Chapter VI A

Vikas
Tushar
Neha
Sonali
Abhishek
Reethika
Introduction
 Provided by the Income Tax Act, 1961.
 Contained in Chapter VI – A and in the form of
deductions from section 80C to 80U.
 They are the permissible amount by which the
gross total income is reduced to arrive at the
total income liable to tax.
 They are intended to act as incentive to the
assessee for achieving certain economic
objectives
Basic Rules
 Rule 1
The aggregate amount of deductions under
sections 80C to 80U cannot exceed gross
total income.
 Rule 2
These deductions are to be allowed only if
the assessee claims these and gives the
proof of such investments/ expenditure/
income.
Categories of Deductions
 To encourage savings

 For certain personal expenditure

 For socially desirable activities

 For physically disabled persons

Deductions – 80 C to 80 U
Sections Particulars Assessee to Quantum of
whom allowed deduction

80C Deduction in respect of life Individual or Max. Rs. 1,00.000  .

insurance premia. deferred HUF
annuity, contributions to
provident fund, subscription
to certain equity shares or
debentures, a term deposit for
a fixed period of not less than
5 years with a scheduled
bank, bonds issued by
NABARD, Post Office 5 year
Time Deposit, Senior Citizen
Savings Scheme etc.
80CCC Deduction in respect of Only Max. Rs. 1,00,000
contribution to certain individuals
pension funds
80CCD Deduction in Central Employer’s and
respect of Government or any employee’s contribution
contribution other employee. From subject to maximum of
to new assessment year 2009- 10% of salary
pension 10 benefit extended to
scheme self-employed persons
also

The aggregate amount of deductions under 80C, 80CCC

and 80CCD put together cannot exceed Rs.1,00,000
80D Deduction in Individual or HUF In case of individuals
respect of whether resident or (/’) For individual himself,
medical non-resident spouse and dependent children
insurance Rs. 15,00
premia (//’) For parents of the
individual, whether dependent
or not Rs. 15,000
In case of HUF      Rs. 15,000
Note.—Addl. Rs. 5,000 if any
of the above person insured is a
senior citizen
80DD Deduction in Individual or HUF Rs. 50,000 Rs. 75,000
respect of resident in India: Increased to Rs. 1,00,000
maintenance •  with disability W.e.f. A.Y. 2010-11
including •  with severe
medical disability
treatment of
person with
physical
disability
80DDB Deduction in respect of Individual or Rs. 40,000 Addl.
medical treatment, etc. HUF resident in Rs. 20.000
India For senior
citizen
80E Deduction for interest paid Individual Actual amount
on loan taken for pursuing whether resident paid
his higher education or for or not
the purpose of higher
education of his relative.
W.e.f. A.Y. 2010-11
meaning of higher
education has been
enlarged to cover all post
schooling courses
“Relative” means the
spouse and children of the
individual.
80G Deduction in respect All (a)   100% or 50% of
of donations to assessees eligible donations, without
certain funds, applying qualifying limit
charitable institutions, in certain cases
etc. (b)   100% or 50% of
eligible
donations, after applying
Qualifying limit of 10% of
adjusted GTI.
80GG Deductions in respect Individual Maximum Rs. 2,000 p.m.
of rent paid only
80GGA Deduction in respect All assessees 100% of sum donated
of certain donations not having
for scientific research business
or rural development, income.
etc.
80GGB Deduction in respect of Indian 100% of sum
contribution to political companies contributed
parties.
W..e.f. A.Y. 2010-11,
contribution to Electoral
Trust also eligible for
deduction.
80GGC Deduction in respect of All assessees 100% of sum
contribution to political (except local contributed
parties. authority and
W.e.f. A.Y. 2010-11, artificial judicial
contribution to Electoral person)
Trust also eligible for
deduction
Deduction 80 IA
Period of commencement
Nature of Industry Assessee Deductions
of business
Infrastructure facility 100% for 10 years
(new undertaking; out of 20 years.
Indian Company On or after  1-4-1995
agreement with the In case of Port
Central Govt.) out of 15 years.
Any undertaking .
Telecommunication (New In case of 100% for first 5
undertaking: new domestic 1-4-95 to 31-3-2005 years; 30% for
Plant) satellite Indian next 5 years.
Company
IP- 1-4-97 to 31-3-2006
.                                               .
100% for 10 years
Industrial Park or SEZ Any undertaking
SEZ- on or after 1-4-2001 out of 5 years
to 31-3-2006
New network – 1-4-99 to
31-3-2006
Power ( New .                                                      .
100% for 10 years
undertaking : New Any undertaking
Substantial renovation. – out of 15 years
Plant)
1-4-2004 to 31-3-
2006.
Deduction 80 IAB

