DEDUCTION UNDER CHAPTER VIA

Difference between Exemption & Deduction

Exemptions and Deductions have the same goal
Reduction of Tax liability
But usages are completely different
Exemptions
Can be termed as tax free income
They are deducted first to arrive at your gross total income
Reduced the over all taxable income
Deductions
Once the Gross total income is calculated, the deduction is
allowed to arrive at Total income or net taxable income
Deducted from Gross Total Income as a result of expenses
or made tax deductible investment (except under section
80U)
 Basic Rules for claiming deductions

Chapter VIA of the Income Tax Act provides for a straight deduction of the whole or a
specified percentage of the amount qualifying for the same in computing the total income.
Deductions under chapter VIA are not available from
(1) LTCG
(2) STCG covered under section 111A (i.e. STCG on which STT is charged
- Transfer of Equity Shares or Units of Equity Fund over Stock Exchange); and
(3) Casual income like winning from lotteries, races, etc.
(4) Income referred in Section115A, 115AB, 115AC, 115ACA, 115AD and 115D
Limit of deduction
The aggregate amount of deduction under chapter VIA cannot exceed Gross Total Income of
the assessee (Section 80A(2) excluding :
(1) LTCG;
(2) STCG covered under section 111A (i.e., STCG on which STT is charged —
Transfer of Equity Shares or Units of Equity Fund over Stock Exchange); and
(3) Casual income like winning from lotteries, races, etc.
(4) Income referred in Section 115A, 115AB, 115AC, 115ACA, 115AD and 115D.
Deduction must be claimed
Deduction under chapter VI A shall be available only if the assesse claims
for it.

Double Deduction not permissible

Where deduction under any section of chapter VIA has been claimed then
the same shall not qualify for deductions in any other section.

Return Filling in time

Section 80AC stipulates compulsory filling 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 VIA under
the Heading “C - Deductions in respect of certain incomes” – [Section 80H
to 80RRB].
 Basis of Deductions

[1] Payments based deductions

(i) Investments
Section 80C : LIP, PPF, RPF, FD, School Fees etc.
Section 80CCC : Annuity Plan of Life Insurer
Section 80CCD : NPS, ATAL Pension Yojana

(ii) Medical
Section 80D : Medical Insurance premium, expenses
Section 80DD : Medical Treatment of dependent disabled
Section 80DDB : Medical treatment of Specified disease
Section 80U : Deduction to Disable persons

(iii) Interest payments

Section 80E : Interest on Education Loan
Section 80EE : Interest on Housing Loan
Section 80EEA : Interest on Housing Loan
Section 80EEB : Interest on Electric vehicle loan
(iv) Donation
Section 80G : Donations to charitable funds
Section 80GGA : Donations for Scientific research or rural development
Section 80GGB : Donations to Political parties by Companies
Section 80GGC : Donations to Political party by Any person

(v) Rent payments

Section 80GG : Rent Paid for Home

[2] Income Based deductions

(i) Special Incomes

Section 80JJAA : Hiring new employees
Section 80QQB : Royalty on Books
Section 80RRB : Royalty on patents

(ii) Interest income

Section 80TTA : Interest on Saving Accounts
Section 80TTB : Interest on Senior Citizen's deposits
Deductions to be made in computing total income
[Section 80A]

Aggregate of these deductions cannot exceed the gross

total income of the assessee [Section 80A(2)]
It has been made clear in Section 80A(2) that the aggregate of
these deductions cannot exceed the gross total income of the
assessee.
No deduction under the same section shall be allowed in
computing the total income of a member of AOP or BOI, in
relation to his share in the income of the AOP or BOI
[Section 80A(3)]
Section 80A(3) provides that where a deduction has been allowed
under Sections 80G, 8OGGA, 80GGC, 8OHH, 8OHHA, 8OHHB,
8OHHC, 8OHHD, 80-I, 80-IA, 8080IB, 80IC, 80ID, 80IE, 80J or 80JJ, in
computing the total income of AOP. or body of individuals, no
deduction under the same section shall be allowed in computing the
total income of a member of the AOP or BOI, in relation to his share
in the income of the AOP or BOI.
 [1] Investment in LIC, PF, PPF etc.
[Section 80C]

Eligible Assessee
Individual - Self ,Spouse or any Child (minor or major)
HUF – Any member

Quantum of Deduction
Maximum Rs. 1,50,000/- (with effect from assessment year 2015-
16).

Conditions
All investments /payments in 80C must be actually paid within the relevant
previous years.

The sums paid or deposited need not be out of income chargeable to tax of the
previous year.
Different Investment in this section includes
 Life Insurance premium (Paid by an individual, spouse, and child. In
the case of HUF, on the life of any member of HUF).
 EPF-Employee contribution can be claimed for deduction.
 Public Provident Fund (Paid by an individual, spouse, and child. In the case
of HUF, on the life of any member of HUF).
 National Savings Certificate (NSC).
 Sukanya Samriddhi Account
 ELSS or Tax Saving Mutual Funds
 Senior Citizen Savings Scheme
 5-Years Post Office or Bank Deposits.
 Tuition fee of kids.
 Principal payment towards home loan.
 Stamp duty and registration cost of the house.
 [2] Deduction in respect of deposits under National
Savings Scheme or payment to a deferred annuity
plan
[Section 80CCA]
Eligible Assessee
Where an assessee, being —
(a) an individual, or
(b) a Hindu undivided family,
Quantum of Deduction
Whole of the amount deposited or paid
Conditions
The sums paid or deposited need be out of income chargeable to tax of the
previous year.
Section 80CCA(2) deems withdrawals from National Savings Scheme as income of
the previous year in which such withdrawal is made.
As per Second proviso to Section 80CCA no deduction under this sub-section shall
be allowed in relation to any amount deposited or paid under clauses (i) and (ii)
on or after the 1st day of April, 1992.
 [4] Contribution to certain
Pension Funds [Section 80CCC]
Eligible Assessee
Individual.
Quantum of Deduction
Deduction available up to Rs. 150,000/-
Essential Conditions:
(i) The amount is to be paid out of his income chargeable to tax of the concerned
individual.
(ii) Where any amount paid or deposited by the assessee has been taken into
account for the purposes of this section, deduction under section 80C shall not be
allowed with reference to such amount

Not applicable from A Y 2006-07

[5] Contribution to pension scheme
notified by Central Government
[Section 80CCD]

Eligible Assessee
Only to an individual (citizen of India, Resident or Non-Resident) who may
be an employee or may be engaged in business/profession.
Quantum of Deduction
Deduction under Section 80CCD(2) is allowed on Contribution
made by employer in the previous year to the said account of an
employee

Entire employer’s contribution would be added in the salary of

employee and then deduction shall be allowed restricted to 10% of
Salary (14% in case contribution made by CG)

Following are the notified pension schemes:

1. NPS – National Pension System
2. APY – Atal Pension Yojana
As per section 80CCE, maximum permissible deduction under
sections 80C, 80CCC and 80CCD(1) put together is Rs.
1,50,000/-.

