Income Tax Guidelines

2023-24
 Income Tax Sections with Description and Eligibility

Section Section Description Section Limit

Payment towards Life Insurance Policy
Contribution to Public Provident Fund
Contribution to Superannuation Fund
Contribution to ULIP
Deposit under Post Office Savings Bank (Cumulative Time Deposits)
Rule1959
Contribution to notified annuity plan of LIC
80C Subscription to notified mutual fund 1,50,000.00
Subscription to notified pension fund
Repayment of Housing loan
Tuition fees
Term Deposits
5-year time deposit under the Post Office Time Deposit Rules 1981
Sukanya Samriddhi Scheme
Stamp duty and registration fee
Medical Insurance Premium (Non-Senior Citizen) 25,000.00
Medical Insurance Premium (Senior Citizen) 50,000.00
Medical Insurance Premium (Payment on behalf of parents - non-
25,000.00
senior Citizen)
80D
Medical Insurance Premium (Payment on behalf of parents - senior
50,000.00
citizen)
Preventive Health Check-up (Self) 5,000.00
Preventive Health Check-up (Parents) 5,000.00
Deduction for dependent with disability 75,000.00
80DD
Deduction for dependent with severe disability 1,25,000.00
Medical Treatment 40,000.00
80DDB
Medical Treatment for Senior Citizen 1,00,000.00
80E Repayment of Interest on Loan for Higher Education No Limit
Deduction for self-disability 75,000.00
80U
Deduction for self-severe disability 1,25,000.00
80CCD Contribution to pension scheme of Central Government (NPS) 2,00,000.00
Self-occupied/deemed self-occupied House Property
U/S 24 Partly let out House Property 2,00,000.00
Wholly let out House Property
General Information
• All investments / payments should have been made between 01 st April 2023 & 31st
March 2024
• Name, Date, Amount shall be clear & visible in all the documents
• Claim for deduction u/s. 80 G (Donation to Charitable Institutions) shall be claimed
only while filing the Individual Income Tax Returns and not through the employer
• Claim for deduction u/s. 80 TTA (Interest from savings bank account) shall be claimed
only while filing the Individual Income Tax Returns and not through the employer
• Claim for deduction u/s. 80 TTB (Interest on deposits for senior citizens) shall be
claimed only while filing the Individual Income Tax Returns and not through the
employer
• If Individual PAN not available, only Section 10 exemptions will be eligible and
Exemption under other section will not be eligible

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Sec 10 (13A) - House Rent Allowance (HRA)
HRA or House Rent Allowance is a component of salary provided by employer to its
employees. If you receive HRA as part of your salary and you live in a rented accommodation,
then you can claim full or partial HRA exemption under Section-10.

However, HRA is fully taxable if you do not live in a rented accommodation.

• Delhi, Chennai, Mumbai and Kolkata alone would be considered for Metro benefit
• Rent receipts to be signed by the landlord across a Revenue Stamp
• PAN Number of landlord is Mandatory if rent exceeds Rs. 1,00,000/- per annum

Note: No deduction is available for premises belonging to the employee. For rented premises,
the deduction will be the lowest of the following scenarios:

a) 50% of basic salary (Only in case house is situated at Delhi, Chennai, Mumbai and
Kolkata), 40% for other locations
b) Actual rent paid in excess of 10% of basic salary
c) Actual HRA received from employer

Sec 80C – Payment towards Life Insurance Policy

• The Investment in life insurance can be tax exempted up to Rs. 1,50,000/-
• Life Insurance investments should be in name of self / Spouse / Children & legal
guardian only
• If you are paying premium for more than one insurance policy, all the premiums can
be included

Note:
a) Please note that premium paid for policies in the name of any other third party (other
than spouse or children) such as parents (father / mother / both) or in-laws, brothers
and sisters are not eligible for deduction under section 80C
b) Late payment will not qualify for exemption of tax
c) New Investment will be considered only when payments are made within FY 2023-24
d) Self, spouse or his/her children can be claim tax benefit

Sec 80C - Contribution to Public Provident Fund (PPF)

Public Provident Fund (PPF) scheme is a popular long-term investment option backed by
Government of India which offers safety with attractive interest rate and returns that are fully
exempted from Tax. Investors can invest minimum Rs. 500 to maximum Rs. 1,50,000 in one
financial year and can get the facilities such as loan, withdrawal and extension of account.

