Presentation on Income Tax Deductions

(I) (a) Individual/HUF/AOP/BOI and every artificial judicial person
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Level of Total Income Rate Of Income Tax
Where the total income does not
exceed Rs 2,50000
NIL
Where the total income does exceed
Rs 2,50000 but does not exceed Rs
5,000,00.
10% of the amount by which the total
income exceeds Rs 2,50000.
Rs 5,000,00. but does not exceed Rs
10,000,00.
Rs 25000 plus 20% of the amount by
which the total income exceeds Rs
5,000,00.
Rs 10,000,00.
Rs 1,25000 plus 30% of the amount by
10,000,00.

(b) Resident Individual of age of 60 years or more but less than 80 Years at
any time during the financial year
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exceed Rs 30,0000
NIL
5,000,00.
Rs 5,000,00. but does not exceed Rs
10,000,00.
Rs 20000 plus 20% of the amount by
5,000,00.
Rs 10,000,00.
10,000,00.

(c) For Resident Individual of age of 80 years or more at any time during the
financial year
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exceed Rs 50,0000
NIL
10,000,00.
Where the total income exceeds Rs
10,000,00.
10,000,00.

Other Types Of Assesse
(ii) Co-operative Society: - There is no change in the rate structure as
compared to assessment year 2015-16.
(iii) Firm/Limited Liability Partnership: -
The rate of tax for AY 2016-17 is 30% on the whole of the total incomeof the
firm. The rate would apply to LLP also.
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Level of Total Income Rate of Income Tax
Where the total income does not exceed
Rs 10000.
10% of total income.
Where the total income does exceed Rs
10000 but does not exceed Rs 20000.
Rs 1000 plus 20% of amount by which
the total income exceeds Rs 10000.
Where the total income exceeds Rs
20000.
Rs 3000 plus 30% of amount by which
the total income exceeds Rs 20000.

(iv) Local Authority: -The rate of tax for local authority is 30% on the whole of
the total income of the local authority.
(v) Company: -
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In the case of a domestic company. 30% of Total Income.
In the case of companies other than
domestic company.
40% of Total Income.

Basic Terminology Used
i. Previous Year: - As per the income tax act 1961, previous year means
the financial year immediately preceding the assessment year.
ii. Assessment Year: - Assessment year is basically a 12 months period
starting from April 1, during which an assesse is required to file the
return of income (ITR) and the ITO has to initiate assessment
proceedings for income as per ITR and tax thereon. Since Income Tax
is on income of a financial/ previous year or period, so tax filings and
assessment can start thereafter. Probably, that’s why it’s called
assessment year/ period.
iii. Surcharge: - An additional tax i.e. not included in the existing tax which
is chargeable when the total income exceeds Rs 1crore.
iv. Co-operative Society: - A co-operative is an autonomous association of
people united voluntarily to meet their common economic, social, and
cultural needs and aspirations through a jointly owned and
democratically controlled business.
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V Circular: - It is internal memorandum or note of the ministry/department
which may clarify certain aspect of law. It may be superseded by yet another
circular or amendment.
VI Notification: - It is a public notification in official gazette. In various
enactments we see phrases such as “as may be prescribed”. These are later
notified through notification. Notifications are integral part of enactment.
VII Amendment: - Change in legal document made by adding, altering, or
omitting a certain part or term. Amended documents when properly executed
retain the legal validity of original documents.
VIII Official Gazette: - It is a public journal and it prints official notices from
the government. It is strictly in accordance with the government policies and
decisions. It is published weekly by department of publication , ministry of
urban development.
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Sections Providing Deductions From Tax
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Section Deduction in respect of….
80C Life Insurance Premium , Contribution to PF, Subscription to certain equity
shares or debentures etc.
80CCC Contribution to certain Pension Fund.
80CCD Contribution to Pension Scheme of CG.
80CCE Limit on deduction under above section.
80CCG Investment made under equity saving scheme.
80D Medical Insurance Premium.
80DD Maintenance including medical treatment of dependent who is person with
disability.
80DDB Medical Treatment.
80U In case of person with disability.
80E Interest on loan taken for higher studies.
80EE Interest on loan taken from residential house property.

