Menu Close

Deduction for Certain Payments – 80CCC to 80GGC

Under the Income Tax Act Deduction is Allowable for Certain Payments, these deductions are covered under Section 80C to Section 80GGC of Income Tax Act. Here we will Discuss all the payments eligible for 80CCC to 80GGC deduction.

80CCC Contributions to certain pension funds of LIC

  • Nature of Payment – Contributions to certain pension funds of LIC or any other insurer (up to Rs. 1,50,000) (subject to certain conditions)
  • Type of Assessee –  Individual
  • Limit –  Restricted to Rs. 1,50,000/-
  • Taxability at the time of Withdrawal/ Pension Annuity –
    • Amount standing to the credit of Fund shall be taxable in case of Withdrawal whether by the assessee or his nominee
    • Amount received as pension from the annuity plan shall also be taxable.
  • Where deduction is claimed under this section, deduction in relation to same amount cannot be claimed under section 80C.

80CCD Contribution to pension scheme notified by Central Government (NPS)

  • Nature of Payment – Contribution to pension scheme notified by Central Government (like NPS)
  • Deduction – Contribution made or 10% of Salary, whichever is lower
  • Contribution by employer – Contribution made by employer shall also be allowed as deduction under section 80CCD(2) while computing total income of the employee. However, amount of deduction could not exceed 10% of salary of the employee
  • Type of Assessee to whom deduction is available  – Individual
  • Section 80CCE provides that the aggregate amount of deductions under section 80C, section 80CCC and section 80CCD shall not, in any case, exceed Rs. 1,50,000
  • Important points – 
    • Contribution made by the Central Government or any other employer (not employee) to a pension scheme shall not be included in the limit of deduction of Rs. 1,50,000 provided under section 80CCE.
    • Further, a new sub-section (1B) is inserted to provide for additional deduction to the extent of Rs. 50,000. The additional deduction is not subject to ceiling limit of Rs. 1,50,000 as provided under Section 80CCE.
  • Taxability on withdrawal –
    • Any payment from NPS to an employee because of closure or his opting out of the pension scheme is chargeable to tax.
    • However the whole amount received by the nominee from NPS on death of the assessee shall be exempt from tax.

Subscription to long-term infrastructure bonds.

  • Amount up to Rs. 20,000, paid or deposited, during the previous years, as subscription to notified long-term infrastructure bonds.
  • To whom deduction is available – Individuals/ HUF

80D (Heath Insurance or[and] preventive health check-up)

  • Amount paid (in any mode other than cash) to LIC or other insurer  to keep in force health insurance of
    • In case of Individual – self, spouse, dependent children or parents
    • In case of HUF – Any member thereof
  • Deduction shall also be available for payment made for payment to the Central Government health scheme and/or on account of preventive health check-up only upto Rs. 5000/-.(Payment on account of preventive health check-up may be made in cash.)
  • To whom deduction is available – Individual/ HUF
  • Deduction Available
    • In Case of Individual-
      • For self, spouse and dependent children : Rs. 25,000 (Rs. 50,000 if person insured is a senior citizen*);
      • For parents of the assessee : (Additional) Rs. 25,000 (Rs. 50,000 if person insured is a senior citizen)
      • Medical expenditure if no amount is paid in respect of health insurance-Rs.50,000 (only in case of senior citizen)
      • Aggregate amount of deduction cannot exceed Rs.1,00,000 in any case
    • In case of HUF –
      • Premium up to Rs. 25,000 (Rs. 50,000 if member insured is a senior citizen) paid to insure any member of the family.
      • Medical expenditure if no amount is paid in respect of health insurance-Rs.50,000 (only in case of senior citizen)
      • Aggregate amount of deduction cannot exceed Rs.50,000 in any case.

80DD

  • Any expenditure has been incurred for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability [as defined under Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995] (w.e.f. assessment year 2005-06 including autism, cerebral palsy and multiple disability as referred to in National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities Act, 1999). or
  • any amount is paid or deposited under an approved scheme framed in this behalf by the LIC or any other insurer or the Administrator or the specified company for the maintenance of a dependent, being a person with disability
  • To whom deduction is available – Resident Individual/ HUF
  • Deduction Available – Rs. 75,000 (Rs. 1,25,000 in case of severe disability)

80DDB

  • Expenses paid for medical treatment of specified diseases and ailments subject to certain conditions
  • To whom deduction is available – Resident Individual/ HUF
  • Deduction available – Expenses Actually incurred subject to maximum limit of Rs. 40,000/-. (Rs. 1,00,000/- in case expenses incurred on Senior Citizen
  • Documents Required for deduction – the taxpayer shall be required to obtain a prescription from a specialist doctor (not necessarily from a doctor working in a Government hospital) for availing this deduction.

80E (Interest on Education Loan)

  • Amount paid  by way of payment of interest on loan taken from financial institution/approved charitable institution for pursuing higher education
  • To whom Deduction is available – Individuals
  • Duration of Deduction available – Deduction shall be available for the period in which interest is paid subject to maximum of 8 years.
  • Meaning of Higher Education – any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, Board or university recognized 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.

80EE (Interest on Home Loan)

  • Interest payable on loan taken by an individual from any financial institution for the purpose of acquisition of a residential house property
  • To whom deduction is available – Individual
  • Deduction Available – Actual Interest paid subject to maximum limit of Rs. 50,000/-.
  • Other Conditions –
    • The amount of loan sanctioned for acquisition of the residential house property does not exceed thirty-five lakh rupees
    • The value of residential house property does not exceed fifty lakh rupees
    • the assessee does not own any residential house property on the date of sanction of loan.
    • Where a deduction under this section is allowed , 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.

