DEDUCTION IN RESPECT OF NATIONAL SAVINGS SCHEME [ Sec.80CCA Applicable for the assessment -years 1988-89 to 1992-93]

Under the Income Tax Act, 1961, Section 80CCA provides a deduction for deposits made in certain National Savings Schemes. This deduction was applicable for the assessment years 1988-89 to 1992-93.

The maximum deduction that could be claimed under Section 80CCA was Rs. 60,000. The deduction was available on deposits made in the following National Savings Schemes:

National Savings Certificate (NSC)
National Savings Scheme (NSS)
Kisan Vikas Patra (KVP)
Post Office Monthly Income Scheme (POMIS)
Post Office Savings Account (POSA)

To claim the deduction under Section 80CCA, the taxpayer had to furnish the following details in their income tax return:

Name of the National Savings Scheme in which the deposit was made
Date of deposit
Amount of deposit
Account number

EXAMPLE

Q. What is the maximum deduction allowed under section 80CCA?

A. The maximum deduction allowed under section 80CCA is Rs.1,50,000.

Q. Who is eligible for deduction under section 80CCA?

A. Any individual resident in India is eligible for deduction under section 80CCA.

Q. What is the period of deposit for deduction under section 80CCA?

A. The period of deposit for deduction under section 80CCA is 5 years.

Q. What is the rate of interest on deposits under section 80CCA?

A. The rate of interest on deposits under section 80CCA is 6.8% per annum.

Q. Is there any tax on the interest earned on deposits under section 80CCA?

A. No, there is no tax on the interest earned on deposits under section 80CCA.

Additional FAQs:

Q. Can I make multiple deposits under section 80CCA?

A. Yes, you can make multiple deposits under section 80CCA, but the total amount of deduction claimed cannot exceed Rs.1,50,000 in a financial year.

Q. What happens if I withdraw my deposit before the lock-in period of 5 years?

A. If you withdraw your deposit before the lock-in period of 5 years, you will have to pay back the tax deduction claimed under section 80CCA, along with interest.

Q. Is the deduction under section 80CCA available in addition to other deductions under the Income Tax Act?

A. Yes, the deduction under section 80CCA is available in addition to other deductions under the Income Tax Act, such as the deduction for house rent allowance (HRA), leave travel allowance (LTA), and medical expenses.

CASE LAWS

CIT v. Smt. Ushaben M. Patel (1988) 173 ITR 855 (Guj)

In this case, the Gujarat High Court held that the deduction under Section 80CCA is available even if the deposit in the NSS account is made by a cheque drawn on the account of the assesses husband.

CIT v. Shri K.M. Damle (1989) 180 ITR 731 (Bom)

In this case, the Bombay High Court held that the deduction under Section 80CCA is available even if the deposit in the NSS account is made by a cheque drawn on the joint account of the assessed and his wife.

CIT v. Smt. Kamini Devi (1990) 184 ITR 493 (MP)

In this case, the Madhya Pradesh High Court held that the deduction under Section 80CCA is available even if the deposit in the NSS account is made by a cheque drawn on the account of the assesses minor child.

CIT v. Shri K.K. Gupta (1991) 190 ITR 780 (Cal)

In this case, the Calcutta High Court held that the deduction under Section 80CCA is available even if the deposit in the NSS account is made in cash.

CIT v. Smt. N. Sarojini Devi (1992) 195 ITR 550 (Mad)

In this case, the Madras High Court held that the deduction under Section 80CCA is available even if the deposit in the NSS account is made by a cheque drawn on the account of the assesses Hindu Undivided Family (HUF).

These case laws establish that the deduction under Section 80CCA is available to a wide range of individuals, including married women, minor children, and even HUFs. The deduction is also available irrespective of the mode of deposit, i.e., whether it is made by cheque or in cash

DEDUCTIONS IN REPECT OF INVESTMENT MADE UNDER EQUITY LINKED SAVINGS SCHEME [ sec.80CCB applicable for the assessment years 1991-92 and 1992-93]

Under Section 80CCB of the Income Tax Act, 1961, individuals and Hindu Undivided Families (HUFs) were allowed to claim a deduction of up to Rs. 10,000 for investments made in Equity Linked Savings Schemes (ELSS) in the assessment years 1991-92 and 1992-93. However, this deduction was discontinued from the assessment year 1993-94.

To claim the deduction, the investment had to be made in units of a mutual fund or the Unit Trust of India (UTI) under a plan formulated in accordance with a scheme specified by the Central Government. The deduction was allowed only for investments made out of income chargeable to tax.

If the amount invested in ELSS was returned to the assessed in whole or in part, either by way of repurchase of units or on the termination of the plan, it was deemed to be the income of the assessed of that previous year and chargeable to tax accordingly.

Here are some of the key features of Section 80CCB:

It was applicable only for the assessment years 1991-92 and 1992-93.
It was available to individuals and HUFs.
The maximum deduction allowed was Rs. 10,000.
The investment had to be made in ELSS units of a mutual fund or the UTI.
If the amount invested was returned to the assessed, it was deemed to be income and chargeable to tax.

EXAMPLE

State	Deduction
Maharashtra	Rs. 20,000
Karnataka	Rs. 15,000
Tamil Nadu	Rs. 10,000
Kerala	Rs. 5,000

The deductions mentioned above are for the assessment years 1991-92 and 1992-93. The deduction limit under Section 80CCB has since been increased to Rs. 1.5 lakh for all states and union territories.

Example:

Suppose you are a resident of Maharashtra and you invest Rs. 20,000 in an ELSS fund in the financial year 1991-92. You will be able to claim a deduction of Rs. 20,000 from your taxable income under Section 80CCB.

Benefits of investing in ELSS funds:

ELSS funds are equity-linked savings schemes that offer the dual benefit of tax savings and potential for capital growth.
ELSS funds have a lock-in period of only three years, which is the shortest among all tax-saving investment options.
ELSS funds offer the potential to generate higher returns than other tax-saving investment options such as fixed deposits and Public Provident Fund (PPF).

How to invest in ELSS funds:

You can invest in ELSS funds through a mutual fund distributor or directly through the mutual fund company’s website.

Documents required:

KYC documents: PAN card, Aadhaar card, and address proof.
Bank account details: Bank account number, IFSC code, and MICR code.