Deduction under Section 80CCD(1B)

Additional Deduction of up to Rs 50,000 is allowable to an
individual for Contribution made to NPS beyond the Normal
Deduction of up to Rs 1,50,000/-.
 [6] Limit of deductions under section
80C, section 80CCC and section 80CCD
[Section 80CCE]

Eligible Assessee
As per section 80CCE, the maximum amount of deduction that an assessee can
claim under sections 80C, 80CCC and 80CCD will be limited to Rs 2,00,000/- (Rs.
1,50,000 + 50,000). In other words, under section 80CCE, there is not the
separate deduction.
Quantum of Deduction
The aggregate amount of deduction under section 80C, section 80CCC and section
80CCD(1) shall not, in any case exceed Rs. 1,50,000 (Rs. 1,00,000/- up to
assessment year 2014-15).
Essential Conditions
Only employee’s/assessee’s contribution to New Pension Scheme to be included
for the limit of Rs. 1,50,000/-.
 [7] Deduction in respect of
subscription to long-term
infrastructure bonds
[Section 80CCF]
Eligible Assessee
An individual or a Hindu undivided family
Quantum of Deduction
The maximum amount of deduction allowable under section
80CCF cannot exceed Rs. 20,000.
Conditions
The term period (maturity period) of the long term infrastructure
bond is generally 10 years.
The lock in period of such long term infrastructure bond is 5 years.
The interest received on such long term infrastructure bond is
taxable under the head ‘Income from Other Sources’.
 [8] Investment made under Rajiv
Gandhi Equity Saving Scheme or
listed units of an equity oriented
fund
[Section 80CCG]
Eligible Assessee
only to a resident individual for investment made in listed equity
shares or listed units of an equity oriented fund.
Quantum of Deduction
(i) 50% of the amount invested in such equity shares or listed units of
an equity oriented fund; or
(ii) Rs. 25,000/-,
whichever is less.

Section 80CCG deduction to be discontinued from Assessment year 2018-19.

[9] Medical Insurance Premium, etc.
[Section 80D]

Eligible Assessee
An individual or Hindu Undivided Family whether
resident or non-resident.
Quantum
Covered of Deduction
Maxiumum Maxiumum Total Maximum
deduction for deduction for deduction under
self, family and parents 80D for Individual
children
Self, family and parents below 25,000 25,000 50,000
60 years
Self and family but parents 25,000 50,000 75,000
above the age of 60
Both the individual and parents 50,000 50,000 1,00,000
are above 60 years of age
Members of HUF 25,000 25,000 25,000
Non resident 25,000 25,000 25,000
[10] Maintenance including Medical Treatment of a
handicapped dependent who is a person with disability
[Section 80DD]

Eligible Assessee
Individual or a Hindu Undivided Family (HUF) who is
resident in India.
Quantum of Deduction
Assessment year Dependent person Dependent person with
with disability (a severe disability (a
person with 40% or person with 80% or
more of one or more more of one or more
disability) disability)
From 75,000 1,25,000
Assessment year 2016-17
Upto 50,000 1,00,000
Assessment year 2015-16
 [11] Medical treatment etc. of specified disease or ailments
[Section 80DDB]

Eligible Assessee
Individual or a Hindu Undivided Family (HUF) who is
resident in India.
Quantum
Assessment Normal of Deduction
Senior Citizen Very Senior Citizen
Year
2019-20 Rs. 40,000/- or the amount Deduction of Rs. 1,00,000/- for both senior citizens and very senior
actually paid, whichever is less citizens
onwards

2016-17 to Rs. 40,000/-or the amount actually In case of senior citizen Rs. For very senior citizens Rs. 80,000 is
2018-19 paid, whichever is less 60,000 or amount actually paid, the maximum deduction that can be
whichever is less claimed

2015-16 `Rs. 40,000/-or the amount In case of senior citizen, Rs. 60,000 or amount actually paid, whichever
actually paid, whichever is less. is less
 [12] Interest paid on loan taken for higher education
[Section 80E]

Eligible Assessee
Individual
Quantum of Deduction
Entire payment of interest paid during previous year is allowed as
deduction.
Conditions
1. Loan must have taken for the purpose of Higher Education of self or
spouse or children or the student of whom the individual is the Legal
guardian.
2. Loan must have been taken from any financial Institution or approved
charitable institution.
3. Loans taken from friends or relatives don’t qualify for deduction.
Higher Education: Any course of study (including vocational studies)
pursued after Senior Secondary Examination (Class XII) or its
equivalent.
 [13] Interest on loan taken for residential house property :
Interest on Home Loan (First Time Buyers)
[Section 80EE]

Eligible Assessee
Individuals can only claim this deduction
Quantum of Deduction
Interest paid on loan for buying house property shall be allowed upto Rs. 50,000/-.
(Deduction can be claimed over and above Rs. 2,00,000/- under section 24).
Conditions
(a) The loan taken for the purpose of acquiring residential property shall have been
sanctioned only between 01.04.2016 and 31.03.2017.
(b) The amount of loan sanctioned shall not exceed Rs. 35 lacs.
(c) Value of the residential property which is subject to loan shall not exceed Rs. 50
Lacs.
(d) The individual must not be owning another residential property as on the date of
sanction of loan.
(e) The loan has to be sanctioned by Housing Finance Corporation or Financial
Institutions.
[14] Interest on loan taken from any financial institution for
the purpose of acquisition of a residential house property
[Section 80EEA]

