an institution

Golapbag More, Burdwan.

Dumdum, Mobile : 9932926701
1 DEDUCTION P.P
SUB :- DIRECT TAX jk jkj
COMPUTATION OF TAXABLE INCOME
Part 1
Income from salary S
Income from House property H
Profit & gains of business or profession B
Capital gain :-
Income from transfer or unit scheme 64 (us 64 long term or short term) is exempted
u/s 10(33) Long term listed equity shares & units in equity oriented mutual fund,
STT is covered ,then it is non-taxable
Short term capital gain (from any short term assets + from equity oriented units, C( normal
listed equity shares& Bonus shares, non listed equity shares, listed preference rate)
shares, non-listed preference share, listed debenture, non-listed debenture, listed
government securities, non-listed government securities (all are not covered by
security transaction tax).

Short term capital gain on transfer of listed equity shares or units in equity oriented C1(15%tax
mutual fund on or after 1.10.2005 where security transaction tax is paid.[Sec. 111A] rate.)

Long term capital gain (from any long term assets with indexation)+ Non-listed L( 20% tax
debenture without indexation Sec. 112 rate)

Long term capital gain from listed equity shares, listed Pref share in a company& L1(10%tax
units in equity oriented mutual fund & listed government securities & listed rate)
debenture ,all are not covered by security transaction tax and all are without
indexation).Sec. 112A

Income from other sources :-

Interest income, commission etc. I
Income from horse races, card game, winning from lottery etc.Sec. 115BB

W
Gross Total Income (subject to provisions of set off and carry forward GTI
i,e if there are any loss in any head then inter source adjustment, inter head
adjustment is to be made. )
Less – Deduction u/s 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB,80E, 80G,80GG,
80GGA, 80IA, 80IAB, 80IB, 80IC, 80QQB,& 80U, etc least of the following :-
(i)Available amount for deduction X D
(ii)Amount from S + H + B + C + I (i.e., other than short term capital gain of special S + H +
rate, all long term capital gain and winning from lottery etc.) B+C+I
Taxable income after set off, clubbing [rounded off to the nearest Rs 10 u/s GTI – D = K
288A]
an institution
Golapbag More, Burdwan.
Dumdum, Mobile : 9932926701
2 DEDUCTION P.P
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At a Glance

Maximum deduction
Income Tax Deduction for FY 2024- available for FY
Sections 25(AY 2025-26) Eligible person 2024-25(AY 2025-26)

Section 80C Investing into very common and Individual Upto Rs 1,50,000
popular investment options like LIC, Or
PPF, Sukanya Samriddhi Account, HUF
Mutual Funds, FD, child tuition fee,
ULIP, etc

Section Investment in Pension Funds Individuals

80CCC

Section Atal Pension Yojana and National Individuals

80CCD (1) Pension Scheme Contribution

Section Atal Pension Yojana and National Individuals Upto Rs 50,000

80CCD(1B) Pension SchemeContribution
(additional deduction)

Section National Pension Individuals Amount Contributed

80CCD(2) SchemeContribution by Employer or
14% of Basic Salary
+ Dearness
Allowance (in case
the employer is
Government)
10% of Basic Salary+
Dearness
Allowance(in case of
any other employer)
- Whichever is lower

Section 80D Medical Insurance Premium, Individual Upto Rs 1,00,000

preventive health checkup and Or
Medical Expenditure HUF

Section Medical Treatment of a Dependent Individual Normal Disability (atleast

80DD with Disability Or 40% or more but less than
HUF 80%): Rs 75000/-
Severe Disability (atleast
80% or more) : Rs
125000/-

Section Medical expenditure for treatment of Individual Senior Citizens: Upto Rs

80DDB Specified Diseases Or 1,00,000
HUF Others: Upto Rs 40,000

Section 80E Interest paid on Loan taken for Individual No limit (Any amount
Higher Education of interest paid on
education loan)upto 8
assessment years

Section Interest paid on Housing Loan Individual Upto Rs 50,000

80EE subject to some
an institution
Golapbag More, Burdwan.
Dumdum, Mobile : 9932926701
3 DEDUCTION P.P
jk jkj
Maximum deduction
Income Tax Deduction for FY 2024- available for FY
Sections 25(AY 2025-26) Eligible person 2024-25(AY 2025-26)

conditions

Section Interest Paid on Housing Loan Individual Upto Rs 1,50,000/-

80EEA subject to some
conditions

Section Interest paid on Electric Vehicle Individual Upto Rs 1,50,000

80EEB Loan subject to some
conditions

Section 80G Donation to specified All Assessee 100% or 50% of the

funds/institutions. Institutions (Individual, HUF, Donated amount or
Company, etc) Qualifying limit,
Allowed donation in
cash upto Rs.2000/-