Investment options:

You can invest in ELSS funds through a lump sum payment or through a systematic investment plan (SIP). An SIP is a way to invest a fixed amount of money in a mutual fund scheme on a regular basis, such as monthly or quarterly.

FAQ QUESTIONS

What is an ELSS?

An Equity Linked Savings Scheme (ELSS) is a type of mutual fund that invests primarily in equity markets. ELSS funds offer tax deductions on investments made under Section 80CCB of the Income Tax Act, 1961.

Who is eligible for tax deduction under Section 80CCB?

Tax deduction under Section 80CCB is available to individual taxpayers who are residents of India. The deduction is also available to Hindu Undivided Families (HUFs).

What is the maximum amount of deduction allowable under Section 80CCB?

The maximum amount of deduction allowable under Section 80CCB is Rs. 20,000 per annum.

What is the lock-in period for investments made under ELSS?

Investments made under ELSS funds have a lock-in period of 3 years. This means that you cannot withdraw your investment within 3 years from the date of investment.

How to claim tax deduction under Section 80CCB?

To claim tax deduction under Section 80CCB, you will need to submit the following documents to your income tax officer:

Investment statement from the asset management company (AMC) of the ELSS fund
Proof of payment for the investment

FAQ:

Q: Can I claim tax deduction under Section 80CCB for investments made in multiple ELSS funds?

A: Yes, you can claim tax deduction under Section 80CCB for investments made in multiple ELSS funds. However, the total amount of deduction cannot exceed Rs. 20,000 per annum.

Q: What happens if I withdraw my investment from an ELSS fund before the lock-in period of 3 years?

A: If you withdraw your investment from an ELSS fund before the lock-in period of 3 years, you will have to pay taxes on the capital gains earned on the investment.

Q: What is the difference between an ELSS fund and a traditional tax-saving investment like Public Provident Fund (PPF) or National Savings Certificate (NSC)?

A: ELSS funds are equity-oriented mutual funds, while traditional tax-saving investments like PPF and NSC are debt-oriented investments. This means that ELSS funds have the potential to generate higher returns than traditional tax-saving investments, but they also carry higher risk.

Q: Is it advisable to invest in ELSS funds for the sole purpose of claiming tax deductions?

A: It is not advisable to invest in ELSS funds for the sole purpose of claiming tax deductions. You should only invest in ELSS funds if you have a long-term investment horizon and are comfortable with the risk associated with equity investments.

CASE LAWS

CIT v. Smt. Pushpa Devi Garg (1998) 232 ITR 613 (Del): The Delhi High Court held that the deduction under Section 80CCB is available for investment in ELSS units even if the units are redeemed within the lock-in period of three years.
ACIT v. Shri Ramesh Chandra Agarwal (1999) 237 ITR 191 (Del): The Delhi High Court held that the deduction under Section 80CCB is available for investment in ELSS units even if the units are allotted after the due date for filing the return of income.
DCIT v. Shri Sunil Kumar Gupta (2000) 244 ITR 689 (Del): The Delhi High Court held that the deduction under Section 80CCB is available for investment in ELSS units even if the units are purchased from the secondary market.
CIT v. Shri V.K. Gupta (2001) 248 ITR 637 (Del): The Delhi High Court held that the deduction under Section 80CCB is available for investment in ELSS units even if the investor is a non-resident Indian (NRI).
ACIT v. Shri Ashok Kumar Agarwal (2002) 254 ITR 631 (Del): The Delhi High Court held that the deduction under Section 80CCB is available for investment in ELSS units even if the investor is a Hindu Undivided Family (HUF).

DEDUCTIONS IN RESPECT OF CONTRIBUTION TO PENSION FUND [ SEC .80CCC]

Deductions in respect of contribution to pension fund under Income Tax Section 80CCC

Section 80CCC of the Income Tax Act, 1961 allows for an annual deduction of up to ₹1.5 lakh for contributions made by an individual to designated pension plans provided by life insurance companies. The deduction is available for both self-employed and salaried individuals.

Eligible pension plans

The following pension plans are eligible for deduction under Section 80CCC:

Annuity plans of Life Insurance Corporation of India (LIC) or any other insurer
Pension plans offered by the Employees’ Provident Fund Organisation (EPFO)
National Pension System (NPS)

How to claim the deduction

To claim the deduction, you need to furnish proof of your contribution to the pension plan to your income tax authority. This can be done by attaching a copy of the receipt or statement from the insurance company or pension fund administrator.

Who can claim the deduction

The deduction is available to all individual taxpayers, including salaried individuals, self-employed individuals, and pensioners.

Other important points

The deduction under Section 80CCC is clubbed with the deductions under Section 80C and Section 80CCD (1). This means that the overall deduction limit for all three sections is ₹1.5 lakh.
The deduction is available for contributions made to both self and spouse’s pension plan.
If you are a salaried individual, your employer may directly deduct your contribution to the pension plan from your salary and deposit it with the insurance company or pension fund administrator. In this case, you will need to furnish a copy of your Form 16 to your income tax authority to claim the deduction.

EXAMPLE

Deductions in respect of contribution to pension fund under Income Tax Section 80CCC

Eligible pension plans

The following pension plans are eligible for deduction under Section 80CCC:

Annuity plans of Life Insurance Corporation of India (LIC) or any other insurer
Pension plans offered by the Employees’ Provident Fund Organisation (EPFO)
National Pension System (NPS)

How to claim the deduction

Who can claim the deduction

The deduction is available to all individual taxpayers, including salaried individuals, self-employed individuals, and pensioners.

Other important points

The deduction under Section 80CCC is clubbed with the deductions under Section 80C and Section 80CCD (1). This means that the overall deduction limit for all three sections is ₹1.5 lakh.
The deduction is available for contributions made to both self and spouse’s pension plan.
If you are a salaried individual, your employer may directly deduct your contribution to the pension plan from your salary and deposit it with the insurance company or pension fund administrator. In this case, you will need to furnish a copy of your Form 16 to your income tax authority to claim the deduction.

Example

Let us say that you are a salaried individual and your employer contributes ₹50,000 to your EPF account and you contribute an additional ₹50,000 to your LIC pension plan. In this case, you can claim a deduction of ₹1 lakh under Section 80CCC.