80G (Donations to certain approved funds, trusts, charitable institutions)

  • Donations to certain approved funds, trusts, charitable institutions/donations for renovation or repairs of notified temples, etc.
  • To whom deduction is available – All assessees
  • Deduction Available –
    • 100 % in case donation is made in following
      1. National Defence Fund set up by the Central Government
      2. Prime Minister’s National Relief Fund
      3. National Foundation for Communal Harmony
      4. An approved university/educational institution of National eminence
      5. Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
      6. Fund set up by a State Government for the medical relief to the poor
      7. National Illness Assistance Fund
      8. National Blood Transfusion Council or to any State Blood Transfusion Council
      9. National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
      10. National Sports Fund
      11. National Cultural Fund
      12. Fund for Technology Development and Application
      13. National Children’s Fund
      14. Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
      15. the Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
      16. The Maharashtra Chief Minister’s Relief Fund during October 1, 1993 and October 6, 1993
      17. Chief Minister’s Earthquake Relief Fund, Maharashtra
      18. Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
      19. Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat (contribution made during January 26, 2001 and September 30, 2001) or
      20. Prime Minister’s Armenia Earthquake Relief Fund
      21. Africa (Public Contributions – India) Fund
      22. Swachh Bharat Kosh (applicable from FY 2014-15)
      23. Clean Ganga Fund (applicable from FY 2014-15)
      24. National Fund for Control of Drug Abuse (applicable from FY 2015-16)
    • 50% of Donation made without Qualifying limit
      1. Jawaharlal Nehru Memorial Fund
      2. Prime Minister’s Drought Relief Fund
      3. Indira Gandhi Memorial Trust
      4. Rajiv Gandhi Foundation
    • 100% Deduction Subject to 10% of Adjusted Gross Total Income
      1. Government or any approved local authority, institution or association to be utilised for the purpose of promoting family planning
      2. Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India.
    • 50% of donation made subject to 10% of Adjusted Gross Total Income
      1. Any other fund or any institution which satisfies conditions mentioned in Section 80G(5)
      2. Government or any local authority to be utilised for any charitable purpose other than the purpose of promoting family planning
      3. Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both
      4. Any corporation referred in Section 10(26BB) for promoting interest of minority community
      5. For repairs or renovation of any notified temple, mosque, gurudwara, church or other place.
  • Adjusted Total Income – Adjusted gross total income is the gross total income (sum of income under all heads) less the following:
    • Exempt income
    • Long-term capital gains
    • Amount deductible under Sections 80CCC to 80U (but not Section 80G)
    • Income referred to in Sections 115A, 115AB, 115AC, 115AD and 115D, relating to non-residents and foreign companies
  • Other Points – No deduction shall be allowed in respect of donation of any sum exceeding two thousand rupees unless such sum is paid by any mode other than cash.

80GG (Rent Paid)

  • Rent paid for furnished/unfurnished residential accommodation
  • To whom deduction is available – Individuals not receiving any house rent allowance
  • Deduction Available – Least of following
    •  Rent paid in excess of 10% of salary (Rent Paid – 10% of Salary)
    • 25% of Total Income
    • Rs. 5000/-.
  • Other Point – the expressions “ten per cent of his total income” and “twenty-five per cent of his total income” shall mean ten per cent or twenty-five per cent, as the case may be, of the assessee’s total income before allowing deduction for any expenditure under this section.

80GGA (Certain donations for scientific, social or statistical research or rural development programme)

  • Donations for scientific, social or statistical research or rural development programme or for carrying out an eligible project or scheme or National Urban Poverty Eradication Fund.
  • To whom deduction is available – All assessees not having any income chargeable under the head ‘Profits and gains of business or profession’
  • Deduction Available – 100% of donation made in following is available as deduction –
    1. Sum paid to a research association which undertakes scientific research, or sum paid to a college, university or any other institution to be used for scientific research and these are all approved by the prescribed authority under section 35(1)(ii)
    2. Sum paid to a research association which undertakes research in social science or statistical research or sum paid to a college, university or any other institution to be used for the same purpose and these are all approved by the prescribed authority under section 35(1)(iii)
    3. Sum paid to approved association or institution which undertakes any program of rural development and is approved under section 35CCA
    4. Sum paid to an approved association or institution which undertakes trainings of persons for implementing programs of rural development
    5. Sum paid to a public sector company, local authority or an approved association or institution which carries out project or scheme approved under section 35AC.
    6. Sum paid to notified Rural Development Fund
    7. Sum paid to notified Fund for Afforestation
    8. Sum paid to notified National Poverty Eradication Fund
  • Other Point –  No deduction shall be allowed under this section in respect of any sum exceeding ten thousand rupees unless such sum is paid by any mode other than cash.

80GGB (Donation to Political Parties by Companies)

  • 100 % of Sum contributed to any political party/electoral trust
  • To whom Deduction is available – Indian company
  • Deduction will not be allowed if sum is contributed in cash.

80GGC (Donation to Political Parties)

  • 100 % of sum contributed to any political party/electoral trust
  • To whom Deduction is available – All assessees, other than local authority and artificial juridical person wholly or partly funded by Government
  • Deduction will not be allowed if sum is contributed in cash.

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge