DEDUCTIONS UNDER

SECTION
80C TO 80U

ASHA RANI
Deduction under section 8OC to 8OU
The purpose of these deductions is to encourage savings,
industrialization, and to assist the taxpayers in meeting
their essential expenditures.

Deductions under sections 80C to 80GGC are in relation to

various investments and payments, Whereas sections 80-IA
to 80U covers deduction in respect of certain income.
Basic rules u/s 80c to 80u governing
deductions
The aggregate amount of deductions under sections 80C to 80U
cannot exceed gross total income

Deduction under section 80-IA to 80U is admissible in respect of

“net income” computed under the provisions of the Act (i.e.,
income arrived at after deducting permissible deductions and
adjusting current or brought forward losses) [Section 80AB].

These deductions are allowed only if the assessee claims them.

[Section 80A]
 LIFE INSURANCE
PREMIA, DEFERRED ANNUITY, CONTRIBUTIONS TO
PROVIDENT FUND, SUBSCRIPTION TO CERTAIN
EQUITY SHARES OR DEBENTURES,

Section 80C
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Conditions:
Deduction under section 80C is available only to an individual or a Hindu undivided
family.

Deduction is available on the basis of specified qualifying investments/contributions/

deposits/ payments made by the taxpayer during the previous year. Such investment,
deposits, etc., can be made out of taxable income or otherwise.

Deduction is available on actual payment basis.

Section 80C provides deduction in respect of specified qualifying amounts paid or

deposited by the assessee in the previous year.

The amount of deduction u/s 80C is Rs.150,000.

The maximum amount deductible under sections 80C, 80CCC and 80CCD(1) [i.e.,
contribution by an employee (or any other individual) toward national pension scheme]
cannot exceed Rs.1,50,000.
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6. There is a minimum period of holding in

some cases:
• (a) 5 years: Unit-linked insurance plan
(ULIP), Deposit under Senior Citizen Saving
Scheme, Time Deposit in Post Office and
cost of purchase/ construction of a
residential house property including
repayment of loan
• (b) 2 years: Life insurance premium
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FOLLOWING ARE ELIGIBLE INVESTMENT
UNDER THIS SECTION:

1. Life insurance 2. Payment in respect of 3. Any sum deducted from

non-commutable deferred salary payable to a
premium Government employee for the
annuity.
• Note: In the case of individual, purpose of securing him a
policy should be taken on his own deferred annuity (subject to
life, life of the spouse or any child
• Note: Annuity plan should a maximum of 20% of salary)
(child may be dependent/
independent, male/ female, minor/ be taken in the name of the
major or married/ unmarried). In individual, his wife/ her
the case of a Hindu undivided husband or any child of such • Note: It should be for the
family, policy may be taken on the
individual. benefit of the individual, his
life of any member of the family.
wife or children.
• Minimum period of holding in this
case is 2 years.
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4. Contribution (not being repayment of loan) towards statutory provident fund (SPF) and
recognized provident fund (RPF).

5.Contribution (not being repayment of loan) towards 15-year public provident fund (PPF).

6. Contribution towards an approved superannuation fund.

7. Subscription to National Savings Certificates, VIII Issue.

Note: Accrued interest (which is deemed to be reinvested) is also qualified for deduction
for first 5 years.
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8. Contribution for participating in the unit-linked insurance plan (ULIP) of Unit

Trust of India.

• Note: In the case of individual, ULIP should be taken on his own life, life of the spouse
or any child (child may be dependent/ independent, male/ female, minor/ major or
married/ unmarried). In the case of a Hindu undivided family, policy may be taken on the
life of any member of the family.
• Minimum period of holding is 5 years.

9. Contribution for participating in the unit-linked insurance plan (ULIP) of LIC Mutual
Fund (i.e. formally known as Dhanraksha plan of LIC Mutual Fund).

• Note: In the case of individual, ULIP should be taken on his own life, life of the spouse
or any child (child may be dependent/ independent, male/ female, minor/ major or
married/ unmarried). In the case of a Hindu undivided family, policy may be taken on the
life of any member of the family.
• Minimum period of holding is 5 years.
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10. Payment for notified annuity plan of LIC (i.e., New Jeevan Dhara, New Jeevan Akshay, New
Jeevan Dhara I, New Jeevan Akshay I or New Jeevan Akshay II or Jeevan Akshay III) or any
other insurer.