Eligible Assessee
an individual
Quantum of Deduction
Interest up to Rs. 1,50,000 on loan taken for residential house property from any
financial institution. This is in addition to Rs. 2,00,000 deduction under section 24.
Essential conditions
(i) Loan has been sanctioned by a financial institution during the period beginning
on the 1st April, 2019 to 31st March, 2022.
(ii) The stamp duty value of house property does not exceed forty-five lakh
rupees;
(iii) Assessee does not own any residential house property on the date of sanction
of loan.
(iv) Where a deduction under this section is allowed for any interest, deduction
shall not be allowed in respect of such interest under any other provision of this
Act for the same or any other assessment year.
[15] Interest on loan taken for purchase of an electric vehicle from
any financial institution
[Section 80EEB]
Eligible Assessee
An individual
Quantum of Deduction
Interest up to Rs. 1,50,000 on loan taken for purchase of an electric
vehicle from any financial institution.
Essential conditions
(i) The loan has been sanctioned by a financial institution including a
non-banking financial company during the period beginning on the 1st
April, 2019 to 31st March, 2023;
(ii) The assessee does not own any other electric vehicle on the date of
sanction of loan.
(iii) Where a deduction under this section is allowed for any interest,
deduction shall not be allowed in respect of such interest under any
other provisions of the Act for the same or any other assessment year.
 [16] Donation to certain funds/ Trust etc.
[Section 80G]

Eligible Assessee
All ssessee who pays any sum as donation to eligible funds
or institutions, is entitled to a certain limitations, from the
gross total income.

Quantum of Deduction
(1) Deduction without any Ceiling Limit
(a) Donation qualifying 100% deduction
(b) Donation qualifying 50% deduction
(2) Deduction with Ceiling Limit
(a) Donation qualifying 100% deduction
(b) Donation qualifying 50% deduction
[1(a)] Deduction wit out any ceiling limit : Donation qualifying 100% deduction
1. National Defence Fund
2. Army/ Naval/ Air force Welfare fund
3. Prime Minister’s National Relief Fund
4. National Children’s Fund
5. National Communal Harmony Foundation
6. National/ State Blood Transfusion Council
7. National Illness Assistance Fund
8. National Sports Fund
9. National Cultural Fund
10. National Technology Development fund
11. National Trust for mental Disabilities
12. National Fund for Drug Abuse
13. Swachh Bharat Kosh except CSR
14. Clean Ganga Fund except CSR
15. Approved University
16. Prime Minister’s Armenia Earthquake Relief Fund
17. Africa Fund
18. State Government Medical Fund for poor
19. Chief Minister’s Relief Fund
20. Maharashtra Earthquake Fund
21. Gujarat Earthquake Fund
22. Andhra Pradesh Cyclone Fund
23. Zila Saksharta Samiti
24. PM CARES Fund
[1(b)] Donation without any ceiling limit : Qualifying 50% deduction
1. Jawaharlal Nehru Memorial Fund
2. Prime Minister’s Drought Relief Fund
3. Indira Gandhi Memorial Trust
4. Rajiv Gandhi Foundation

[2(a)] Subject to qualifying limit - Donation qualifying 100% deduction

1. Govt./Local authority for promoting family planning
2. Sum paid by a company as donation to the Indian Olympic Association
or any other associate/ 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

[2(b)] Donation qualifying 50% deduction

(i) Any Institution or Fund established in India for charitable purposes fulfilling
prescribed
conditions.
(ii) Govt./ local authority for utilization for any charitable purpose except promoting
family
planning.
(iii) Authority under law enacted either for dealing with and satisfying the need the
need for
housing accommodation or for the purpose of planning, development or
improvement of
cities, towns and villages.
Step for computation of qualifying limit:

Step – 1 Compute Adjusted Total Income i.e. the GTI as reduced by

the
following:
• Deductions under Chapter VIA, except under section 80G
• STCG under section 111A
• LTCG under section 112 & 112A

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,
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.

Donations in kind shall not qualify for deduction.

No deduction shall be allowed in respect of donation of any

sum exceeding Rs.2,000 unless such sum is paid by a mode
other than cash.

The deduction under section 80G can be claimed whether it has any
nexus with the business of the
assesse or not.
 [17] Deduction in respect of rents paid
[Section 80GG]
Eligible Assessee
Deduction under Section 80GG is available only to the
individuals :
those employees who do not get HRA (for instance, because they
work in very small firms or in the informal sector); or
self-employed persons. businessman
Quantum of Deduction
Least of the following is allowed as deduction under section 80GG:-
(i) Rs. 5,000/- per month (Rs. 2,000/- per month up to
assessment year 2016-17);
(ii) 25 % of adjusted Total Income;
(iii) Actual rent paid minus 10% of Adjusted Total Income
Essential Conditions:
(i) He should be a self-employed person and/or a salaried employee, who is not in
receipt of house rent allowance and also he is not being provided with Rent Free
Accommodation by his employer at any time during the previous year.
(ii) He should not have any house in his name or in the name of the spouse or in the
name of the minor child or in the name of Hindu Undivided Family of which he is a
member, at a place where he ordinarily resides or performs duties of his office or
employment or carries on his business or profession.
(iii) Also he should not have house even at any other place which he has declared to be
self-occupied.
(iv) He has paid rent for the accommodation taken by him for his residence.
(v) The assessee should file a declaration in Form No. 10BA regarding the expenditure
incurred by him towards payment of rent.
[18] Donations for scientific research or rural development
[Section 80GGA]

Eligible Assessee
Any assessee who does not have income chargeable under the head
“Profits and gains of business or profession” can claim deduction
under section 80GGA.

Quantum of Deduction
Deduction allowed is equal to the amount of donations i.e. 100%
deduction of sum donated. Deduction under section 80GGA is allowed
for donations made towards scientific research or rural development.