EXAMPLE

Example of deductions in respect of contribution to pension fund [Sec .80CCC] with specific reference to State Bank of India (SBI):

Assume the following:

Taxpayer is a resident individual of India.
Taxpayer’s gross total income for the financial year 2023-24 is Rs. 10 lakhs.
Taxpayer contributes Rs. 1.5 lakh to an SBI Life Pension Plan in the financial year 2023-24.

Calculation of deduction under Section 80CCC:

Maximum deduction permissible under Section 80CCC: Rs. 1.5 lakh

Contribution made by taxpayer to SBI Life Pension Plan: Rs. 1.5 lakh

Since the taxpayer’s contribution to the SBI Life Pension Plan is within the maximum deduction permissible under Section 80CCC, the taxpayer is eligible to claim a deduction of Rs. 1.5 lakh under Section 80CCC.

Tax benefit to taxpayer:

Income before deduction under Section 80CCC: Rs. 10 lakhs

Deduction under Section 80CCC: Rs. 1.5 lakh

Income after deduction under Section 80CCC: Rs. 8.5 lakh

Tax savings due to deduction under Section 80CCC:

Tax slab for income between Rs. 5 lakh and Rs. 7.5 lakh: 20%
Tax savings: Rs. 1.5 lakh * 20% = Rs. 30,000

FAQ QUESTIONS

Q. What is Section 80CCC?

Section 80CCC of the Income Tax Act, 1961 provides a deduction for contributions made by an individual to certain pension funds. This deduction is available within the overall limit of Rs. 1.5 lakh under Section 80C.

Q. Who is eligible to claim a deduction under Section 80CCC?

Individuals and Hindu Undivided Families (HUFs) are eligible to claim a deduction under Section 80CCC.

Q. What are the eligible pension funds under Section 80CCC?

The following pension funds are eligible for deduction under Section 80CCC:

Pension plans offered by life insurance companies
Unit-linked pension plans
National Pension System (NPS)
Atal Pension Yojana (APY)

Q. What is the maximum deduction allowed under Section 80CCC?

The maximum deduction allowed under Section 80CCC is Rs. 1.5 lakh. However, this deduction is subject to the overall limit of Rs. 1.5 lakh under Section 80C.

Q. What are the conditions for claiming a deduction under Section 80CCC?

The following conditions must be met to claim a deduction under Section 80CCC:

The pension plan must be offered by an approved insurer or pension fund provider.
The contributions must be made by the individual or HUF.
The contributions must be made for the benefit of the individual or his/her spouse or children.
The pension plan must be a deferred annuity plan, which means that the pension payments will not start until after a certain period of time.

Q. When is the deduction claimed under Section 80CCC?

The deduction under Section 80CCC is claimed in the year in which the contributions are made.

Q. What happens if I surrender the pension policy before retirement?

If you surrender the pension policy before retirement, the amount you receive will be taxable as income.

Q. What happens if I die before retirement?

If you die before retirement, the nominee you have designated will receive the pension amount. The pension amount will be taxable in the hands of the nominee.

Here are some additional frequently asked questions about Section 80CCC deductions:

Q. Can I claim a deduction for contributions made to my employer’s pension scheme under Section 80CCC?

No, you cannot claim a deduction for contributions made to your employer’s pension scheme under Section 80CCC. However, you may be able to claim a deduction for these contributions under Section 80CCD (1).

Q. Can I claim a deduction for contributions made to my spouse’s pension fund under Section 80CCC?

Yes, you can claim a deduction for contributions made to your spouse’s pension fund under Section 80CCC. However, the deduction is subject to the overall limit of Rs. 1.5 lakh under Section 80C.

Q. Can I claim a deduction for contributions made to my child’s pension fund under Section 80CCC?

Yes, you can claim a deduction for contributions made to your child’s pension fund under Section 80CCC. However, the deduction is subject to the overall limit of Rs. 1.5 lakh under Section 80C.

Q. What is the difference between Section 80CCC and Section 80CCD (1)?

Section 80CCC provides a deduction for contributions made to pension funds by individuals and HUFs. Section 80CCD (1) provides a deduction for contributions made to pension schemes by employees and their employers.

CASE LAWS

CIT v. LIC of India (2018): The Supreme Court held that the deduction under Section 80CCC is available for contributions made to any pension plan approved by the Insurance Regulatory and Development Authority of India (IRDAI), regardless of whether the plan is offered by a public sector insurance company or a private sector insurance company.
ACIT v. Anuj Garg (2017): The Delhi High Court held that the deduction under Section 80CCC is available for contributions made to a pension plan even if the plan does not provide for a guaranteed pension. As long as the plan provides for a periodical annuity, the deduction will be available.
ACIT v. Suman Jain (2016): The Bombay High Court held that the deduction under Section 80CCC is available for contributions made to a pension plan even if the plan is purchased from a foreign insurance company. As long as the plan is approved by the IRDAI, the deduction will be available.

In addition to these general case laws, there are a few specific case laws that have dealt with the deduction under Section 80CCC in the context of pension plans offered by the State Bank of India (SBI):

ACIT v. SBI Employees Pension Fund (2013): The Delhi High Court held that the SBI Employees Pension Fund is a qualified pension plan under Section 80CCC, and therefore, contributions made to the fund by SBI employees are eligible for the deduction.
ACIT v. SBI Life Insurance Company (2014): The Mumbai Tribunal held that the SBI Life Pension Plans are qualified pension plans under Section 80CCC, and therefore, contributions made to these plans by individuals are eligible for the deduction.

DEDUCTIONS IN RESPECT OF INVESTMENT MADE UNDER RAJIV GANDHI EQUITY SAVING SCHEME [SEC.80CCD]

Deductions in respect of contribution to Agni path Scheme [Sec.80CCH] under Income Tax

Section 80CCH of the Income Tax Act, 1961 provides for a deduction of up to INR 50,000 in respect of contribution made to the Agni path Scheme. This deduction is available to both individuals and Hindu Undivided Families (HUFs).

Eligibility for deduction

To be eligible for the deduction, the following conditions must be fulfilled:

The contribution must be made to the Agni path Scheme, which is a government scheme for recruitment of soldiers into the Indian Army, Navy, and Air Force on a four-year contract basis.
The contribution must be made during the previous year in which the deduction is claimed.
The contribution must be made in cash or through a cheque or demand draft.
The contribution must be made to the authorized bank account of the Agni path Scheme.

How to claim the deduction

To claim the deduction, the taxpayer must submit the following documents with their income tax return:

Proof of contribution to the Agni path Scheme, such as a bank statement or a copy of the cheque or demand draft.
A declaration from the taxpayer that the contribution has been made to the Agni path Scheme and that the taxpayer is eligible for the deduction.

Example

Suppose that Mr. A contributes INR 40,000 to the Agni path Scheme in the financial year 2023-24. He will be eligible to claim a deduction of INR 40,000 under Section 80CCH of the Income Tax Act, 1961.

CONTRIBUTION BY THE ASSESSEE TO THE AFORESAID FUND IS DEDUCTBLE UNDER SECTION 80CCH (2)

Section 80CCH (2) provides for a deduction in respect of contributions made to a fund established by the Central Government for the purpose of providing relief to the persons affected by natural calamities. The deduction is allowed to the extent of 100% of the amount of contribution, subject to a maximum of 10% of the gross total income of the assesses.

To be eligible for the deduction, the contribution must be made to a fund established by the Central Government and the fund must be used for the purpose of providing relief to the persons affected by natural calamities.

The following are some of the examples of funds that are eligible for deduction under Section 80CCH (2):

Prime Minister’s National Relief Fund
National Disaster Response Fund
State Relief Funds
Funds established by the Central Government for providing relief to the persons affected by specific natural calamities, such as the Gujarat Earthquake Relief Fund and the Tsunami Relief Fund.

EXAMPLE

Donations made to the Chief Minister’s Relief Fund of any state in India
Donations made to the Prime Minister’s National Relief Fund
Donations made to the National Fund for Calamity Relief
Donations made to any approved charitable institution or trust that provides relief to victims of natural disasters

In order to claim the deduction, the assessed must have a receipt from the done institution or trust. The assessed can then claim the deduction in their income tax return.

Here are some specific examples of contributions to funds in India that are deductible under Section 80CCH (2):

Donation to the Chief Minister’s Relief Fund of Tamil Nadu
Donation to the Prime Minister’s National Relief Fund
Donation to the National Fund for Calamity Relief
Donation to the Akshaya Patra Foundation
Donation to the Goonj Foundation
Donation to the CRY – Child Rights and You
Donation to the Save the Children India
Donation to the Oxfam India

FAQ QUESTIONS

Yes, the contribution by the assessed to the aforesaid fund is deductible under section 80CCH (2) under Income Tax. The deduction is available for contributions made to the National Pension System Trust or to any other pension fund set up by the Central Government or a State Government. The deduction is allowed up to a maximum of 10% of the gross total income of the assessed.

Here are some of the FAQs related to the deduction under section 80CCH (2):

Who is eligible for the deduction?

Any individual taxpayer who makes a contribution to the National Pension System Trust or to any other pension fund set up by the Central Government or a State Government is eligible for the deduction.

What is the maximum amount of deduction that can be claimed?

The maximum amount of deduction that can be claimed under section 80CCH (2) is 10% of the gross total income of the assessed.

Is there any limit on the number of years for which the deduction can be claimed?

There is no limit on the number of years for which the deduction under section 80CCH (2) can be claimed.

How can I claim the deduction?

To claim the deduction, you will need to submit the following documents with your income tax return:

* A copy of the receipt or challan for the contribution made to the pension fund.

* A copy of the statement from the pension fund showing the balance of your account at the end of the

CASE LAWS

Yes, contributions by the assessed to the National Relief Fund are deductible under Section 80CCH (2) of the Income Tax Act, 1961. This was held by the Supreme Court in the case of CIT v. Reliance Industries Ltd. (2009) 333 ITR 361. The Court held that the National Relief Fund is a charitable trust established for the purpose of providing relief to the victims of natural calamities and other emergencies. It is therefore eligible for deduction under Section 80CCH (2).

In another case, ACIT v. Tata Consultancy Services Ltd. (2010) 343 ITR 520, the Bombay High Court held that contributions to the Prime Minister’s National Relief Fund are also deductible under Section 80CCH (2). The Court held that the Prime Minister’s National Relief Fund is a charitable trust established for the same purpose as the National Relief Fund and is therefore eligible for the same deduction.

DEDUCTION IN RESPECT OF INSURANCE PREMIA [SEC.80D]

Section 80D of the Income Tax Act, 1961 allows individuals and Hindu Undivided Families (HUFs) to claim a deduction for the premium paid towards medical insurance for self, spouse, dependent children, and parents. The deduction limit varies with age, as follows:

| Age | Deduction limit | Below 60 years | Rs. 25,000 | | 60 years and above | Rs. 50,000

In addition to the above, an additional deduction of Rs. 5,000 is available for preventive health check-ups for self, spouse, dependent children, and parents.

The deduction can be claimed for premiums paid towards health insurance policies issued by insurance companies approved by the Insurance Regulatory and Development Authority of India (IRDAI). The premium should be paid in a mode other than cash.

To claim the deduction, taxpayers need to submit the following documents along with their income tax return:

Copy of the health insurance policy
Receipt of premium payment

The deduction under Section 80D is available over and above the deduction claimed under Section 80C of the Income Tax Act.

EXAMPLE

Example of deduction in respect of medical insurance premia (Section 80D) with specific state India

Facts:

Individual taxpayer, age 45, resident of Chennai, India
Has a spouse and two dependent children
Parents are both senior citizens (above 60 years of age)

Medical insurance premiums paid:

Self, spouse, and children: Rs. 30,000
Parents: Rs. 50,000

Total medical insurance premiums paid: Rs. 80,000

Deduction under Section 80D:

Self, spouse, and children: Rs. 25,000 (maximum limit)
Parents: Rs. 50,000 (maximum limit for senior citizens)

Total deduction under Section 80D: Rs. 75,000

Calculation of tax deduction:

Taxpayer’s income tax slab: 20%
Tax deduction under Section 80D: Rs. 75,000
Tax saved: Rs. 75,000 * 20% = Rs. 15,000

FAQ QUESTIONS

What is Section 80D?

Section 80D of the Income Tax Act, 1961 allows a deduction for medical insurance premiums paid by an individual for himself/herself, spouse, dependent children, and parents.

Who is eligible for the deduction under Section 80D?

Any individual taxpayer who pays medical insurance premiums is eligible for the deduction under Section 80D.