• Annual contributions qualify for tax deduction under Section 80C of income tax. The
tax benefit is capped at Rs. 1,50,000/- per financial year
• Tax free Interest – No Tax is payable on the interest earned on PPF (Public Provident
Fund) account
• Individual taxpayer can claim tax benefit

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Sec 80C - Contribution to ULIP
ULIP stands for Unit Linked Insurance Plan, ULIPs cover life insurance with benefits of equity
investments.
• Deduction is available on ULIPs under Section 80C, provided the sum assured is at least
10 times the annual premium. This is within the overall limit of Rs. 1,50,000/- of
Section 80C, of course you can invest a higher amount, but the deduction will be
limited to Rs. 1,50,000/-
• An individual may purchase a ULIP in his/her own name, or for spouse or any child.
Child may be married or unmarried, dependent or independent, minor or major – all
these investments shall qualify for deduction under Section 80C
• Tax benefit on maturity: You are allowed to make partial withdrawals after 5 years.
There is no tax on the withdrawals & maturity for ULIPs, provided the sum assured is
at least 10 times the annual premium
• Individual taxpayer, Dependent (Spouse and Children) can claim tax benefit

Sec 80C – Deposit under Post Office Savings Bank

(Cumulative Time Deposits) Rule1959
• Sum deposited in a 10 year or 15-year account under the Post office savings scheme
(CTD) Rules, 1959
• In the name of self and as a guardian of minor in case of individual and in the name of
any member in case of HUF is eligible for income tax deduction under section 80C
• Individual taxpayer can claim tax benefit

Sec 80C - Contribution to notified annuity plan of LIC

• Deduction for contribution annuity plan of insurance company is allowed under
section 80CCC
• Deduction for annuity plan of other than insurance companies is allowed. Sum paid
towards notified annuity plan of LIC (New Jeevan Dhara / New Jeevan Dhara-I / New
Jeevan Akshay / New Jeevan Akshay-I / New Jeevan Akshay-II / Jeevan Akshay-III plan
of LIC) or other insurer
• In case of individual, on life of the individual, individual's spouse and any child of the
individual (however, contract should not contain an option to receive cash payment
in lieu of annuity)
• Contributions to certain pension funds of LIC or any other insurer up to Rs. 1,50,000/-
• Individual taxpayer can claim tax benefit

Sec 80C - Subscription to notified Mutual Fund

A mutual fund investor can avail of the deduction through investment in notified mutual fund
schemes, known as ELSS (Equity Linked Saving Schemes). This helps them not only in availing
tax benefits under section 80C, but also gives them the benefit of diversification in equity for
a long time period.
• These funds have lock-in period of 3 years and underlying investment in equity
• Investments in all mutual funds should be eligible for deduction under section 80C

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 • Section 80C of the Income Tax Act, 1961 allows an assessed deduction in respect of
certain investments
• Individual taxpayer can claim tax benefit
Sec 80C - Subscription to notified pension fund
• Section 80CCD provides for income tax deductions for contribution made to the
notified pension scheme of the central Government i.e., for contribution to the
National Pension scheme (NPS)
• Deduction under this section is only available to Individuals. The Individual claiming
deduction under this section may be Resident or Non-Resident
• A new sub-section 1B has also been introduced to provide for additional deduction in
respect of any amount paid, of up to Rs. 50,000/- for contributions made by any
individual assessed under NPS
• The additional benefit of Rs. 50,000/- is over and above the benefit of Rs. 1.5 Lakhs
allowed to be claimed as a deduction under section 80C. Therefore, now the total
deduction that can be claimed under section 80C + Section 80CCD = Rs. 2,00,000/-
• Section 80CCD (2) deduction to NPS scheme for contribution by the employer
• Individual taxpayer can claim tax benefit