Double deduction is not permissible

Where a deduction under this section is claimed and allowed for any
assessment year then no deduction shall be allowed in respect of
such payments under any other provision of the Act for the same or
any other assessment year.
 [19] Donates to a political party or an
electoral trust registered in India
[Section 80GGB]

Eligible Assessee
Any Indian company or enterprise that donates to a political party or
an electoral trust registered in India can claim a deduction for the
amount contributed.
Quantum of Deduction
The Company can claim 100% deduction against the amount
donated to a political party under section 80GGB.
 [20] Contributions given by any person to political parties
[Section 80GGC]

Eligible Assessee
Any person other than
Local Authority
Artificial Juridical Person wholly or partly funded by Government.

Quantum of Deduction
Any amount of contribution made by the assessee (i.e., 100% sum
contributed) to a political party or an electoral trust.
 [21] Profits and gains from newly established
industrial undertakings or hotel business in
backward areas
[Section 80HH]
Eligible Assessee
Any assessee
Quantum of Deduction
Deduction from profit and gains to an undertaking engaged in
manufacturing or business of hotel and provides deduction @20% of the
profits and gains of undertaking for 10 assessment years.
Conditions
This section applies to any industrial undertaking which fulfils all the
following conditions, namely :—
(i) it has begun or begins to manufacture or produce articles after the 31st
day of December, 1970 but before the 1st day of April, 1990, in any
backward area;
(ii) it is not formed by the splitting up, or the reconstruction, of a business
already in existence in any backward area :
 [22] Profits and gains from newly established small-scale
industrial undertakings in certain areas
[Section 80HHA]
Eligible Assessee
All assessee
Quantum of Deduction
Deduction from such profits and gains of an amount equal to 20%
thereof.
Conditions
This section applies to any small-scale industrial undertaking which
fulfils all the following conditions, namely :—
(i) it begins to manufacture or produce articles after the 30th day of
September, 1977 but before the 1st day of April, 1990, in any rural
area ;
(ii) it is not formed by the splitting up, or the reconstruction, of a
business already in existence :
 [23] Deduction in respect of profits and gains from
projects outside India
[Section 80HHB]
Eligible Assessee
Assessee being an Indian company or a person (other than a company)
who is resident in India
Quantum of Deduction
(i) 40% thereof for an assessment year beginning on the 1st day of April,
2001;
(ii) 30% thereof for an assessment year beginning on the 1st day of April,
2002;
(iii) 20% thereof for an assessment year beginning on the 1st day of April,
2003;
(iv) 10% thereof for an assessment year beginning on the 1st day of April,
2004,
No deduction shall be allowed in respect of the assessment year beginning
on the 1st day of April, 2005 and any subsequent assessment year :
[24] Profits and gains from housing projects in certain
cases [Section 80HHBA]
Eligible Assessee
An assessee being an Indian company or a person (other than a
company) who is a resident in India
Quantum of Deduction
(i) 40% thereof for an assessment year beginning on the 1st day of
April, 2001;
(ii) 30% thereof for an assessment year beginning on the 1st day of
April, 2002;
(iii) 20% thereof for an assessment year beginning on the 1st day of
April, 2003;
(iv) 10% thereof for an assessment year beginning on the 1st day of
April, 2004,
and no deduction shall be allowed in respect of the assessment year
beginning on the 1st day of April, 2005 and any subsequent
assessment year.
 [25] Deduction in respect of profits retained for
export business
[Section 80HHC]
Eligible Assessee
an Indian company or a person (other than a company) resident in India, is
engaged in the business of export out of India of any goods or merchandise to
which this section applies,
Quantum of Deduction
(i) 80% thereof for an assessment year beginning on the 1st day of April,
2001;
(ii) 70% thereof for an assessment year beginning on the 1st day of April,
2002;
(iii) 50% thereof for an assessment year beginning on the 1st day of April,
2003;
(iv) 30% thereof for an assessment year beginning on the 1st day of April,
2004,
and no deduction shall be allowed in respect of the assessment year beginning
on the 1st day of April, 2005 and any subsequent assessment year.
 [26] Deduction in respect of earnings in convertible
foreign exchange
[Section 80HHD]
Eligible Assessee
An assessee, being an Indian company or a person (other than a company) resident in India, is
engaged in the business of a hotel or of a tour operator, approved by the prescribed authority
Quantum of Deduction
For an assessment year beginning on the 1st day of April, 2004, a deduction of a sum equal to
the aggregate of—
(i) 50% of the profits derived by him from services provided to foreign tourists; and
(ii) so much of the amount not 50% of the profits referred to in sub-clause (i) as is debited to
the profit and loss account of the previous year in respect of which the deduction is to be
allowed and credited to a reserve account to be utilised for the purposes of the business of the
assessee in the manner laid down in sub-section (4),
and no deduction shall be allowed in respect of the assessment year beginning on the 1st day
of April, 2005 and any subsequent assessment year :
 [27] Deduction in respect of profits from export of
computer software, etc.
[Section 80HHE]
Eligible Assessee
An assessee, being an Indian company or a person (other than a company) resident in
India,

Quantum of Deduction
(i) 80% of such profits for an assessment year beginning on the 1st day of April, 2001;
(ii) 70% thereof for an assessment year beginning on the 1st day of April, 2002;
(iii) 50% thereof for an assessment year beginning on the 1st day of April, 2003;
(iv) 30% thereof for an assessment year beginning on the 1st day of April, 2004,
and no deduction shall be allowed in respect of the assessment year beginning on the
1st day of April, 2005 and any subsequent assessment year.
 [28] Deduction in respect of profits and gains from export or
transfer of film software, etc.
[Section 80HHF]

