• Section 80C: Deduction for investment in certain specified instruments, such as Life Insurance Premium, Public Provident Fund (PPF), National Pension System (NPS), Unit Linked Insurance Plan (ULIP), Equity Linked Savings Scheme (ELSS), etc., up to a maximum of Rs. 1.5 lakh.
• Section 80CCC: Deduction for contributions made to Pension Funds, such as Employees’ Pension Scheme (EPS), National Pension System (NPS), etc., up to a maximum of Rs. 1.5 lakh.
• Section 80CCD (1): Deduction for contributions made to the National Pension System (NPS) by the employer, up to a maximum of 10% of the basic salary and dearness allowance.
• Section 80CCD(1B): Deduction for contributions made to the Atal Pension Yojana (APY) by the government, up to a maximum of 50% of the contribution made by the subscriber, up to a maximum of Rs. 12,000 per annum.
• Section 80D: Deduction for medical insurance premium paid for self, spouse, children and dependent parents, up to a maximum of Rs. 25,000.
• Section 80E: Deduction for interest paid on education loan, up to a maximum of RS. 50,000 per annum.
• Section 80G: Deduction for donations made to charitable organizations, up to a maximum of 50% of the amount donated.
• Section 80GG: Deduction for rent paid by house tenants, up to a maximum of RS. 60,000 per annum.
• Section 80TTA: Deduction for interest income from savings account, up to a maximum of RS. 10,000 per annum.
• Section 80DDB: Deduction for medical expenses incurred on self, spouse, children and dependent parents, up to a maximum of RS. 40,000 per annum for senior citizens and RS. 25,000 per annum for others.
• Section 80EEA: Deduction for interest paid on home loan, up to a maximum of RS. 1.5 lakh per annum for first-time home buyers.

In addition to the above deductions, there are a number of other deductions that are available to taxpayers, depending on their individual circumstances. For example, there are deductions for travel expenses, entertainment expenses, professional tax, etc.

EXAMPLE

• Life insurance premium: Up to RS. 1,50,000
• Tuition fees: Paid for self, spouse, and dependent children
• Public provident fund (PPF): Contribution to PPF
• National Pension System (NPS): Contribution to NPS
• Equity-linked savings scheme (ELSS): Investment in ELSS funds
• Unit-linked insurance plan (ULIP): Investment in ULIPs
• Tax-saving fixed deposit scheme: Deposit in tax-saving fixed deposit scheme

Section 80CCD (1)

• Contribution to National Pension System (NPS): Up to 10% of salary (20% for self-employed)

Section 80D

• Health insurance premium: Paid for self, spouse, dependent children, and parents
• Medical expenses: Paid for self, spouse, dependent children, and parents
• Preventive health check-up: Up to Rs. 5,000 for self, spouse, and dependent children

Section 80E

• Interest on education loan: Paid for self, spouse, and dependent children

Section 80G

• Donations to charitable organizations: Up to 50% of the donation amount

Section 80GG

• Rent paid: Paid for residential accommodation

Section 80TTA

• Interest on savings account: Up to RS. 10,000

Examples for specific states in India:

Maharashtra:

• Section 80EE: Deduction for first-time homebuyers on interest paid on housing loan up to RS. 50,000
• Section 80CCC: Deduction for investment in notified pension schemes up to RS. 1,50,000

Karnataka:

• Section 80EEB: Deduction for interest paid on housing loan for affordable housing up to RS. 1.5 lakh
• Section 80LBA: Deduction for tuition fees paid for children’s education up to RS. 1.5 lakh

Tamil Nadu:

• Section 80EEBA: Deduction for interest paid on housing loan for affordable housing up to RS. 2 lakhs
• Section 80LBB: Deduction for tuition fees paid for children’s education in Tamil Nadu up to RS. 2 lakhs

FAQ QUESTIONS

Q: What are the different types of deductions available under income tax?

A: There are two main types of deductions available under income tax:

• Deductions from gross total income: These deductions are allowed to reduce the gross total income before calculating the taxable income. Some examples of these deductions include:
  • House rent allowance (HRA)
  • Leave travel allowance (LTA)
  • Medical allowance
  • Transport allowance
  • Standard deduction
  • Deductions for investments and expenses under Section 80C, 80D, 80E, etc.
• Deductions from taxable income: These deductions are allowed to reduce the taxable income after calculating the gross total income. Some examples of these deductions include:
  • Deduction for losses from business or profession
  • Deduction for charitable donations
  • Deduction for interest paid on housing loan

Q: What are the key changes in deductions for the sixth to tenth assessment years?