Sec 80C - Repayment of Housing loan principal

There shall be allowed a deduction of up to Rs. 1,50,000/- u/s 80C from your gross total
income for the principal repayment of the loan. However, the deduction shall be allowed from
the year in which possession took place even if the repayment was made in multiple annual
instalments.
• Deduction for house loan principal repayment available up to Rs 1,50,000/- under Sec.
80C
• The payment of loan should be made towards cost of purchase/construction of new
residential house property
• The benefit is available only to Individual assessee and to HUF assessee
• Only principal qualifies for deduction under section 80C
• Housing loan benefit for more than one house can also be claimed
• The house loan should not be for addition or alteration or renovation or repair of
house property
• The tax benefit under section 80C is available on residential house property only and
not available on commercial house property
• Individual taxpayer can claim tax benefit, if home loan in joint owners declaration has
to be provided with percentage (%) of sharing

Sec 80C - Tuition fee - child 1 & 2

• Tax benefits on tuition fee can be availed only by individual taxpayers.
• The maximum Tax exemption permitted under section 80C is Rs 1,50,000/- per
financial
• year.

Note:
o Only Tuition fees are exempt from tax

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 o Admin charges / Term fee / bus charges / exam fees / Donations / uniform fees /
library fees / sports fees / computer fees, etc. are not considered for tax exemption
o Building fund or any donation etc not allowed
o Deduction under this section is available for tuition fees paid on two children’s
education. If Assessee have more than two children, then he/she can claim tuition fees
paid of only two children. The Deduction is available for any two children
o The tuition fees should be paid to university, college, school or other education
institution. No deduction available for fees paid for private tuitions.
o Pre-nursery, play school and nursery class fees are also covered under section 80C
o The deduction is available for full time course only. Term Fees is not eligible for
deduction
o The Deduction is not available for tuition fees paid for studies of self / spouse
o Individual taxpayer can claim tax benefit

Sec 80C - Term Deposits

As Term deposit (Fixed Deposit) for 5 years or more with scheduled bank in accordance with
a scheme framed and notified by the Central government is eligible for income tax deduction
under section 80C.
• There is no tax benefit on deposits with less than five-year tenure
• Tax deductions on amount invested up to Rs.1,50,000/- per financial year
• The Investments can either be made in single name or joint in name, In case of joint
accounts, only the first holder will get tax deduction for section 80C for investment in
this type of tax saving fixed deposit
• Tax on interest earned on term deposits
• Individual taxpayer can claim tax benefit

Sec 80C – 5 year time deposit under the Post Office Time Deposit
Rules 1981
• Investment made in "five-year time deposit in an account under Post Office Time
Deposit Rules, 1981" will be eligible for deduction from the Gross total income, under
section 80C, with the overall section threshold of Rs. 1,50,000/-
• Post office time deposit (POTD) scheme are like bank deposits
• Only 5-year post office time deposit account shall qualify for deduction under section
80C
• 1 year, 2 year and 3-year time deposit account are not qualified for deduction under
section 80C
• Individual taxpayer can claim tax benefit

Sec 80C - Sukanya Samriddhi Scheme

Sukanya Samriddhi Scheme is a small savings scheme which was launched in January 2014
and is aimed at encouraging savings for a girl child's education and marriage. A Sukanya
Samriddhi Account can be opened any time after the birth of a girl till she turns 10, with a
minimum deposit of Rs 1,000/-. A maximum of Rs 1,50,000/- can be deposited during the

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ongoing financial year. The account will remain operative for 21 years from the date of its
opening or till the marriage of the girl after she turns 18.
• Parents or a legal guardian can open an account in the name of a girl child right from
the birth of a girl child till she attains the age of ten years
• The account can be opened in any post office or authorized branches of commercial
banks - Authorized bank or post office Passbook with Front page copy
• Applicable for Girl child investment for below 10 years only
• Applicable for Indian Citizen only
• Sukanya Samriddhi Scheme is exempted up to Rs 1,50,000/-
• Only one account can be opened per girl child to the maximum limit of two children
except in a case of twins or triplets, wherein this facility would be extended to the
third child which means you can even open three accounts in case you are blessed
with twin girls on the second occasion or in case the first birth itself results into three
girl children
• A depositor may open and operate only one account in the name of the girl child under
these rules. One can't open two accounts for one girl
• Individual taxpayer can claim tax benefit

Sec 80C - Stamp duty and Registration fee

Stamp duty and Registration fee: According to the law, ‘the amount paid towards stamp duty,
registration fees and other expenses for the purpose of transfer of house property to the
owner also qualifies for tax exemption’. This is over and above the principal payment that
qualifies under Section 80C of the Income-tax Act, 1961, up to a limit of Rs. 1,50,000/-.