Eligible Assessee
An assessee, being an Indian company or a person (other than a company) resident
in India,
Quantum of Deduction
(i) 80% of such profits for an assessment year beginning on the 1st day of April,
2001;
(ii) 70% thereof for an assessment year beginning on the 1st day of April, 2002;
(iii) 50% thereof for an assessment year beginning on the 1st day of April, 2003;
(iv) 30% thereof for an assessment year beginning on the 1st day of April, 2004,
and no deduction shall be allowed in respect of the assessment year beginning on
the 1st day of April, 2005 and any subsequent assessment year.
[29] Profits and gains from industrial undertakings after a certain
date, etc.
[Section 80I]
Eligible Assessee
Any assessee
Quantum of Deduction
Deduction from such profits and gains of an amount equal to 20% thereof
Any profits and gains derived by an assessee from—
(i) an industrial undertaking which begins to manufacture or produce articles or things or to operate its
cold storage plant or plants; or
(ii) a ship which is first brought into use; or
(iii) the business of a hotel which starts functioning,
on or after the 1st day of April, 1990, but before the 1st day of April, 1991, there shall, in accordance
with and subject to the provisions of this section, be allowed in computing the total income of the
assessee, a deduction from such profits and gains of an amount equal to twenty-five per cent thereof :
 [30] Profits and gains from industrial undertakings
or enterprises engaged in infrastructure
development, etc.
[Section 80-IA]
Eligible Assessee
Indian Company or any consortium (combination) of
such company or by an authority or a board or a
corporation or any other body established or
constituted under any Central or State Act
Nature of business:
The enterprise should carry on the business of –
 any Infrastructure Facility[Available up to Assessment year 2010-20]
 starts providing Telecommunication Services [Available up to Assessment year 2010-20]
 develops an Industrial Park [Available up to Assessment year 2010-20]
 develops special economic zone [Available up to Assessment year 2010-20]
 generates power [Available up to Assessment year 2010-20]
 commences transmission [Available up to Assessment year 2010-20]
 distribution of power [Available up to Assessment year 2010-20]
 undertakes substantial renovation and modernisation of the existing transmission or distribution
lines [Available up to Assessment year 2010-20]

Infra-structure facility means —

(a) A road including toll road, a bridge or a rail system;
(b) A highway project including housing or other activities being an integral part
of the highway project;
(c) A water supply project, water treatment system, irrigation project, sanitation
and sewerage system or solid waste management system;
(d) A port, airport, inland waterway or inland port or navigational channel in the
sea.
Quantum of Deduction
(a) For infrastructure facility being - A port, airport, inland waterway
or inland port
or navigational channel in the sea - 100% of the profit derived
from such business - For any 10
consecutive years out of 15 years commencing from the year in
which the undertaking begins
to operate.
(b) Any housing and other development activities which are an
integral part of the highway project - 100% of the profit derived from
such business- For any 10 consecutive years out of 20 years
commencing from the year in which the undertaking begins to
operate subject to certain other conditions#
(c) Any other facility - 100% of the profit derived from such business.
- For any 10 consecutive years out of 20 years commencing from the
year in which the undertaking begins to operate.
 [31] Profits and gains by an undertaking or enterprise
engaged in development of special economic zone
[Section 80-IAB]
Eligible Assessee
All assessee
Quantum of Deduction
100% of profit derived from such business for 10 consecutive assessment years
out of 15 years commencing from the year in which such SEZ has been notified.
Conditions to be satisfied
1.It must be engaged in the business of developing a Special Economic Zone
(SEZ).
2.Such SEZ shall be notified on or after 01.04.2005 under the Special Economic
Zones Act, 2005
3.Such development has begun before 01.04.2017
 [32] Deduction in respect of eligible start-up
[Section 80-IAC]

Eligible Assessee
An eligible start-up
 Eligible start-up means a company or a limited liability partnership
engaged in eligible business which fulfils the following conditions:
a.it is incorporated on or after 01.04.2016 but before 01.04.2021;
b.b. the total turnover of its business does not exceed Rs. 100 crore
in the previous year relevant to the assessment year for which
deduction is claimed; and
c.it holds a certificate of eligible business from the notified Inter-
Ministerial Board of Certification.
d. Eligible business means a business carried out by an eligible
start up engaged in innovation, development or improvement of
products or processes or services or a scalable business model
with a high potential of employment generation or wealth creation.
Conditions to be satisfied
1. Eligible Business: The assessee should be engaged in the eligible
business
2. New Business: Business should not be formed by splitting up or
reconstruction of an existing business. Exception However, this
condition is not applicable when conditions given u/s 33B are
satisfied, which are as follows –
 The business of an industrial undertaking carried on in India is
discontinued in any previous year by reason of extensive damage to,
or destruction of, any building, machinery, plant or furniture owned
by the assessee being used for business purpose.
 Such damage was caused due to –
i. flood, typhoon, hurricane, cyclone, earthquake or other convulsion
of nature; or
ii. riot or civil disturbance; or
iii. accidental fire or explosion; or iv. action by an enemy or action
taken in combating an enemy (whether with or without a
declaration of war),  Such business is re-established,
reconstructed or revived by the assessee at any time before the
expiry of 3 years from the end of previous year in which damage
was caused.
3. New Plant and Machinery: Such undertaking should not be formed
by transfer of machinery or plant previously used for any purpose.
Exception
(i) A plant or machinery is deemed as new asset if the following
conditions are
satisfied -
a. Such plant or machinery is imported into India;
b. Depreciation on such asset has not been allowed under this Act to
any person; and
c. The assessee was the first user of such asset in India.

(ii) Where the total value of old plant and machinery transferred to the
new business does not exceed 20% of total value of plant and
machinery used in such business, then this condition is deemed to be
satisfied.

Quantum of deduction
100% of profit derived from such business for 3 consecutive
assessment years out of 10 years commencing from the year in which
such eligible start-up is incorporated.
 [33] Profits and gains from certain industrial
undertakings other than infrastructure development
undertakings
[Section 80-IB]
Eligible Assessee
All assessee
Deduction under this section is available to undertaking
engaged in –
1. Industrial undertaking
2. Mineral oils
3. Processing, preservation and packaging of fruits or
vegetables, meat or integrated business of handling,
storage & transportation of foodgrains
Conditions to be satisfied
1. Nature of business: It must be engaged in the following business in
India –
(a) Manufactures or produces any article or thing other than article or
thing specified in the list in the 11th Schedule (further in case of
industrial undertaking located in the State of Jammu and Kashmir,
such undertaking should also not be engaged in any the
manufacture or production of any article or thing specified in Part C
of the Thirteenth Schedule); or
(b)Operates cold storage plant.
 Manufacture, with its grammatical variations, means a change in a
non-
living physical object or article or thing:
(a) resulting in transformation of the object or article or thing into
a new
and distinct object or article or thing having a different name,
character and use; or
(b) bringing into existence of a new and distinct object or article or
thing
with a different chemical composition or integral structure.
 Manufacture or production of article or thing does not include
construction of dam, bridge, road or building
 Undertaking located in the State of Jammu and Kashmir shall not
manufacture or produce any article mentioned in the 11th Schedule
as well as following items (being mentioned in Part C of 13th
Schedule):
a. Cigarettes/cigars of tobacco, manufactured tobacco and substitutes
b. Distilled/brewed alcoholic drinks
c. Aerated branded beverages and their concentrates:.

