What are the Deductions Available under Chapter VIA

What are the Deductions Available under Chapter VIA

CHAPTER VIA DEDUCTIONS :

Gross Total Income (GTI) means the aggregate of income computed under each head as per provisions of the Act. GTI is computed after giving effect to the provisions for clubbing of incomes and set off of losses, but before making any deductions under Chapter VIA of the Act. In order to compute ‘Total Income or Net Total Income’, deductions under Chapter VIA are considered and adjusted from GTI. The aggregate amount of deductions under Chapter VIA cannot exceed GTI of the assesse. For the purpose of calculating Income Tax Total Income will be considered.

Deductions Available under Chapter VIA

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Section

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Brief Information about the Section

Deduction Limit

80C

Amount paid or deposited towards life insurance, contribution to Provident Fund set up by the Government, recognized Provident Fund, contribution by the assessee to an approved superannuation fund, subscription to National Savings Certificates, tuition fees, payment/ repayment for purposes of purchase or construction of a residential house and many other investments. For full list, please refer to section 80C of the Income-tax Act. ( The aggregate amount of deduction under section 80C, 80CCC and 80CCD(1) shall not exceed Rs. 1,50,000/- )

80C + 80CCC+ 80CCD(1) should be less than or equal to Rs. 1,50,000

80CCC

Deduction in respect of Payment of premium for annuity plan of LIC or any other insurer. Deduction is available upto a maximum of Rs. 150,000/-.

The premium must be deposited to keep in force a contract for an annuity plan of the LIC or any other insurer for receiving pension from the fund.

80CCD(1)

Deduction for contribution in pension scheme notified by the Government to the extent of 10% of salary in case of employees and 10% of total income in case of others.

80CCD(1B)

Contribution to National Pension Scheme. The deduction is in addition to the maximum deduction of Rs. 1,50,000/- available under 80C, 80CCC and 80CCD(1).

Rs. 50,000

80CCD(2)

Contribution by employer in pension scheme notified by the Government

Max 10% of salary.

80CCG

Investment in Rajiv Gandhi Equity Saving Scheme

upto 50% of the amount invested
( Max. of Rs. 25,000 )

80D

Medical Insurance Premium for Self and family members.

 

For self, spouce and children ( any one age < 60 yrs )

Rs. 25,000

For Parents - Father or mother or both (any one age < 60 yrs)

Rs. 25,000

For self, spouce and children ( any one age > 60 yrs )

Rs. 30,000

For Parents - Father or mother or both (any one age > 60 yrs)

Rs. 30,000

80DD

Deduction in respect of maintenance including medical treatment of dependent who is a person with disability.

Rs. 1 lac - severe diability
Rs. 50,000 - others

80DDB

Medical treatment of specified disease or ailment for self or dependent relative.

Max Rs. 40000

80E

Interest on loan taken for pursuing higher education of self or family members or a relative.

No limit

80G

Eligible Donations

upto either 100% or 50% with or without restriction

80GG

House Rent ( for self employed and emp. Who have not recived HRA )

Rs. 60,000

80TTA

Interest on Saving accounts

Rs. 10,000

80U

Person with disability. 

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Severe Disability - Rs. 1,00,000
General Disability - Rs. 50,000

 

Conclusion :

While nobody likes to pay taxes, then they can use right full deductions to lower their taxes. To put it plainly, a tax deduction lowers your taxable income, which therefore lowers your tax liability. Don’t misuse these deductions. Some people will claim even though they are not eligible or not made investments under those sections and they might think that no supporting documents are required for the claim. They are wrong.Income tax dept may keenly observe your incomes, expenses and savings. Dept may require you to submit the supporting documents and as and when they requires.