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Section Deduction in respect of….
80GGA Certain donations for scientific research or rural development.
80GGB Contribution given by companies to political parties or electoral trust.
80GGC Contribution given by any person to political parties or electoral trust.
80JJAA Employment of new workmen.
80LA Certain incomes of offshore banking unit & International Financial Service
centre.
80QQB Royalty Income etc of authors for certain books other than text books.
80RRB Royalty on Patents.
80TTA Interest on Deposits in Saving Accounts.

Overlook on Few Important Sections
Section 80C: - Deductions under this section shall be allowed to individual
or HUF.
Eligible Amount: - Any sum paid or deposited by the assesse-
1. As life insurance premium to keep in force the insurance on life of (a)self
, spouse and any child in case of individual and (b) any member in case
of HUF.
2. A five year term deposit in an account under the post office time deposit
Rules 1981.
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Policy Issued before 1st April 2012 20% of actual capital sum assured.
Policy Issued after 1st April 2012 10% of actual capital sum assured.
Policy Issued on or after 1st April
2013- In case of person with
disability or person with severe
disability or suffering from disease or
ailment
15% of actual capital sum assured.

3. A subscription to any notified bonds of National Bank for Agriculture and
Rural Development(NABARD).
4. A Term Deposit(Fixed Deposit) for 5 years or more with any scheduled
bank in accordance with a scheme framed by central government.
5. Tuition fees( excluding any payment towards any development fees or
donation or payment of similar nature), 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.
6. Subscription to National Saving Certificates(NSC).
7. Any sum deposited in a 10 years or 15 years account under the post
office saving bank rules 1959 in the name of self, and as a guardian of
minor in case of individual and in name of any member in case of HUF.
8. Any contribution by any individual to statutory provident fund.
9. Any contribution to public provident fund in the name of self, spouse and
any child in case of individual.
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Extent of deduction: - 100% of amount invested or Rs 1,500,00 whichever is
less.
Section 80D: - Deduction in respect of Medical Insurance Premium (Individual
& HUF)
a) Up-to Rs 25000 to an assesse being an individual in respect of-
(1) Health Insurance premium, paid by any mode, other than cash, to effect or
to keep in force an insurance on the health of assesse or his family(spouse and
dependent children);
(2) Any contribution made to the central government health scheme or any
other notified scheme.
(3) Any payment made on account of preventive health check of the assesse
and his family.
In case any of the above person is of the age of 60 years or more than the
deduction has been raised to Rs 30000.
(b) An additional deduction of Rs 25000 is provided to an individual to keep in
force insurance on the health of his or her parent or parents.
In case any of the above person is of the age of 60 years or more than the
deduction has been raised to Rs 30000.
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For Super Senior Citizens: - As a welfare mechanism for the super senior
citizens who are unable to get health insurance coverage, Section 80(D) has
been amended to provide that deduction of up-to Rs 30000 would be allowed
in respect of any payment made on account of medical expenditure in respect
of a very senior citizen, if no payment has been made to keep in force an
insurance on the health of such person.
Maximum Rs 5000 allowed as deduction for aggregate of preventive health
check up expenditure subject to overall limit of Rs 25000 or Rs 30000 as the
case may be.
Example: - Mr Arjun(52 years old) furnish the following particulars: -
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S. No Particulars Amount(Rs)
1. Premium paid for insuring the health of
• Self
• Spouse
• Dependent son
• Mother
10,000
8,000
4,000
18,000
2. • Paid for preventive health check up of