Exception
However, following undertakings may produce any article specified in
the 11th schedule –
• A small-scale industrial undertaking; or
• An industrial undertaking in an industrially backward State (or Union
territories) specified in the 8th Schedule.
Quantum of Deduction
Quantum of Deduction under Section 80-IB(9) :
Deduction shall be available @ 100% of eligible profits
for 7 assessment years commencing from the initial
assessment year.

Quantum of deduction under Section Section 80-IB(11A) :

Assessee Period of Deduction % of Profit eligible for
(commencing from initial Deduction
assessment year)
(a) Owned by a Company First 5 Years 100%
Next 5 Years 30%
(b) Owned by any other Assessee First 5 Years 100%
Next 5 Years 25%
 [34] Deduction in respect of profits and gains from housing
projects (affordable Housing Scheme)
[Section 80-IBA]

Eligible Assessee
All assessee
Quantum of Deduction
100% of the profits derived from such business.
Conditions
(1) The project must be completed within a period of five years from the date of
approval by the competent authority
(2) The project will be deemed to be completed where certificate of completion in
obtained from competent authority in writing.
(3) The carpet area of the shops and other commercial establishments included in
housing project cannot exceed 3% of aggregate carpet area
(4) Where a residential unit in the housing project is allotted to an individual, no other
residential unit in the housing project shall be allotted to the individual or the spouse
or the minor children of such individual.
(5) The assessee maintains separate books of accounts in respect of the housing
project.
(6) Project is approved by the competent authority after the 1st day of June, 2016, but
on or before the 31st day of March, 2021;
If Project is Approved On or After to 1st September, 2019
Location of project Area of plot of Carpet area of Project Utilizatio
land on which the residential n of Floor area
project is situated unit ratio

Where project is located Not less than 1,000 Not to exceed 60 Not less
within the metropolitan square metres square metres than 90% permissi
cities of Bengaluru, ble under
Chennai, Delhi National rules made by
Capital Region (limited to Government or
Delhi, Noida, Greater local authority
Noida, Ghaziabad,
Gurugram, Faridabad),
Hyderabad, Kolkata and
Mumbai (whole of Mumbai
Metropolitan Region)
Where the project is Not less than 2,000 Not to exceed 90 Not less
located in any other place square metres square metres than 80% permissi
ble under rules
made by
Government or
local authority
 [35] Deduction in respect of undertaking in special
category states
[Section 80-IC]
Eligible Assessee
All assessee
Quantum of Deduction
(a) Sikkim or any State of North-Eastern Region
100% of profit or gain of undertaking for 10 assessment year from the
initial assessment year
(b) Himachal Pradesh or Uttrakhand
100% of profit or gain of undertaking for 5 assessment year from the
initial assessment year# and 25% (30% in case of company) of profit or
gain of undertaking for next 5 years
Specified Articles to be produced:
Assessee must produce or manufacture any article or thing other than
any article or thing specified in the Thirteenth Schedule in specified
State.
 [36] Profits and gains from business of hotels and convention
centres in specified area
[Section 80ID]
Eligible Assessee
All assessee
Quantum of Deduction
100% of the profits and gains derived from such business for five consecutive assessment years
beginning from the initial assessment year.
This section applies to any undertaking,—
(i) engaged in the business of hotel located in the specified area, if such hotel is constructed and has
started or starts functioning at any time during the period beginning on the 1st day of April, 2007 and
ending on the 31st day of July, 2010; or
(ii) engaged in the business of building, owning and operating a convention centre, located in the
specified area, if such convention centre is constructed at any time during the period beginning on the
1st day of April, 2007 and ending on the 31st day of July, 2010; or
(iii) engaged in the business of hotel located in the specified district having a World Heritage Site, if such
hotel is constructed and has started or starts functioning at any time during the period beginning on the
1st day of April, 2008 and ending on the 31st day of March, 2013.
The deduction under sub-section (1) shall be available only if—
(i) the eligible business is not formed by the splitting up, or the reconstruction, of a
business already in existence;
(ii) the eligible business is not formed by the transfer to a new business of a building
previously used as a hotel or a convention centre, as the case may be;
(iii) the eligible business is not formed by the transfer to a new business of machinery or
plant previously used for any purpose.
 [37] Special provisions in respect of certain undertakings
in north- eastern states
[Section 80-IE]
Eligible Assessee
All assessee
Quantum of Deduction
100% of the profits and gains of such business for a period of 10 consecutive
assessment years, beginning from the assessment year relevant to the
previous year in which such undertaking begins to manufacture or produce
articles or things, or completes substantial expansion.
Location
Such activity takes place in any of the North-Eastern States. North-Eastern
States means the States of Arunachal Pradesh, Assam, Manipur, Meghalaya,
Mizoram, Nagaland, Sikkim and Tripura.
Carry on any eligible business

i. hotel (not below two star category);

ii. adventure and leisure sports including ropeways;
iii. providing medical and health services in the nature of nursing
home with a minimum capacity of 25 beds;
iv. running an old-age home;
v. operating vocational training institute for hotel management,
catering and food craft, entrepreneurship development, nursing
and para-medical, civil aviation related training, fashion designing
and industrial training;
vi. running information technology related training centre;
vii. manufacturing of information technology hardware; and
viii.Bio-technology
 [38] Profits and gains from business of collecting and
processing of bio-degradable waste
[Section 80JJA]
Eligible Assessee
All assessee
Quantum of Deduction
100% of the profit derived from such business for a period of 5 consecutive years from the year of
commencement of such business.
Conditions to be satisfied
Assessee is engaged in business of collecting and processing or treating of bio-degradable waste for –
(a) generating power; or
(b) producing bio-fertilizers, bio-pesticides or other biological agents; or
(c) producing biogas; or
(d) making pellets or briquettes for fuel; or
(e) organic manure.
 [39] Employment of New Employees
[Section 80JJAA]
Eligible Assessee
Any assessee subject to tax audit under sec. 44AB
Quantum of Deduction
30% of additional employee cost incurred in the course of such business in the
previous year, for 3 assessment years including the assessment year relevant to
the previous year in which such employment is provided.
Conditions to be satisfied
1. New Business: Business is not formed by splitting up, or the reconstruction, of
an existing business. Exception: Refer sec. 80-IAC.
2. No business reorganization: Business is not acquired by the assessee by way
of transfer from any other person or as a result of any business reorganization.
3. Audit: Books of account should be audited and report thereof should be
submitted one month prior to the due date of the filing of the return of income.
4. Claimed in the return:
No deduction shall be allowed if the deduction has not been claimed in the
return of income.
Where an employee is employed during the previous years for <240/
150 days, but is employed for > 240/150 days in the immediately
succeeding year. He shall be deemed to have been employed in the
succeeding year and the provision of this section shall apply
accordingly