 Profits and gains by an undertaking or enterprise engaged in

development of Special Economic Zone
 The gross total income of the tax payer includes profits and
gains derived by an undertaking from any business of
developing a SEZ.
 Amount of Deduction – 100% deduction available for 10
consecutive assessment years.
Deduction 80 IB
Rate
Undertaking When Set up Period
Company Others
I. Industrial Undertaking [ Section 80-IB(2)]
(a) Industry set up in 100% 100% For first 5 years
1-4-93 to 31-3-2004
Industrial backward state. 30% 25% For next 5 years
(b) Industry set up in North 100% 100% For first 5 years
1.10.93 to 31.3.2004
Eastern States 30% 25% For next 5 years
     
(c) Industry set up in 1.10.94 to 31.3.2004 100% 100% For first 5 years
A. category backward district 1.10.94 to 31.3.2002 30% 25% For next 5 years
         
B. category backward district 1.10.94 to 31.3.2004 100% 100% For first 5 years
  1.10.94 to 31.3.2002 30% 25% For next 5 years
     
(d) Other Industries
1.4.91 to 31.3.2002 30% 25% 12 years for coop.
A. in small sector co-op.
      other 10 years
 
1.4.91 to 31.3.1995 30% 25% ----do----
B. any other in priority sector
II. Production of Mineral
oil in North Eastern region From 1.4.97
100% 100% First 7 years
or any where in India onwards
[80IB(4E)]
III. Refining of mineral oil
in North Eastern region or From 1.10.98
100% 100% First 7 years
any where in India [80- onwards
IB(4E)]
IV. Construction and
From 1.10.98 ,
development of housing
Project must be
project of residential units 100% 100%  
completed by
whose area does not
31.3.2003
exceed 1,000 sq. feet.
V. Profit from an
undertaking engaged in
For first 5 years
the integrated business of From 1.4.2001 100% 100%
For next 5
handling, storage and onwards 30% 25%
years
transportation of food
grains [ 80-IB(11A)]
VI. Setting up of 1.4.2002 to
50% 50% For first 5 years
multiplex theaters. 31.3.2005
VII. Setting up of 1.4.2002 to
50% 50% For first 5 years
convention center 31.3.2005

VIII. Hotel :

For first 10
(a) in hilly area or in rural 1.4.90 to 31.3.1994 50% Nil years
areas outside municipal and      
limits. 1.4.97 to 31.3.2001 50% Nil For first 10
years
(b) at place other than
For first 10
Clacutta, Chennai, 1.4.97 to 31.3.2001 50% Nil
years
Mumbai & Delhi
For first 10
(c) Any where in India 1.4.91 to 31.3.1995 30% Nil
years
80-IC Deduction in All assessees deriving 25% to 100%
respect of certain income from an under­ of profits
undertakings or takings or enterprises
enterprises in situated in special category
certain special States which begin
category States manufacturing/ production
between specified dates

80-ID Deduction in All assessees engaged in 100% for 5

respect of profits the business of hotel or consecutive
and gains from engaged in the business of assessment
business of hotels building, owning & years
and convention operating a convention
centres in specified centre
area W.e.f A.Y. 2009-10 hotels
located in specified
districts having a World
Heritage Site in India
80-IE Deduction in respect Assessees who have 100% for 10
of profits and gains begun or begin to consecutive
from an undertaking manufacture or produce assessment
in any of the North- eligible articles or years
Eastern States things or undertake
substantial expansion or
carry on any eligible,
business on or after 1-
4-2007.
80JJA Deduction in respect All assessees 100% of profit
of profits and gains for 5 years
from business of
collecting and
processing of bio
degradable waste
80JJAA Deduction in respect of Only Indian 30% of additional wages
employment of new companies for 3 years
workmen
80LA Deduction in respect of Only Scheduled 100% for first 5 years and
certain income of Banks owning 50% for next 5 years
offshore Banking Units etaxindia.org
offshore
Banking Units
in a special
economic zone
80P Deduction in respect of Co-operative 100% of profit
income of co-operative societies
societies except in case
of certain co-operative
banks.
80QQB Deduction in respect Individuals who Actual income or Rs.
of royalty income, are residents  in  3,00,000, whichever is
etc. of authors of India and are less
certain books other authors
than text books
80RRB Deduction in respect Individual who 100% of such income
of royalty on patents is resident in or
India and is a Rs. 3,00,000
patentee whichever is less
80U Deduction in the case Resident Rs. 50,000 Rs. 75,000
of permanent physical individual:
disability (including •     with
blindness). disability
etaxindiaorg •     with severe
disability