Compute the deductions available to Mr. Arjun under Section 80D for the AY 2016-17.
Solution: -
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• Self
• Spouse
• Mother
2,000
1,500
4,000
3. Incurred medical expenditure of Rs 25,000 and Rs 15,000 for his mother, aged 80
Years and father aged 85 Years. Both mother and father are resident of India.
S.No Particulars Amount(In Rs)
1. Premium paid for insuring the
health of
• Self
• Spouse
• Dependent Children
10,000
8,000
4,000
Total 22,000
Preventive Health Check up of
• Self
• Spouse
2000
1500
Total 3500 25,500
Maximum Deduction 25,000

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Aggregate deduction is restricted to 25,000
2. In respect of payment of life
insurance premium of
• Mother 18,000
Preventive Health check up of
• Mother (Rs 4000 but restricted
to only Rs 2000;being Rs 3000
is utilised earlier by Mr Arjun).
2000
Medical Expenditure incurred for
his father aged 85 Years.
15000
Total Deduction 35000
Amount of deduction restricted to 30000
Total Deduction under 80 D 55,000

Section 80DD: - Deduction in respect of maintenance including medical
treatment of dependant who is a person with disability: -
i. Section 80DD provides for a deduction of Rs 75,000 to an individual or
HUF who is resident in India, who has incurred-
(a) Expenditure for the medical treatment(including nursing), training
and rehabilitation of a dependent, being a person with disability or,
(b) paid any amount to LIC or any other insurer in respect of a scheme
for the maintenance of a disabled dependent.
If the dependent is suffering from severe disability the deduction under
section 80DD is Rs 1,25000.
Section 80 U: - It provides for the deduction of Rs 75,000 to an individual
being a resident who at any time during the previous year is certified by the
medical authority to be a person with disability. If the person is suffering from
severe disability then deduction available under this section is Rs 1,25000.
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Section 80DDB: -Deduction in respect to medical treatment, Etc
Where an assesse who is a resident in India has, during the previous year
actually paid any amount for the medical treatment of such disease or
ailment as may be specified in the rules made in this behalf by the board-
(a) For himself or a dependent, in case the assesse is an Individual.
(b) For any member of a HUF, in case the assesse is Hindu Undivided
Family.
The assesse shall be allowed a deduction of the amount actually paid or a
sum of Rs 40000 whichever is less in the year in which such amount was
actually paid.
Further, in order to remove hardship this section has been amended to
provide that assesse will be required to obtain a prescription for such
medical treatment from a specialised doctor for availing this deduction. The
requirement; that such specialist should be working in a government hospital
has been removed.
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(c) A higher deduction of up to Rs 60000 is allowed, where the expenditure is
in respect of senior citizen i.e. residential individual who is of the age of Rs
60 years or more at any time during the relevant financial.
(d) Further it has been provided to provide for higher limit of deduction of up
to Rs 80000 for the expenditure incurred in respect of medical treatment of
himself or a dependent being a “very senior citizen”.
Section 80TTA: - Deduction shall be available on Interest earned by the
assesse on its saving account in: -
• Bank
• Cooperative Banks
• Post Office
However no deduction shall be available in respect of fixed deposits.
Amount of deductions: -
(i) In case where the amount of such income does not exceed in aggregate
Rs 10000, the whole of such amount , and
(ii) In any other case Rs 10000.
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Section-80E: - Deduction in respect of Interest on loan taken for Higher
Education.
(1) In computing the total income of an assesse, being an individual, there
shall be deducted any amount paid by him in previous year, out of his
income chargeable to tax, by way of interest on loan taken by him from any
financial institution or any approved charitable institution for the purpose of
pursuing his higher education or for the purpose of higher education of his
relative.
(2) The deduction specified in sub section(1) shall be allowed in computing
the total income in respect of assessment year and 7 assessment years
immediately succeeding the initial assessment year or until the interest
referred to in subsection (1) is paid by assesse in full, whichever is earlier.
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Topic For Our Next Interaction Would be-
‘TAX- Present & Future’
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Presentation on Income Tax Deductions

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