11. Subscription towards notified units of Mutual Fund or UTI.

12. Contribution to notified pension fund set up by Mutual Fund or UTI (i.e., Retirement Benefit
Pension Fund of UTI).

13. Any sum paid (including accrued interest) as subscription to notified Home Loan Account
Scheme of the National Housing Bank or contribution to any notified pension fund set up by the
National Housing Bank.

14. Any sum paid as subscription to any scheme of –

• a. Public sector company engaged in providing long-term finance for purchase/

construction of residential houses in India (i.e., public deposit scheme of HUDCO)
• b. Housing board constituted in India for the purpose of planning, development or
improvement of cities/ towns.
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15. Any sum paid as tuition fees (not including any payment towards
development fees/ donation/ capitation fees/ payment of similar nature)
whether at the time of admission or otherwise to any university/ college/
educational institution in India for full time education of any TWO
children of an individual.

• Note: Full-time education includes even play-school

activities, pre-nursery and nursery classes.
16. Any payment towards the cost of purchase/ construction of a
residential property (including repayment of loan taken from Government,
bank, cooperative bank, LIC, National Housing Bank, assessee’s employer
where such employer is public company/ public sector company/
university/ co-operative society).

• Minimum period of holding is 5 years.

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17. Amount invested in approved debentures of, and equity shares in, a public sector
company engaged in infrastructure including power sector or units of a mutual fund
proceeds of which are utilized for developing, maintaining, etc., of a new infrastructure
facility.

18. Amount deposited as term deposit for a period of 5 years or more in accordance with
a scheme framed by the Government.

19. Subscription to any notified bonds of National Bank for Agriculture and Rural
Development (NABARD).

20. Amount deposited under Senior Citizens Saving Scheme.

• Note: Date of encashment of cheque/ draft is taken as date of deposit in the case of
public provident fund and Senior Citizens Savings Scheme.
• Minimum period of holding is 5 years.

21. Amount deposited in 5 year time deposit scheme in post office.

• Minimum period of holding is 5 years.

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SECTION 80CCC:
DEDUCTION IN RESPECT OF PENSION FUND

This section is applicable if

the following conditions are a.) Deduction u/s
e). The maximum amount satisfied: 80CCC is
deductible under sections 80C, available to
80CCC and 80CCD(1) [i.e., individual.
contribution by an employee (or
any other individual) toward
notified pension scheme] cannot b.) During the previous
exceed Rs.1,50,000. year, he has paid/
deposited a sum under
an annuity plan of the
d.) The maximum Life Insurance
amount of deduction u/s Corporation of India
80CCC is Rs.150,000. (LIC) or any other
c. )The aforesaid amount is paid insurer for receiving
out of income chargeable to tax. pension.
It is, however, not necessary
that it should be paid out of the
income of the current year.
 Asha Rani

Following points should be noted in this regard:

a. Where (after claiming deduction under section 80CCC) the assessee or his nominee
surrenders the annuity before maturity date of such annuity, the surrender value
shall be taxable in the hands of the assessee or his nominee, as the case may be, in
the year of the receipt.

b. If deduction is claimed under section 80CCC and later on pension is received by

the assessee (or his nominee), such pension will be taxable in the hands of recipients
in the year of receipt.

c. If deduction is claimed under section 80C, in respect of the same investment,

deduction will not be available under section 80CCC.
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Section 80CCD:
DEDUCTION IN RESPECT CONTRIBUTION TO A NOTIFIED PENSION
SCHEME OF CENTRAL GOVERNMENT OR ANY OTHER PERSON

This section is applicable if the following

conditions:

a. The taxpayer is an individual.

b. He is employed by the Central Government or by any other

employer on or after January 1, 2004. From the assessment
year 2009-10, even a self-employed person can claim the
benefit of this deduction.
c. He has in the previous year paid or deposited any amount
in his account under a pension schemes notified by the
Central Government.
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If the all conditions are satisfied, then the following consequences given by section 80CCD should
be noted:

a. An assessee’s contribution to the notified pension scheme is deductible in the year in which
contribution is made. However, no deduction is available in respect of employee’s contribution
which is in excess of 10% of the salary of the employee.