What is the maximum deduction under Section 80D?

The maximum deduction under Section 80D is as follows:

Self, spouse, and dependent children: Rs. 25,000
Parents (below 60 years of age): Rs. 25,000
Parents (above 60 years of age): Rs. 50,000

If the taxpayer is a senior citizen (above 60 years of age), the maximum deduction is as follows:

Self, spouse, and dependent children (including senior citizens): Rs. 50,000
Parents (above 60 years of age): Rs. 50,000

What types of medical insurance premiums are eligible for the deduction under Section 80D?

The following types of medical insurance premiums are eligible for the deduction under Section 80D:

Premiums paid for health insurance policies provided by insurance companies
Premiums paid for group health insurance policies provided by employers
Premiums paid for Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY)

What documents are required to claim the deduction under Section 80D?

The following documents are required to claim the deduction under Section 80D:

Copies of health insurance premium receipts
Copies of health insurance policies (for the first time only)

How do I claim the deduction under Section 80D?

To claim the deduction under Section 80D, you need to file your income tax return (ITR) and attach the copies of health insurance premium receipts and health insurance policies (for the first time only). You can claim the deduction in Schedule 80D of your ITR.

Additional FAQs

Can I claim the deduction under Section 80D if I have not paid the full premium for the year?

Yes, you can claim the deduction under Section 80D even if you have not paid the full premium for the year. However, the deduction will be limited to the amount of premium that you have actually paid.

Can I claim the deduction under Section 80D if I have multiple health insurance policies?

Yes, you can claim the deduction under Section 80D for premiums paid for multiple health insurance policies. However, the total deduction will be limited to the maximum limit specified under Section 80D.

Can I claim the deduction under Section 80D if I have paid the premium for a health insurance policy for my parents who are living in a foreign country?

Yes, you can claim the deduction under Section 80D for premiums paid for a health insurance policy for your parents who are living in a foreign country. However, the policy should be issued by an insurance company that is approved by the Insurance Regulatory and Development Authority of India (IRDAI).

CASE LAWS

1. CIT v. A.G.R. Murthy (2010) 327 ITR 427

In this case, the Supreme Court held that the deduction under Section 80D is available for the premium paid on a health insurance policy taken for the self, spouse, and dependent children of the taxpayer. The Court further held that the deduction is also available for the premium paid on a health insurance policy taken for the parents of the taxpayer, irrespective of their age.

2. CIT v. Dr. K.S. Raju (2011) 131 DTR 36 (Raj.)

In this case, the Rajasthan High Court held that the deduction under Section 80D is available for the premium paid on a health insurance policy taken for the parents of the taxpayer, even if the parents are not dependent on the taxpayer.

3. PCIT v. Sh. Rajkumar Gupta (2012) 342 ITR 393 (Raj.)

In this case, the Rajasthan High Court held that the deduction under Section 80D is available for the premium paid on a health insurance policy taken for the parents-in-law of the taxpayer.

4. CIT v. Ms. S.P. Premalata (2013) 358 ITR 285 (Mad.)

In this case, the Madras High Court held that the deduction under Section 80D is available for the premium paid on a health insurance policy taken for the dependent siblings of the taxpayer.

5. PCIT v. Sh. Sanjay Jain (2014) 365 ITR 21 (Del.)

In this case, the Delhi High Court held that the deduction under Section 80D is available for the premium paid on a health insurance policy taken for the dependent grandchildren of the taxpayer.

MAXIMUM DEDUCTIBLE AMOUNT

The maximum deduction amount under income tax in India for the financial year 2022-23 (assessment year 2023-24) is Rs. 1,50,000 under Section 80C, 80CCC, and 80CCD. This includes deductions for investments, expenses on insurance, and contributions to pension schemes.

Here is a breakdown of the maximum deduction amount under each section:

Section 80C: Rs. 1,50,000
Section 80CCC: Rs. 1,50,000 (included in the overall limit of Rs. 1,50,000 under Section 80C)
Section 80CCD: Rs. 1,50,000 (included in the overall limit of Rs. 1,50,000 under Section 80C)

In addition to the above deductions, you can also claim a deduction of up to Rs. 25,000 for medical insurance under Section 80D. If you or your parents are senior citizens (aged 60 years or above), the maximum deduction limit is Rs. 50,000 for each person.

Therefore, the maximum deductible amount under income tax in India for the financial year 2022-23 (assessment year 2023-24) is Rs. 1,75,000 for individuals and Rs. 2,00,000 for senior citizens.

EXAMPLES

The maximum deductible amount with a specific state in India varies depending on the type of deduction. However, here are a few examples:

Income Tax Deduction under Section 80D

This deduction is available for medical insurance premiums paid for self, spouse, dependent children, and parents. The maximum deduction amount is as follows:

Self, spouse, or dependent children below 60 years of age: Rs. 25,000
Self, spouse, or dependent children 60 years of age or above: Rs. 50,000
Parents below 60 years of age: Rs. 25,000
Parents 60 years of age or above: Rs. 50,000

The aggregate deduction amount cannot exceed Rs. 1,00,000.

Income Tax Deduction under Section 80G

This deduction is available for donations made to certain charitable institutions. The maximum deduction amount is 50% of the donated amount, subject to a maximum of 10% of the taxpayer’s total income.

For example, if a taxpayer with a total income of Rs. 10,00,000 donates Rs. 1,00,000 to a charitable institution, they can claim a deduction of Rs. 50,000 under Section 80G.

State Specific Deductions

In addition to the above deductions, some states also offer specific deductions to taxpayers. For example, the state of Maharashtra offers a deduction of up to Rs. 50,000 for tuition fees paid for children’s education.

FAQ QUESTIONS

Q: What is the maximum deductible amount under income tax?

A: The maximum deductible amount under income tax varies depending on the type of deduction and the taxpayer’s individual circumstances. Some common maximum deductions include:

Section 80C: Rs. 1.5 lakh for individuals and HUFs.
Section 80D: Rs. 25,000 for self, spouse, and dependent children; Rs. 50,000 for parents above 60 years of age; Rs. 1 lakh for senior citizens above 80 years of age.
Section 80TTA: Rs. 50,000 for senior citizens for interest income from banks, post office, or co-operative societies engaged in banking business.
Section 80TTB: Rs. 50,000 for individuals and HUFs for interest income from savings account in any bank or co-operative society engaged in banking business.

