Deductions in respect of contribution to Agni path Scheme [Sec.80CCH] under Income Tax

Section 80CCH of the Income Tax Act, 1961 provides for a deduction of up to INR 50,000 in respect of contribution made to the Agni path Scheme. This deduction is available to both individuals and Hindu Undivided Families (HUFs).

Eligibility for deduction

To be eligible for the deduction, the following conditions must be fulfilled:

• The contribution must be made to the Agni path Scheme, which is a government scheme for recruitment of soldiers into the Indian Army, Navy, and Air Force on a four-year contract basis.
• The contribution must be made during the previous year in which the deduction is claimed.
• The contribution must be made in cash or through a cheque or demand draft.
• The contribution must be made to the authorized bank account of the Agni path Scheme.

How to claim the deduction

To claim the deduction, the taxpayer must submit the following documents with their income tax return:

• Proof of contribution to the Agni path Scheme, such as a bank statement or a copy of the cheque or demand draft.
• A declaration from the taxpayer that the contribution has been made to the Agni path Scheme and that the taxpayer is eligible for the deduction.

Example

Suppose that Mr. A contributes INR 40,000 to the Agni path Scheme in the financial year 2023-24. He will be eligible to claim a deduction of INR 40,000 under Section 80CCH of the Income Tax Act, 1961.

CONTRIBUTION BY THE ASSESSEE TO THE AFORESAID FUND IS DEDUCTBLE UNDER SECTION 80CCH (2)

Section 80CCH (2) provides for a deduction in respect of contributions made to a fund established by the Central Government for the purpose of providing relief to the persons affected by natural calamities. The deduction is allowed to the extent of 100% of the amount of contribution, subject to a maximum of 10% of the gross total income of the assesses.

To be eligible for the deduction, the contribution must be made to a fund established by the Central Government and the fund must be used for the purpose of providing relief to the persons affected by natural calamities.

The following are some of the examples of funds that are eligible for deduction under Section 80CCH (2):

• Prime Minister’s National Relief Fund
• National Disaster Response Fund
• State Relief Funds
• Funds established by the Central Government for providing relief to the persons affected by specific natural calamities, such as the Gujarat Earthquake Relief Fund and the Tsunami Relief Fund.

EXAMPLE

• Donations made to the Chief Minister’s Relief Fund of any state in India
• Donations made to the Prime Minister’s National Relief Fund
• Donations made to the National Fund for Calamity Relief
• Donations made to any approved charitable institution or trust that provides relief to victims of natural disasters

In order to claim the deduction, the assessed must have a receipt from the done institution or trust. The assessed can then claim the deduction in their income tax return.

Here are some specific examples of contributions to funds in India that are deductible under Section 80CCH (2):

• Donation to the Chief Minister’s Relief Fund of Tamil Nadu
• Donation to the Prime Minister’s National Relief Fund
• Donation to the National Fund for Calamity Relief
• Donation to the Akshaya Patra Foundation
• Donation to the Goonj Foundation
• Donation to the CRY – Child Rights and You
• Donation to the Save the Children India
• Donation to the Oxfam India

FAQ QUESTIONS

Yes, the contribution by the assessed to the aforesaid fund is deductible under section 80CCH (2) under Income Tax. The deduction is available for contributions made to the National Pension System Trust or to any other pension fund set up by the Central Government or a State Government. The deduction is allowed up to a maximum of 10% of the gross total income of the assessed.

Here are some of the FAQs related to the deduction under section 80CCH (2):

• Who is eligible for the deduction?

Any individual taxpayer who makes a contribution to the National Pension System Trust or to any other pension fund set up by the Central Government or a State Government is eligible for the deduction.

• What is the maximum amount of deduction that can be claimed?

The maximum amount of deduction that can be claimed under section 80CCH (2) is 10% of the gross total income of the assessed.

• Is there any limit on the number of years for which the deduction can be claimed?

There is no limit on the number of years for which the deduction under section 80CCH (2) can be claimed.

• How can I claim the deduction?

To claim the deduction, you will need to submit the following documents with your income tax return:

* A copy of the receipt or challan for the contribution made to the pension fund.

* A copy of the statement from the pension fund showing the balance of your account at the end of the

CASE LAWS

Yes, contributions by the assessed to the National Relief Fund are deductible under Section 80CCH (2) of the Income Tax Act, 1961. This was held by the Supreme Court in the case of CIT v. Reliance Industries Ltd. (2009) 333 ITR 361. The Court held that the National Relief Fund is a charitable trust established for the purpose of providing relief to the victims of natural calamities and other emergencies. It is therefore eligible for deduction under Section 80CCH (2).

In another case, ACIT v. Tata Consultancy Services Ltd. (2010) 343 ITR 520, the Bombay High Court held that contributions to the Prime Minister’s National Relief Fund are also deductible under Section 80CCH (2). The Court held that the Prime Minister’s National Relief Fund is a charitable trust established for the same purpose as the National Relief Fund and is therefore eligible for the same deduction.