b. Contribution by the employer to the notified pension scheme is deductible in the hands of the
concerned employee in the year in which contribution is made. However, no deduction is available
in respect of employer’s contribution which is in excess of 10% of the salary of the employee.

c. Pension (or any other payment)out of NPS account (for which deduction has been claimed u/s
80CCD) will be taxable in the hands of recipient. If, however, the amount received is used for
purchasing an annuity plan in the same previous year, then it will be exempt from tax.
 Asha Rani

d. If deduction is claimed under section 80C, the same

investment is not qualified for deduction under section
80CCD.

e. Salary for the purpose of point (a) and (b) means

basic salary (+) D.A. (if terms of employment so
provide) but excludes all other allowances and
perquisites.
f. The maximum amount deductible under sections 80C,
80CCC and 80CCD(1) [i.e., contribution by an employee
(or any other individual) toward notified pension scheme]
cannot exceed Rs.1,50,000
 Asha Rani

Additional deduction of Rs.50,000 under section

80CCD(IB)

From the Assessment year 2016-17, sub section (IB ) has been
inserted to provide for an additional deduction in respect of
any amount paid (up to Rs. 50,000) for contribution made by
any individual assessee under the NPS.
On this additional contribution, the ceiling of Rs. 1,50,000 is
not applicable
 Asha Rani
SECTION 80CCG
DEDUCTION IN RESPECT OF INVESTMENT MADE UNDER ANY EQUITY
SAVING SCHEME
Inserted from AY 2013-14. Conditions are-

It is available to resident individual (may be ordinarily resident or not

ordinarily resident).

His GTI does not exceed Rs. 12 lakh.

He has acquired listed shares in accordance with a notified scheme.

The assessee is a retail investor as specified in the above notified scheme.

The investment is locked-in for a period of 3 years from the date of

acquisition in accordance with the above scheme.

The assessee satisfies any other condition as may be prescribed.

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Period of deduction
The deduction under this section is available for 3
consecutive years beginning with the previous year relevant
to the P/Y in which the listed equity shares or listed units
are first acquired. Deduction is 50% of amount invested
during the PY or Rs. 25,000, whichever is less. However this
deduction is available up to 2017-18.
 Asha Rani
SECTION 80D:
DEDUCTION IN RESPECT OF MEDICAL INSURANCE PREMIA

This section is applicable if the following conditions are satisfied:

• The taxpayer is an individual (may be resident/ non-resident or Indian
citizen/ foreign citizen) or a HUF (may be resident or non-resident).
• Mediclaim insurance is paid by the individual or HUF. In case of
individual payment can also be made to the Central Government Health
Scheme and/ or on account of preventive health check-up.
• The health insurance should be in accordance of scheme framed in this
behalf by (i) GIC and approved by CG, or (ii) any other insurer who is
approved by the Insurance Regulatory and Development Authority
(IRDA) shall also be eligible for deduction.
• The aforesaid premium is paid by any mode other than cash.
• It is paid out of income chargeable to tax.
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(A) Mediclaim insurance premium, Contribution to CGHS/

notified schemes, Preventive health check ups

In case of an In case of parents In case of HUF

Family (all three ( premium and preventive
included) health check up)
(only premium)

General deduction : General deduction :

Rs. 25,000 Rs. 25,000
General deduction :
Rs. 25,000 Additional deduction Additional deduction
: Rs.25000* : Rs.25000*

*Additional deduction only in case where policy is taken on the life of a senior citizen
Rs.5000 for preventive healh check-up shall be within the overall ceiling of Rs.25000.
 Asha Rani

(B) Medical expenditure on the health of a person who is super senior

citizen ( Senior Citizen From the A/Y 2019-20) if Mediclaim is not
paid on the health of such person

Maximum Deduction for

the Individual and HUF

For A/Y 2016-17 to From the A/Y

2018-19 2019-20
Rs. 30,000 Rs. 50,000
 Asha Rani

Maximum deduction in respect of (A) and (B)

Maximum Deduction for the

Individual ( Family and parents)
and HUF

For A/Y 2016-17 to 2018-19 From the A/Y 2019-20

Rs. 30,000 Rs. 50,000
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SECTION 80DD
DEDUCTION IN RESPECT OF MAINTENANCE INCLUDING MEDICAL
TREATMENT OF DEPENDENT BEING A PERSON WITH DISABILITY

This section is applicable if the following conditions are satisfied:

• The taxpayer is resident individual or a resident HUF.