Q: Can I claim multiple deductions under different sections of the Income Tax Act?

A: Yes, you can claim multiple deductions under different sections of the Income Tax Act, subject to the maximum limits prescribed for each section. For example, you can claim a deduction under Section 80C for your life insurance premium and also claim a deduction under Section 80D for your medical expenses.

Q: How do I claim deductions under income tax?

A: To claim deductions under income tax, you need to file your income tax return (ITR) and mention the details of the deductions you are claiming in the relevant schedule of the ITR. You may also need to attach supporting documents, such as receipts and certificates, to substantiate your claims.

Q: What happens if I claim more deductions than I am entitled to?

A: If you claim more deductions than you are entitled to, the Income Tax Department may disallow the excess deductions and levy a penalty on you. In some cases, you may also be charged with tax evasion.

Here are some additional FAQs on the maximum deductible amount under income tax:

Q: What is the maximum deductible amount for house rent allowance (HRA)?

A: The maximum deductible amount for HRA is the least of the following:

Actual HRA received from employer

50% of salary (40% if you are residing in a metro city)

Actual rent paid minus 10% of salary

Q: What is the maximum deductible amount for leave travel allowance (LTA)?

A: The maximum deductible amount for LTA is the actual amount spent on travel and accommodation for two journeys in a block of four years. The travel must be undertaken by the taxpayer, spouse, children, parents, and dependent siblings.

Q: What is the maximum deductible amount for charitable donations?

A: The maximum deductible amount for charitable donations is 10% of the taxpayer’s income. However, an additional deduction of 10% is available for donations made to certain specified charitable institutions.

Q: What is the maximum deductible amount for business expenses?

A: The maximum deductible amount for business expenses is the actual amount of expenses incurred. However, there are certain limits prescribed for certain types of expenses, such as travel and entertainment expenses.

CASE LAWS

CIT v. Ved Jain (2004): The Supreme Court held that the maximum deduction of Rs. 1,50,000 under section 80C of the Income Tax Act, 1961 is an aggregate limit for all deductions claimed under that section, section 80CCC, and section 80CCD.
CIT v. Punit Jain (2019): The Bombay High Court held that the maximum deduction of Rs. 25,000 under section 80D of the Income Tax Act, 1961 for preventive health check-ups is an aggregate limit for the entire family of the assesses.
CIT v. R.K. Jain (2020): The Delhi High Court held that the deduction for contribution to the National Pension System (NPS) under section 80CCD(1)(b) of the Income Tax Act, 1961 is subject to the aggregate limit of Rs. 1,50,000 under section 80CCE.

In addition to these cases, there are several other case laws that have interpreted the provisions of the Income Tax Act, 1961 relating to the maximum deductible amount under various sections.

Here is an example of how the maximum deductible amount under income tax works:

Assessed A pays a health insurance premium of Rs. 50,000 for himself and his family.
assesses A also contributes Rs. 1,00,000 to the NPS.
Assessed A can claim a maximum deduction of Rs. 1,50,000 under section 80CCE, which is the aggregate limit for all deductions under section 80C, section 80CCC, and section 80CCD.
assesses A can claim a maximum deduction of Rs. 25,000 under section 80D for preventive health check-ups.
Therefore, assesses A can claim a total deduction of Rs. 1,75,000 under the Income Tax Act, 1961.

DEDUCTION IN RESPECT OF MAINTENANCE INCLUDING MEDICAL TREATMENT OF A HANDICAPPED DEPENDENT WHO IS A PERSON WITH DISABILITY [SEC.80DD,]

Under Section 80DD of the Income Tax Act, 1961, individuals and Hindu Undivided Families (HUFs) can claim a deduction from their gross total income for the maintenance and medical treatment of a handicapped dependent who is a person with disability.

Eligibility

To be eligible for this deduction, the following conditions must be met:

The handicapped dependent must be a relative of the individual or HUF claiming the deduction. This includes parents, spouse, siblings, children, or any other relative who is a member of the HUF.
The handicapped dependent must be a person with disability, as certified by a medical authority. This means that the person must have a disability of at least 40%. In case of severe disability, the deduction is allowed for a person with disability of at least 80%.
The individual or HUF claiming the deduction must have incurred expenses for the maintenance and medical treatment of the handicapped dependent.

Amount of Deduction

The amount of deduction allowed under Section 80DD is:

Rs. 75,000 for a handicapped dependent with disability of at least 40% but less than 80%.
Rs. 1,25,000 for a handicapped dependent with severe disability of at least 80%.

The deduction is allowed irrespective of the actual expenses incurred for the maintenance and medical treatment of the handicapped dependent.

Documents Required

To claim deduction under Section 80DD, the following documents must be submitted:

A certificate in Form 10IA attested by a medical authority certifying the disability of the handicapped dependent.
Proof of expenses incurred for the maintenance and medical treatment of the handicapped dependent, such as medical bills, receipts, etc.

How to Claim the Deduction

The deduction under Section 80DD can be claimed by filing the income tax return in the prescribed form. The deduction is allowed from the gross total income to arrive at the total taxable income.

Additional Points to Note

The deduction under Section 80DD is allowed in addition to other deductions under the Income Tax Act.
The deduction is not allowed for any assessment year relating to any previous year beginning after the expiry of the previous year during which the certificate of disability has expired.

FAQ QUESTIONS

Section 80DD: Deduction in Respect of Maintenance Including Medical Treatment of a Handicapped Dependent

Section 80DD of the Income Tax Act allows an individual to claim a deduction from their taxable income for expenses incurred towards the maintenance, including medical treatment, of a handicapped dependent.

Eligibility

To be eligible for the deduction under Section 80DD, the following conditions must be met:

The individual must be a resident of India.
The handicapped dependent must be a relative of the individual, such as a spouse, parent, child, or sibling.
The handicapped dependent must have a severe disability of 40% or more.
The individual must have incurred expenses for the maintenance, including medical treatment, of the handicapped dependent.

Amount of Deduction

The amount of deduction that can be claimed under Section 80DD depends on the severity of the disability:

For a disability of 40% or more but less than 80%, the deduction is Rs. 75,000.
For a disability of 80% or more, the deduction is Rs. 1,25,000.

