7

5.1
CHAPTER

DEDUCTIONS FROM
GROSS TOTAL INCOME

LEARNING OUTCOMES
After studying this chapter, you would be able to–
 appreciate the types of deductions allowable from gross
total income;
 identify the assessees eligible for deduction under various
sections;
 compute deductions in respect of payments, applying the
provisions under the relevant sections;
 compute deductions in respect of certain income, applying
the provisions under the relevant sections;
 compute the deduction allowable in the case of a person with
disability.

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 CHAPTER OVERVIEW Deductions from Gross Total Income
7.2

Deductions in respect of certain Deductions in respect of certain Deductions in respect of other Other
payments incomes income Deductions

Section 80C– In respect of LIP, PPF, PF etc. Section 80JJAA – In respect of employment of new employees
Section 80CCC– In respect of contribution to certain pension funds Section 80RRB – In respect of royalty on patents
Section 80CCD–In respect of contribution to pension scheme of Section 80QQB – In respect of royalty income etc. of authors
of Central Government certain books other than text books
Section 80D– In respect of medical insurance premium
Section 80DD– In repect of maintenance including medical treatment of a dependent disabled
INCOME TAX LAW

Section 80DDB – In respect of amt paid for medical treatment etc. of specified disease or ailment

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Section 80E – In respect of interest on loan taken for higher education
Section 80EE/80EEA – In respect of interest payable on loan borrowed for acquisition of house property by an individual
Section 80EEB – In respect of interest payable on loan taken for purchase of electric vehicle
Section 80G – In respect of donations to certain funds, charitable instutions etc. Section 80TTA – In respect of interest on deposits
in savings account
Section 80GG – In respect of rent paid Section 80TTB – In respect of interest on
deposits in case of senior citizens
Section 80GGA –In respect of donations for scientific research and rural development
Section 80GGB– In respect of contributions given by companies to political parties Section 80U – Deduction in case of a
person with disability
Section 80GGC –In respect of contributions given by any person to political parties
 DEDUCTIONS FROM GROSS TOTAL INCOME 7.3

7.3

1 GENERAL PROVISIONS
As we have seen earlier, section 10 exempts certain incomes. Such income are
excluded from total income and do not enter into the computation process at all.
On the other hand, Chapter VI-A contains deductions from gross total income.
The important point to be noted here is that if there is no gross total income,
then no deductions will be permissible. This Chapter contains deductions in
respect of certain payments, deductions in respect of certain incomes, deductions
in respect of other income and other deductions.

Section 80A
(i) Section 80A(1) provides that in computing the total income of an assessee,
there shall be allowed from his gross total income, the deductions specified
in sections 80C to 80U.
(ii) According to section 80A(2), the aggregate amount of the deductions under
this chapter shall not, in any case, exceed the gross total income of the
assessee.
Thus, an assessee cannot have a loss as a result of the deduction under
Chapter VI-A and claim to carry forward the same for the purpose of set-off
against his income in the subsequent year.
(iii) Section 80A(3) provides that in the case of AOP/BOI, if any deduction is
admissible under section 80G/80GGA/80GGC 1, no deduction under the
same section shall be made in computing the total income of a member of
the AOP or BOI in relation to the share of such member in the income of the
AOP or BOI.
(iv) The profits and gains allowed as deduction under section 10AA or under
any provision of Chapter VI-A under the heading "C.-Deductions in respect
of certain incomes" in any assessment year, shall not be allowed as
deduction under any other provision of the Act for such assessment year
[Section 80A(4)];
(v) The deduction, referred to in (iv) above, shall not exceed the profits and
gains of the undertaking or unit or enterprise or eligible business, as the
case may be [Section 80A(4)];

1
80-IA/80-IB/80-IC/80-ID/80-IE

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 7.4 INCOME TAX LAW

(vi) No deduction under any of the provisions referred to in (iv) above, shall be
allowed if the deduction has not been claimed in the return of income
[Section 80A(5)];
(vii) The transfer price of goods and services between such undertaking or unit
or enterprise or eligible business and any other business of the assessee
shall be determined at the market value of such goods or services as on the
date of transfer [Section 80A(6)].
(viii) For this purpose, the expression "market value" has been defined to mean,-
(a) in relation to any goods or services sold or supplied, the price that
such goods or services would fetch if these were sold by the
undertaking or unit or enterprise or eligible business in the open
market, subject to statutory or regulatory restrictions, if any;
(b) in relation to any goods or services acquired, the price that such
goods or services would cost if these were acquired by the
undertaking or unit or enterprise or eligible business from the open
market, subject to statutory or regulatory restrictions, if any;
(ix) Where a deduction under any provision of this Chapter under the heading
“C – Deductions in respect of certain incomes” is claimed and allowed in
respect of the profits of such specified business for any assessment year, no
deduction under section 35AD is permissible in relation to such specified
business for the same or any other assessment year.
In short, once the assessee has claimed the benefit of deduction under
section 35AD for a particular year in respect of a specified business, he
cannot claim benefit under Chapter VI-A under the heading “C.-Deductions
in respect of certain incomes” for the same or any other year and vice versa.
Section 80AB
Deductions specified in Chapter VI-A under the heading “C.-Deductions in respect
of certain incomes”, shall be allowed only to the extent such income computed in
accordance with the provisions of the Income-tax Act, 1961 is included in the
gross total income of the assessee.

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.5

Section 80AC: Furnishing return of income on or before due date

mandatory for claiming deduction under Chapter VI-A under the
heading “C. – Deductions in respect of certain incomes"
(i) Section 80AC stipulates compulsory filing of return of income on or
before the due date specified under section 139(1), as a pre-condition
for availing benefit of deductions under any provision of Chapter VI-A
under the heading “C. – Deductions in respect of certain incomes”.
Table showing the deductions contained in Chapter VI-A under the
heading “C. – Deductions in respect of certain income”

Section Deduction
80-IA Deductions in respect of profits and gains from undertakings
or enterprises engaged in infrastructure development/
operation/maintenance, generation/transmission/distribution
of power etc.
80-IAB Deduction in respect of profits and gains derived by an
undertaking or enterprise engaged in development of SEZ
80-IAC Deduction in respect of profits and gains derived by an
eligible start-up from an eligible business
80-IB Deduction in respect of profits and gains from certain
industrial undertakings other than infrastructure development
undertakings
80-IBA Deduction in respect of profits and gains from housing
projects
80-IC Deduction in respect of profits and gains from certain
undertakings or enterprises in certain special category States
[Himachal Pradesh and Uttaranchal]
80-IE Deduction in respect of profits and gains from manufacture or
production of eligible article or thing, substantial expansion to
manufacture or produce any eligible article or thing or
carrying on of eligible business in North-Eastern States
80JJA Deduction in respect of profits and gains from business of
collecting and processing of bio-degradable waste
80JJAA Deduction in respect of employment of new employees

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 7.6 INCOME TAX LAW

80LA Deduction in respect of certain income of Offshore Banking

Units and International Financial Services Centre
80M Deduction in respect of certain inter-corporate dividends
80P Deduction in respect of income of co-operative societies
80PA Deduction in respect of certain income of Producer
Companies
80QQB Deduction in respect of royalty income, etc., of authors of
certain books other than text books
80RRB Deduction in respect of royalty on patents

(ii) The effect of this provision is that in case of failure to file return of income
on or before the stipulated due date, the undertakings would lose the
benefit of deduction under these sections.

Note: The deductions under section 80-IA to 80-IE, 80JJA, 80LA, 80M, 80P and 80PA
in respect of certain incomes will be dealt with in detail at the Final Level.

ILLUSTRATION 1
Examine the following statements with regard to the provisions of the Income-tax
Act, 1961:
(a) For grant of deduction under section 80JJAA, filing of audit report in
prescribed form is must for a corporate assessee; filing of return within the
due date laid down in section 139(1) is not required.
(b) Filing of belated return under section 139(4) of the Income-tax Act, 1961 will
debar an assessee from claiming deduction under section 80M.
SOLUTION
(a) The statement is not correct. Section 80AC stipulates compulsory filing of
return of income on or before the due date specified under section 139(1),
as a pre-condition for availing the benefit of deduction, inter alia, under
section 80JJAA.
(b) The statement is correct. As per section 80AC, the assessee has to furnish
his return of income on or before the due date specified under section
139(1), to be eligible to claim deduction under, inter alia, section 80M.

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.7

Section 80B(5)
“Gross total income” means the total income computed in accordance with the
provisions of the Act without making any deduction under Chapter VI-A.
“Computed in accordance with the provisions of the Act” implies—
(i) that deductions under appropriate computation section have already been
given effect to;
(ii) that income of other persons, if includible under sections 60 to 64, has been
included;
(iii) the intra head and/or inter head losses have been adjusted; and
(iv) that unabsorbed business losses, unabsorbed depreciation etc., have been
set-off.
Let us first consider the deductions allowable in respect of certain payments.

2. DEDUCTIONS IN RESPECT OF PAYMENTS

2.1 Deduction in respect of investment in specified assets
[Section 80C]
(i) Deduction in respect of investment/contributions
Section 80C provides for a deduction from the Gross Total Income, of
savings in specified modes of investments. The deduction under section 80C
is available only to an individual or HUF. The maximum permissible
deduction under section 80C is ` 1,50,000. The following are the
investments/contributions eligible for deduction –
(1) Premium paid in respect of Life Insurance policy
Premium paid on insurance on the life of the individual, spouse or any child
(minor or major) and in the case of HUF, any member thereof. This will
include a life policy and an endowment policy.

Exemption on receipts from Life insurance policy (LIP) [Section

10(10D)]: Any sum received under a life insurance policy, including the sum
allocated by way of bonus on such policy shall not be included in the total
income of a person.

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 7.8 INCOME TAX LAW

The following is a tabular summary of the exemption available under section

10(10D) and deduction allowable under section 80C vis-à-vis the date of
issue of such policies –

Exemption u/s 10(10D) Deduction u/s

80C
In respect Any sum received under a LIP Premium paid to
of policies including the sum allocated by way the extent of 20%
issued of bonus is exempt. of “actual capital
before sum assured”.
1.4.2003
In respect Any sum received under a LIP Premium paid to
of policies including the sum allocated by way the extent of 20%
issued of bonus is exempt. However, of “actual capital
between exemption would not be available if sum assured”.
1.4.2003 the premium payable for any of the
and years during the term of the policy
31.3.2012 exceeds 20% of “actual capital sum
assured”.
In respect Any sum received under a LIP Premium paid to
of policies including the sum allocated by way the extent of 10%
issued on or of bonus is exempt. However, of “minimum
after exemption would not be available if capital sum
1.4.2012 the premium payable for any of the assured”
but before years during the term of the policy
1.4.2013 exceeds 10% of “minimum capital
sum assured” under the policy on the
happening of the insured event at
any time during the term of the
policy.
In respect (a) Where the insurance is on the life of a person with
of policies disability or severe disability as referred to in
issued on or section 80U or a person suffering from disease or
after ailment as specified under section 80DDB.
1.4.2013 Any sum received under a LIP Premium paid to
including the sum allocated by the extent of 15%
way of bonus is exempt. of “minimum
However, exemption would not capital sum

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.9

be available if the premium assured”

payable for any of the years
during the term of the policy
exceeds 15% of “minimum
capital sum assured” under the
policy on the happening of the
insured event at any time
during the term of the policy.
(b) Where the insurance is on the life of any person,
other than mentioned in (a) above
Any sum received under a LIP Premium paid to the
including the sum allocated by extent of 10% of
way of bonus is exempt. “minimum capital
However, exemption would not sum assured”.
be available if the premium
payable for any of the years
during the term of the policy
exceeds 10% of “minimum
capital sum assured” under the
policy on the happening of the
insured event at any time
during the term of the policy.
Notes:
(a) Amounts not to be considered while computing actual capital sum
assured: For the purpose of calculating the actual capital sum assured,
(1) the value of any premiums agreed to be returned or
(2) the value of any benefit by way of bonus or otherwise, over and
above the sum actually assured,
shall not be taken into account.
(b) Meaning of actual capital sum assured: In respect of the life
insurance policies to be issued on or after 1st April, 2012, the actual
capital sum assured shall mean the minimum amount assured under
the policy on happening of the insured event at any time during the
term of the policy, not taking into account -
(1) the value of any premium agreed to be returned; or

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 7.10 INCOME TAX LAW

(2) any benefit by way of bonus or otherwise over and above the
sum actually assured which is to be or may be received under
the policy by any person.
In effect, in case the insurance policy has varied sum assured during
the term of policy then the minimum of the sum assured during the
life time of the policy shall be taken into consideration for calculation
of the “actual capital sum assured”, in respect of life insurance policies
to be issued on or after 1st April, 2012.
(c) Exemption is not available in respect of amount received from an
insurance policy taken for disabled person under section 80DD:
Any sum received under section 80DD(3) shall not be exempt under
section 10(10D). Accordingly, if the dependent disabled, in respect of
whom an individual has paid or deposited any amount in any scheme
of LIC or any other insurer, predeceases the individual, the amount so
paid or deposited shall be deemed to be the income of the individual
of the previous year in which such amount is received. Such amount
would not be exempt under 10(10D).
(d) Exemption is not available in respect of the sum received under a
Keyman insurance policy: Any sum received under a Keyman
insurance policy shall also not be exempt.
Explanation 1 to section 10(10D) defines “Keyman insurance policy” as a
life insurance policy taken by one person on the life of another person
who is or was the employee of the first-mentioned person or is or was
connected in any manner whatsoever with the business of the first-
mentioned person. The term includes within its scope a keyman
insurance policy which has been assigned to any person during its term,
with or without consideration. Therefore, such policies shall continue to
be treated as a keyman insurance policy even after the same is assigned
to the keyman. Consequently, the sum received by the keyman on such
policies, being “keyman insurance policies”, would not be exempt under
section 10(10D).
ILLUSTRATION 2
Compute the eligible deduction under section 80C for A.Y.2021-22 in respect of
life insurance premium paid by Mr. Ganesh during the P.Y.2020-21, the details
of which are given hereunder –

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.11

Date of Person insured Actual Insurance

issue of capital sum premium paid
policy assured (`) during 2020-
21(`)
(i) 30/3/2012 Self 5,00,000 51,000
(ii) 1/5/2016 Spouse 1,50,000 20,000
(iii) 1/6/2018 Handicapped son 4,00,000 80,000
(section 80U disability)

SOLUTION
Date of Person Actual Insurance Deduct- Remark
issue of insured capital premium ion u/s (restricted
policy sum paid during 80C for to % of
assured 2020-21 A.Y.2021- sum
(`) (`) 22 assured)
(`) (`)
(i) 30/3/2012 Self 5,00,000 51,000 51,000 20%
(ii) 1/5/2016 Spouse 1,50,000 20,000 15,000 10%
(iii) 1/6/2018 Handicapped 4,00,000 80,000 60,000 15%
son (section
80U disability)
Total 1,26,000

(2) Premium paid in respect of a contract for deferred annuity

Premium paid to effect and keep in force a contract for a deferred annuity
on the life of the individual and/or his or her spouse or any child, provided
such contract does not contain any provision for the exercise by the insured
of an option to receive cash payments in lieu of the payment of the annuity.
It is pertinent to note here that a contract for a deferred annuity need not
necessarily be with an insurance company. It follows therefore that such a
contract can be entered into with any person.
(3) Any sum deducted from the salary payable of a Government employee
for securing a deferred annuity
Amount deducted by or on behalf of the Government from the salary of a
Government employee in accordance with the conditions of his service for
securing a deferred annuity or making provision for his spouse or children.
The excess, if any, over one-fifth of the salary is to be ignored.