• Deduction is available if the assessee has incurred expenditure during the
PY-
• incurred any expenditure for the medical treatment (including nursing),
training and rehabilitation of a dependent (being a person with disability)
• paid or deposited under any scheme framed in this behalf by the Life
Insurance Corporation (LIC) or any other insurer, or UTI for
maintenance of dependent (being a person with disability).
 Asha Rani
Amount of deduction
The amount deductible is a fixed deduction of Rs.75,000.
A higher deduction of Rs.1,25,000 shall be allowed, where such dependent is a person with
severe disability of 80 per cent or above.

Following points should be noted in this regard:

- “Person with
disability” means
-In the case of a person who
For the above an individual, suffers 40% or
purpose, a dependent more of any of
- Such person is
“dependent means the - In the case the following–
wholly or mainly
being a person spouse, of a HUF, blindness, low
dependent upon
with disability” children, “dependent” vision, leprosy-
such individual or
is a person who parents, means a member cured, hearing
HUF for support
satisfies the brothers and of a HUF; impairment,
and maintenance;
following points sisters of the locomotor
– individual or any disability,
of them; mental
retardation and
mental illness.
 Asha Rani
SECTION 80DDB:
DEDUCTION IN RESPECT OF MEDICAL TREATMENT.

This section is applicable if the following conditions are

satisfied:
• a.) The taxpayer is resident individual or a resident HUF.
• b.) The taxpayer has actually incurred expenditure for the medical treatment of a
specified disease or ailment as prescribed by the Board.
• c.) The expenditure is actually incurred for medical treatment of the assessee
himself or wholly/ mainly dependent husband/ wife, children, parents, brothers and
sisters of the tax-payer.
If the taxpayer is a HUF, the expenditure is actually incurred for the medical
treatment of any member of the family who is wholly/ mainly dependent upon the
family.
• d.) The assessee shall have to submit a certificate in Form No. 10-I from a
neurologist, an oncologist, a urologist, a haematologist, an immunologist or such
other specialist, as may be prescribed, working in a Government hospital.
 Asha Rani

Amount of deduction:
Rs.40,000 or the expenditure actually incurred, whichever is lower
Rs.1,00,000 or the expenditure actually incurred , whichever is
lower in the case of senior or super senior citizen

It is to be noted that under this section deduction shall be

reduced by the amount received, if any, under insurance
from insurer, or reimbursed by an employer, for the
medical treatment of the person referred to above.
 Asha Rani
ILLUSTRATION
The gross total income of A for the PY 2018-19 as computed is Rs. 3,50,000 which includes Rs.
2,60,000 Long-term Capital Gain on sale of jewellery and Rs. 30,000 on account of Short-term
Capital Gain from the sale on 5.11.2018 of listed shares through a recognised stock
exchange. Besides the above he provides you the following information :
• He has deposited Rs. 12,000 to effect a contract for annuity plan of LIC
• He has paid the following premium to the New India Assurance Co. Ltd. for medi claim
scheme for himself and his relatives:
• His own health Rs. 1,000
• For health of spouse Rs. 600
• Major son not dependent on him Rs. 800
• Mother dependent on him Rs. 1,200
• Brother dependent on him Rs. 1,100
• One of his brothers is a person with disability wholly dependent on him for medical
treatment and rehabilitation. A spends Rs. 10,000 on such brother.
• He has also deposited Rs. 25,000 under a scheme framed by UTI for the maintenance of
his dependent brother with disability.