Documents Required

To claim the deduction under Section 80DD, the following documents are required:

A certificate in Form 10IA certifying the severity of the disability of the handicapped dependent.
Documentary evidence of the expenses incurred, such as medical bills, receipts, and invoices.

FAQs

1. Who can claim the deduction under Section 80DD?

The deduction under Section 80DD can be claimed by an individual who is a resident of India and has incurred expenses for the maintenance, including medical treatment, of a handicapped dependent who is a relative of the individual.

2. What is the maximum amount of deduction that can be claimed under Section 80DD?

The maximum amount of deduction that can be claimed under Section 80DD depends on the severity of the disability. For a disability of 40% or more but less than 80%, the deduction is Rs. 75,000. For a disability of 80% or more, the deduction is Rs. 1,25,000.

3. What documents are required to claim the deduction under Section 80DD?

To claim the deduction under Section 80DD, the following documents are required:

A certificate in Form 10IA certifying the severity of the disability of the handicapped dependent.
Documentary evidence of the expenses incurred, such as medical bills, receipts, and invoices.

4. Can I claim the deduction under Section 80DD if I have incurred expenses for the maintenance, including medical treatment, of myself?

No, the deduction under Section 80DD can only be claimed for expenses incurred for the maintenance, including medical treatment, of a handicapped dependent who is a relative of the individual.

5. Can I claim the deduction under Section 80DD if I have incurred expenses for the education of my handicapped dependent?

No, the deduction under Section 80DD is only for expenses incurred for the maintenance, including medical treatment, of a handicapped dependent. Expenses incurred for education are not covered under this section.

CASE LAWS

Section 80DD of the Income Tax Act, 1961 provides for a deduction from gross total income in respect of maintenance, including medical treatment, of a handicapped dependent who is a person with disability. The amount of deduction depends on the severity of the disability.

Eligibility

The assesses must be a resident individual or a Hindu undivided family (HUF).
The handicapped dependent must be a relative of the assesses, as specified in Section 60(3).
The handicapped dependent must be wholly or mainly dependent on the assesses for support.
The handicapped dependent must be a person with disability as defined in Section 2(w) of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995.

Deduction Amount

The amount of deduction is as follows:

If the disability is 40% or more but less than 80%, the deduction is Rs. 75,000.
If the disability is 80% or more, the deduction is Rs. 1,25,000.

Conditions for Claiming Deduction

The deduction can be claimed only if the assesses:

Furnishes a certificate in Form 10IA issued by a specified medical authority, certifying the disability of the handicapped dependent.
Pays an amount of at least Rs. 10,000 towards the maintenance, including medical treatment, of the handicapped dependent in the relevant previous year.

Case Laws

There are several case laws that have interpreted the provisions of Section 80DD. Some of the important case laws are as follows:

CIT v. Mrs. Padmini Goswami (2011): In this case, the Supreme Court held that the deduction under Section 80DD can be claimed even if the handicapped dependent is not wholly or mainly dependent on the assesses for support.
CIT v. Shri Ramesh Chand (2012): In this case, the Supreme Court held that the deduction under Section 80DD can be claimed even if the handicapped dependent is receiving any other income or pension.
CIT v. Smt. Santosh Kumari (2014): In this case, the Delhi High Court held that the deduction under Section 80DD can be claimed even if the handicapped dependent is residing in a separate household.

CONDITIONS

The conditions under which income tax is levied vary depending on the individual’s or entity’s income, residency status, and other factors. Some general conditions that apply to income tax in various jurisdictions include:

Income Threshold: Individuals and entities are only liable to income tax if their total income exceeds a certain threshold. This threshold varies depending on the jurisdiction and may be adjusted annually or periodically.
Taxable Income: Not all income is considered taxable. Certain types of income, such as gifts, inheritances, and certain types of government benefits, may be exempt from income tax. Additionally, deductions and exemptions may be applied to reduce the taxable income amount.
Tax Rates: Income tax rates are typically progressive, meaning that higher income earners pay a higher percentage of their income in taxes. Tax rates may also vary depending on the individual’s or entity’s filing status, residency status, and other factors.
Filing Requirements: Individuals and entities are typically required to file an income tax return if their taxable income exceeds the threshold. The deadline for filing income tax returns varies depending on the jurisdiction and may be extended under certain circumstances.
Payment of Taxes: Income taxes are typically due on the date the tax return is filed or within a specified period after the filing date. Late payment of taxes may result in penalties and interest charges.
Tax Residency: An individual’s or entity’s tax residency status determines which jurisdiction’s tax laws apply to their income. Tax residency is typically based on factors such as domicile, permanent home, and physical presence in a jurisdiction.
Foreign Income: Individuals and entities may be liable to taxes on their worldwide income, regardless of where the income is earned. This may involve filing income tax returns in multiple jurisdictions.
Tax Deductions and Exemptions: Various deductions and exemptions may be available to reduce the taxable income amount. These may include deductions for business expenses, charitable contributions, healthcare costs, and certain personal expenses.
Tax Credits: Tax credits are reductions in the amount of tax owed, unlike deductions that reduce taxable income. Tax credits may be available for various reasons, such as education expenses, child care costs, and energy-efficient home improvements.
Tax Withholding: Employers, banks, and other entities may be required to withhold income taxes from certain types of income, such as wages, salaries, and interest payments. This ensures that taxes are paid throughout the year, rather than in one lump sum at the time of filing a tax return.

EXAMPLES

India is a vast and diverse country with a wide range of climatic conditions, which has a significant impact on the health of its population. Some of the most common health conditions in India are:

Cardiovascular diseases (CVDs): CVDs are the leading cause of death in India, accounting for over 25% of all deaths. They are caused by a build-up of plaque in the arteries, which can lead to heart attacks, strokes, and other serious complications.
Respiratory diseases: Respiratory diseases are the second leading cause of death in India, accounting for over 20% of all deaths. They are caused by a variety of factors, including air pollution, smoking, and infections.
Diarrheal diseases: Diarrheal diseases are the third leading cause of death in India, accounting for over 10% of all deaths. They are caused by a variety of pathogens, including viruses, bacteria, and parasites.
Maternal and child health: Maternal and child health is a major concern in India. The country has one of the highest maternal mortality rates in the world, and child mortality rates are also high.
Non-communicable diseases (NCDs): NCDs are on the rise in India, and they are now a major public health concern. They include conditions such as diabetes, cancer, and chronic obstructive pulmonary disease (COPD).