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 7.12 INCOME TAX LAW

(4) Contribution to SPF/PPF/RPF

Contributions to any provident fund to which the Provident Funds Act, 1925
applies and recognized provident fund qualifies for deduction under section 80C.
Contribution made to any Provident Fund set up by the Central Government
and notified in his behalf (i.e., the Public Provident Fund established under
the Public Provident Fund Scheme, 1968) also qualifies for deduction under
section 80C. Such contribution can be made in the name of the individual,
his spouse and any child of the individual; and any member of the family, in
case of a HUF. The maximum limit for deposit in PPF is ` 1,50,000 in a year.
ILLUSTRATION 3
An individual assessee, resident in India, has made the following
deposit/payment during the previous year 2020-21:

Particulars `
Contribution to the public provident fund 1,50,000
Insurance premium paid on the life of the spouse (policy taken 25,000
on 1.4.2015) (Assured value ` 2,00,000)

What is the deduction allowable under section 80C for A.Y.2021-22?

SOLUTION
Computation of deduction under section 80C for A.Y.2021-22

Particulars `
Deposit in public provident fund 1,50,000
Insurance premium paid on the life of the spouse
(Maximum 10% of the assured value ` 2,00,000, as the policy is
taken after 31.3.2012) 20,000
Total 1,70,000
However, the maximum permissible deduction u/s 80C is 1,50,000
restricted to

(5) Contribution to approved superannuation Fund

Contribution by an employee to an approved superannuation fund qualifies
for deduction under section 80C.

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.13

(6) Any sum paid or deposited in Sukanya Samridhi Account

Subscription to any such security of the Central Government or any such
deposit scheme as the Central Government as may notify in the Official
Gazette. Accordingly, Sukanya Samriddhi Scheme has been notified to
provide that any sum paid or deposited during the previous year in the said
Scheme, by an individual in the name of –
(a) any girl child of the individual; or
(b) any girl child for whom such individual is the legal guardian
would be eligible for deduction under section 80C.
(7) Subscription to National Savings Certificates VIII
Subscription to any Savings Certificates under the Government Savings
Certificates Act, 1959 notified by the Central Government in the Official
Gazette (i.e. National Savings Certificate (VIII Issue) issued under the
Government Savings Certificates Act, 1959).
(8) Contribution in Unit-linked Insurance Plan 1971
Contributions in the name of the individual, his spouse or any child of the
individual for participation in the Unit-linked Insurance Plan 1971. In case of
a HUF, the contribution can be in the name of any member.
(9) Contribution in Unit-linked Insurance Plan of LIC Mutual Fund
Contributions in the name of the individual, his spouse or any child of the
individual for participation in any Unit linked Insurance Plan of the LIC Mutual
Fund. In case of a HUF, the contribution can be in the name of any member.
(10) Contribution to approved annuity plan of LIC
Contributions to approved annuity plans of LIC (New Jeevan Dhara and New
Jeevan Akshay, New Jeevan Dhara I and New Jeevan Akshay I, II and III) or
any other insurer (Tata AIG Easy Retire Annuity Plan of Tata AIG Life
Insurance Company Ltd.) as the Central Government may, by notification in
the Official Gazette, specify in this behalf.
(11) Subscription towards notified units of mutual fund or UTI
Subscription to any units of any mutual fund or from the Administrator or
the specified company under any plan formulated in accordance with such
scheme notified by the Central Government;

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(12) Contribution to notified pension fund set up by mutual fund or UTI

Contribution by an individual to a pension fund set up by any Mutual Fund
or by the Administrator or the specified company as the Central
Government may specify (i.e., UTI-Retirement Benefit Pension Fund set up
by the specified company referred to in section 2(h) of the Unit Trust of
India (Transfer of Undertaking and Repeal) Act, 2002 as a pension fund).

“Specified company” means a company formed and registered under the

Companies Act, 1956 2 and whose entire capital is subscribed by such
financial institutions or banks as may be specified by the Central
Government, by notification in the Official Gazette, for the purpose of
transfer and vesting of the undertaking
“Administrator” means a person or a body of persons appointed as
Administrator by the Central Government. The Central Government shall
appoint a person or a body of persons, as the “Administrator of the specified
undertaking of the Unit Trust of India” for the purpose of taking over the
administration thereof and the Administrator shall carry on the management of
the specified undertaking of the Trust for and on behalf of the Central
Government.
“Specified undertaking” includes all business, assets, liabilities and
properties of the Trust representing and relatable to the schemes and
Development Reserve Fund.

(13) Contribution to National Housing Bank (Tax Saving) Term Deposit

Scheme, 2008
Subscription to any deposit scheme or contribution to any pension fund set
up by the National Housing Bank i.e., National Housing Bank (Tax Saving)
Term Deposit Scheme, 2008.
(14) Subscription to notified deposit scheme
Subscription to any such deposit scheme of
• a public sector company which is engaged in providing long-term
finance for construction, or purchase of houses in India for residential
purposes or
• any such deposit scheme of any authority constituted in India by or
under any law enacted either for the purpose of dealing with and

2
Now Companies Act, 2013

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.15

satisfying the need for housing accommodation or for the purpose of

planning, development or improvement of cities, towns and villages or
for both.
The deposit scheme should be notified by the Central Government, for
example, public deposit scheme of HUDCO.
(15) Payment of tuition fees to any university, college, school or other
educational institution within India for full-time education for
maximum 2 children
Payment of tuition fees by an individual assessee at the time of admission
or thereafter to any university, college, school or other educational
institutions within India for the purpose of full-time education of any two
children of the individual. This benefit is only for the amount of tuition fees
for full-time education and shall not include any payment towards
development fees or donation or payment of similar nature and payment
made for education to any institution situated outside India.
(16) Repayment of housing loan including stamp duty, registration fee and
other expenses
Any payment made towards the cost of purchase or construction of a new
residential house property. The income from such property –
(i) should be chargeable to tax under the head “Income from house
property”;
(ii) would have been chargeable to tax under the head “Income from
house property” had it not been used for the assessee’s own
residence.
The approved types of payments are as follows:
(a) Any instalment or part payment of the amount due under any self-
financing or other schemes of any development authority, Housing
Board or other authority engaged in the construction and sale of
house property on ownership basis; or
(b) Any instalment or part payment of the amount due to any company or
a cooperative society of which the assessee is a shareholder or
member towards the cost of house allotted to him; or
(c) Repayment of amount borrowed by the assessee from:
I The Central Government or any State Government;

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II Any bank including a co-operative bank;

III The Life Insurance Corporation;
IV The National Housing Bank;
V Any public company formed and registered in India with the
main object of carrying on the business of providing long-term
finance for construction or purchase of houses in India for
residential purposes which is eligible for deduction under sec-
tion 36(1)(viii);
VI Any company in which the public are substantially interested or
any cooperative society engaged in the business of financing the
construction of houses;
VII The assessee’s employer, where such employer is an authority or
a board or a corporation or any other body established or
constituted under a Central or State Act;
VIII the assessee’s employer where such employer is a public
company or public sector company or a university established by
law or a college affiliated to such university or a local authority
or a co-operative society.
(d) Stamp duty, registration fee and other expenses for the purposes of
transfer of such house property to the assessee.
Inadmissible payments: However, the following amounts do not qualify for rebate:
(A) admission fee, cost of share and initial deposit which a shareholder of
a company or a member of a co-operative society has to pay for
becoming a shareholder or member; or
(B) the cost of any addition or alteration or renovation or repair of the
house property after the completion of the house or after the house
has been occupied by the assessee or any person on his behalf or
after it has been let out; or
(C) any expenditure in respect of which deduction is allowable under section 24.
(17) Subscription to certain equity shares or debentures
Subscription to equity shares or debentures forming part of any eligible
issue of capital approved by the Board on an application made by a public
company or as subscription to any eligible issue of capital by any public
financial institution in the prescribed form.

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A lock-in period of three years is provided in respect of such equity shares or

debentures. In case of any sale or transfer of shares or debentures within three
years of the date of acquisition, the aggregate amount of deductions allowed
in respect of such equity shares or debentures in the previous year or years
preceding the previous year in which such sale or transfer has taken place shall
be deemed to be the income of the assessee of such previous year and shall be
liable to tax in the assessment year relevant to such previous year.
A person shall be treated as having acquired any shares or debentures on
the date on which his name is entered in relation to those shares or
debentures in the register of members or of debenture-holders, as the case
may be, of the public company.
(18) Subscription to certain units of mutual fund
Subscription to any units of any mutual fund and approved by the Board on
an application made by such mutual fund in the prescribed form.
It is necessary that such units should be subscribed only in the eligible issue
of capital of any company.
(19) Investment in five year term deposit
Investment in term deposit
(i) for a period of not less than five years with a scheduled bank; and
(ii) which is in accordance with a scheme framed and notified by the
Central Government in the Official Gazette
qualifies as an eligible investment for availing deduction under section 80C.
The maximum limit for investment in term deposit is ` 1,50,000.
Scheduled bank means -
(1) the State Bank of India constituted under the State Bank of India Act, 1955,
or
(2) a subsidiary bank as defined in the State Bank of India (Subsidiary Banks)
Act, 1959, or
(3) a corresponding new bank constituted under section 3 of the -
(a) Banking Companies (Acquisition and Transfer of Undertakings)
Act, 1970, or
(b) Banking Companies (Acquisition and Transfer of Undertakings)
Act, 1980, or

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(4) any other bank, being a bank included in the Second Schedule to the
Reserve Bank of India Act, 1934.
(20) Subscription to notified bonds issued by NABARD
Subscription to such bonds issued by NABARD (as the Central Government
may notify in the Official Gazette) qualifies for deduction under section 80C.
(21) Investment in five year Post Office time deposit
Investment in five year time deposit in an account under Post Office Time
Deposit Rules, 1981qualifies for deduction under section 80C.
(22) Deposit in Senior Citizens Savings Scheme Rules, 2004
Deposit in an account under the Senior Citizens Savings Scheme Rules, 2004
qualifies for deduction under section 80C.
(23) Contribution to additional account under NPS
Contribution by a Central Government employee to additional account
under NPS (specified account) referred to in section 80CCD for a fixed
period of not less than 3 years and which is in accordance with the scheme
notified by the Central Government for this purpose qualifies for deduction
under section 80C. It may be noted that only the contribution to the
additional account under NPS will qualify for deduction under section 80C.
There are two types of NPS account i.e., Tier I and Tier II, to which an
individual can contribute. Section 80CCD provides deduction in respect of
contribution to individual pension account [Tier I account] under the NPS
[referred to in section 20(2)(a) of the Pension Fund Regulatory and
Development Authority Act, 2013 (PFRDA)] whereas deduction under
section 80C is allowable in respect of contribution by Central Government
employee to additional account [Tier II account] of NPS [referred to in
section 20(3) of the PFRDA], which does not qualify for deduction under
section 80CCD.Thus, Tier II account is the additional account under NPS,
contribution to which would qualify for deduction under section 80C only in
the hands of a Central Government employee.
(ii) Termination of Insurance Policy or Unit Linked Insurance Plan or
transfer of House Property or withdrawal of deposit:
Where, in any previous year, an assessee:
(i) terminates his contract of insurance referred to in (1) above, by notice
to that effect or where the contract ceases to be in force by reason of

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.19

not paying the premium, by not reviving the contract of insurance, -

(a) in case of any single premium policy, within two years after the
date of commencement of insurance; or
(b) in any other case, before premiums have been paid for two
years; or
(ii) terminates his participation in any Unit Linked Insurance Plan referred
to in (8) or (9) above, by notice to that effect or where he ceases to
participate by reason of failure to pay any contribution, by not
reviving his participation, before contributions in respect of such
participation have been paid for five years, or
(iii) transfers the house property referred to in (16) above, before the
expiry of five years from the end of the financial year in which
possession of such property is obtained by him, or receives back,
whether by way of refund or otherwise, any sum specified in (16)
above, then, no deduction will be allowed to the assessee in respect of
sums paid during such previous year and the total amount of
deductions of income allowed in respect of the previous year or years
preceding such previous year, shall be deemed to be income of the
assessee of such previous year and shall be liable to tax in the
assessment year relevant to such previous year.
Further, where any amount is withdrawn by the assessee from his
account under the Senior Citizens Savings Scheme or under the Post
Office Time Deposit Rules before the expiry of a period of 5 years
from the date of its deposit, the amount so withdrawn shall be
deemed to be the income of the assessee of the previous year in
which the amount is withdrawn. Accordingly, the amount so
withdrawn would be chargeable to tax in the assessment year relevant
to such previous year. The amount chargeable to tax would also
include that part of the amount withdrawn which represents interest
accrued on the deposit.
However, if any part of the amount relating to interest so received or
withdrawn has been subject to tax in any of the earlier years, such
amount shall not be taxed again.
If any amount has been received by the nominee or legal heir of the
assessee, on the death of such assessee, the amount would not be
chargeable to tax. But if the amount relating to interest on deposit

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 7.20 INCOME TAX LAW

was not included in the total income of the assessee in any of any
earlier years, then such interest would be chargeable to tax.

2.2 Deduction in respect of contribution to certain pension

funds [Section 80CCC]
(i) Eligible assessee: Where an assessee, being an individual, has in the previous
year paid or deposited any amount out of his income chargeable to tax to
effect or keep in force a contract for any annuity plan of LIC of India or any
other insurer for receiving pension from the fund set up by LIC or such other
insurer, he shall be allowed a deduction in the computation of his total income.
For this purpose, the interest or bonus accrued or credited to the assessee’s
account shall not be reckoned as contribution.
Note: Where any amount paid or deposited by the assessee has been taken
into account for the purposes of this section, a deduction under section 80C
shall not be allowed with reference to such amount.
(ii) Maximum Deduction: The maximum permissible deduction is ` 1,50,000
(Further, the overall limit of ` 1,50,000 prescribed in section 80CCE will
continue to be applicable i.e. the maximum permissible deduction under
sections 80C, 80CCC and 80CCD(1) put together is ` 1,50,000).
(iii) Deemed Income: Where any amount standing to the credit of the assessee
in the fund in respect of which a deduction has been allowed, together with
interest or bonus accrued or credited to the assessee’s account is received
by the assessee or his nominee on account of the surrender of the annuity
plan in any previous year or as pension received from the annuity plan, such
amount will be deemed to be the income of the assessee or the nominee in
that previous year in which such withdrawal is made or pension is received.
It will be chargeable to tax as income of that previous year.

2.3 Deduction in respect of contribution to pension scheme

notified by the Central Government [Section 80CCD]
(i) Pension Scheme of Central Government: As per the “Restructured Defined
Contribution Pension System” applicable to new entrants to Government
service, it is mandatory for persons entering the service of the Central
Government on or after 1st January, 2004, to contribute 10% of their salary
every month towards their pension account. A matching contribution is
required to be made by the Government to the said account. The benefit of

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.21

this scheme is also available to individuals employed by any other employer

as well as to self-employed individuals.
(ii) Deduction: Section 80CCD provides deduction in respect of contribution
made to the pension scheme notified by the Central Government.
Accordingly, in exercise of the powers conferred by section 80CCD(1), the
Central Government has notified the ‘Atal Pension Yojana (APY)’ as a
pension scheme, contribution to which would qualify for deduction under
section 80CCD in the hands of the individual.
(iii) Quantum of deduction:
(a) Section 80CCD(1) provides a deduction for the amount paid or
deposited by an employee in his pension account subject to a
maximum of 10% of his salary. The deduction in the case of a self-
employed individual would be restricted to 20% of his gross total
income in the previous year.