In the 1st year of a new business, emoluments paid or payable to

employee employed during that previous year shall be deemed to be
the additional employee cos
[40] Certain incomes of Offshore Banking Units and International
Financial Services Centre
[Section 80LA]
Eligible Assessee
Assessee must be a scheduled bank;  It has a branch in India located in SEZ
Quantum of Deduction
In case of Unit of an International Financial Services Center - For any 10 consecutive
assessment years = 100% of the income
For next 5 consecutive years - 50% of the income
Applicable to
 A scheduled bank owning an offshore banking unit in a Special Economic Zone
(SEZ); or
 Any other bank incorporated by or under the laws of a country outside India and
having an Offshore banking unit in SEZ.
 Unit of an International Financial Services Center.
Offshore Banking Unit means a branch of a bank in India located in the SEZ and has
obtained the permission u/s 23(1)(a) of the Banking Regulation Act, 1949.
International Financial Services Center means an International Financial Services
Center which has been approved by the Central Government u/s 18(1) of the
Special Economic Zones Act, 2005.
 [41] Deduction in respect of certain inter-corporate dividends
[Section 80M]
Eligible Assessee
Domestic Company
Quantum of Deduction
Minimum of the following: (a) Dividend so received by the
assessee; or (b) Dividend distributed by the assessee within
due date.
Conditions to be satisfied
a.Dividend Income: Gross total income of the assessee includes
any income by way of dividends from any other domestic
company or a foreign company or a business trust.
b.Dividend Distribution: Assessee distributes dividend among its
shareholder within due date
c.Due date means the date one month prior to the due date for
furnishing the return of income.
 [42] Deduction in respect of royalties, etc., from certain foreign
enterprises
[Section 80O]
Eligible Assessee
Indian company or a person (other than a company) who is resident in
India,
Quantum of Deduction
(i) 40% for an assessment year beginning on the 1st day of April, 2001;
(ii) 30% for an assessment year beginning on the 1st day of April, 2002;
(iii) 20% for an assessment year beginning on the 1st day of April, 2003;
(iv) 10% for an assessment year beginning on the 1st day of April, 2004,
of the income so received in, or brought into, India, in computing the total
income of the assessee and no deduction shall be allowed in respect of
the assessment year beginning on the 1st day of April, 2005 and any
subsequent assessment year :
 [43] Deduction in respect of income of co-operative societies
[Section 80P]

Eligible Assessee
Co-operative society,
Quantum of Deduction
In the case of a co-operative society engaged in—
(i) carrying on the business of banking or providing credit facilities to its members, or
(ii) a cottage industry, or
(iii) the marketing of agricultural produce grown by its members, or
(iv) the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose
of supplying them to its members, or
(v) the processing, without the aid of power, of the agricultural produce of its members, or
(vi) the collective disposal of the labour of its members, or
(vii) fishing or allied activities, that is to say, the catching, curing, processing, preserving, storing or marketing of fish
or the purchase of materials and equipment in connection therewith for the purpose of supplying them to its
members,
the whole of the amount of profits and gains of business attributable to any one or more of such activities :
Primary society engaged in supply of milk, oil seeds, fruits,
etc. [Section 80P(2)(b)]
The deductions of the whole of the amounts of profits and gains of a
co- operative society is available if the following conditions are
satisfied-
1. The co-operative society is a primary society engaged in supplying
milk, oil seeds, fruits or vegetables.
2. Milk, oil seeds, fruits or vegetables are grown or raised by its
members.
3. Milk, oil seeds, fruits or vegetables are supplied

Income from other activities [Section 80P(2)(c)]

If a co-operative society is engaged in any other activity (either independently
or in addition to those specified in clause (a) or clause (b) then the following
amount is deductible under Section 80P(2)(c) :
1.In the case of a consumer co-operative society (i.e., a society for the benefits
of consumers): Rs. 1,00,000; and
2.In any other case: Rs. 50,000.
 [44] Deduction in respect of certain income of Producer
Companies
[Section 80PA]
Eligible Assessee
Producer Company as defined under section 581A of the
Companies Act, 2013
Quantum of Deduction
100% of the profits and gains attributable to such eligible
business.
Conditions to be satisfied
(a) Turnover: Total turnover of the assessee is less than
Rs. 100 crore in any previous year.
(b) Profit from eligible business: Gross total income of the
assessee includes any income from eligible business
 [45] Deduction in respect of profits and gains from the business of
publication of books
[Section 80Q]

Eligible Assessee
All assessee
Quantum of Deduction
A deduction from such profits and gains of an amount
equal to twenty per cent thereof.
“Books" shall not include
For the purposes of this section, "books" shall not
include newspapers, journals, magazines, diaries,
brochures, tracts, pamphlets and other publications of
a similar nature by whatever name called.
[46] Deduction in respect of professional income of
authors of text books in Indian languages
[Section 80QQA]

Eligible Assessee
An individual resident in India, being an author

Quantum of Deduction
An amount equal to 25% thereof.
[47] Deduction in respect of royalty income of authors of books
[Section 80QQB]