Compute his total income and tax payable for the AY 2019-20.
 SECTION 80E: Asha Rani

DEDUCTION IN RESPECT OF REPAYMENT OF

LOAN TAKEN FOR HIGHER EDUCATION
This section is applicable if the following conditions are satisfied:
• a. The assessee is an individual.
• b. He had taken a loan from any financial institution [i.e., a banking
company or notified financial institution] or an approved charitable
institution.
• c. The loan was taken by the taxpayer for the purpose of pursuing his
own higher education (or for the purpose of higher education of his
relatives, i.e., spouse/ any child/ the student for whom the taxpayer
is the legal guardian).
• e. Amount is paid by the individual during the previous year by way of
interest on such loan.
• f. Such amount is paid out of income chargeable to tax.
 Asha Rani

If the above conditions are satisfied, the

Amount of
deduction entire amount paid by way of interest is
deductible under section 80E.

Deduction shall be allowed for 8 assessment

Period of years starting from AY in which the assessee
Deduction starts paying the interest on loan, or until the
interest thereon is paid by the assessee in full,
whichever is earlier.
 Asha Rani
SECTION 80EE:
DEDUCTION IN RESPECT OF INTEREST ON LOAN TAKEN
FOR RESIDENTIAL PROPERTY

This section is applicable if the following conditions are satisfied:

• The assessee is an individual. He may be resident or Non- resident.
• He had taken a loan.
• The loan was taken by the taxpayer for the purpose of Acquisition of House
Property.
• Loan is taken from Housing Finance Company
• Loan has been sanctioned by the bank/ Housing finance company during April
1,2016 and March 31,2017
• Amount of loan sanctioned for residential property does not exceed Rs.35
lakhs.
• Value of residential property does not exceed Rs.50 lakhs.
• Assessee does not own any residential house property on the date on sanction
of loan.
 Asha Rani

If the above conditions are satisfied, amount paid

by way of interest is deductible or Rs.50,000,
Amount of
deduction whichever is less. Deduction is available for the
assessment year 2017-18 and subsequent
assessment years.

Double If Deduction is claimed under 80 EE then no

Deduction deduction will be allowed in any other provision
of the Act.
 Asha Rani
SECTION 80G:

DEDUCTION IN RESPECT OF DONATIONS TO CERTAIN

FUNDS, CHARITABLE INSTITUTIONS

Essential conditions for claiming deduction under this section:

• Deduction is available to all assessees.
• The donation should be of a sum of money. Donations in kind do not
qualify for donation.
• The donation should be made only to specified funds/institutions.
• Proper proof of payment should be produced.
• No deduction shall be allowed under this section in respect of donation
of any sum exceeding Rs. 2,000 unless such sum is paid by any mode
other than cash.
 Asha Rani

DEDUCTION UNDER SECTION 80G IS

CALCULATED UNDER THE FOLLOWING THREE
STEPS:

Gross Qualifying Amount

Net Qualifying Amount

Amount Deductible
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QUANTUM OF DEDUCTION IN RESPECT OF VARIOUS
KINDS OF DONATIONS
Donations made to following
are eligible for 100% deduction
without qualifying limit:
National Defense Fund set
An approved university/
up by the Central
educational institution
Government

Prime Minister’s National

National Foundation for Relief Fund
Communal Harmon

Africa (Public Prime Minister’s

Contributions-India) Armenia Earthquake
Fund Relief Fund
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National Children’s fund

Any fund set up by the Government of Gujarat for providing

relief to victims of earthquake in Gujarat

Zila Saksharta Smiti

National Blood Transfusion Council (NBTC) and State Council

for Blood Transfusion
Fund set up by a State Government for the medical relief to
the poor
Central Welfare Fund of the Army and Air Force and the
Indian Naval Benevolent Fund
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Andhra Pradesh Chief Minister’s Cyclone Relief Fund.

National Illness Assistance Fund

Chief Minster’s Relief Fund or Lieutenant Governor’s Relief Fund

National Sports Fund or National Cultural Fund or Fund for Technology Development
and Application

National Cultural Fund set up by the Central Government.

Fund for technology development and application, set up by the Central Government.