Deduction under section 80CCD(1)

An individual
employed by CG on
or after 01.04.2004
10% of salary
Eligible An Individual
Assessee employed by any
other employer

Any other 20% of GTI

individual

(b) Section 80CCD(1B) provides for an additional deduction of up to

` 50,000 in respect of the whole of the amount paid or deposited by
an individual assessee under NPS in the previous year, whether or not
any deduction is allowed under section 80CCD(1).
(c) Whereas the deduction under section 80CCD(1) is subject to the
overall limit of ` 1.50 lakh under section 80CCE (i.e the maximum
permissible deduction under sections 80C, 80CCC and 80CCD(1) put
together), the deduction of upto ` 50,000 under section 80CCD(1B) is

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 7.22 INCOME TAX LAW

in addition to the overall limit of ` 1.50 lakh provided under section

80CCE.
(d) Under section 80CCD(2), contribution made by the Central
Government or any other employer in the previous year to the said
account of an employee, is allowed as a deduction in computation of
the total income of the assessee.
(e) The entire employer’s contribution would be included in the salary of
the employee. However, deduction under section 80CCD(2) would be
restricted to 14% of salary, in case of contribution made by the
Central Government, and to 10% of salary, in case of contribution
made by any other employer.

Notes:
1. The limit of ` 1,50,000 under section 80CCE does not apply to employer’s
contribution to pension scheme of Central Government which is allowable
as deduction under section 80CCD(2).
2. No deduction will be allowed under section 80C in respect of amounts
paid or deposited by the assessee, for which deduction has been
allowed under section 80CCD(1) or under section 80CCD(1B).

(iv) Deemed Income: The amount standing to the credit of the assessee in the
pension account (for which deduction has already been claimed by him
under this section) and accretions to such account, shall be taxed as income
in the year in which such amounts are received by the assessee or his
nominee on -
(a) closure of the account or
(b) his opting out of the said scheme or
(c) receipt of pension from the annuity plan purchased or taken on such
closure or opting out.
However, the amount received by the nominee on the death of the assessee
under the circumstances referred to in (a) and (b) above, shall not be
deemed to be the income of the nominee.
Further, the assessee shall be deemed not to have received any amount in
the previous year if such amount is used for purchasing an annuity plan in
the same previous year.

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.23

Notes:
1. Exemption on payment from NPS Trust to an assessee on closure of
his account or on his opting out of the pension scheme [Section
10(12A)]
(i) As per section 80CCD, any payment from National Pension System
Trust to an assessee on account of closure or his opting out of the
pension scheme is chargeable to tax.
(ii) Section 10(12A) provides that any payment from National Pension
System Trust to an assessee on account of closure or his opting
out of the pension scheme referred to in section 80CCD, to the
extent it does not exceed 60% of the total amount payable to him
at the time of closure or his opting out of the scheme, shall be
exempt from tax.
2. Exemption on payment from NPS Trust to an employee on partial
withdrawal [Section 10(12B)]
To provide relief to an employee subscriber of NPS, section 10(12B)
provides that any payment from National Pension System Trust to an
employee under the pension scheme referred to in section 80CCD, on
partial withdrawn made out of his account in accordance with the terms
and conditions specified under the Pension Fund Regulatory and
Development Authority Act, 2013 and the regulations made there
under, shall be exempt from tax to the extent it does not exceed 25% of
amount of contributions made by him.

2.4 Limit on deductions under sections 80C, 80CCC &

80CCD(1) [Section 80CCE]
This section restricts the aggregate amount of deduction under section 80C, 80CCC
and 80CCD(1) to ` 1,50,000. It may be noted that the deduction of upto
` 50,000 under section 80CCD(1B) and employer’s contribution to pension scheme,
allowable as deduction under section 80CCD(2) in the hands of the employee, would
be outside the overall limit of ` 1,50,000 stipulated under section 80CCE.
The following table summarizes the ceiling limit under these sections–

Section Particulars Ceiling limit (`)

80C Investment in LIP, Deposit in PPF/SPF/RPF etc. 1,50,000

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 7.24 INCOME TAX LAW

80CCC Contribution to certain pension funds 1,50,000

80CCD(1) Contribution to NPS of Government 10% of salary Or
20% of GTI, as
the case may be.
80CCE Aggregate deduction under sections 80C, 1,50,000
80CCC & 80CCD(1)
80CCD(1B) Contribution to NPS notified by the Central 50,000
Government (outside the limit of `1,50,000
under section 80CCE)
80CCD(2) Contribution by the Central Government to 14% of salary
NPS A/c of its employees (outside the limit of
` 1,50,000 under section 80CCE)
Contribution by any other employer to NPS 10% of salary
A/c of its employees (outside the limit of
`1,50,000 under section 80CCE)

Note: For computation of limit under section 80CCD(1) and (2), salary includes
dearness allowance, if the terms of employment so provide, but excludes all other
allowances and perquisites.

ILLUSTRATION 4
The basic salary of Mr. A is ` 1,00,000 p.m. He is entitled to dearness allowance,
which is 40% of basic salary. 50% of dearness allowance forms part of pay for
retirement benefits. Both Mr. A and his employer, ABC Ltd., contribute 15% of basic
salary to the pension scheme referred to in section 80CCD. Explain the tax
treatment in respect of such contribution in the hands of Mr. A.
SOLUTION
Tax treatment in the hands of Mr. A in respect of employer’s and own
contribution to pension scheme referred to in section 80CCD
(a) Employer’s contribution to such pension scheme would be treated as salary
since it is specifically included in the definition of “salary” under section
17(1)(viii). Therefore, ` 1,80,000, being 15% of basic salary of ` 12,00,000,
will be included in Mr. A’s salary.
(b) Mr. A’s contribution to pension scheme is allowable as deduction under section
80CCD(1). However, the deduction is restricted to 10% of salary. Salary, for this
purpose, means basic pay plus dearness allowance, if it forms part of pay.

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.25

Therefore, “salary” for the purpose of deduction under section 80CCD for
Mr. A would be –

Particulars `
Basic salary = ` 1,00,000 × 12 = 12,00,000
Dearness allowance = 40% of ` 12,00,000 = ` 4,80,000
50% of Dearness Allowance forms part of pay = 50% of 2,40,000
` 4,80,000
Salary for the purpose of deduction under section 80CCD 14,40,000
Deduction under section 80CCD(1) is restricted to 10% of 1,44,000
` 14,40,000(as against actual contribution of ` 1,80,000,
being 15% of basic salary of ` 12,00,000)
As per section 80CCD(1B), a further deduction of upto 36,000
` 50,000 is allowable. Therefore, deduction under section
80CCD(1B) is ` 36,000(` 1,80,000 - ` 1,44,000).

` 1,44,000 is allowable as deduction under section 80CCD(1). This would be

taken into consideration and be subject to the overall limit of ` 1,50,000
under section 80CCE. ` 36,000 allowable as deduction under section
80CCD(1B) is outside the overall limit of ` 1,50,000 under section 80CCE.
In the alternative, ` 50,000 can be claimed as deduction under section
80CCD(1B). The balance ` 1,30,000 (` 1,80,000- ` 50,000) can be claimed as
deduction under section 80CCD(1).
(c) Employer’s contribution to pension scheme would be allowable as deduction
under section 80CCD(2), subject to a maximum of 10% of salary. Therefore,
deduction under section 80CCD(2), would also be restricted to ` 1,44,000,
even though the entire employer’s contribution of ` 1,80,000 is included in
salary under section 17(1)(viii). However, this deduction of employer’s
contribution of ` 1,44,000 to pension scheme would be outside the overall
limit of ` 1,50,000 under section 80CCE i.e., this deduction would be over and
above the other deductions which are subject to the limit of ` 1,50,000.
ILLUSTRATION 5
The gross total income of Mr. X for the A.Y.2021-22 is ` 8,00,000. He has made the
following investments/payments during the F.Y.2020-21 –

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 7.26 INCOME TAX LAW

Particulars `
(1) Contribution to PPF 1,10,000
(2) Payment of tuition fees to Apeejay School, New Delhi, for 45,000
education of his son studying in Class XI
(3) Repayment of housing loan taken from Standard Chartered 25,000
Bank
(4) Contribution to approved pension fund of LIC 1,05,000

Compute the eligible deduction under Chapter VI-A for the A.Y.2021-22.
SOLUTION
Computation of deduction under Chapter VI-A for the A.Y.2021-22

Particulars `

Deduction under section 80C

- Contribution to PPF 1,10,000
- Payment of tuition fees to Apeejay School, New Delhi, for 45,000
education of his son studying in Class XI
- Repayment of housing loan 25,000
1,80,000
Restricted to ` 1,50,000, being the maximum permissible deduction 1,50,000
u/s 80C
Deduction under section 80CCC
- Contribution to approved pension fund of LIC ` 1,05,000 1,05,000
2,55,000
As per section 80CCE, the aggregate deduction under section 80C,
80CCC and 80CCD(1) has to be restricted to ` 1,50,000
Deduction allowable under Chapter VIA for the A.Y. 2021-22 1,50,000

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.27

2.5 Deduction in respect of medical insurance premium

[Section 80D]
1. In case of an Individual
(i) Deduction in respect of insurance premium paid for family: A deduction
to the extent of ` 25,000 is allowed in respect of the following payments –
(1) premium paid to effect or to keep in force an insurance on the health
of self, spouse and dependent children or
(2) any contribution made to the Central Government Health Scheme or
(3) such other health scheme as may be notified by the Central
Government. Contributory Health Service Scheme of the Department
of Space has been notified by the Central Government.
(ii) Deduction in respect of insurance premium for parents: A further
deduction up to ` 25,000 is allowable to effect or to keep in force an
insurance on the health of parents of the assessee.

Quantum of deduction in case of senior citizen: An increased deduction of

` 50,000 (instead of ` 25,000) shall be allowed in case any of the persons
mentioned above is a senior citizen i.e., an individual resident in India of the
age of 60 years or more at any time during the relevant previous year.

(iii) Deduction in respect of payment towards preventive health check-up:

Section 80D provides that deduction to the extent of ` 5,000 shall be
allowed in respect payment made on account of preventive health check-up
of self, spouse, dependent children or parents during the previous year.
However, the said deduction of ` 5,000 is within the overall limit of ` 25,000
or ` 50,000, specified in (i) and (ii) above.
(iv) Mode of payment: For claiming deduction under section 80D, the payment
can be made:
(1) by any mode, including cash, in respect of any sum paid on account of
preventive health check-up;
(2) by any mode other than cash, in all other cases.
(v) Deduction for medical expenditure incurred on senior citizens: As a
welfare measure towards senior citizens i.e., person of the age of 60 years or
more and resident in India, who are unable to get health insurance coverage,
deduction of upto ` 50,000 would be allowed in respect of any payment made

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 7.28 INCOME TAX LAW

on account of medical expenditure in respect of a such person(s), if no

payment has been made to keep in force an insurance on the health of such
person(s).

‘Senior citizen’ means an individual resident in India who is of the age of

60 years or more at any time during the relevant previous year.

2. In case of a HUF
Deduction under section 80D is allowable in respect of premium paid to
insure the health of any member of the family. The maximum deduction
available to a HUF would be ` 25,000 and in case any member is a senior
citizen, ` 50,000.
Further, the amount paid on account of medical expenditure incurred on the
health of any member(s) of a family who is a resident senior citizen would
qualify for deduction subject to a maximum of ` 50,000 provided no amount
has been paid to effect or keep in force any insurance on the health of such
person(s).
3. Other conditions
The other conditions to be fulfilled are that such premium should be paid
by any mode, other than cash, in the previous year out of his income
chargeable to tax. Further, the medical insurance should be in accordance
with a scheme made in this behalf by -
(a) the General Insurance Corporation of India and approved by the
Central Government in this behalf; or
(b) any other insurer and approved by the Insurance Regulatory and
Development Authority.
The following table summarizes the provisions of section 80D –
S. Nature of Expenditure on behalf of Deduction
No. payment/
expenditure
I (i) Any premium
paid, otherwise In case of Self, spouse and ` 25,000
than by way of individual dependent
cash, to keep in children
force an
In case of Family member
insurance on
HUF
the health

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(ii) Contribution
to Central
Government In case any of the above
Health Scheme persons is of the age of 60
(CGHS) years or more + resident in
(iii) Preventive India ` 50,000
health check up
expenditure
II (i) Any premium Parents ` 25,000
paid, otherwise
than by way of
cash, to keep in In case either or both the
force an parents is of the age of 60 ` 50,000
insurance on years or more + Resident in
the health India
(ii) Preventive
health check up

Maximum ` 5,000 allowed as deduction for aggregate of

preventive health check-up expenditure, by any mode
including cash, mentioned in I and II (Subject to overall
limit of ` 25,000 or ` 50,000, as the case may be)

III Amount paid on For self/spouse/parents + who

account of is of the age of 60 years or ` 50,000
medical more + Resident in India + no
expenditure payment has been made to
keep in force an insurance on
the health of such person

Note: In case the individual or any of his family members is a senior citizen,
the aggregate of deduction, in respect of payment of premium, contribution
to CGHS and medical expenditure incurred, as specified in (I) & (III) above,
cannot exceed ` 50,000.

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In case one of the parents is a senior citizen who is covered under

mediclaim policy and another is also a senior citizen but not covered under
mediclaim policy, the aggregate of deduction, in respect of payment of
medical insurance premium and medical expenditure incurred, as specified
in (II) & (III) above, cannot exceed ` 50,000.
4. Deduction where premium for health insurance is paid in lump sum
[Section 80D(4A)]
(i) Appropriate fraction of lump sum premium allowable as
deduction: In a case where mediclaim premium is paid in lumpsum
for more than one year by:
(a) an individual, to effect or keep in force an insurance on his
health or health of his spouse, dependent children or parents; or
(b) a HUF, to effect or keep in force an insurance on the health of
any member of the family,
then, the deduction allowable under this section for each of the
relevant previous year would be equal to the appropriate fraction of
such lump sum payment.
(ii) Meaning of certain terms

Term Meaning
Appropriate fraction 1 ÷ Total number of relevant previous
years
Relevant previous The previous year in which such lump sum
year amount is paid; and the subsequent
previous year(s) during which the
insurance would be in force.

ILLUSTRATION 6
Mr. A, aged 40 years, paid medical insurance premium of ` 20,000 during the
P.Y. 2020-21 to insure his health as well as the health of his spouse. He also paid
medical insurance premium of ` 47,000 during the year to insure the health of his
father, aged 63 years, who is not dependent on him. He contributed ` 3,600 to
Central Government Health Scheme during the year. He has incurred ` 3,000 in
cash on preventive health check-up of himself and his spouse and ` 4,000 by
cheque on preventive health check-up of his father. Compute the deduction
allowable under section 80D for the A.Y. 2021-22.