Section Income Tax Deduction for House Individual Rs. 5000 per month
80GG Rent Paid 25% of Adjusted
Total Income
Rent paid - 10% of
Adjusted Total
Income
- whichever is lower

Section Donation to Scientific Research & All assessees except 100% of the amount
80GGA Rural Development those who have an donated.
income (or loss) from Allowed donation in
a business and/or a cash upto
profession Rs.10,000/-

Section Contribution to Political Parties Companies 100% of the amount

80GGB contributed
No deduction
available for the
contribution made in
cash

Section Individuals on contribution to Individual 100% of the amount

80GGC Political Parties HUF contributed.
AOP No deduction
BOI available for the
Firm contribution made in
cash

Section Royalty on Patents Individuals (Indian Rs.3,00,000/-

80RRB citizen or foreign Or
citizen being resident Specified Income
in India) - whichever is lower

Section Royalty Income of Authors Individuals (Indian Rs.3,00,000/-

80QQB citizen or foreign Or
citizen being resident Specified Income
an institution
Golapbag More, Burdwan.
Dumdum, Mobile : 9932926701
4 DEDUCTION P.P
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Maximum deduction
Income Tax Deduction for FY 2024- available for FY
Sections 25(AY 2025-26) Eligible person 2024-25(AY 2025-26)

in India) - whichever is lower

Section Interest earned on Savings Individual Upto Rs 10,000/-

80TTA Accounts Or
HUF (except senior
citizen)

Section Interest Income earned on Individual (60 yrs or Upto Rs 50,000/-

80TTB deposits(Savings/ FDs) above)

Section 80U Disabled Individuals Individuals Normal Disability: Rs.

75,000/-
Severe Disability: Rs.
1,25,000/-

Deduction u/s 80C Salient features of section 80C :-

The following are the main provisions of the newly inserted :-
i) Deduction under section 80C available only to an individual or a Hindu undivided family.
ii) The maximum amount deductible under sections 80C, 80CCC and 80CCD(1) cannot exceed Rs. 150000.
Computation of deduction under section 80C :- The deduction is calculated as per the following steps –
Step 1 : Gross qualifying amount Step 2 : Amount of deduction.
Step 1 : Gross qualifying amount is the aggregate of the following :-
1. Life insurance premium paid by individual on his own life, life of spouse, life of child (child may be dependent
/ independent, male / female, minor / major, married / unmarried) (for HUF on life of any member of family),
least of the following :- (i) actual premium paid, (ii) 20% of policy value (if policy is issued before
01.04.2012). If policy is issued from 01.04.2013 then 10% of policy value. If policy on life of disable
person is issued from 01.04.2013 then 15% of policy value.) Such policy should be continued for at least 2
years, otherwise deduction is not available. If such policy is discontinued before 2 years then actual deduction
already taken in preceding years would be income in the discontinued year.
2. Payment in respect of non-commutable deferred annuity (on his own life, life of spouse, life of child) (child
may be dependent / independent, male / female, minor / major, married / unmarried).
3. Any sum deducted from salary of Government employee for contribution to deferred annuity, least of the
following:- (i) actual amount deducted, (ii) 20% of salary.
4. Contribution towards statutory provident fund and recognized provident fund, public provident fund (public
provident minimum Rs 500 and maximum Rs. 1,50,000 pa).
5. Contribution towards an approved superannuation fund.
6. Deposit to National Savings Certificates VIII Issue (accrued interest is also qualified for deduction for first five
years)( Not for Non-Resident) .
7. Contribution for participating in the unit-linked insurance plan (ULIP) of UTI, ULIP of LIC mutual fund
(Dhanaraksha plan, Jeevandhara, Jeevan akshay, ICICI prudential life insurance) (such policy should be
continued for at least 5 years, otherwise deduction is not available. If such policy is discontinued before 5 years
then actual deduction already taken in preceding years would be income in the discontinued year).
8. Contribution to mutual fund, UTI, pension fund of UTI.
9. Any sum paid (including accrued interest) to home loan account scheme of National Housing Bank OR Tax
saving Term deposit scheme of National Housing Bank. OR public deposit scheme of HUDCO.
10. Any instalment paid (principle only) to cost of purchase / construction of residential house( not cost of
alteration / repair after completion certificate) property to Government , public sector company engaged in
providing long term finance for purchase / construction of residential house, cooperative bank, LIC, employer
company, cooperative society ( not for interest, stamp duty, repair). The loan holding period is minimum 5 years.
an institution
Golapbag More, Burdwan.
Dumdum, Mobile : 9932926701
5 DEDUCTION P.P
11. Tuition fees paid to any University / College / Education institution in India for full time education of any two children.
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12. Amount invested in approved debenture and equity share of public company engaged in providing
infrastructure facility.
13. Amount invested in NABARD, Senior citizen saving scheme (paid by cheque or draft), 5 years time deposit
scheme in post office. Such policy should be continued for at least 5 years, otherwise deduction is not
available. If such policy is discontinued before 5 years then actual deduction already taken in preceding years
would be income in the discontinued year).
14) 1)As per section 80C(2), subscription made to Sukanya Samriddhi Account scheme by the
individual in the name of(i) individual, or (ii) any girl child of that individual, or (iii) any girl child for
whom such person is the legal guardian, if the scheme so specifies shall be eligible for deduction
under section 80C:
(2) Withdrawal from the Sukanya Samriddhi Account shall be exempt under section 10(11A) .As a
result, the interest accruing on deposits in, and withdrawals from any account under the scheme
would be exempt.
15) Stamp duty and registration charges for purchase of property, Senior citizen savings scheme
(SCSS), tax saving FD for 5 years,

Step 2 : Actual deduction least of the following :-

1. Qualifying amount 2. Maximum 1,50,000 (aggregate amount of deduction u/s 80C, 80CCC, 80CCD(1)
cannot exceed Rs. 1,50,000).

Deduction u/s 80CCC

Such deduction is available to an Individual for amount paid out of income chargeable to tax of any year to the
pension fund of LIC/ Other insurance company.
Actual deduction, least of the following :- (i) Amount deposited, (ii) Maximum Rs. 1,50,000 (aggregate
amount of deduction u/s 80C, 80CCC, 80CCD(1) cannot exceed Rs. 1,50,000).

Deduction u/s 80CCD

Such deduction is available to an Individual to the Notified Pension Scheme (NPS) of Central
Government(New Pension System and Atal Pension Yojna)..

80CCD(1):- For Employee’s contribution to NPS –( Date of joining is not necessary)

Actual deduction, least of the following :- (i) Amount deposited, (ii) 10% of salary (Basic + DA) of employee. [in
case of other than employee20% of gross total income] (Aggregate amount of deduction u/s 80C, 80CCC,
80CCD(1) cannot exceed Rs. 1,50,000)
Pension or any amount received from NPS is taxable in the year of received.

Deduction of ` 50,000 under section 80CCD(1B): Irrespective of the deduction u/s 80CCD(1), an
assessee may be allowed a further deduction upto ` 50,000 under any notified pension scheme and
Contributions to Atal Pension Yojana [Section 80CCD (1B)]. In other words:- Deduction u/s80
CCD(1B) is least of (i) Actual deposit in NPS/Contributions to Atal Pension Yojana by Assessee –
amount claimed and allowed as deduction u/s 80CCD(1) taken within 150000 of 80 C+CCC+CCD(1) And
(ii) maximum 50,000 .
Where any amount standing to the credit of the assessee in his pension account in respect of which a
deduction has been allowed under Section 80CCD(1) or 80CCD(1B), together with the amount accrued
thereon, if any, is received on account of closure by the:-
a) Self employed person or his nominee– fully taxable.
b)Govt employee – 60% of amount received is taxable.
c) amount received by the nominee on the death of Assessee( self employed +Govt employee) shall not be
treated as income of the nominee. Ie nontaxable

80CCD(2):- For Employer’s contribution to NPS –

Such contribution is taxable as salary income in the hands of employee in the year of contribution. But
deduction is also available, least of the following :– (i) Amount deposited, (ii) 10% of salary (Basic + DA) of
employee. 14% of salary (Basic + DA) of Govt employee. It should not be considered for ceiling Rs
1,50,000.
Problem1) X completed employed by the Government on the following terms – Basic Salary ` 20,000 p.m.
DA ` 5,000 p.m. (forming a part of retirement benefit) Bonus ` 40,000. During the year, his employer
contributed ` 33,000 to the pension scheme being notified u/s 80CCD of the Income Tax Act, 1961. X also
contributed similar amount. His income from house property is ` 50,000. During the year he contributed `
15,000 to pension plan of LIC, to PPF ` 1,00,000 and paid LIC premium of ` 16,000 (Policy value ` 1,20,000).
Compute his total income.
Problem 2)A resident individual and self-employed, furnished the following particulars for the year
ended on 31-03-2024:
INR
an institution
Golapbag More, Burdwan.
Dumdum, Mobile : 9932926701
6 DEDUCTION P.P
jk jkj
Gross total income 6,00,000

Housing loan principal repayment. The property is under construction at Jaipur as on

1,10,000
31-3-2024.

Principal repayment of housing loan from a relative. This property is self-occupied

50,000
situated at Jodhpur.

Contribution to Public Provident Fund in the name of her mother. 70,000

A sum of INR 15,000 was deposited per month in account under a pension scheme notified by the
Central Government.
How to compute the total income?
Ans:
Computation of total income for the A.Y. 2024-25:
Particulars INR

6,00,000

Gross Total Income

Less: Deductions under Chapter VI-A

Section 80C

Principal repayment for housing loan taken for house property at Jaipur [Note 1]
NIL
Principal repayment for housing loan taken for house property at Jodhpur [Note 2]
NIL
Contribution to public provident fund in the name of mother [Note 3]
NIL
Section 80CCD

Contribution to pension scheme notified by the Central Government [Note 4]

1,20,000

Additional deduction u/s 80CCD(1B) [Note 5]

50,000

1,70,000

Total income 4,30,000

Notes:
an institution
Golapbag More, Burdwan.
Dumdum, Mobile : 9932926701
7 DEDUCTION P.P
(1) As per section 80C, the deduction for principal repayment of housing loan is provided only in respect jk ofjkj
a
house property whose income is chargeable to tax under the head ‘Income from house property’. As the house
property at Jaipur is still under construction, no income is chargeable to tax under the head “Income from
house property”. Hence, no deduction would be available under section 80C for principal repayment of the
housing loan for property under construction.
(2) The deduction for principal repayment of housing loan under section 80C is provided only in respect of the
loan taken from the specified institutions (like banks, Life Insurance Corporation of India, National Housing
Bank, specified employer etc.). Thus, loan from a relative does not qualify for deduction u/s 80C.
(3) The contribution to public provident fund (PPF) is allowed as deduction only if it is in the name of specified
persons mentioned in section 80C, namely, self, spouse or any child of such individual. Since mother of the
individual is not a specified person as per section 80C, no deduction would be available.
(4) The deduction u/s 80CCD(1) shall be an amount not exceeding 20% of the gross total income for a self-
employed individual. Therefore, a deduction of ` 1,20,000 (` 6,00,000 × 20%) shall be allowed.
(5) The total amount deposited to pension scheme notified by the Central Government is ` 1,80,000 (` 15,000 ×
12 months). Out of which ` 1,20,000 has been claimed as deduction u/s 80CCD(1). So, for remaining ` 60,000,
is eligible for additional deduction to the extent of ` 50,000 u/s 80CCD (1B) in respect of such deposited
amount.
Problem 3)R, an individual resident in India, aged 54 years, submits you the following information for the
previous year 2024-25:Compute the tax payable by R
Income under the head salary 6,80,00
Income from house property (self occupied for residence) (-) 0
Income from other sources 2,00,000
1,60,00
Amount deposited in PPF 0
1,20,00
Amount deposited in Sukanya Samridhi Account in the name of girl child 0 70,00
0
Problem 4) R, aged 61 years, a resident in India, submits you the following information for the previous
year ending 31-3-2025.
Income under the head salary 6,00,00
Income from house property 01,10,00
Income from other sources 0 30,00
He has contributed 10% of basic salary and dearness allowance amounting to `50,000 0 to
National Pension Scheme referred to in section 80CCD(1) to which his employer contributes equal amount.
He has also deposited ` 1,00,000 to his PPF. In addition to amount contributed under section 80CCD(1), he
has deposited a sum of ` 45,000 in new pension scheme under section 80CCD(1B). Compute the tax
payable by R for the assessment year 24-25