Download Automated Income Tax Master of Form 16 Part B for F.Y. 2018-19 With Income Tax Deductions allowed under chapter VI-A for FY 2018-19 (AY 2019-20)

Income Tax exemption is a monetary exemption that reduces the taxable income of an individual. This decreases total taxable income and reduces the amount of income tax you would have otherwise paid. Deduction under chapter VI-A is restricted to Gross total income & this deduction cannot be carried forward. Let us discuss the following deductions covered u/s VI-A

Section 80 C

Section 80C covers following deductions up to an amount of Rs. 150,000 as per Income Tax Act. Any investment or expense as suggested in the list will be allowed for an exemption from Taxable income subject to max of Rs.150,000. These investments and expenses include –

• Employee Provident Fund
• Home loan principal payment
• Life insurance premium
• National Saving Certificate
• PPF Account Contribution
• Tax-saving fixed Deposit
• Tuition fees for children

Section 80CCC

This section says about contribution to the Pension Fund of Life Insurance Company or any other insurance company. The eligible assessee is only an individual, The deduction allowed shall be maximum Rs 150,000 which is part of overall 80C limit.

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Section 80 CCD

This section covers contribution to pension scheme of central government/new pension scheme/Atal Pension Yojna. The deduction is allowed only to individuals as per section 80 CCD (1). For Salaried employees, a deduction shall be employee’s contribution or 10% of salary whichever is earlier. Further, for other individuals, a deduction shall be lower of assessee’s contribution or 20% of Gross Total Income.

Section 80 CCD(1B)

Under this section, an additional deduction of up to Rs 50,000 shall be allowed other than contributions covered u/s 80CCD (1).

Section 80CCD (2)

This section covers an employer’s contribution to the National Pension System (NPS) for the benefit of an employee. Employer’s contribution if the first taxable under the head salary in hands of employee & then he will get deduction u/s 80CCD (2). The deduction shall be employer’s contribution or 10% of salary.

Section 80 CCE

Aggregate deduction u/s 80C+80CCC+80CCD (1) is restricted to maximum Rs 150,000.

Deduction u/s 80D

Under this section, a taxpayer can avail deduction for buying or paying a premium for medical insurance. When you are buying or paying for your spouse and dependent children, then also you are eligible for such deductions. For self, you can claim up to Rs.25000 for the same and another Rs.25000 for the family. This deduction can go up to Rs.30000 (instead of 25000) in case of a senior citizen. So the total deduction you get under Section 80D can go up to Rs.60000.

Deduction u/s 80DDB

This deduction is primarily for those who need to get treatment for dangerous diseases like Cancer, Aids etc. Under this section, the deduction shall be the amount actually spend on medical treatment or Rs.40000/60000/80000 whichever is lower depending on the age of the patient. In a normal individual, senior citizen or super senior citizen, the limit is 40000, 60000 and 80000 respectively. To claim this benefit, the taxpayer must obtain a prescription for such medical treatment from a neurologist, an oncologist, immunologist or such other specialist as may be prescribed.

Deduction u/s section 80E

The deduction is allowed in respect of interest on loan towards higher education in India or abroad. This expenditure is deductible under Section 80E of the Income-tax Act. The deduction is allowed for any course of study after clearing the senior secondary education. The deduction is allowed for self or for your spouse, children or student from whom assessee is a legal guardian

Deduction u/s section 80G

Normally, this deduction u/s 80G of the Act is not allowed at the time of providing your investment proofs to the employer. Hence, there is a chance that the individual may miss this deduction on donations made by him to certain charitable institutions, funds and so on. The deduction is allowed for certain donations by the taxpayer shall be either 100% or 50% (whichever is permitted) of the donation with or without the limitation. Donations without limitations are National defend fund set by Central Government (100%), Jawaharlal Nehru Memorial Fund (50%). Donations with limitations are a contribution to the government or association for promoting family planning (100%), an institution established for a charitable purpose (50%).

In case of donations without limitations, the deduction can be claimed full on 50% of the amount donated. However, in the case of donations with limitations, the deduction can be claimed as either 100% or 50% of 10% the Gross adjusted income of the individual

Gross Adjusted income for this purpose is calculated as Gross Total Income minus (i) all exempted incomes, (ii) long-term capital gains and, (iii) all deductions under section 80C to 80U except for 80G. Section 80G also applies to the company.

Deduction for rent paid (HRA) under section 80GG

Under Section 80GG of the IT Act1961, this applies when the taxpayer has already paid the rent but HRA is not received from his employer. The taxpayer i.e an individual is allowed for deduction only in respect of rent paid by him for his own residence. The amount of deduction allowed is the least of the following

• Rent paid less 10% of his adjusted total income;
• 25% of his total income
• Rs 5,000 per month.

Deduction u/s 80U

Under Section 80U of the Act, a resident individual who is certified by the prescribed medical authority to be a person with a disability can claim a fixed deduction of Rs.75000 and in case the individual suffers from a severe disability, the amount of higher deduction that can claim is Rs.125000. It is important to note that this deduction can be claimed irrespective of the actual amount of expenditure incurred by the resident individual.

The disabilities for which deductions can be claimed are mental retardedness, low blindness, low-vision, leprosy-cured, hearing impairment etc.

Deduction u/s 80TTA

Every taxpayer maintains one or more savings accounts with the banking company, post office or co-op banks. These accounts fetch income in the form of interest from deposits. This interest income is also liable for the tax. Under 80 TTA, you are eligible to get a tax deduction up to Rs 10,000 or actual interest amount, whichever is lower.

The government has provided various benefits under the income tax Act under which you can save tax lawfully. These benefits are in the form of tax exemptions and tax deductions. Both of these are applicable to individuals who draw salaries as well as self-employed individuals in India.