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.31

SOLUTION
Deduction allowable under section 80D for the A.Y.2021-22

Actual Maximum
Particulars Payment deduction
` allowable `
A. Premium paid and medical expenditure
incurred for self and spouse
(i) Medical insurance premium paid for self and 20,000 20,000
spouse
(ii) Contribution to CGHS 3,600 3,600
(iii) Exp. on preventive health check-up of self & spouse 3,000 1,400
26,600 25,000
B. Premium paid or medical expenditure
incurred for father, who is a senior citizen
(i) Mediclaim premium paid for father, who is over 47,000 47,000
60 years of age
(ii) Expenditure on preventive health check-up of 4,000 3,000
father
51,000 50,000
Total deduction under section 80D (` 25,000 + 75,000
` 50,000)

Notes:
(1) The total deduction under A. (i), (ii) and (iii) above should not exceed
` 25,000. Therefore, the expenditure on preventive health check-up for self
and spouse would be restricted to ` 1,400, being (` 25,000 – ` 20,000 –
` 3,600).
(2) The total deduction under B. (i) and (ii) above should not exceed `50,000.
Therefore, the expenditure on preventive health check-up for father would
be restricted to ` 3,000, being (` 50,000 – ` 47,000).
(3) In this case, the total deduction allowed on account of expenditure on
preventive health check-up of self, spouse and father is ` 4,400 (i.e., ` 1,400
+ ` 3,000), which is within the maximum permissible limit of ` 5,000.

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ILLUSTRATION 7
Mr. Y, aged 40 years, paid medical insurance premium of ` 22,000 during the
P.Y. 2020-21 to insure his health as well as the health of his spouse and dependent
children. He also paid medical insurance premium of ` 33,000 during the year to
insure the health of his mother, aged 67 years, who is not dependent on him. He
incurred medical expenditure of ` 20,000 on his father, aged 71 years, who is not
covered under mediclaim policy. His father is also not dependent upon him. He
contributed ` 6,000 to Central Government Health Scheme during the year.
Compute the deduction allowable under section 80D for the A.Y. 2021-22.
SOLUTION
Deduction allowable under section 80D for the A.Y.2021-22

Particulars ` `
(i) Medical insurance premium paid for self, spouse
and dependent children 22,000
(ii) Contribution to CGHS 6,000
28,000
restricted to 25,000
(iii) Mediclaim premium paid for mother, who is over
60 years of age 33,000
(iv) Medical expenditure incurred for father, who is over
60 years of age and not covered by any insurance 20,000
53,000
restricted to 50,000
75,000

2.6 Deduction in respect of maintenance including medical

treatment of a dependant disabled [Section 80DD]
(i) Eligible assessee: Section 80DD provides deduction to an assessee, who is
a resident in India, being an individual or Hindu undivided family.
(ii) Payments qualifying for deduction:
(a) Any amount –
- incurred for the medical treatment (including nursing), training
and rehabilitation of a dependant, being a person with disability,
or

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- paid or deposited under a scheme framed in this behalf by the

Life Insurance Corporation or any other insurer or the
Administrator or the Specified Company as referred to in section
2(h) of the Unit Trust of India (Transfer of Undertaking and
Repeal) Act, 2002, for the maintenance of a dependant, being a
person with disability
qualifies for deduction.
(b) The scheme should provide for payment of annuity or a lump sum
amount for the benefit of a dependant, being a person with disability,
in the event of the death of the individual or member of the HUF, in
whose name subscription was made and the assessee must nominate
either the dependant, being a person with disability or any other
person or a trust to receive the payment on his behalf, for the benefit
of the dependant, being a person with disability.
(c) The benefit of deduction under this section is also available to
assessees incurring expenditure on maintenance including medical
treatment of persons suffering from autism, cerebral palsy and
multiple disabilities.
(iii) Quantum of deduction: The quantum of deduction is ` 75,000 and in case
of severe disability (i.e. person with 80% or more disability) the deduction
shall be ` 1,25,000.
(iv) Conditions:
(a) For claiming the deduction, the assessee shall have to furnish a copy of the
certificate issued by the medical authority under the Persons with Disability
(Equal Opportunities, Protection of Rights and Full Participation) Act, 1995
along with the return of income under section 139.
(b) Where the condition of disability requires reassessment, a fresh
certificate from the medical authority shall have to be obtained after
the expiry of the period mentioned in the original certificate in order
to continue to claim the deduction.
(c) If the dependent, being a person with disability, predeceases the
individual or the member of HUF, in whose name subscription was
made, then, the amount paid or deposited under the said scheme
would be chargeable to tax in the hands of the assessee in the
previous year in which such amount is received by the assessee.

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(v) Meaning of “Dependant”:

Assessee Dependant
(1) Individual the spouse, children, parents, brother or sister of the
individual who is wholly or mainly dependant on such
individual and not claimed deduction under section 80U in
the computation of his income
(2) HUF a member of the HUF, wholly or mainly dependant on
such HUF and not claimed deduction under section 80U
in the computation of his income

ILLUSTRATION 8
Mr. X is a resident individual. He deposits a sum of ` 50,000 with Life Insurance
Corporation every year for the maintenance of his handicapped grandfather who is
wholly dependent upon him. The disability is one which comes under the Persons
with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act,
1995. A copy of the certificate from the medical authority is submitted. Compute the
amount of deduction available under section 80DD for the A.Y. 2021-22.
SOLUTION
Since the amount deposited by Mr. X was for his grandfather, he will not be
allowed any deduction under section 80DD. The deduction is available if the
individual assessee incurs any expense for a dependant disabled person.
Grandfather does not come within the definition of dependant.
ILLUSTRATION 9
What will be the deduction if Mr. X had made this deposit for his dependant father?
SOLUTION
Since the expense was incurred for a dependant disabled person, Mr. X will be
entitled to claim a deduction of ` 75,000 under section 80DD, irrespective of the
amount deposited. In case his father has severe disability, the deduction would be
` 1,25,000.

2.7 Deduction in respect of medical treatment etc. [Section

80DDB]
(i) Eligible assessee: This section provides deduction to an assessee, who is
resident in India, being an individual and Hindu undivided family. The

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deduction is available to an individual for medical expenditure incurred on

himself or a dependant. It is also available to a Hindu undivided family
(HUF) for such expenditure incurred on any of its members.
(ii) Meaning of “Dependant”:

Assessee Dependant
(1) Individual the spouse, children, parents, brother or sister of the
individual or any of them, wholly or mainly dependant
on such individual for his support and maintenance.
(2) HUF a member of the HUF, wholly or mainly dependant on
such HUF for his support and maintenance.

(iii) Payment qualifying for deduction: Any amount actually paid for the
medical treatment of such disease or ailment as may be specified in the
rules made in this behalf by the Board for himself or a dependant, in case
the assessee is an individual, or for any member of a HUF, in case the
assessee is a HUF, will qualify for deduction.
(iv) Quantum of deduction: The amount of deduction under this section shall
be equal to the amount actually paid or ` 40,000, whichever is less, in
respect of that previous year in which such amount was actually paid.
In case the amount is paid in respect of a senior citizen, i.e., a resident
individual of the age of 60 years or more at any time during the relevant
previous year, then the deduction would be the amount actually paid or
` 1,00,000, whichever is less.
The deduction under this section shall be reduced by the amount received,
if any, under an insurance from an insurer, or reimbursed by an employer,
for the medical treatment of the assessee or the dependant
(v) Maximum deduction: The maximum limit of deduction under section
80DDB for these two categories of dependant are summarized hereunder:

Dependent Maximum limit (`)

(1) A senior citizen, being a resident individual 1,00,000
(2) Other than a senior citizen 40,000

(vi) Condition: No such deduction shall be allowed unless the assessee obtains
the prescription for such medical treatment from a neurologist, an

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oncologist, a urologist, a hematologist, an immunologist or such other

specialist, as may be prescribed.

2.8 Deduction in respect of interest on loan taken for higher

education [Section 80E]
(i) Eligible assessee: Section 80E provides deduction to an individual-assessee
in respect of any interest on loan paid by him in the previous year out of his
income chargeable to tax.
(ii) Conditions: The loan must have been taken for the purpose of pursuing his
higher education or for the purpose of higher education of his or her
relative. The loan must have been taken from any financial institution or
approved charitable institution.
(iii) Meaning of Relative: Spouse and children of the individual or the student
for whom the individual is the legal guardian.
(iv) Meaning of “Higher education”: It means any course of study (including
vocational studies) pursued after passing the Senior Secondary Examination
or its equivalent from any school, board or university recognised by the
Central Government or State Government or local authority or by any other
authority authorized by the Central Government or State Government or
local authority to do so. Therefore, interest on loan taken for pursuing any
course after Class XII or its equivalent, will qualify for deduction under
section 80E.
(v) Period of deduction: The deduction is allowed in computing the total income
in respect of the initial assessment year (i.e. the assessment year relevant to the
previous year, in which the assessee starts paying the interest on the loan) and
seven assessment years immediately succeeding the initial assessment year or
until the interest is paid in full by the assessee, whichever is earlier.
(vi) Meaning of “Approved charitable institution”: It means an institution
established for charitable purposes and approved by the prescribed
authority 3 or an institution referred to in section 80G(2)(a).
(vii) Meaning of “Financial institution”: It means –
(1) a banking company to which the Banking Regulation Act, 1949 applies
(including a bank or banking institution referred to in section 51 of the Act); or

3
under section 10(23C)

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.37

(2) any other financial institution which the Central Government may, by
notification in the Official Gazette, specify in this behalf.
ILLUSTRATION 10
Mr. B has taken three education loans on April 1, 2020, the details of which are
given below:

Loan 1 Loan 2 Loan 3

For whose education loan was taken B Son of B Daughter of B
Purpose of loan MBA B. Sc. B.A.
Amount of loan (`) 5,00,000 2,00,000 4,00,000
Annual repayment of loan (`) 1,00,000 40,000 80,000
Annual repayment of interest (`) 20,000 10,000 18,000

Compute the amount deductible under section 80E for the A.Y.2021-22.
SOLUTION
Deduction under section 80E is available to an individual assessee in respect of any
interest paid by him in the previous year in respect of loan taken for pursuing his
higher education or higher education of his spouse or children. Higher education
means any course of study pursued after senior secondary examination.
Therefore, interest repayment in respect of all the above loans would be eligible
for deduction.
Deduction under section 80E = ` 20,000 + ` 10,000 + ` 18,000 = ` 48,000.

2.9 Deduction for interest on loan borrowed for acquisition

of house property by an individual [Section 80EE]
(i) Eligible assessee: An individual who has taken a loan for acquisition of
residential house property from any financial institution. Interest payable on
such loan would qualify for deduction under this section.
(ii) Conditions: The conditions to be satisfied for availing this deduction are as
follows –

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Value of house ≤
` 50 lakhs
The assessee should
not own any Loan should be
residential house on Conditions sanctioned during the
the date of sanction P.Y.2016-17
of loan
Loan sanctioned
≤ ` 35 lakhs

(iii) Period of benefit: The benefit of deduction under this section would be
available till the repayment of loan continues.
(iv) Quantum of deduction: The maximum deduction allowable is ` 50,000. The
deduction of upto ` 50,000 under section 80EE is over and above the
deduction of upto ` 2,00,000 available under section 24 for interest paid in
respect of loan borrowed for acquisition of a self-occupied property.
(v) Meaning of certain terms:

Term Meaning
(a) Financial • A banking company to which the Banking
institution Regulation Act, 1949 applies; or
• Any bank or banking institution referred to in
section 51 of the Banking Regulation Act, 1949; or
• A housing finance company.
(b) Housing A public company formed or registered in India with the
finance main object of carrying on the business of providing
company long-term finance for construction or purchase of
houses in India for residential purposes.

ILLUSTRATION 11
Mr. A purchased a residential house property for self-occupation at a cost of ` 45
lakh on 1.4.2017, in respect of which he took a housing loan of ` 35 lakh from Bank
of India@11% p.a. on the same date. The loan was sanctioned on 28th March, 2017.
Compute the eligible deduction in respect of interest on housing loan for A.Y.2021-
22 under the provisions of the Income-tax Act, 1961, assuming that the entire loan
was outstanding as on 31.3.2021 and he does not own any other house property.

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SOLUTION

Particulars `
Interest deduction for A.Y.2021-22
(i) Deduction allowable while computing income under the
head “Income from house property”
Deduction under section 24(b) ` 3,85,000
[` 35,00,000 × 11%]
Restricted to 2,00,000
(ii) Deduction under Chapter VI-A from Gross Total Income
Deduction under section 80EE ` 1,85,000
(` 3,85,000 – ` 2,00,000)
Restricted to 50,000

2.10 Deduction in respect of interest payable on loan taken

for acquisition of residential house property [Section
80EEA]
(i) Eligible assessee: An individual who has taken a loan for acquisition of
residential house property from any financial institution. Interest payable on
such loan would qualify for deduction under this section.
(ii) Conditions: The conditions to be satisfied for availing this deduction are as
follows –

Stamp Duty Value

of house ≤ ` 45
lakhs

The individual should not Loan should be sanctioned

own any residential by a Financial Institution
Conditions during the period between
house on the date of
sanction of loan 1st April, 2019 and 31st
March 2021
The individual should
not be eligible to
claim deduction u/s
80EE

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(iii) Period of benefit: The benefit of deduction under this section would be
available from A.Y. 2020-21 and subsequent assessment years till the
repayment of loan continues.
(iv) Quantum of deduction: The maximum deduction allowable is ` 1,50,000.
The deduction of upto ` 1,50,000 under section 80EEA is over and above the
deduction available under section 24(b) in respect of interest payable on
loan borrowed for acquisition of a residential house property.
In respect of self-occupied house property, interest deduction under section
24(b) is restricted to ` 2,00,000. In case of let out or deemed to be let out
property, even though there is no limit under section 24(b), section 71(3A)
restricts the amount of loss from house property to be set-off against any
other head of income to ` 2,00,000. Accordingly, if interest payable in
respect of acquisition of eligible house property is more than ` 2,00,000, the
excess can be claimed as deduction under section 80EEA, subject to
fulfilment of conditions.
(v) No deduction under any other provision: The interest allowed as
deduction under section 80EEA will not be allowed as deduction under any
other provision of the Act for the same or any other assessment year.
(vi) Meaning of certain terms:

Term Meaning
(a) Financial • A banking company to which the Banking
institution Regulation Act, 1949 applies; or
• Any bank or banking institution referred to in
section 51 of the Banking Regulation Act, 1949; or
• A housing finance company.
(b) Housing A public company formed or registered in India with the
finance main object of carrying on the business of providing
company long-term finance for construction or purchase of
houses in India for residential purposes.

2.11Deduction in respect of interest payable on loan taken

for purchase of electric vehicle [Section 80EEB]
(i) Eligible Assessee: An individual who has taken a loan for purchase of an
electric vehicle from any financial institution. Interest payable on such loan
would qualify for deduction under this section.

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.41

(ii) Conditions: The conditions to be satisfied for availing this deduction are as
follows –

Loan should be
taken for purchase
of an electric
vehicle
Loan should be
The assessee should be Conditions sanctioned during the
an individual. period between 1.4.2019
and 31.3.2023
Loan should be
sanctioned by a FI
(bank or specified
NBFCs)

(iii) Period of benefit: The benefit of deduction under this section would be
available from A.Y. 2020-21 and subsequent assessment years till the
repayment of loan continues.
(iv) Quantum of deduction: Interest payable, subject to a maximum of
` 1,50,000.
(v) No deduction under any other provision: The interest allowed as
deduction under section 80EEB will not be allowed as deduction under any
other provision of the Act for the same or any other assessment year.
(vi) Meaning of certain terms:

Term Meaning
(a) Financial • A banking company to which the Banking
institution Regulation Act, 1949 applies; or
• Any bank or banking institution referred to in
section 51 of the Banking Regulation Act, 1949; or
• Any deposit taking NBFC
• A systemically important non-deposit taking NBFC
i.e., a NBFC which is not accepting or holding public
deposits and having total assets of not less than
` 500 crore as per the last audited balance sheet
and is registered with the RBI.