National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental
Retardation and Multiple Disabilities
 Asha Rani

B. Donations made to following are eligible

for 50% deduction without qualifying limit
• Prime Minister’s Drought Relief Fund
• Jawaharlal Nehru Memorial Fund
• Indira Gandhi Memorial Trust
• Rajiv Gandhi Foundation
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C. Donations to the following are eligible for

100% deduction subject to qualifying limit
• The Indian Olympic Association or to an institute
notified by the Central Government for the
development of infrastructure for sports and games in
India; or the sponsorship of sports and games in India
(only donation by a company)
• Government or any approved local authority, institution
or association to be utilized for the purpose of
promoting family planning
 Asha Rani
D. Donations to the following are eligible for 50%
deduction subject to qualifying limit
• Government or any local authority to be utilized for any charitable
purpose other than the purpose of promoting family planning
• Any other approved fund or any institution which satisfies the
conditions mentioned in section 80G(5)
• Any authority constituted in India by (or under) any law enacted
either for the purpose of dealing with and satisfying the need for
housing accommodation or for the purpose planning, development or
improvement of cities, towns and villages, or for both
• Any corporation specified in section 10(26BB) for promoting
interest of minority community
• Any notified temple, mosque, gurudwara, church or other place (for
renovation or repair)
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Qualifying Limit:
10% of the adjusted gross total income.

Adjusted gross total income - The following shall be deducted from

gross total income to find out adjusted gross total income:

• Amount deductible under sections 80C to 80U (except section 80G);

• Such incomes on which income-tax is not payable;
• Long-term capital gains;
• Short-term capital gain which is taxable under section 111A @ 15%
• Incomes referred to in section 115A, 115AB, 115AC or 115AD.
 Asha Rani

ILLUSTRATION
Mr. X, an Indian citizen gives the following particulars of his
income and expenditure for the PY 2018-19
• Business income Rs. 1,10,000
• Long-term capital gain Rs. 2,00,000
• Short-term capital gain on sale of shares taxable u/s 111A Rs. 10,000
• Other short-term capital gains Rs. 5,000
• Donation to Prime Minister’s National Relief Fund Rs. 11,000
• Donation to govt. of India for family planning Rs. 3,000
• Donation to an approved institution Rs. 12,000
• Payment of medical insurance premium on his own health Rs. 5,000

Determine the net income and tax liability of Mr. X for the
AY 2019-20.
 Asha Rani
SECTION 80GG
DEDUCTION IN RESPECT OF RENT PAID
This section is applicable if the following
conditions are satisfied:
• The taxpayer is an individual.
• The taxpayer is a self-employed
person. Alternatively, the taxpayer is
an employee but he does not get any
HRA from the employer at any time
during the previous year.
 Asha Rani

c. The following persons should not own any residential accommodation at the
place where the taxpayer resides, performs the duties of his office, or
employment or carries on his business or profession –

• i. The taxpayer;
• ii. His/ her spouse;
• iii. His/ her minor child (including minor step child and
minor adopted child); and
• iv. The HUF of which the taxpayer is a member.
d. If the taxpayer owns a residential accommodation at a place other than the
place noted above, then in respect of that house the concession in respect of
self-occupied property in not claimed by him [under section 23(2)(a) or 23(4)(a)].

e. The taxpayer files a declaration in Form No. 10BA regarding the expenditure
incurred by him towards payment of rent.
 Asha Rani

Amount of deduction:
If the above conditions are satisfied, the amount
deductible under section 80GG is least of the following;

• Rs.5,000 per month;

• 25% of adjusted total income; or
• Rent paid – 10% of adjusted total
income.
 Asha Rani

Adjusted total income for this purpose is calculated by

deducting the following items from gross total income:
• Long-term capital gains
• Short-term capital gains under section 111A
• Amount deductible under sections 80C to 80U (except
80GG).
• Incomes referred to in section 115A, 115AB, 115AC
or 115AD.
 ILLUSTRATION:3
Asha Rani

X, a professional tax consultant, based at New Delhi furnishes the following

particulars of his income/ expenditure relevant for the assessment year
2019-20.
• Income from profession Rs.6,80,000
• STCG (covered by section 111A) Rs.4,000
• LTCG Rs.10,000
• Winning from Camel Races Rs.1,700
• Winning from Horse Races Rs.2,000
• Winning from lotteries Rs.1,600
• Income from other sources Rs.10,000
• Payment of medical insurance premium on his own life Rs.13,000
• Payment of Rent Rs.80,000
• Contribution towards PPF Rs.70,000

Determine the amount deductible u/s 80GG and the net income for the
assessment year 2019-20.
 Asha Rani
SECTION 80GGA
DEDUCTION IN RESPECT OF CERTAIN DONATIONS FOR
SCIENTIFIC RESEARCH OR RURAL DEVELOPMENT

Deduction is permissible to an assessee whose “Gross Total Income” does not include income
chargeable under the head “profits and gains of business or profession ”.

