rs. 30,000.
• Deduction for expenditure on preventive health check up of Rs 5,000 ( to
be included in above )

Medical expenditure
• Amount incurred up to Rs 30,000 on account
of medical expenditure of the assessee or any
family member ( Super senior citizen )above
80

80DD Deduction in respect of maintenance including medical
treatment of dependent who is a person with disability
• Deduction of Rs. 75,000 (Fixed amount) available to assessee
towards expenditure incurred for medical treatment of
dependent
• Available to the parents, spouse, Children, brothers & sisters
or any one of such dependents in respect of either medical
expenditure incurred on medical treatment of or for the
deposits for future needs of the disabled or handicapped
dependent.
• If disability is 80% or more a sum of Rs. 1,25,000 is allowed.

80E- Deduction in respect of loan taken for higher
education
Conditions - The following conditions should be satisfied -
1. The taxpayer is an individual.
2. He had taken a loan for the purpose of pursuing his higher education or his
relatives. Spouse, children or the student for whom the individual is legal
gardian)
‘‘Higher education’’ for this purpose means full-time studies for any graduate
or post-graduate course in engineering, medicine, management, etc.
3.The aforesaid loan was taken from any bank, an approved charitable
institution or a financial institution notified by the Government.
4. During the previous year, the taxpayer has paid interest on such loan.
5. Such interest is paid out of his income chargeable to tax.
Period – max 8 years or until the interest is paid in full

80G – Donation
1. Deductions under section 80G is available to any taxpayer
(individual/ firm/HUF/ Company)
2. Donation in kind is not eligible for deduction.

Amount of deduction
100% of deduction if donation given to
1. National Defence Fund set up by the Central Government
2. Prime Minister’s National Relief Fund
3. Prime Minister’s Armenia Earthquake Relief Fund
4. Africa (Public Contributions — India) Fund
5. National children’s fund
6. National Foundation for Communal Harmony
7. University/educational institution of National eminence;
8. The Maharashtra Chief Minister’s Relief Fund during October
1, 1993 and October 6,1993 and Chief Minister’s Earthquake
Relief Fund, Maharashtra

9. Any fund set up by the State Government of Gujarat
exclusively for providing relief to the victims of earthquake in
Gujarat
10. Any Zila Saksharta Samiti constituted under District Collector
11. National Blood Transfusion Council or to any State Blood
Transfusion Council
12. Fund set up by a State Government for the medical relief to
the poor
13. The Army Central Welfare Fund or the Indian Naval
Benevolent Fund or the Air Force Central Welfare Fund
14. Andhra Pradesh Chief Minister’s Cyclone Relief Fund

15. National Illness Assistance Fund
16. Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund
17. National Sports Fund, National Cultural Fund or Fund for Technology Development and
Application
18. National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation
and Multiple Disabilities
19. Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the
victims of earthquake in Gujarat (contribution made during January 26, 2001 and
September 30, 2001)
20. Swachh Bharat Kosh
21. Clean Ganga fund
22. National fund for control of drug abuse

50% of deduction if donation given to
1. Jawaharlal Nehru Memorial Fund
2. Prime Minister’s Drought Relief Fund
3. Indira Gandhi Memorial Trust
4. Rajiv Gandhi Foundation.

With ceiling of 10% of adjusted Gross Total Income:—
(a) 100% of qualifying amount, if donation given to
• Government or any approved local authority, Institution or association to
be utilised for the purpose of promoting family planning
• To the Indian Olympic Association or to any other notified association or
institution established in India for the development of infrastructure for
sports and games in India or the sponsorship of sports and games in India.

50% of qualifying amount if donation given to
1. Any other fund or any institution which satisfies conditions mentioned in
Section 80G(5) ( charitable purpose)
2. Government or any local authority to be utilised for any charitable
purpose other than the purpose of promoting family planning
3. Any authority constituted in India for the purpose of dealing with and
satisfying the need for housing accommodation or for the purpose of
planning, development or improvement of cities, towns, villages or both
4. Any corporation referred in Section 10(26BB) for promoting interest of
minority community
5. For repairs or renovation of any notified temple, mosque, gurudwara,
church or other place.

Steps followed in calculating deductions admissible
1. Gross qualifying amount – it is an amount aggregate of the
donation made to any of the institutions / funds
2. Net qualifying amount – limited to 10 percent of adjusted gross
total income.
3. Adjusted gross total income
gross total income as reduced by the following
a) amount deductable under section 80C to 80U (except 80G)
b) Such sum on which income tax is not payable
c) Long term capital gains ( taxed at 20 percent )
d) Short term capital gains taxable under section 111A( taxed at 15
percent )

80TTA.
Applicable to Individual and HUF
Income by way of interest on deposits (not being
time deposits) in a savings account with—
(a) a banking company
(b) a co-operative society engaged in carrying on
the business
(c) Post office
Deductions
Maximum Rs. 10,000.

80U - Deduction in the case of person with disability
• Persons Covered-Individual resident in India.
• Extent of Deduction
• (a) Rs. 75,000/- in case of normal disability or
• (b) Rs. 1,25,000/- in case of severe disability.
• Severe Disability” means a person suffering
from 80% or more

Interest on Post office saving bank
interest
• Exempted u/s 10(15)1 Rs 3500 in single
account and Rs 7000 in joint account

Section 87 A
• Deduction of ₹ 5,000 or 100 percent of
income tax
• Where total income of assessee or net income
or taxable income ( gross total income –
deductions under section 80 C to 80 U ) does
not exceed Rs 5,00,000

Permissible deductions from gross total income

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