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 7.42 INCOME TAX LAW

(b) Electric A vehicle which is powered exclusively by an electric

Vehicle motor whose traction energy is supplied exclusively by
traction battery installed in the vehicle. The vehicle
should have electric regenerative braking system, which
during braking provides for the conversion of vehicle
kinetic energy into electrical energy.

ILLUSTRATION 12
The following are the particulars relating to Mr. A, Mr. B, Mr. C and Mr. D, salaried
individuals, for A.Y. 2021-22 –

Particulars Mr. A Mr. B Mr. C Mr. D

Amount of loan ` 43 lakhs ` 45 lakhs ` 20 lakhs ` 15 lakhs
taken
Loan taken from HFC Deposit Deposit Public sector
taking NBFC taking bank
NBFC
Date of sanction of 1.4.2020 1.4.2019 1.4.2019 30.3.2019
loan
Date of 1.5.2020 1.5.2019 1.5.2019 1.5.2019
disbursement of loan
Purpose of loan Acquisition Acquisition Purchase of Purchase of
of residen- of residential electric electric
tial house house vehicle for vehicle for
property for property for personal personal use
self- self- use
occupation occupation
Stamp duty value of ` 45 lakhs ` 48 lakhs - -
house property
Cost of electric - - ` 22 lakhs ` 18 lakhs
vehicle
Rate of interest 9% p.a. 9% p.a. 10% p.a. 10% p.a.

Compute the amount of deduction, if any, allowable under the provisions of the
Income-tax Act, 1961 for A.Y.2021-22 in the hands of Mr. A, Mr. B, Mr. C and Mr. D.
Assume that there has been no principal repayment during the P.Y.2019-20 and
P.Y. 2020-21.

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.43

SOLUTION

Particulars `
Mr. A
Interest deduction for A.Y.2021-22
(i) Deduction allowable while computing income under the
head “Income from house property”
Deduction u/s 24(b) ` 3,54,750
[` 43,00,000 × 9% x 11/12]
Restricted to 2,00,000
(ii) Deduction under Chapter VI-A from Gross Total Income
Deduction u/s 80EEA ` 1,54,750
(` 3,54,750 – ` 2,00,000)
Restricted to 1,50,000
Mr. B
Interest deduction for A.Y.2021-22
(i) Deduction allowable while computing income under the
head “Income from house property”
Deduction u/s 24(b) ` 4,05,000
[` 45,00,000 × 9%]
Restricted to 2,00,000
(ii) Deduction under Chapter VI-A
Deduction u/s 80EEAis not permissible since:
(i) loan is taken from NBFC
(ii) stamp duty value exceeds ` 45 lakh. Nil
Deduction under section 80EEA would not be permissible
due to either violation listed above.
Mr. C
Deduction under Chapter VI-A
Deduction u/s 80EEB for interest payable on loan taken for 1,50,000
purchase of electric vehicle [` 20 lakhs x 10% = ` 2,00,000,
restricted to ` 1,50,000, being the maximum permissible
deduction]

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 7.44 INCOME TAX LAW

Mr. D
Deduction under Chapter VI-A
Deduction u/s 80EEB is not permissible since loan was sanctioned Nil
before 1.4.2019.

2.12 Deduction in respect of donations to certain funds,

charitable institutions etc. [Section 80G]
(i) Eligible assessee: An assessee who pays any sum as donation to eligible
funds or institutions, is entitled to a deduction, subject to certain limitations,
from the gross total income.
(ii) Quantum of deduction:
There are four categories of deductions. The following table gives the
details of the institutions and funds to which donations can be made for the
purpose of claiming deduction under section 80G, –

I Donation qualifying for 100% deduction, without any

qualifying limit
(1) The 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) The Africa (Public Contributions-India) Fund
(5) The National Children’s Fund
(6) The National Foundation for Communal Harmony
(7) Approved University or educational institution of national
eminence
(8) 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 the Gujarat earthquake
(10) Any Zila Saksharta Samiti constituted in any district for
improvement of primary education in villages and towns and for
literacy and post-literacy activities
(11) National Blood Transfusion Council or any State Blood
Transfusion Council whose sole objective is the control, supervi-
sion, regulation or encouragement in India of the services related

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.45

to operation and requirements of blood banks

(12) Any State Government Fund set up to provide medical relief to
the poor
(13) The Army Central Welfare Fund or Indian Naval Benevolent Fund or
Air Force Central Welfare Fund established by the armed forces of
the Union for the welfare of past and present members of such
forces or their dependents.
(14) The Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
(15) The National Illness Assistance Fund
(16) The Chief Minister’s Relief Fund or Lieutenant Governor’s Relief
Fund in respect of any State or Union Territory
(17) The National Sports Fund set up by the Central Government
(18) The National Cultural Fund set up by the Central Government
(19) The Fund for Technology Development and Application set up by
the Central Government
(20) National Trust for welfare of persons with Autism, Cerebral Palsy,
Mental Retardation and Multiple Disabilities
(21) The Swachh Bharat Kosh, set up by the Central Government, other
than the sum spent by the assessee in pursuance of CSR u/s 135(5)
of the Companies Act, 2013
(22) The Clean Ganga Fund, set up by the Central Government, where
such assessee is a resident, other than the sum spent in
pursuance of CSR u/s 135(5) of the Companies Act, 2013
(23) The National Fund for Control of Drug Abuse
(24) Prime Minister's Citizen Assistance and Relief in Emergency
Situations Fund (PM Cares Fund)

II Donation qualifying for 50% deduction, without any qualifying limit

(1) The Jawaharlal Nehru Memorial Fund
(2) Prime Minister’s Drought Relief Fund
(3) Indira Gandhi Memorial Trust
(4) Rajiv Gandhi Foundation

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III Donation qualifying for 100% deduction, subject to qualifying

limit
(1) The Government or to any approved local authority, institution or
association for promotion of family planning
(2) Sum paid by a company as donation to the Indian Olympic
Association or any other association/institution established in
India, as may be notified by the Government for the development
of infrastructure for sports or games, or the sponsorship of sports
and games in India

IV Donation qualifying for 50% deduction, subject to qualifying

limit
(1) Any Institution or Fund established in India for charitable purposes
fulfilling prescribed conditions
(2) The Government or any local authority for utilisation for any
charitable purpose other than the purpose of promoting family
planning
(3) An authority constituted in India by or under any other law enacted
either for dealing with and satisfying the need for housing
accommodation
or for the purpose of planning, development or improvement of
cities, towns and villages, or both
(4) Any Corporation established by the Central Government or any
State Government for promoting the interests of the members of a
minority community
(5) for renovation or repair of Notified temple, mosque, gurdwara,
church or other place of historic, archaeological or artistic
importance or which is a place of public worship of renown
throughout any State or States

(iii) Qualifying limit: The eligible donations referred to in III and IV should be
aggregated and the sum total should be limited to 10% of the adjusted
gross total income. This would be the maximum permissible deduction.
The donations qualifying for 100% deduction would be first adjusted from
the maximum permissible deduction and thereafter 50% deduction of the
balance would be allowed.

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.47

Steps for computation of qualifying limit

Step 1: Compute adjusted total income i.e., the GTI as reduced by the
following:
(i) Deductions under Chapter VI-A, except under section 80G
(ii) Short-term capital gain taxable under section 111A
(iii) Long-term capital gains taxable under sections 112 & 112A
(iv) Any income on which income-tax is not payable
Step 2: Calculate 10% of adjusted total income
Step 3: Calculate the actual donation, which is subject to qualifying limit
(Total of Category III and IV donations, shown in the table above)
Step 4: Lower of Step 2 or Step 3 is the maximum permissible deduction.
Step 5: The said deduction is adjusted first against donations qualifying
for 100% deduction (i.e., Category III donations). Thereafter, 50%
of balance qualifies for deduction under section 80G.

(iv) Other points:

(1) Where an assessee has claimed and has been allowed any deduction
under this section in respect of any amount of donation, the same
amount will not qualify for deduction under any other provision of the
Act for the same or any other assessment year.
(2) Donations in kind shall not qualify for deduction.
(3) No deduction shall be allowed in respect of donation of any sum
exceeding ` 2,000 unless such sum is paid by any mode other than cash.
(4) The deduction under section 80G can be claimed whether it has any
nexus with the business of the assessee or not.
(5) As per Circular No.2/2005 dated 12.1.2005, in cases where employees
make donations to the Prime Minister’s National Relief Fund, the Chief
Minister’s Relief Fund or the Lieutenant Governor’s Relief Fund
through their respective employers, it is not possible for such funds to
issue separate certificate to every such employee in respect of
donations made to such funds as contributions made to these funds
are in the form of a consolidated cheque. An employee who makes
donations towards these funds is eligible to claim deduction under

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 7.48 INCOME TAX LAW

section 80G. It is, hereby, clarified that the claim in respect of such
donations as indicated above will be admissible under section 80G on
the basis of the certificate issued by the Drawing and Disbursing
Officer (DDO)/Employer in this behalf.
ILLUSTRATION 13
Mr. Shiva aged 58 years, has gross total income of ` 7,75,000 comprising of income
from salary and house property. He has made the following payments and investments:
(i) Premium paid to insure the life of her major daughter (policy taken on
1.4.2017) (Assured value ` 1,80,000) – ` 20,000.
(ii) Medical Insurance premium for self – ` 12,000; Spouse – ` 14,000.
(iii) Donation to a public charitable institution registered under 80G ` 50,000 by
way of cheque.
(iv) LIC Pension Fund – ` 60,000.
(v) Donation to National Children’s Fund - ` 25,000 by way of cheque
(vi) Donation to Jawaharlal Nehru Memorial Fund - ` 25,000 by way of cheque
(vii) Donation to approved institution for promotion of family planning - ` 40,000
by way of cheque
(viii) Deposit in PPF – ` 1,00,000
Compute the total income of Mr. Shiva for A.Y. 2021-22.
SOLUTION
Computation of Total Income of Mr. Shiva for A.Y. 2021-22

Particulars ` `
Gross Total Income 7,75,000
Less: Deduction under section 80C
Deposit in PPF 1,00,000
Life insurance premium paid for insurance of 18,000
major daughter (Maximum 10% of the assured
value `1,80,000, as the policy is taken after
31.3.2012)
1,18,000

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Deduction under section 80CCC in respect of LIC 60,000

pension fund
1,78,000
As per section 80CCE, deduction under section 80C & 1,50,000
80CCC is restricted to
Deduction under section 80D
Medical Insurance premium in respect of self and spouse 26,000
Restricted to 25,000
Deduction under section 80G (See Working Note
below) 87,500
Total income 5,12,500

Working Note: Computation of deduction under section 80G

Particulars of donation Amount % of deduction Deduction

donated u/s 80G (`)
(`)
(i) National Children’s Fund 25,000 100% 25,000
(ii) Jawaharlal Nehru 25,000 50% 12,500
Memorial Fund
(iii) Approved institution for 40,000 100%, subject to 40,000
promotion of family qualifying limit
planning
(iv) Public Charitable Trust 50,000 50% subject to
qualifying limit
(See Note
below) 10,000
87,500

Note - Adjusted total income = Gross Total Income – Amount of deductions

under section 80C to 80U except section 80G i.e., ` 6,00,000, in this case.
` 60,000, being 10% of adjusted total income is the qualifying limit, in this case.
Firstly, donation of `40,000 to approved institution for family planning qualifying for
100% deduction subject to qualifying limit, has to be adjusted against this amount.
Thereafter, donation to public charitable trust qualifying for 50% deduction, subject

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 7.50 INCOME TAX LAW

to qualifying limit is adjusted. Hence, the contribution of ` 50,000 to public charitable

trust is restricted to 20,000 (being, ` 60,000 - ` 40,000), 50% of which would be the
deduction under section 80G. Therefore, the deduction under section 80G in respect
of donation to public charitable trust would be ` 10,000, which is 50% of ` 20,000.

2.13 Deduction in respect of rent paid [Section 80GG]

(i) Eligible assessee: Assessee, who is not in receipt of HRA qualifying for
exemption under section 10(13A) from employer and who pays rent for
accommodation occupied by him for residential purposes.
(ii) Conditions: The following conditions have to be satisfied for claiming
deduction under section 80GG -
(1) The assessee should not be receiving any house rent allowance
exempt under section 10(13A).
(2) The expenditure incurred by him on rent of any furnished or
unfurnished accommodation should exceed 10% of his total income
arrived at after all deductions under Chapter VI-A except section
80GG.
(3) The accommodation should be occupied by the assessee for the
purposes of his own residence.
(4) The assessee should fulfill such other conditions or limitations as may
be prescribed, having regard to the area or place in which such
accommodation is situated and other relevant considerations.
(5) The assessee or his spouse or his minor child or a HUF of which he is a
member should not own any accommodation at the place where he
ordinarily resides or perform duties of his office or employment or
carries on his business or profession; or
(6) If the assessee owns any accommodation at any place other than that
referred to above, such accommodation should not be in the
occupation of the assessee and its annual value is not required to be
determined under section 23(2)(a) or section 23(4)(a).
(7) The assessee should file a declaration in the prescribed form,
confirming the details of rent paid and fulfillment of other conditions,
with the return of income.

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(iii) Quantum of deduction: The deduction admissible will be the least of the
following:
(1) Actual rent paid minus 10% of the total income of the assessee before
allowing the deduction, or
(2) 25% of such total income (arrived at after making all deductions under
Chapter VI A but before making any deduction under this section), or
(3) Amount calculated at ` 5,000 p.m.
ILLUSTRATION 14
Mr. Ganesh, a businessman, whose total income (before allowing deduction under
section 80GG) for A.Y.2021-22 is ` 4,60,000, paid house rent at ` 12,000 p.m. in
respect of residential accommodation occupied by him at Mumbai. Compute the
deduction allowable to him under section 80GG for A.Y.2021-22.
SOLUTION
The deduction under section 80GG will be computed as follows:
(i) Actual rent paid less 10% of total income
(10×4,60,000)
` 1,44,000 (-) = ` 98,000 (A)
100
25×4,60,000
(ii) 25% of total income = = ` 1,15,000 (B)
100
(iii) Amount calculated at ` 5,000 p.m.= ` 60,000 (C)
Deduction allowable [least of (i), (ii) and (iii)] = ` 60,000

2.14 Deduction in respect of donations for scientific research

and rural development [Section 80GGA]
(i) Eligible assessee: Any assessee not having income chargeable under the
head “Profits and gains of business or profession”, who makes donations for
scientific research or rural development.
(ii) Donations qualifying for deduction:
(1) Any sum paid by the assessee in the previous year to a research association
which has, as its object, the undertaking of scientific research or to a Uni-
versity, college or other institution to be used for scientific research;

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Such association, University, college or institution must be approved

under section 35(1)(ii).
(2) Any sum paid to a Research Association which has as its object the
undertaking of research in social science or statistical research,
University, College or other institution to be used for research in social
science or statistical research.
Such association, University, college or institution must be approved
under section 35(1)(iii).
Further, it has been clarified that the deduction to which an assessee
(i.e. donor) is entitled on account of payment of any sum to a research
association or university or college or other institution for scientific
research or research in a social science or statistical research, shall not
be denied merely on the ground that subsequent to payment of such
sum by the assessee, the approval granted to any of the aforesaid
entities is withdrawn.
(3) Any sum paid by the assessee in the previous year to an association or
institution which has as its object the undertaking of any programme of
rural development, to be used for carrying out any programme of rural
development approved by the prescribed authority for purposes of
section 35CCA or to an institution or association which has as its object
the training of persons for implementing programmes of rural
development.
It is, however, essential that in respect of both the aforesaid
donations, the association or institution to which the donation is given
must be approved by the prescribed authority; in the case of donation
for scientific research, the donation must be to the institution
approved under section 35(1)(ii) whereas in the case of donation for
rural development the institution or association must be approved by
the prescribed authority under section 35CCA(2)/(2A).
(4) Any sum paid to a public sector company or a local authority or to an
association or institution approved by the National Committee for
carrying out any eligible project or scheme.
(5) Any sum paid to a rural development fund set up and notified under
section 35CCA.
(6) Any sum paid by the assessee in the previous year to National Urban
Poverty Eradication Fund (NUPEF).