The deduction is available in respect of the payments made to following institutions:

• To an approved research association, university, college or other institution to be used for

scientific research;
• To an approved research association which has as its objects the undertaking of research in social
sciences or statistical research or to university, college or other institution for research in social
science or statistical research.
• To an association or institution engaged in any approved programme for rural development, or which
is engaged in training of persons for implementation of rural development programmes, or to a
notified rural development fund or to the notified National Urban Poverty Eradication Fund.
• To a public sector company or a local authority, or to an association or institution approved by the
National Committee, for carrying out any eligible project or scheme.
 Asha Rani

Quantum of deduction

100% of the sum paid to

these institution
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Contribution to a political party is deductible under section 80GGB

(if a contribution is made by an Indian company) or under section
80GGC (if a contribution is made by a person other than an Indian
company).

Expenditure by way of advertisement in a magazine owned by

a political party is treated as “contribution” to a political party for the
purpose of section 80GGB, but not for the purpose of section 80GGC.

However, the deduction is not available to a local authority and every

artificial juridical person wholly or partly funded by the Government
No deduction shall be allowed under this section in respect of any sum
contributed by way of cash.
 Asha Rani
SECTION 80QQB
DEDUCTION IN RESPECT OF ROYALTY INCOME OF
AUTHORS
Conditions
a. The taxpayer is a resident individual (may be an Indian citizen or foreign
citizen).
b. He is an author or joint author.

c. The book authored by him is work of literary, artistic or scientific nature.

d. The gross total income of the taxpayer includes the following:

i. Royalty or copyright fees (payable in lump sum or otherwise) in respect of aforesaid

book (it also includes advance payment which is not returnable); and

ii. Lump sum consideration for transfer (or grant) of any interest in the copyright of the
book.
 Asha Rani

Amount of deduction
a.) Rs. However, where the income by way
of such royalty or the copyright
3,00,000
fee is not a lump sum consideration
in lieu of all rights of the assessee
b.) Income in the book, then such royalty,
from royalty etc., before allowing expenses, in
excess of 15% of the value of
such books sold during the PY,
whichever shall be ignored.
is lower.
 Asha Rani

Where any income is earned from any source outside

India, only so much of the income shall be taken into
account for the purpose of this section as is brought
into India by, or on behalf of, the assessee in
convertible foreign exchange within a period of 6
months from the end of the PY in which such income
is earned or within such further period as the
competent authority may allow in this behalf.
 Asha Rani
SECTION 80RRB

This section is applicable if the following conditions are

satisfied:
• a. The taxpayer is an individual (may be an Indian citizen or foreign citizen).
• b. He must be resident in India.
• c. He is a patentee (he may also be a co-owner of patent). Patentee means the
person (being the true and first inventor of the invention), whose name is entered on
the patent register as the patentee, in accordance with the Patents Act, 1970.
• d. He is in receipt of any income by way of royalty in respect of patent, which is
registered under the Patent Act after March 31, 2003.
• e. The assessee shall have to furnish a certificate in Form No. 10CCE, duly signed by
the prescribed authority along with the return of income
• f. Deduction under section 80RRB is not available unless it is claimed with the return
of income.
 Asha Rani

Amount of deduction
a.) Rs. However, where a compulsory licence
3,00,000 granted in respect of any patent under the
Patents Act, 1970, the income by way of
royalty for the purpose of allowing
b.) Income deduction under this section shall not
from royalty exceed the amount of royalty under the
terms and conditions of a licence settled
whichever by the Controller under the Act.

is lower.
 Asha Rani
SECTION 80TTA

Where the gross total income of an assessee, being an individual or a

HUF (resident or non-resident), includes any income by way of
interest on deposits (not being time deposits) in a savings account
with-