Conditions to claim a deduction of Stamp Duty and Registration Charges-

• These deductions can only be claimed by an individual or a HUF (Hindu Undivided
Family)
• Deductions can only be claimed in the same financial year in which the house or
property is purchased
• The property should be in the name of the individual and the expenses should be paid
by the individual himself. No deductions would be granted if the deductions are paid
by some other person
• In case a property is owned jointly, the expenses can be claimed by the co-owners
based on their share in the property
• For claiming the expenses, the payment of expenses and the possession of the house
must be in the same financial year

Sec – 80D Medical insurance - Self /Family/ Parents &

Preventive Health check-up - Medical Expenditure
Medical Insurance is an insurance policy that ensures that you get cashless treatment or
expenses reimbursement, in case you fall ill. A medical insurance policy reimburses the
insured for medical surgical expenses arising from an illness or injury that leads to
hospitalization. The insurance company provides the insured with the facility of cashless
hospitalization at a network hospital or provides a reimbursement for the incurred expenses.

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 i. The below mentioned heads and limits explain how the Exemption amounts are
calculated under Section 80D
ii. Preventive Health Check-up (Self) + Medical Insurance Premium (Self) - Total Limit is
Rs. 25,000/-
iii. Preventive Health Check-up (Self) + Medical Insurance Premium (Self Senior Citizen) -
Total Limit is Rs.50,000/-
iv. Preventive Health Check-up (Parents) + Medical Insurance Premium (Parents – non-
Senior) - Total Limit is Rs. 25,000/-
v. Preventive Health Check-up (Parents) + Medical Insurance Premium (Parents - Senior)
- Total Limit Rs. 50,000/-

However, the limits for SELF and PARENTS are ADDITIVE, which means that (i) and (iii) can add
up to give a maximum exemption of Rs. 50,000/- or (i) and (iv) can add up to give a maximum
exemption of Rs. 55,000/-. Similarly, (ii) and (iii) can add up and so can (ii) and (iv) in this
scenario.

Finally, the MAXIMUM exemption that you can get is INR 60,000/-. This is because the
maximum exemption for Parents (Senior Citizen) and Self (Senior Citizen) is INR 30,000/- each.
For claim tax benefit, individuals a disabled dependent can be spouse, son / daughter (any
child), parents.

Sec 80DD - Deduction for dependent with disability / severe

disability
• If a person incurs any expenditure on medical treatment of a dependent family
member with medical disability, would be allowed to claim deduction u/s 80DD
• Certificate from Registered Medical practitioner for the current FY in Form 10 I stating
percentage of disability
• To be eligible for the claim deduction under the section 80DD, one must -
o Be an Individual or be a part of a Hindu undivided family, who is a resident in
India
o This deduction is not available to non-resident Indian (NRI)
• Expenditure for the medical treatment (including nursing), training and rehabilitation
of a disabled dependent
• The deduction allowed as follows -
o Disabled if a dependent person with 40% or more of one or more disability
Rs.75,000/- allowed
o Disabled if a dependent person with 80% or more of one or more disability
Rs.1,25,000/- allowed
• For claim tax benefit, individuals a disabled dependent can be spouse, son / daughter
(any child), parents, brother / sister (siblings)

Sec 80DDB – Medical Treatment for Non-senior / Senior / Very

Senior Citizen
• Section 80DDB provides for income tax deduction under Chapter VI-A for payment of
medical treatment of a person suffering from a specified from a specified disease. The
deduction under section 80DDB is allowed only to Individual and HUF’s.