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(iii) Restrictions on deduction:

(1) No deduction under this section would be allowed in the case of an
assessee whose gross total income includes income which is
chargeable under the head “Profits and gains of business or
profession.”
(2) Where a deduction under this section is claimed and allowed for any
assessment year, deduction shall not be allowed in respect of such
payment under any provision of this Act for the same or any other
assessment year.
(3) No deduction shall be allowed in respect of donation of any sum
exceeding ` 2,000 4 unless such sum is paid by any mode other than
cash.

2.15 Deduction in respect of contributions given by

companies to political parties [Section 80GGB]
(i) Deduction & Conditions: This section provides for deduction of any sum
contributed in the previous year by an Indian company to any political party
or an electoral trust. However, no deduction shall be allowed in respect of
any sum contributed by way of cash.
(ii) Meaning of “Contribute”: For the purposes of this section, the word
“contribute” has the same meaning assigned to it under section 293A of the
Companies Act, 1956 5, which provides that -
(a) a donation or subscription or payment given by a company to a
person for carrying on any activity which is likely to effect public
support for a political party shall also be deemed to be contribution
for a political purpose;
(b) the expenditure incurred, directly or indirectly, by a company on
advertisement in any publication (being a publication in the nature of a
souvenir, brochure, tract, pamphlet or the like) by or on behalf of a
political party or for its advantage shall also be deemed to be a
contribution to such political party or a contribution for a political
purpose to the person publishing it.

4
Upto 31st May, 2020, the limit is ` 10,000
5
Now section 182 of the Companies Act, 2013

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(iii) Meaning of “Political party”: It means a political party registered under

section 29A of the Representation of the People Act, 1951.
ILLUSTRATION 15
During the P.Y. 2020-21, ABC Ltd., an Indian company,
(1) contributed a sum of ` 2 lakh to an electoral trust; and
(2) incurred expenditure of ` 25,000 on advertisement in a brochure of a political
party.
Is the company eligible for deduction in respect of such contribution/expenditure,
assuming that the contribution was made by cheque? If so, what is the quantum of
deduction?
SOLUTION
An Indian company is eligible for deduction under section 80GGB in respect of
any sum contributed by it in the previous year to any political party or an
electoral trust. Further, the word “contribute” in section 80GGB has the meaning
assigned to it in section 293A of the Companies Act, 1956, and accordingly, it
includes the amount of expenditure incurred on advertisement in a brochure of a
political party.
Therefore, ABC Ltd. is eligible for a deduction of ` 2,25,000 under section 80GGB
in respect of sum of ` 2 lakh contributed to an electoral trust and ` 25,000
incurred by it on advertisement in a brochure of a political party.
It may be noted that there is a specific disallowance under section 37(2B) in
respect of expenditure incurred on advertisement in a brochure of a political
party. Therefore, the expenditure of ` 25,000 would be disallowed while
computing business income/gross total income. However, the said expenditure
incurred by an Indian company is allowable as a deduction from gross total
income under section 80GGB.

2.16 Deduction in respect of contributions given by any

person to political parties [Section 80GGC]
(i) Deduction & Conditions: This section provides for deduction of any sum
contributed in the previous year by any person to a political party or an
electoral trust. However, no deduction shall be allowed in respect of any
sum contributed by way of cash.

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(ii) Persons not eligible for deduction: This deduction will, however, not be
available to a local authority and an artificial juridical person, wholly or
partly funded by the Government.
(iii) Meaning of “Political party”: It means a political party registered under
section 29A of the Representation of the People Act, 1951.

3. DEDUCTION IN RESPECT OF CERTAIN INCOMES

3.1 Deduction in respect of employment of new employees
[Section 80JJAA]
(i) Quantum and period of deduction: Where the gross total income of an
assessee to whom section 44AB applies, includes any profits and gains
derived from business, a deduction of an amount equal to 30% of additional
employee cost incurred in the course of such business in the previous year,
would be allowed for three assessment years including the assessment year
relevant to the previous year in which such employment is provided.
(ii) Conditions to be fulfilled: The deduction would be allowed only subject to
fulfilment of the following conditions:

The report of the accountant,

The business is not giving the prescribed particulars,
The business should not acquired by the assessee has to be furnished before 30th
be formed by splitting up, by way of transfer from September of the A.Y., being
or the reconstruction, of any other person or as a the specified date referred to
an existing business result of any business in Section 44AB i.e., the date
reorganisation one month prior to due date
for filing ROI u/s 139(1)

(iii) Meaning of certain terms:

Term Meaning
(a) Additional Total emoluments paid or payable to additional
employee cost employees employed during the previous year.
In the The additional employee cost shall be
case of Nil, if—
an (a) there is no increase in the number
existing of employees from the total
business number of employees employed as

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on the last day of the preceding

year;
(b) emoluments are paid otherwise
than by an account payee cheque
or account payee bank draft or by
use of electronic clearing system
through a bank account or through
any other prescribed electronic
mode [credit card, debit card, net
banking, IMPS (Immediate Payment
Services), UPI (Unified Payment
Interface), RTGS (Real Time Gross
Settlement), NEFT (National
Electronic Fund Transfer), BHIM
(Bharat Interface for Money) Aadhar
Pay].
In the The emoluments paid or payable to
first employees employed during that
year of previous year shall be deemed to be the
a new additional employee cost.
business
(b) Additional An employee who has been employed during the
employee previous year and whose employment has the
effect of increasing the total number of employees
employed by the employer as on the last day of
the preceding year.
Exclusions from the definition:
(a) an employee whose total emoluments are
more than ` 25,000 per month; or
(b) an employee for whom the entire contribution
is paid by the Government under the
Employees’ Pension Scheme notified in
accordance with the provisions of the
Employees’ Provident Funds and
Miscellaneous Provisions Act, 1952; or
(c) an employee who does not participate in the
recognised provident fund.

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(d) an employee employed for a period of less

than 240 days during the previous year. In
case of an assessee engaged in the business
of manufacturing of apparel or footwear or
leather products, an employee employed for a
period of less than 150 days during the
previous year; or
Note – If an employee is employed during the
previous year for less than 240 days or 150 days, as
the case may be, but is employed for a period of
240 days or 150 days, as the case may be, in the
immediately succeeding year, he shall be deemed to
have been employed in the succeeding year.
Accordingly, the employer would be entitled to
deduction of 30% of additional employee cost of
such employees in the succeeding year.
(c) Emoluments any sum paid or payable to an employee in lieu of
his employment by whatever name called.
Exclusions from the definition:
(a) any contribution paid or payable by the
employer to any pension fund or provident
fund or any other fund for the benefit of the
employee under any law for the time being in
force; and
(b) any lump-sum payment paid or payable to an
employee at the time of termination of his
service or superannuation or voluntary
retirement, such as gratuity, severance pay,
leave encashment, voluntary retrenchment
benefits, commutation of pension and the like.

ILLUSTRATION 16
Mr. A has commenced the business of manufacture of computers on 1.4.2020. He
employed 350 new employees during the P.Y. 2020-21, the details of whom are as
follows –

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No. of Date of Regular/ Total monthly

employees employment Casual emoluments per
employee (`)
(i) 75 1.4.2020 Regular 24,000
(ii) 125 1.5.2020 Regular 26,000
(iii) 50 1.8.2020 Casual 24,500
(iv) 100 1.9.2020 Regular 24,000

The regular employees participate in recognized provident fund while the casual
employees do not. Compute the deduction, if any, available to Mr. A for A.Y. 2021-
22, if the profits and gains derived from manufacture of computers that year is ` 75
lakhs and his total turnover is ` 5.16 crores.
What would be your answer if Mr. A has commenced the business of manufacture
of footwear on 1.4.2020?
SOLUTION
Mr. A is eligible for deduction under section 80JJAA since he is subject to tax
audit under section 44AB for A.Y. 2021-22 and he has employed “additional
employees” during the P.Y. 2020-21.
I If Mr. A is engaged in the business of manufacture of computers
Additional employee cost = ` 24,000 × 12 × 75 [See Working Note below]
=` 2,16,00,000
Deduction under section 80JJAA = 30% of ` 2,16,00,000 = ` 64,80,000.
Working Note:
Number of additional employees

Particulars No. of
workmen
Total number of employees employed during the year 350
Less: Casual employees employed on 1.8.2020 who do 50
not participate in recognized provident fund
Regular employees employed on 1.5.2020, since 125
their total monthly emoluments exceed `25,000

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Regular employees employed on 1.9.2020 since

they have been employed for less than 240 days 100 275
in the P.Y.2020-21.
Number of “additional employees” 75

Notes –
(i) Since casual employees do not participate in recognized provident fund,
they do not qualify as additional employees. Further, 125 regular
employees employed on 1.5.2020 also do not qualify as additional
employees since their monthly emoluments exceed ` 25,000. Also, 100
regular employees employed on 1.9.2020 do not qualify as additional
employees for the P.Y.2020-21, since they are employed for less than
240 days in that year.
Therefore, only 75 employees employed on 1.4.2020 qualify as
additional employees, and the total emoluments paid or payable to
them during the P.Y.2020-21 is deemed to be the additional employee
cost.
(ii) As regards 100 regular employees employed on 1.9.2020, they would be
treated as additional employees for previous year 2021-22, if they
continue to be employees in that year for a minimum period of 240
days. Accordingly, 30% of additional employee cost in respect of such
employees would be allowable as deduction under section 80JJAA in the
hands of Mr. A for the A.Y. 2022-23.
II If Mr. A is engaged in the business of manufacture of footwear
If Mr. A is engaged in the business of manufacture of footwear, then, he
would be entitled to deduction under section 80JJAA in respect of employee
cost of regular employees employed on 1.9.2020, since they have been
employed for more than 150 days in the previous year 2020-21.
Additional employee cost = ` 2,16,00,000 + ` 24,000 × 7 × 100 = ` 3,84,00,000
Deduction under section 80JJAA = 30% of ` 3,84,00,000 = ` 1,15,20,000

3.2 Deduction in respect of royalty income, etc., of authors

of certain books other than text books [Section 80QQB]
(i) Eligible assessee & Quantum of deduction: Under section 80QQB,
deduction of up to a maximum ` 3,00,000 is allowed to an individual

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resident in India in respect of income derived as author i.e., the deduction

shall be the income derived as author or ` 3,00,000, whichever is less.
(ii) Eligible Income:
(a) This income may be received either by way of a lumpsum
consideration for the assignment or grant of any of his interests in the
copyright of any book.
(b) Such book should be a work of literary, artistic or scientific nature, or
of royalties or copyright fees (whether receivable in lump sum or
otherwise) in respect of such book.
(c) This deduction shall not, however, be available in respect of royalty
income from textbook for schools, guides, commentaries, newspapers,
journals, pamphlets and other publications of similar nature.

Note -Where an assessee claims deduction under this section, no deduction

in respect of the same income may be claimed under any other provision of
the Income-tax Act, 1961.

(iii) Manner of computation of deduction: For the purpose of calculating the

deduction under this section, the amount of eligible income (royalty or
copyright fee received otherwise than by way of lumpsum) before allowing
expenses attributable to such income, shall not exceed 15% of the value of
the books sold during the previous year.
However, this condition is not applicable where the royalty or copyright fees
is receivable in lump sum in lieu of all rights of the author in the book.
(iv) Conditions:
(a) Furnishing of certificate in prescribed form: For claiming the
deduction, the assessee shall have to furnish a certificate in the
prescribed manner in the prescribed format, duly verified by the
person responsible for making such payment, setting forth such
particulars as may be prescribed.
(b) Period for repatriation of income earned outside India: Where the
assessee earns any income from any source outside India, he should
bring such income into India in convertible foreign exchange within a
period of six months from the end of the previous year in which such
income is earned or within such further period as the competent

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authority may allow in this behalf for the purpose of claiming

deduction under this section.
The competent authority shall mean the Reserve Bank of India or such other
authority as is authorised under any law for the time being in force for
regulating payments and dealings in foreign exchange.

3.3 Deduction in respect of royalty on patents

[Section 80RRB]
(i) Eligible assessee: A resident individual who is registered as the true and
first inventor in respect of an invention under the Patents Act, 1970,
including the co-owner of the patent and earning income by way of royalty
of a patent registered on or after 1.4.2003.
(ii) Quantum of deduction: Income by way of royalty of a patent registered on
or after 1.4.2003, subject to a maximum of ` 3 lakhs.

Note - No deduction in respect of such income will be allowed under any

other provision of the Income-tax Act, 1961

(iii) Eligible income: This exemption shall be restricted to the royalty income
including consideration for transfer of rights in the patent or for providing
information for working or use of a patent, use of a patent or the rendering
of any services in connection with these activities.
The exemption shall not be available on any consideration for sale of
product manufactured with the use of the patented process or patented
article for commercial use.
(iv) Conditions: In respect of any such income which is earned from sources
outside India, the deduction shall be restricted to such sum as is brought to
India in convertible foreign exchange within a period of 6 months from the
end of the previous year in which such income is earned or extended period
as is allowed by the competent authority (Reserve Bank of India). For claiming
this deduction the assessee shall be required to furnish a certificate in the
prescribed form signed by the prescribed authority, alongwith the return of
income.

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4. DEDUCTION IN RESPECT OF OTHER INCOME

4.1 Deduction in respect of interest on deposits in savings
accounts [Section 80TTA]
(i) Eligible assessee and Quantum of deduction: Section 80TTA provides that
in case the gross total income of an assessee, being an individual or a Hindu
Undivided Family, includes any income by way of an interest on deposits in
a saving account (not being time deposits, which are deposits repayable on
expiry of fixed periods), deduction up to ` 10,000 in aggregate shall be
allowed while computing the total income of such assessee. Such deduction
shall be allowed in case the saving account is maintained with:
(1) a banking company to which the Banking Regulation Act, 1949,
applies (including any bank or banking institution referred to in
section 51 of that Act);
(2) a co-operative society engaged in carrying on the business of banking
(including a co-operative land mortgage bank or a co-operative land
development bank); or
(3) a post office.

Note - Deduction under this section would, however, not be available to

a resident senior citizen eligible for deduction under section 80TTB.

(ii) Restrictions: If the aforesaid income is derived from any deposit in a savings
account held by, or on behalf of, a firm, an AOP/BOI, no deduction shall be
allowed in respect of such income in computing the total income of any
partner of the firm or any member of the AOP or any individual of the BOI.
In effect, the deduction under this section shall be allowed only in respect of
the income derived in form of the interest on the saving bank deposit (other
than time deposits) made by the individual or Hindu Undivided Family directly.