• A banking company to which the Banking Regulation Act, 1949, applies (including
any bank or banking institution referred to in section 51 of the Act);
• A cooperative society engaged in carrying on the business of banking (including a
cooperative land mortgage bank or a cooperative land development bank); or
• A post office as defined in clause (k) of section 2 of the Indian Post Office Act,
1898,

deduction of such interest shall be allowed to the maximum extent of

Rs. 10,000.
 Asha Rani

However, where the income referred to in

this section is derived from any deposit in
a savings account held by, or on behalf of,
a firm, an AOP or BOI, no deduction shall
be allowed under this section in respect of
such income in computing the total income
of any partner of a firm or any member of
the association or any individual of the
body.
 Asha Rani

The above deduction of Section

80TTA is in addition to the
exemption available under section
10(15)(i) where Post Office savings
bank interest is exempt up to Rs.
3,500 (in case of Individual
account)
 Asha Rani
SECTION 80TTB

Senior citizen to be allowed a deduction of Rs.50,000 on account

of interest on deposits 80TTB(1) where GTI of an assessee,
being a senior citizen, includes, any income by way of interest
on deposits with –
• A banking company
• A co-operative society engaged in carrying on business of banking
• A post office

No deduction to be allowed if the deposit held in the name of

partner/member by the fitm/AOP 80TTB(2)
 Asha Rani
SECTION 80U DEDUCTION IN
CASE OF A PERSON WITH DISABILTY
This section is applicable if the following conditions are
satisfied:

• a.) The taxpayer is a resident individual (may be an Indian citizen or

foreign citizen).
• b.) The taxpayer suffers 40% or more than 40% of any disability
viz. blindness, low vision, leprosy-cured, hearing impairment,
locomotor disability, mental retardation and mental illness.
• c.) Amount of deduction: Rs.75,000 And a higher deduction of Rs.
1,25,000 is allowed in respect of a person with severe disability
(i.e., having disability of 80% or above).
• d.) Where a deduction is claimed under section 80U, no deduction can
be claimed under section 80DD and vice versa.
 Asha Rani
ILLUSTRATION
X (age: 59 years) as an employee of a private ltd. co. in Mumbai. He gets Rs. 45,000 p.m. as
salary. Besides, the employer provides a furnished housing facility (house being owned by the
employer) at concessional rate (fair rent of unfurnished house: Rs. 1,28,000; rent of furniture:
Rs. 1,29,300; rent paid by X: Rs. 1,36,000); and medical allowance at the rate of Rs. 1,500 p.m.

Determine the net income and tax liability of X for the AY 2019-20 after giving due consideration
of the following particulars:

• Long-term capital gains in respect of commercial buildings Rs. 1,17,000

• Long-term capital gains in respect of shares (non-listed) Rs. 1,10,000
• Income from horse races (gross) Rs. 1,04,000
• Winnings from lottery (gross) Rs. 2,75,000
• Expenditure on recovery of lottery prize Rs. 26,000
• Interest from IFCI Rs. 18,000
 Asha Rani
ILLUSTRATION …
Interest paid on capital borrowed for the purpose of investment in bonds of IFCI
Rs.18,500

Interest on company deposit Rs. 1,58,200

Insurance premium paid on a joint life policy on the life of X and Mrs. X (sum assured of the
policy taken in 2007: Rs. 5,90,000) Rs. 1,24,000

Medi claim insurance on the life of X’s father Rs. 26,000

Income from royalty on “Financial Modelling Using Excel” a book written by X and
recommended by the Rajasthan University (gross amount: Rs. 17,000, expenses: Rs. 5,000)
Rs. 12,000

Income from royalty on patents Rs. 19,000

 Asha Rani

ILLUSTRATION
X ( resident in India) and Y (non-resident in India) are foreign citizens. During
the PY 2018-19. they receive royalty income for authoring books of literary
nature. The details of their income are as follows:

X Y
Royalty on books of literary nature Rs. 9,00,000 Rs. 70,000
Royalty as percentage 20% 15%
Expenses on earning royalty income Rs. 7,000 Rs. 5,000

X and Y deposit Rs. 10,000 each in Public Provident Fund. In addition, X pays
medical insurance premium of Rs. 10,000 on the health of his dependent
brother and Y pays Rs. 30,000 as medical premium on the health of Mrs. Y.
Compute total income of X and Y for the AY 2019-20.