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 • The expense should be incurred by the individual or HUF either for himself or for any
dependent family member (Spouse, Children, Parents, Brother and Sister).
• Rs. 40,000/- will be allowed as a deduction under section 80DDB. However, the above
limit of Rs. 40,000/- shall be increased to Rs. 1,00,000/- in case the person on behalf
of whom the payment is being is a senior citizen
• For claim tax benefit: Individuals, dependent can be spouse, son / daughter (any child),
• parents, brother / sister

Sec 80E – Repayment of Interest on Loan for Higher Education

An Education loan can not only fund your higher studies but also help save tax. The interest
paid on the education loan can be claimed as deduction, as per Section 80E of the Income Tax
Act, 1961. However, the principal part does not qualify for tax benefit.
• Provisional Certificate from the financial institute specifying the interest paid towards
the education loan. Break up of principal and interest paid on the loan in the current
financial year (Apr’23–Mar’24)
• An individual can avail of tax benefit if he/she has taken an education loan to support
higher studies of self, spouse, children or for the student of he/she is the legal
guardian. So, education loan taken for siblings or other relatives does not qualify for
Section 80E benefit
• This tax deduction is allowed only if the education loan has been availed from any
bank or notified financial institution or any approved charitable institution. So, no
deduction under Section 80E would be available if the education loan is taken from
employer, family or friends
• The income tax benefit can only be claimed on interest part of the loan. The principal
part does not qualify for tax benefit. There is no limit on the amount of interest you
can claim as deduction under this section
• Education Loan should have been taken for the purpose of pursuing higher studies of
Individual, Spouse, and Children of Individual or of the student of whom individual is
legal Guardian

Sec 80U - Deduction for self-disability or severe disability

• The taxpayer will be covered u/s 80U of income tax act 1961 if he or she suffers 40%
or more of one or more physical disability of the any following: Blindness, Low vision,
Leprosy – cured, Hearing Impairment, Locomotor disability, Mental retardation &
Mental illness
• Certificate from Registered Medical practitioner for the current FY in Form 10 I stating
percentage of disability
• The taxpayer must keep a copy of the certificate issued by medical authority and such
certificate has to be renewed in timely manner to keep claiming the income tax
deduction u/s 80U
• A fixed tax deduction of Rs. 75,000/- is available for the taxpayer
• A higher tax deduction of Rs. 1,25,000/- can be claimed u/s 80U if the taxpayer has
severe disability. Sever disability means having disability of 80% or above
• Individual taxpayer can claim tax benefit

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Sec 24 - Self-occupied/deemed self-occupied/Wholly let out House
Property
• A self-Occupied property is one which is used by the person for his own residential
purpose. If a person has occupied more than one property for his residential purpose
then only one house is treated as self-occupied and others are treated as "Deemed to
be let out"
• The maximum amount of interest permissible in cases of self-occupied / deemed self-
occupied/ Wholly let out property is Rs. 2,00,000/-
• Loan is borrowed before 1st April 1999 for purchase, construction, the home loan
must be for purchase and construction of a new property

Note:
o Conditions for claiming Interest on home loan deduction – You need to meet all
the below 3 conditions to claim this deduction:
i. The acquisition or construction is completed within 5 years from the end of the
financial year in which the loan was taken
ii. There is interest certificate available for the interest payable on the loan
iii. Note that your interest deduction may be limited to Rs 30,000 if any one of
these conditions is met, the loan must be taken on or after 1 April 1999
• Individual taxpayer can claim tax benefit, if home loan in joint owner’s declaration
must be provided with % of sharing

Previous Employer Tax Details

• Form - 16 or Form 12B or Tax computation sheet for the FY 2023-24 is required from
the previous employer person joining in organization in the middle of the year and is
a form for furnishing the details of income earned from the previous employer for FY
2023-24
• Form 12B is required to be furnished as per rule 26A by a person joining any
organization in the middle of the year and is a form for furnishing the details of income
earned from the previous employer. It is a form required to be submitted by the new
employee to the employer and requires details like -
o Details of your previous employer like PAN number and TAN number
o Break up of salary like Basic salary, HRA, leave encashment, Leave Travel
Allowance (LTA) etc.
o Deduction if any under Sections 80C, 80D, 80E, Section 24 & Others
o TDS on salary deducted by the previous employer
o Professional Tax (if any) paid by the employee

Note: In case the above proofs are not submitted, the previous employer’s income will not
be considered by NISG and its Entities for tax calculation and the same can be later on filed
along with Income Tax Returns filing.

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