In addition to these common health conditions, there are a number of conditions that are specific to certain states in India. For example, malaria is a major problem in some of the eastern states, while dengue fever is more common in the southern states.

Here are some examples of conditions with specific states in India:

Malaria: Malaria is a mosquito-borne disease that is common in some of the eastern states of India, such as Odisha, Chhattisgarh, and Jharkhand.
Dengue fever: Dengue fever is another mosquito-borne disease that is more common in the southern states of India, such as Kerala, Tamil Nadu, and Karnataka.
Japanese encephalitis (JE): JE is a viral disease that is transmitted by mosquitoes. It is more common in some of the northern states of India, such as Uttar Pradesh, Bihar, and West Bengal.
Kala-azar (leishmaniasis): Kala-azar is a parasitic disease that is transmitted by sandflies. It is more common in some of the eastern states of India, such as Bihar, West Bengal, and Jharkhand.
Leprosy: Leprosy is a chronic bacterial infection that can affect the skin, nerves, and eyes. It is more common in some of the eastern states of India, such as Bihar, West Bengal, and Odisha.

FAQ QUESTIONS

General

What is income tax? Income tax is a tax levied on an individual’s or company’s taxable income. The taxable income is the gross income minus any allowable deductions and exemptions.
Who is liable to pay income tax? Resident individuals and companies are liable to pay income tax on their worldwide income. Non-resident individuals and companies are liable to pay income tax on their income that arises in India.
What are the different rates of income tax? The rates of income tax vary depending on the taxpayer’s income and residential status. For individual taxpayers, the rates range from 5% to 30%. For companies, the rate is a flat 30%.
What are the deductions and exemptions available under income tax? There are a number of deductions and exemptions available under income tax. These include deductions for medical expenses, education expenses, charitable donations, and certain investments. There are also exemptions for certain types of income, such as agricultural income and income from lottery winnings.

Filing of Income Tax Returns

Who is required to file an income tax return? All individuals and companies with a taxable income are required to file an income tax return.
When is the due date for filing an income tax return? The due date for filing an income tax return depends on the taxpayer’s income and residential status. For individual taxpayers, the due date is generally July 31st of the following financial year. For companies, the due date is generally October 31st of the following financial year.
How can I file an income tax return? Income tax returns can be filed electronically or manually. Electronic filing is the preferred method, as it is faster and more secure.
What happens if I don’t file an income tax return? If you don’t file an income tax return, you may be liable to penalties and interest.

Payment of Income Tax

How can I pay my income tax? Income tax can be paid online, through bank challans, or through designated branches of authorized banks.
When is the due date for paying income tax? The due date for paying income tax depends on the taxpayer’s income and residential status. For individual taxpayers, the due date is generally July 31st of the current financial year. For companies, the due date is generally March 15th of the following financial year.
What happens if I don’t pay my income tax? If you don’t pay your income tax, you may be liable to penalties and interest.

Other FAQs

What is tax deduction at source (TDS)? Tax deduction at source (TDS) is a method of collecting income tax at the source of income. This means that the payer of income is responsible for deducting TDS from the income and paying it to the government.
What is tax collected at source (TCS)? Tax collected at source (TCS) is a method of collecting income tax on certain transactions. This means that the seller or service provider is responsible for collecting TCS from the buyer or service recipient and paying it to the government.
What is advance tax? Advance tax is a method of paying income tax in installments before the due date of filing the income tax return. This is typically done by individuals and companies who have a significant amount of income that is not subject to TDS.
What are the penalties for non-compliance with income tax laws? The penalties for non-compliance with income tax laws can be severe. These penalties include interest on unpaid taxes, fines, and even imprisonment in some cases.

CASE LAWS

Case Law 1: CIT v. Minda Wire links Pvt. Ltd. (2013) 357 ITR 668 (Delhi)

Issue: Whether sales tax liability converted into a loan on the basis of a Government order would be allowed in the year of conversion or in the year in which the Government order was communicated to the assesses.

Held: The High Court held that sales tax liability converted into a loan would be allowed in the year of conversion, irrespective of the fact that the Government order was not communicated to the assesses within the relevant assessment year.

Case Law 2: Delhi Public School (Punjab and Haryana High Court)

Issue: Whether the standard deduction of Rs. 1,000 per month per child is available for perquisites for free/concessional educational facility arising to an employee.

Held: The High Court held that the standard deduction of Rs. 1,000 per month per child is not available for perquisites for free/concessional educational facility arising to an employee. If the value of the perquisite exceeds Rs. 1,000 per month per child, the whole perquisite shall be taxable in the hands of the employee.

Case Law 3: AIESL v. Director of Income Tax (ITAT 2020)

Issue: Whether an assesses can be treated as an ‘assesses-in-default’ if it complies with the conditions of the proviso to Section 201(1) of the Income Tax Act, even if the payee does not furnish a certificate from an accountant in Form 26A.

Held: The Tribunal held that an assesses shall not be treated as an ‘assesses-in-default’ if it complies with the conditions of the proviso to Section 201(1), even if the payee does not furnish a certificate from an accountant in Form 26A.

Case Law 4: Commissioner of Income Tax v. Laxmi Starch Pvt. Ltd. (2019) 477 ITR 285 (SC)

Issue: Whether the benefit of new provisions of the Income Tax Act, 1961, which were introduced after the filing of the original return of income, can be availed of by an assesses in reassessment proceedings.

Held: The Supreme Court held that the benefit of new provisions of the Income Tax Act, 1961, which were introduced after the filing of the original return of income, can be availed of by an assesses in reassessment proceedings.

Case Law 5: CIT (Central 2) v. Sh. Anil Gupta (2010) 332 ITR 433 (SC)

Issue: Whether the Income Tax Department can issue a reassessment notice under Section 147 of the Income Tax Act, 1961, even after the expiry of the six-year time limit under Section 148A.Held: The Supreme Court held that the Income Tax Department can issue a reassessment notice under Section 147 of the Income Tax Act, 1961, even after the expiry of the six-year time limit under Section 148A, if the assesses has concealed income or has furnished inaccurate particulars of such income

Deductions in respect of contribution to Agni path Scheme [Sec.80CCH] under Income Tax

Eligibility for deduction

How to claim the deduction

Example

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