4.2 Deduction in respect of interest on deposits in case of

senior citizens [Section 80TTB]
(i) Eligible assessee: A senior citizen (a resident individual who is of the age
of 60 years or more at any time during the relevant previous year), whose
gross total income includes income by way of interest on deposits (both
fixed deposits and saving accounts) with –

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(a) a banking company to which Banking Regulation Act, 1949 applies

(b) a co-operative society engaged in carrying on the business of banking
(including a co-operative land mortgage bank or a co-operative land
development bank)
(c) a Post Office.
(ii) Quantum of deduction: Actual amount of interest on deposits or
` 50,000, whichever is lower.
(iii) Non-availability of deduction to partner/member, where deposit held
by firm/AOP/BOI: Where interest income is derived from any deposit held
by, or on behalf of, a firm, an AOP or a BOI, the partner of the firm or
member of AOP/BOI would not be allowed deduction in respect of such
income while computing their total income.
ILLUSTRATION 17
Mr. A, a resident individual aged 61 years, has earned business income (computed)
of ` 1,35,000, lottery income of ` 1,20,000 (gross) during the P.Y. 2020-21. He also
has interest on Fixed Deposit of ` 30,000 with banks. He invested an amount of
` 1,50,000 in Public Provident Fund account. What is the total income of Mr. A for
the A.Y. 2021-22?
SOLUTION
Computation of total income of Mr. A for A.Y.2021-22

Particulars ` `
Profits and gains of business or profession 1,35,000
Income from other sources
- Interest on Fixed Deposit with banks 30,000
- lottery income 1,20,000
Gross Total Income 2,85,000
Less: Deductions under Chapter VIA [See Note
below]
Under section 80C
- Deposit in Public Provident Fund 1,50,000
Under section 80TTB
- Interest on fixed deposits with banks 30,000
1,80,000

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Restricted to 1,65,000
Total Income 1,20,000

Note: In case of resident individuals of the age of 60 years or more, interest on

bank fixed deposits qualifies for deduction upto ` 50,000 under section 80TTB.
Though the aggregate of deductions under Chapter VI-A is ` 1,80,000, however, the
maximum permissible deduction cannot exceed the gross total income exclusive of
long term capital gains taxable under section 112 and section 112A, short-term
capital gains covered under section 111A and winnings from lotteries of the assessee.
Therefore, the maximum permissible deduction under Chapter VI-A = ` 2,85,000 –
` 1,20,000 = ` 1,65,000.
ILLUSTRATION 18
Mr. Gurnam, aged 42 years, has salary income (computed) of ` 5,50,000 for the
previous year ended 31.03.2021. He has earned interest of ` 14,500 on the saving
bank account with State Bank of India during the year. Compute the total income of
Mr. Gurnam for the assessment year 2021-22 from the following particulars:
(i) Life insurance premium paid to Birla Sunlife Insurance in cash amounting to
` 25,000 for insurance of life of his dependent parents. The insurance policy
was taken on 15.07.2018 and the sum assured on life of his dependent
parents is ` 2,00,000.
(ii) Life insurance premium of ` 25,500 paid for the insurance of life of his major
son who is not dependent on him. The sum assured on life of his son is
` 2,50,000 and the life insurance policy was taken on 30.3.2012.
(iii) Life insurance premium paid by cheque of ` 22,500 for insurance of his life.
The insurance policy was taken on 08.09.2017 and the sum assured is
` 2,00,000.
(iv) Premium of ` 26,000 paid by cheque for health insurance of self and his wife.
(v) ` 1,500 paid in cash for his health check-up and ` 4,500 paid in cheque for
preventive health check-up for his parents, who are senior citizens.
(vi) Paid interest of ` 6,500 on loan taken from bank for MBA course pursued by
his daughter.
(vii) A sum of ` 5,000 donated in cash to an institution approved for purpose of
section 80G for promoting family planning.

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SOLUTION
Computation of total income of Mr. Gurnam for the
Assessment Year 2021-22

Particulars ` ` `
Income from salary 5,50,000
Interest on saving bank deposit 14,500
Gross Total Income 5,64,500
Less: Deduction under Chapter VIA
Under section 80C (See Note 1)
Life insurance premium paid for life
insurance of:
- major son 25,500
- self ` 22,500 restricted to 10% of ` 2,00,000 20,000 45,500
Under section 80D (See Note 2)
Premium paid for ` 26,000 health insurance of
self and wife by cheque, restricted to 25,000
Payment made for health check-up for parents 4,500 29,500
Under section 80E
For payment of interest on loan taken from bank 6,500
for MBA course of his daughter
Under section 80TTA (See Note 4)
Interest on savings bank account ` 14,500 10,000 91,500
restricted to
Total Income 4,73,000

Notes:
(1) As per section 80C, no deduction is allowed in respect of premium paid for
life insurance of parents, whether they are dependent or not. Therefore, no
deduction is allowable in respect of ` 25,000 paid as premium for life
insurance of dependent parents of Mr. Gurnam.
In respect of insurance policy issued on or after 01.04.2012, deduction shall be
allowed for life insurance premium paid only to the extent of 10% of sum assured.
In case the insurance policy is issued before 01.04.2012, deduction of premium
paid on life insurance policy shall be allowed up to 20% of sum assured.

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Therefore, in the present case, deduction of ` 25,500 is allowable in full in respect

of life insurance of Mr. Gurnam’s son since the insurance policy was issued before
01.04.2012 and the premium amount is less than 20% of ` 2,50,000. However, in
respect of premium paid for life insurance policy of Mr. Gurnam himself, deduction
is allowable only up to 10% of ` 2,00,000 since, the policy was issued on or after
01.04.2012 and the premium amount exceeds 10% of sum assured.
(2) As per section 80D, in case the premium is paid in respect of health of a person
specified therein and for health check-up of such person, deduction shall be
allowed up to ` 25,000. Further, deduction up to ` 5,000 in aggregate shall be
allowed in respect of health check-up of self, spouse, children and parents. In
order to claim deduction under section 80D, the payment for health-checkup
can be made in any mode including cash. However, the payment for health
insurance premium has to be paid in any mode other than cash.
Therefore, in the present case, in respect of premium of ` 26,000 paid for
health insurance of self and wife, deduction would be restricted to
` 25,000. Since the limit of ` 25,000 has been exhausted against medical
insurance premium, no deduction is allowable for preventive health check-
up for self and wife. However, deduction of ` 4,500 is allowable in respect of
health check-up of his parents, since it falls within the limit of ` 5,000.
(3) No deduction shall be allowed under section 80G in case the donation is made
in cash of a sum exceeding ` 2,000. Therefore, deduction under section 80G is
not allowable in respect of cash donation of ` 5,000 made to an institution
approved for the purpose of section 80G for promotion of family planning.
(4) As per section 80TTA, deduction shall be allowed from the gross total
income of an individual or Hindu Undivided Family in respect of income by
way of interest on deposit in the savings account included in the assessee’s
gross total income, subject to a maximum of ` 10,000. Therefore, deduction
of ` 10,000 is allowable from the gross total income of Mr. Gurnam, though
the interest from savings bank account is ` 14,500.

5. OTHER DEDUCTIONS
Deduction in the case of a person with disability [Section 80U]
(i) Section 80U harmonizes the criteria for defining disability as existing under
the Income-tax Rules with the criteria prescribed under the Persons with
Disability (Equal Opportunities, Protection of Rights and Full Participation)
Act, 1995.

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(ii) Eligible assessee: This section is applicable to a resident individual, who, at

any time during the previous year, is certified by the medical authority to be
a person with disability.
The benefit of deduction under this section is also available to persons
suffering from autism, cerebral palsy and multiple disabilities.
(iii) Quantum of deduction: A deduction of ` 75,000 in respect of a person
with disability and ` 1,25,000 in respect of a person with severe disability
(having disability over 80%) is allowable under this section.
(iv) Conditions:
(a) The assessee claiming a deduction under this section shall furnish a
copy of the certificate issued by the medical authority in the form and
manner, as may be prescribed, along with the return of income under
section 139, in respect of the assessment year for which the deduction
is claimed.
(b) Where the condition of disability requires reassessment, a fresh
certificate from the medical authority shall have to be obtained after
the expiry of the period mentioned on the original certificate in order
to continue to claim the deduction.

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LET US RECAPITULATE
Deductions in respect of certain payments
Section Eligible Eligible Payments Permissible Deduction
Assessee
80C Individual Contribution to PPF,
or HUF Payment of LIC
premium, etc.
Sums paid or deposited in Sum paid or deposited,
the previous year by way subject to a maximum of
of ` 1,50,000
- Life insurance
premium
- Contribution to PPF/
SPF/ RPF and
approved
superannuation fund
- Repayment of
housing loan taken
from Govt., bank, LIC,
specified employer
etc.
- Tuition fees to any
Indian university,
college, school for
full-time education of
any two children
- Term deposit for a
fixed period of not
less than 5 years with
schedule bank
- Subscription to
notified bonds of
NABARD
- Five year post office
time deposit

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.69

- Senior Citizen’s
Savings Scheme
Account etc.
- Contribution by
Central Govt.
employee to
additional account
(Tier II A/c) of NPS
referred to u/s 80CCD
80CCC Individual Contribution to certain
pension funds
Any amount paid or Amount paid or
deposited to keep in force deposited, subject to a
a contract for any annuity maximum of
plan of LIC of India or any ` 1,50,000
other insurer for receiving
pension from the fund.
80CCD Individuals Contribution to Pension Employee’s
employed Scheme of Central Contribution/
by the Government Individual’ Contribution
Central
An individual employed In case of a salaried
Governme
by the Central individual, deduction of
nt or any
Government on or after own contribution under
other
1.1.2004 or any other section 80CCD(1) is
employer;
employer or any other restricted to 10% of his
Any other
individual assessee, being an salary.
assessee. individual, who has paid In any other case,
or deposited any amount deduction under section
in his account under a 80CCD(1) is restricted to
notified pension scheme 20% of gross total
[to his individual pension income.
account [Tier I A/c] under
National Pension Scheme Further, additional
& Atal Pension Yojana] deduction of upto
` 50,000 is available
under section 80CCD(1B).

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 7.70 INCOME TAX LAW

Employer’s Contribution
The entire employer’s
contribution would be
included in the salary of
the employee. The
deduction of employer’s
contribution under section
80CCD(2) would be
restricted to 14% of salary,
where the employer is the
Central Government; and
10%, in case of any other
employer.
Note – As per section 80CCE, maximum permissible deduction u/s 80C, 80CCC
& 80CCD(1) is ` 1,50,000. However, the limit ` 1.50 lakh under section 80CCE
does not apply to deduction under section 80CCD(2) and 80CCD(1B).
80D Individual Medical Insurance
and HUF Premium
(1) Any premium paid,
otherwise than by way of
cash, to keep in force an
insurance on the health of –
Maximum ` 25,000
in case of self,
(` 50,000, in case the
an spouse
individual or his or her
individual and
spouse is a senior
dependent
citizen)
children
in case of family
HUF member
(2) In case of an individual,
contribution, otherwise
than by way of cash, to
CGHS or any other
scheme as notified by
Central Government.

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.71

(3) Any premium paid,

otherwise than by way of Maximum ` 25,000
cash, to keep in force an (` 50,000, in case
insurance on the health either or both of the
of parents, whether or parents are senior
not dependent on the citizen(s))
individual.
Notes:
(i) Any amount paid, Amount paid subject to a
otherwise than by way cap of ` 50,000 (in case
of cash, on account of one parent is a senior
medical expenditure citizen, in respect of
incurred on the health whom insurance
of the assessee or his premium is paid, and the
family member or his other is a senior citizen
parent, who is a senior on whom medical
citizen and no amount expenditure is incurred,
has been paid to effect the total deduction
or to keep in force an cannot exceed
insurance on the ` 50,000)
health of such person.
(ii) Payment, including Amount paid subject to a
cash payment, for cap of ` 5,000, in
preventive health aggregate (subject to the
check up of himself, overall individual limits
spouse, dependent of ` 25,000/ ` 50,000, as
children and parents. the case may be)
80DD Resident Maintenance including
Individual medical treatment of a
or HUF dependant disabled
Any amount incurred for Flat deduction of
the medical treatment ` 75,000.
(including nursing), In case of severe
training and rehabilitation disability (i.e. person with
of a dependent disabled 80% or more disability)
and / or the flat deduction shall
Any amount paid or be ` 1,25,000.

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 7.72 INCOME TAX LAW

deposited under the

scheme framed in this
behalf by the LIC or any
other insurer or
Administrator or Specified
Company and approved
by Board.
Meaning of Dependant
(1) (2)
In case of Dependant

An Spouse,
individual children,
parents,
brothers,
sisters
A HUF Any member
Persons mentioned in
column (2) should be
wholly or mainly
dependant on the person
mentioned in
corresponding column (1)
for support and
maintenance. Such
persons should not have
claimed deduction under
section 80U in computing
total income of that year.
80DDB Resident Deduction for medical Actual sum paid or
Individual treatment of specified ` 40,000 (` 1,00,000, if
or HUF diseases or ailments the payment is for
Amount paid for specified medical treatment of a
diseases or ailment senior citizen), whichever
is less,
Assessee Amount spent
minus
An For himself or
the amount received
individual his dependant

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.73

being spouse, from the insurance

children, company or reimbursed
parents, by the employer.
brothers or
sisters wholly or
mainly
dependant on
the individual
for support and
maintenance
A HUF For any
member
80E Individual Interest on loan taken The deduction is
for higher education available for interest
Interest on loan taken payment in the initial
from any financial assessment year (year of
institution or approved commencement of
charitable institution. interest payment) and
Such loan is taken for seven assessment years
pursuing his higher immediately succeeding
education or higher the initial assessment
education of his or her year
relative i.e., spouse or (or)
children of the individual until the interest is paid
or the student for whom in full by the assessee,
the individual is the legal whichever is earlier.
guardian.
80EE Individuals Deduction for interest Deduction of upto
on loan borrowed from ` 50,000 would be
any financial institution allowed in respect of
[bank/housing finance interest on loan taken
company (HFC)] for from a financial
acquisition of residential institution (FI).
house property Conditions:
Loan should be
sanctioned during
P.Y.2016-17

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 7.74 INCOME TAX LAW

Loan sanctioned ≤ ` 35
lakhs
Value of house ≤ ` 50
lakhs
The assessee should not
own any residential
house on the date of
sanction of loan.
80EEA Individual Deduction in respect of Deduction of upto
interest payable on loan ` 1,50,000 would be
taken from a FI (bank or allowed in respect of
HFC) for acquisition of interest payable on loan
residential house taken from a FI for
property acquisition of house
(In case the property is property.
self-occupied, the Conditions:
deduction would be over • Loan should be
and above the deduction sanctioned by a FI
of ` 2 lakhs under section during the period
24) between 1 st
April
For example, if the 2019 to 31 March
st

interest payable is, say, 2021.