Eligible Assessee
A resident individual (irrespective of his citizenship)
Quantum of Deduction
Deduction in case of lump sum royalty in lieu of all rights of
the assessee in the book Minimum of the following –
a.100% of such income; or
b.b. Rs. 3,00,000
Nature of book
The book should be a work of literary, artistic or scientific
nature. It shall not include brochures, commentaries, diaries,
guides, magazines, journals, newspapers, pamphlets, text-
books for school, tracts and other publications of similar
nature, by whatever name called.
 [48] Deduction in respect of remuneration from certain foreign
sources in the case of professors, teachers, etc.
[Section 80R]

Eligible Assessee
an individual who is a citizen of India

Quantum of Deduction
a deduction from such remuneration of an amount equal to—
(i) 60% of such remuneration for an assessment year beginning on the
1st day of April, 2001;
(ii) 45% of such remuneration for an assessment year beginning on the
1st day of April, 2002;
(iii) 30% of such remuneration for an assessment year beginning on the
1st day of April, 2003;
(iv) 50% of such remuneration for an assessment year beginning on the
1st day of April, 2004,
as is brought into India by, or on behalf of, the assessee in convertible
foreign exchange within a period of six months from the end of the
previous year or within such further period as the competent authority
may allow in this behalf and no deduction shall be allowed in respect of
the assessment year beginning on the 1st day of April, 2005 and any
subsequent assessment year :
 [49] Deduction in respect of professional income
from foreign sources in certain cases
[Section 80RR]
Eligible Assessee
An individual resident in India
Conditions
A deduction under section 80RR in respect of professional income from
foreign sources is permitted, if the following conditions are satisfied
1.The taxpayer is a resident individual.
2.He is an author, playwright, artist, musician, actor or sportsman.
3.His income includes income from the exercise of the aforesaid
profession from a foreign
government or from a person not resident in India.
4.Such income may be directly received in India or it may be received
outside India.
5.The taxpayer furnishes a certificate in Form No. 10H along with his
return of income, certifying that the deduction has been correctly
claimed in accordance with the provisions of the section.
Quantum of Deduction
(i) 60% of such income for an assessment year beginning on the 1st
day of April, 2001;

(ii) 45% of such income for an assessment year beginning on the 1st
day of April, 2002;

(iii) 30% of such income for an assessment year beginning on the 1st
day of April, 2003;

(iv) 15% of such income for an assessment year beginning on the 1st
day of April, 2004,

as is brought into India by, or on behalf of, the assessee in convertible

foreign exchange within a period of six months from the end of the
previous year or within such further period as the competent authority
may allow in this behalf and no deduction shall be allowed in respect
of the assessment year beginning on the 1st day of April, 2005 and
any subsequent assessment year :
 [50] Deduction in respect of remuneration received for services
rendered outside India
[Section 80RRA]
Eligible Assessee
An individual who is a citizen of India
Quantum of Deduction
(i) 60% of such remuneration for an assessment year beginning on the 1st day
of April, 2001;
(ii) 45% of such remuneration for an assessment year beginning on the 1st day
of April, 2002;
(iii) 30% of such remuneration for an assessment year beginning on the 1st day
of April, 2003;
(iv) 15% of such remuneration for an assessment year beginning on the 1st day
of April, 2004,
as is brought into India by, or on behalf of, the assessee in convertible foreign
exchange within a period of six months from the end of the previous year or
within such further period as the competent authority may allow in this behalf
and no deduction shall be allowed in respect of the assessment year beginning
on the 1st day of April, 2005 and any subsequent assessment year :
[51] Deduction in respect of
royalty on patents
[Section 80RRB]
Eligible Assessee
A resident individual (irrespective of citizenship of the individual), being a
patentee (i.e. owner or co-owner of a patent)
Quantum of Deduction
(a)Income earned in India
Minimum of the following - • 100% of such income; or • Rs. 3,00,000
(b) Income earned outside India
Minimum of the following - • Income in respect of money brought into India
in convertible foreign exchange within prescribed time limit; or • Rs.
3,00,000
 [52] Deduction in respect of interest on deposits in savings
account with banks, co-operative bank and post office
[Section 80TTA]

Eligible Assessee
Individual (other than the assessee referred to in section 80TTB i.e. other than
senior citizen) or a Hindu Undivided Family.
Quantum of Deduction
Allowed to the maximum extent of Rs. 10,000/- or actual interest, whichever is
lower.
Post office savings bank interest exemption under section 10(15)(i)
With effect from Assessment Year 2012-13, Post Office Savings bank interest is
exempt up to 3,500/- (in an individual account) and 7,000/- (in a joint account)
under section 10(15)(i) by virtue of Notification No. 32/2011, dated 03.06.2011
read with Notification No. GSR 607, dated 09.06.1989.
Up to the Assessment Year 2011-12, full amount of Post Office Saving bank
account interest was exempted.
 [53] Deduction in respect of interest on deposits
with banks, co-operative bank and post office to
Senior Citizens
[Section 80TTB]

The deduction under this section shall be allowed to a Senior Citizen.

“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.
Quantum of Deduction
A deduction from gross total income of the eligible assessee shall be
allowed to the maximum extent of Rs. 50,000/- or actual interest,
whichever is lower.
Post office savings bank interest exemption under section 10(15)
(i)
Exemption under section 10(15) to the extent of Rs.3,500/- (Rs. 7000/-
for joint account) on the interest income on Post office Saving Account is
also available in addition to deduction under section 80TTB.

No Deduction to be Allowed if Deposit held in the name of Partner /

Member by the Firm / AOP [Section 80TTB(2)]
 [54] Person with disability
[Section 80U]
Eligible Assessee
A resident individual (irrespective of citizenship of the individual)
Quantum of Deduction
(a) Assessee is suffering from severe disability (i.e. disability to the extent of 80% or more) =
Rs. 1,25,000
(b) Assessee is suffering from disability but not severe disability (i.e. disability to the extent of
40% or more but less than 80%) = Rs. 75,000
Conditions to be satisfied
1.Assessee is a disable-individual: Assessee, at any time during the previous year, is certified
by the medical authority to be a person with disability.
2.Report: Assessee must furnish a copy of the certificate issued by the medical authority in the
prescribed form along with the return of income, in respect of the assessment year for which
the deduction has been claimed.
 Thanks
Ram Dutt Sharma
ITO (Retd.)

Mobile No. : 09910055143

Blog : ramduttsharma.blogspot.com