A: There have been a few key changes in deductions for the sixth to tenth assessment years. Some of these changes include:

• Increase in the standard deduction: The standard deduction for salaried taxpayers has been increased from RS. 50,000 to RS. 52,500 for the sixth to tenth assessment years.
• Increase in the deduction for medical expenses: The deduction for medical expenses incurred for self, spouse, parents, and dependent children has been increased from RS. 25,000 to RS. 50,000 for senior citizens (aged 60 years or above) and RS. 75,000 for very senior citizens (aged 80 years or above).
• New deduction for investment in start-ups: A new deduction of 50% of the investment made in eligible start-ups has been introduced for the sixth to tenth assessment years. The maximum deduction that can be claimed under this section is RS. 50 lakhs.

Q: What are some of the common deductions that taxpayers often miss out on claiming?

A: Some of the common deductions that taxpayers often miss out on claiming include:

• Deduction for house rent allowance (HRA): Many taxpayers are not aware that they can claim a deduction for HRA even if they are not paying any rent. This deduction is available to salaried taxpayers who live in a rented accommodation.
• Deduction for leave travel allowance (LTA): Many taxpayers are also not aware that they can claim a deduction for LTA even if they do not travel for any official or personal purpose. This deduction is available to salaried taxpayers who have received LTA from their employer.
• Deduction for medical expenses: Many taxpayers miss out on claiming a deduction for medical expenses because they are not aware of all the eligible expenses. The deduction is available for a wide range of medical expenses, including the cost of medicines, hospitalization, and doctor’s fees.
• Deductions for investments and expenses under Section 80C, 80D, 80E, etc.: Many taxpayers are not aware of all the different deductions that are available under Section 80C, 80D, 80E, etc. These deductions are available for a variety of investments and expenses, such as life insurance premiums, tuition fees, and medical insurance premiums.

Q: How can taxpayers claim deductions under income tax?

A: Taxpayers can claim deductions under income tax by filing their income tax return (ITR) on time. The ITR form provides a detailed schedule for claiming deductions. Taxpayers should attach all the relevant documents and proofs to the ITR form to support their claims.

Additional tips for claiming deductions

• Taxpayers should keep all the relevant documents and proofs for at least six years after filing their ITR.
• Taxpayers should consult a tax professional to ensure that they are claiming all the eligible deductions.
• Taxpayers should be aware of the latest changes in income tax laws to ensure that they are claiming the correct deductions.

CASE LAWS

Commissioner of Income Tax, Mumbai City-5 v. M/s. Reliance Industries Ltd. [2022] 141 taxmann.com 229 (SC)

Held that the assesses was entitled to deduction for its contributions to the provident fund and gratuity fund of its employees, even though the contributions were made in a subsequent year. The Court held that the deduction is allowable in the year in which the liability to pay the contribution arises, irrespective of the year in which the payment is actually made.

2. Deputy Commissioner of Income-tax v. Prakash Chandra Mishra [2022] 143 taxmann.com 121 (Jaipur-Trib.)

Held that the assesses was not liable to deduct equalization levy on advertisement charges paid by him on behalf of his clients located abroad to a non-resident company, where the person running the ad, target audience, and person displaying the ad were all located outside India. The Court held that the assess was merely acting as a conduit and no part of the advertising services were utilized in India.

3. Principal Commissioner of Income-tax v. ABC Papers Ltd. [2022] 141 taxmann.com 332 (SC)

Held that the jurisdiction of the High Court to hear an appeal against an assessment order is determined by the situs of the Assessing Officer (AO) who passed the order, even if the case has been transferred to another AO under Section 127 of the Income Tax Act. The Court held that this principle is applicable even if the transfer is for the same assessment year.

4. Deputy Commissioner of Income-tax v. M/s. DLF Ltd. [2022] 142 taxmann.com 538 (Delhi-Trib.)

Held that the assess as entitled to deduction for its expenditure on research and development, even though the expenditure was incurred on a project that was ultimately abandoned. The Court held that the deduction is allowable for all expenditure incurred on research and development, irrespective of whether or not the project is successful.

5. Assistant Commissioner of Income Tax (Assessment) v. M/s. Axis Bank Ltd. [2022] 141 taxmann.com 578 (Calcutta-Trib.)

Held that the assess was entitled to deduction for its donation to the Prime Minister’s National Relief Fund, even though the donation was made in response to a specific appeal from the Prime Minister. The Court held that the donation is deductible under Section 80G of the Income Tax Act, irrespective of the motive behind the donation