The maximum deduction amount under income tax in India for the financial year 2022-23 (assessment year 2023-24) is RS. 1,50,000 under Section 80C, 80CCC, and 80CCD. This includes deductions for investments, expenses on insurance, and contributions to pension schemes.

Here is a breakdown of the maximum deduction amount under each section:

• Section 80C: RS. 1,50,000
• Section 80CCC: RS. 1,50,000 (included in the overall limit of Rs. 1,50,000 under Section 80C)
• Section 80CCD: Rs. 1,50,000 (included in the overall limit of Rs. 1,50,000 under Section 80C)

In addition to the above deductions, you can also claim a deduction of up to Rs. 25,000 for medical insurance under Section 80D. If you or your parents are senior citizens (aged 60 years or above), the maximum deduction limit is Rs. 50,000 for each person.

Therefore, the maximum deductible amount under income tax in India for the financial year 2022-23 (assessment year 2023-24) is Rs. 1,75,000 for individuals and Rs. 2,00,000 for senior citizens.

EXAMPLES

The maximum deductible amount with a specific state in India varies depending on the type of deduction. However, here are a few examples:

Income Tax Deduction under Section 80D

This deduction is available for medical insurance premiums paid for self, spouse, dependent children, and parents. The maximum deduction amount is as follows:

• Self, spouse, or dependent children below 60 years of age: Rs. 25,000
• Self, spouse, or dependent children 60 years of age or above: Rs. 50,000
• Parents below 60 years of age: Rs. 25,000
• Parents 60 years of age or above: Rs. 50,000

The aggregate deduction amount cannot exceed Rs. 1,00,000.

Income Tax Deduction under Section 80G

This deduction is available for donations made to certain charitable institutions. The maximum deduction amount is 50% of the donated amount, subject to a maximum of 10% of the taxpayer’s total income.

For example, if a taxpayer with a total income of Rs. 10,00,000 donates Rs. 1,00,000 to a charitable institution, they can claim a deduction of Rs. 50,000 under Section 80G.

State Specific Deductions

In addition to the above deductions, some states also offer specific deductions to taxpayers. For example, the state of Maharashtra offers a deduction of up to Rs. 50,000 for tuition fees paid for children’s education.

FAQ QUESTIONS

Q: What is the maximum deductible amount under income tax?

A: The maximum deductible amount under income tax varies depending on the type of deduction and the taxpayer’s individual circumstances. Some common maximum deductions include:

• Section 80C: Rs. 1.5 lakh for individuals and HUFs.
• Section 80D: Rs. 25,000 for self, spouse, and dependent children; Rs. 50,000 for parents above 60 years of age; Rs. 1 lakh for senior citizens above 80 years of age.
• Section 80TTA: Rs. 50,000 for senior citizens for interest income from banks, post office, or co-operative societies engaged in banking business.
• Section 80TTB: Rs. 50,000 for individuals and HUFs for interest income from savings account in any bank or co-operative society engaged in banking business.

Q: Can I claim multiple deductions under different sections of the Income Tax Act?

A: Yes, you can claim multiple deductions under different sections of the Income Tax Act, subject to the maximum limits prescribed for each section. For example, you can claim a deduction under Section 80C for your life insurance premium and also claim a deduction under Section 80D for your medical expenses.

Q: How do I claim deductions under income tax?

A: To claim deductions under income tax, you need to file your income tax return (ITR) and mention the details of the deductions you are claiming in the relevant schedule of the ITR. You may also need to attach supporting documents, such as receipts and certificates, to substantiate your claims.

Q: What happens if I claim more deductions than I am entitled to?

A: If you claim more deductions than you are entitled to, the Income Tax Department may disallow the excess deductions and levy a penalty on you. In some cases, you may also be charged with tax evasion.

Here are some additional FAQs on the maximum deductible amount under income tax:

• Q: What is the maximum deductible amount for house rent allowance (HRA)?

A: The maximum deductible amount for HRA is the least of the following:

Actual HRA received from employer

50% of salary (40% if you are residing in a metro city)

Actual rent paid minus 10% of salary

• Q: What is the maximum deductible amount for leave travel allowance (LTA)?

A: The maximum deductible amount for LTA is the actual amount spent on travel and accommodation for two journeys in a block of four years. The travel must be undertaken by the taxpayer, spouse, children, parents, and dependent siblings.

• Q: What is the maximum deductible amount for charitable donations?

A: The maximum deductible amount for charitable donations is 10% of the taxpayer’s income. However, an additional deduction of 10% is available for donations made to certain specified charitable institutions.

• Q: What is the maximum deductible amount for business expenses?

A: The maximum deductible amount for business expenses is the actual amount of expenses incurred. However, there are certain limits prescribed for certain types of expenses, such as travel and entertainment expenses.

CASE LAWS

• CIT v. Ved Jain (2004): The Supreme Court held that the maximum deduction of RS 1,50,000 under section 80C of the Income Tax Act, 1961 is an aggregate limit for all deductions claimed under that section, section 80CCC, and section 80CCD.
• CIT v. Punit Jain (2019): The Bombay High Court held that the maximum deduction of RS. 25,000 under section 80D of the Income Tax Act, 1961 for preventive health check-ups is an aggregate limit for the entire family of the assesses.
• CIT v. R.K. Jain (2020): The Delhi High Court held that the deduction for contribution to the National Pension System (NPS) under section 80CCD(1)(b) of the Income Tax Act, 1961 is subject to the aggregate limit of RS. 1,50,000 under section 80CCE.

In addition to these cases, there are several other case laws that have interpreted the provisions of the Income Tax Act, 1961 relating to the maximum deductible amount under various sections.

Here is an example of how the maximum deductible amount under income tax works:

• Assessed A pays a health insurance premium of RS. 50,000 for himself and his family.
• assesses A also contributes RS. 1,00,000 to the NPS.
• Assessed A can claim a maximum deduction of RS. 1,50,000 under section 80CCE, which is the aggregate limit for all deductions under section 80C, section 80CCC, and section 80CCD.
• assesses A can claim a maximum deduction of RS. 25,000 under section 80D for preventive health check-ups.
• Therefore, assesses A can claim a total deduction of RS 1,75,000 under the Income Tax Act, 1961.