` 3,80,000 on loan taken • Stamp Duty Value of
from FI for acquisition of house ≤ ` 45 lakhs
residential house, ` 2 lakh • The individual should
can be claimed as not own any residential
deduction u/s 24(b) and house on the date of
` 1.50 lakhs as deduction sanction of loan.
u/s 80EEA. Even though
• The individual should
for let-out property, there
not be eligible to
is no limit u/s 24, by
claim deduction u/s
virtue of section 71(3A),
80EE.
set-off of loss from house
property against any
other head of income is
restricted to ` 2 lakh.
Hence, the excess interest
payable can be claimed

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.75

u/s 80EEA, subject to

fulfillment of prescribed
conditions.
80EEB Individual Deduction in respect of Deduction of upto
interest payable on loan ` 1,50,000 would be
taken from a FI (bank or allowed in respect of
certain NBFCs) for interest payable on loan
purchase of electric taken for purchase of
vehicle electric vehicle.
Loan should be
sanctioned by a FI during
the period from 1.4.2019
to 31.3.2023
80G All Donations to certain funds, charitable institutions etc.
assessees There are four categories of deductions –
Category Donee
(I) 100% deduction of Prime Minister’s National
amount donated, Relief Fund, National
without any Children’s Fund, Swachh
qualifying limit Bharat Kosh, National
Defence Fund, PM CARES
Fund etc.
(II) 50% deduction of Prime Minister’s Drought
amount donated, Relief Fund, Jawaharlal
without any Nehru Memorial Fund,
qualifying limit Indira Gandhi Memorial
Trust, Rajiv Gandhi
Foundation.
(III) 100% deduction of Government or local
amount donated, authority, institution for
subject to qualifying promotion of family
limit planning etc.
(IV) 50% deduction of Government or any local
amount donated, authority to be used for
subject to charitable purpose, other
qualifying limit. than promotion of family

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 7.76 INCOME TAX LAW

planning, notified temple,

church, gurudwara,
mosque etc.
Calculation of Qualifying limit for Category III &
IV donations:
Step 1: Compute adjusted total income, i.e., the gross
total income as reduced by the following:
1. Deductions under Chapter VI-A, except u/s 80G
2. Short term capital gains taxable u/s 111A
3. Long term capital gains taxable u/s 112& 112A
Step 2: Calculate 10% of adjusted total income.
Step 3: Calculate the actual donation, which is subject
to qualifying limit
Step 4: Lower of Step 2 or Step 3 is the maximum
permissible deduction.
Step 5: The said deduction is adjusted first against
donations qualifying for 100% deduction (i.e.,
Category III donations). Thereafter, 50% of balance
qualifies for deduction under section 80G.
Note - No deduction shall be allowed for donation in
excess of ` 2,000, if paid in cash.
80GG Individual Rent paid for Least of the following is
not in residential allowable as deduction:
receipt of accommodation (1) 25% of total income;
house rent (2) Rent paid – 10% of
allowance total income
(3) ` 5,000 p.m.
No deduction if any
residential accommodation
is owned by the
assessee/his spouse/minor
child/HUF at the place
where he ordinarily resides
or performs the duties of
his office or employment

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.77

or carries on his business

or profession.
80GGB Indian Contributions to Actual contribution
company political parties (otherwise than by way of
Any sum contributed by cash)
it to a registered
political party or an
electoral trust.
80GGC Any person, Contributions to
other than political parties Actual contribution
local Amount contributed to (otherwise than by way of
authority a registered political cash)
and an party or an electoral
artificial trust.
juridical
person
funded by
the
Government.
Deductions in respect of Certain Incomes
As per section 80AC, furnishing return of income on or before due date is
mandatory for claiming deduction in respect of certain incomes.
Section Eligible Eligible Income Permissible Deduction
Assessee
80JJAA An Deduction in respect of 30% of additional
assessee employment of new employee cost incurred in
to whom employees the previous year.
section Deduction is allowable for
44AB 3 assessment years
applies, including assessment year
whose relevant to the previous
Gross total year in which such
income employment is provided.
includes
profits and
gains

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 7.78 INCOME TAX LAW

derived
from
business
80QQB Resident Royalty income, etc., of Income derived in the
individual, authors of certain books exercise of profession or
being an other than text books ` 3,00,000, whichever is
author Consideration for less.
assignment or grant of In respect of royalty or
any of his interests in the copyright fee received
copyright of any book, otherwise than by way of
being a work of literary, lumpsum, income to be
artistic or scientific nature restricted to 15% of value
or royalty or copyright of books sold during the
fee received as lumpsum relevant previous year.
or otherwise.

80RRB Resident Royalty on patents Whole of such income or

individual, Any income by way of ` 3,00,000, whichever is
being a royalty on patents less.
patentee registered on or after
1.4.2003
Deductions in respect of Other Income
Section Eligible Eligible Income Permissible Deduction
Assessee
80TTA Individual Interest on deposits in
or a HUF, savings account
other than Interest on deposits in a Actual interest subject to a
a resident savings account with a maximum of ` 10,000.
senior bank, a co-operative
citizen society or a post office
(not being time
deposits, which are
repayable on expiry of
fixed periods)
80TTB Resident Interest on deposits Actual interest or
senior ` 50,000, whichever is less.

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.79

citizen (i.e. Interest on deposits

an individual (both fixed deposits and
of the age of saving accounts) with
60 years or banking company, co-
more at any operative society
time during engaged in the business
the previous of banking or a post
year) office.
Other Deductions
Section Eligible Condition for deduction Permissible Deduction
Assessee
80U Resident Deduction in case of a
Individual person with disability
Any person, who is Flat deduction of ` 75,000,
certified by the medical in case of a person with
authority to be a person disability.
with disability. Flat deduction of
` 1,25,000, in case of a
person with severe
disability (80% or more
disability).

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 7.80 INCOME TAX LAW

TEST YOUR KNOWLEDGE

Question 1
Examine the following statements with regard to the provisions of the Income-tax
Act, 1961:
(i) During the financial year 2020-21, Mr. Amit paid interest on loan availed by
him for his son's higher education. His son is already employed in a firm.
Mr. Amit will get the deduction under section 80E.
(ii) Subscription to notified bonds of NABARD would qualify for deduction under
section 80C.
(iii) In order to be eligible to claim deduction under section 80C,
investment/contribution/subscription etc. in eligible or approved modes,
should be made from out of income chargeable to tax.
(iv) Where an individual repays a sum of ` 30,000 towards principal and ` 14,000
as interest in respect of loan taken from a bank for pursuing eligible higher
studies, the deduction allowable under section 80E is ` 44,000.
(v) Mrs. Sheela, widow of Mr. Satish (who was an employee of M/s. XYZ Ltd.),
received ` 7 lakhs on 1.5.2020, being amount standing to the credit of
Mr. Satish in his NPS Account, in respect of which deduction has been allowed
under section 80CCD to Mr. Satish in the earlier previous years. Such amount
received by her as a nominee on closure of the account is deemed to be her
income for A.Y.2021-22.
(vi) Mr. Vishal, a Central Government employee, contributed ` 50,000 towards Tier
II account of NPS. The same would be eligible for deduction under section
80CCD.
Answer
(i) The statement is correct. The deduction under section 80E available to an
individual in respect of interest on loan taken for his higher education or for
the higher education of his relative. For this purpose, relative means, inter alia,
spouse and children of the individual. Therefore, Mr. Amit will get the
deduction under section 80E.It is immaterial that his son is already employed in
a firm. This would not affect Mr. Amit’s eligibility for deduction under section
80E.

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.81

(ii) The statement is correct. Under section 80C(2) subscription to such bonds
issued by NABARD (as the Central Government may notify in the Official
Gazette) would qualify for deduction under section 80C.
(iii) The statement is not correct. There is no stipulation under section 80C
that the investment, subscription, etc. should be made from out of income
chargeable to tax.
(iv) The statement is not correct. Deduction under section 80E is in respect of
interest paid on education loan. Hence, the deduction will be limited to
`14,000.
(v) The statement is not correct. The proviso to section 80CCD(3) provides
that the amount received by the nominee, on closure of NPS account on the
death of the assessee, shall not be deemed to be the income of the
nominee. Hence, amount received by Mrs. Sheela would not be deemed to
be her income for A.Y. 2021-22.
(vi) The statement is not correct. Contribution to Tier II account of NPS would
qualify for deduction under section 80C and not section 80CCD.
Question 2
Examine the allowability of the following:
(i) Rajan has to pay to a hospital for treatment ` 62,000 and spent nothing for
life insurance or for maintenance of handicapped dependent.
(ii) Raja, a resident Indian, has spent nothing for treatment in the previous year
and deposited ` 25,000 with LIC for maintenance of handicapped dependant.
(iii) Rajan has incurred ` 20,000 for treatment and ` 25,000 was deposited with
LIC for maintenance of handicapped dependant.
(iv) Payment of ` 50,000 by cheque to an electoral trust by an Indian company.
Answer
(i) The deduction of ` 75,000 under section 80DD is allowed in full, irrespective
of the amount of expenditure incurred or paid by the assessee. If the
expenditure is incurred in respect of a dependant with severe disability, the
deduction allowable is ` 1,25,000.
(ii) The assessee Rajan has deposited ` 25,000 for maintenance of handicapped
dependent. The assessee is, however, eligible to claim ` 75,000 since the
deduction of ` 75,000 is allowed in full, irrespective of the amount

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deposited with LIC. In the case of dependant with severe disability, the
deduction allowable is ` 1,25,000.
(iii) Section 80DD allows a deduction of `75,000 irrespective of the actual
amount spent on maintenance of handicapped dependent and/or actual
amount deposited with LIC. Therefore, the deduction will be `75,000 even
though the total amount incurred/deposited is only`45,000. If the
dependant is a person with severe disability the quantum of deduction is
`1,25,000.
(iv) Amount paid by an Indian Company to an electoral trust is eligible for
deduction under section 80GGB from gross total income, since such
payment is made otherwise than by way of cash.
Question 3
For the Assessment year 2021-22, the Gross Total Income of Mr. Chaturvedi, a
resident in India, was ` 8,18,240 which includes long-term capital gain of
` 2,45,000 taxable under section 112 and Short-term capital gain of ` 58,000. The
Gross Total Income also includes interest income of ` 12,000 from savings bank
deposits with banks and ` 40,000 interest on fixed deposits with banks.
Mr. Chaturvedi has invested in PPF ` 1,20,000 and also paid a medical insurance
premium ` 51,000. Mr. Chaturvedi also contributed ` 50,000 to Public Charitable
Trust eligible for deduction under section 80G by way of an account payee cheque.
Compute the total income and tax thereon of Mr. Chaturvedi, who is 70 years old as
on 31.3.2021. Ignore the provisions of section 115BAC.
Answer
Computation of total income and tax payable by Mr. Chaturvedi for
the A.Y. 2021-22

Particulars ` `

Gross total income including long term capital gain 8,18,240

Less: Long term capital gain 2,45,000
5,73,240
Less: Deductions under Chapter VI-A:
Under section 80C in respect of PPF deposit 1,20,000
Under section 80D (it is assumed that premium of 50,000
` 51,000 is paid by otherwise than by cash. The

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.83

deduction would be restricted to ` 50,000, since

Mr. Chaturvedi is a senior citizen)
Under section 80G (See Notes 1 & 2 below) 17,662
Under section 80TTB (See Note 3 below) 50,000 2,37,662

Total income (excluding long term capital gains) 3,35,578

Total income (including long term capital gains) 5,80,578
Total income (rounded off) 5,80,580
Tax on total income (including long-term capital
gains of ` 2,45,000)
LTCG ` 2,45,000 x 20% 49,000
Balance total income ` 3,35,580 (See Note 4 below) 1,779
50,779
Add: Health and Education cess @4% 2,031
Total tax liability 52,810

Notes:
1. Computation of deduction under section 80G:

Particulars `
Gross total income (excluding long term capital gains) 5,73,240
Less : Deduction under section 80C, 80D & 80TTB 2,20,000
3,53,240
10% of the above 35,324
Contribution made 50,000
Lower of the two eligible for deduction under section 80G 35,324
Deduction under section 80G – 50% of ` 35,324 17,662

2. Deduction under section 80G is allowed only if amount is paid by any mode
other than cash, in case of amount exceeding ` 2,000. Therefore, the
contribution made to public charitable trust is eligible for deduction since it is
made by way of an account payee cheque.

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 7.84 INCOME TAX LAW

3. Deduction of upto ` 50,000 under section 80TTB is allowed to a senior citizen if

gross total income includes interest income on bank deposits, both fixed
deposits and savings account.
4. Mr. Chaturvedi, being a senior citizen is eligible for basic exemption of
` 3,00,000.
Question 4
Mr. Rajmohan whose gross total income was ` 6,40,000 for the financial year 2020-
21, furnishes you the following information:
(i) Stamp duty paid on acquisition of residential house (self-occupied) - ` 50,000.
(ii) Five year post office time deposit -` 20,000.
(iii) Donation to a recognized charitable trust ` 25,000 which is eligible for
deduction under section 80G at the applicable rate.
(iv) Interest on loan taken for higher education of spouse paid during the year -
` 10,000.
Compute the total income of Mr. Rajmohan for the Assessment year 2021-22.
Answer
Computation of total income of Mr. Rajmohan for the A.Y.2021-22
Particulars ` `
Gross Total Income 6,40,000
Less: Deduction under Chapter VI-A
Under section 80C
Stamp duty paid on acquisition of residential 50,000
house
Five year time deposit with Post Office 20,000
70,000
Under section 80E
Interest on loan taken for higher education of 10,000
spouse, being a relative.
Under section 80G (See Note below)
Donation to recognized charitable trust
(50% of ` 25,000) 12,500 92,500
Total Income 5,47,500
Note: In case of deduction under section 80G in respect of donation to a charitable
trust, the net qualifying amount has to be restricted to 10% of adjusted total

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 DEDUCTIONS FROM GROSS TOTAL INCOME 7.85

income, i.e., gross total income less deductions under Chapter VI-A except 80G. The
adjusted total income is, therefore, ` 5,60,000 (i.e. 6,40,000 – ` 80,000), 10% of
which is ` 56,000, which is higher than the actual donation of ` 25,000. Therefore,
the deduction under section 80G would be ` 12,500, being 50% of the actual
donation of ` 25,000.
Question 5
Compute the eligible deduction under Chapter VI-A for the A.Y. 2021-22 of Ms. Roma,
aged 40 years, who has a gross total income of ` 15,00,000 for the A.Y. 2021-22 and
provides the following information about her investments/payments during the P.Y.
2020-21:

Sl. Particulars Amount

No. (` )
1. Life Insurance premium paid (Policy taken on 31-03-2012 35,000
and sum assured is ` 3,40,000)
2. Public Provident Fund contribution 1,50,000
3. Repayment of housing loan to Bhartiya Mahila Bank, Bangalore 20,000
4. Payment to L.I.C. Pension Fund 1,40,000
5. Mediclaim Policy taken for self, wife and dependent children,
premium paid by cheque 30,000
6. Medical Insurance premium paid by cheque for parents 52,000
(Senior Citizens)

Answer
Computation of eligible deduction under Chapter VI-A of Ms. Roma
for A.Y. 2021-22

Particulars ` `
Deduction under section 80C
Life insurance premium paid ` 35,000 35,000
(allowed in full since the same is within the limit of
20% of the sum assured, the policy being taken before
1.4.2012)
Public Provident Fund 1,50,000
Repayment of housing loan to Bhartiya Mahila Bank,
Bangalore 20,000
2,05,000

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 7.86 INCOME TAX LAW

Restricted to a maximum of ` 1,50,000 1,50,000

Deduction under section 80CCC for payment 1,40,000
towards LIC pension fund
2,90,000
As per section 80CCE, aggregate deduction under, 1,50,000
inter alia, section 80C and 80CCC, is restricted to
Deduction under section 80D
Payment of medical insurance premium of ` 30,000
towards medical policy taken for self, wife and
dependent children restricted to 25,000
Medical insurance premium paid ` 52,000 for parents,
being senior citizens, restricted to 50,000 75,000
Eligible deduction under Chapter VI-A 2,25,000

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