PERMISSIBLE DEDUCTIONS FROM GROSS

TOTAL INCOME(GTI)
SEC- 80C TO 80U

CA. DIPAYAN DAS

INTRODUCTION & 80C
• The purpose of deductions is to encourage savings, industrialization, and to assist the taxpayers in
meeting essential expenditure.
• Deduction are allowed from gross total income.
• Aggregate deduction not to exceed GTI. ( Gross total income after excluding LTCG, STCG, winning
from lotteries, races).
80C( LIC, ANNUITY PLAN,PF CONTRIBUTION, subscription to MF, equity share)
• Deduction u/s 80C is available only to an individual or a HUF.
• Deduction is available on actual payment basis. Insurance payment due on 28 Mar 2020, but
payment is made on 1 Apr 2020. Deduction for P.Y 19-20 not allowed.
• Maximum deduction allowed under section 80C is Rs. 1,50,000.
• Contribution by employee towards National Pension Scheme is included in the above Rs. 1,50,000.
However, contribution by employer is not included in the Rs. 1,50,000.
• Amount invested in NSC( National Saving Scheme) is also included in 80C. Interest accrued every
year is taxable on accrual basis.
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Deduction in respect of Medical Insurance Premia- 80D

• A taxpayer is an individual or HUF
• Payment should be made out of income chargeable to tax
• Payment should be other than cash. However, preventive health-check-up can be made by any
mode
Maximum amount of deduction-
• In case of health insurance of self and family , max is Rs 25,000/-.
• If medi-claim is paid for Parents ( including Senior Citizen) along with family of assessee, the limit is
extended to Rs. 50,000.
• For preventive health-check up, it is max Rs. 5,000. This is in addition to Rs 25,000/Rs.50,000.
• If insurance premium is paid for multiple years, deduction would be allowed on proportionate basis.
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Example-
1. Mr. X paid Rs. 20,000 for his family medi-claim in cash. Rs. 4,000 is spent in cash for
preventive health check up. What is the claim allowed under section 80D? What is your
answer if payment would have been made in cheque for medi-claim Rs. 20,000.
2. Mr. X paid Rs.35,000 for his family medi-claim in cheque. He spent Rs 5,000 for his family
including senior citizen parents' health check-up. He additionally took a medi-claim for his
senior citizen parents by paying a cheque for Rs 30,000. What is the deduction allowed under
section 80D.
• Deduction in respect of maintenance including medical treatment of a dependent being a
person with disability -80DD
• Dependent means spouse, children, parents, brothers and sisters, who is wholly and mainly
dependent upon the individual.
• A fixed deduction of Rs 75,000 is available. A higher deduction of Rs. 1,25,000 is available if
such dependent relative is suffering from a severe disability. ( having disability of 80 % or
above)
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• Deduction in respect of Medical Treatment, etc 80DDB
• A resident individual/HUF can claim a deduction , if he/it has actually incurred expenditure for the
medical treatment of a specified disease or ailments prescribed by Board. Expenditure should be
incurred for medical treatment of the assesee himself or wholly/mainly dependent husband/wife,
children, parents, brothers and sisters of individual .
• Actual expenditure on medical treatment or Rs 40,000 ( Rs, 1,00,000 in case of a senior citizen)
whichever is lower, deductible.
• Deduction in respect of payment of interest on Loan taken for Higher education (80E)
• An individual can claim.
• Loan is taken either for self higher education ( after passing secondary examination ) or relatives ( i.e
Spouse, children, or any student for whom the individual is the legal guardian)
• The entire interest is deductible in the year in which the assessee starts paying interest on loan and
subsequent 7 years or until interest is paid in full.
• Mr. X has taken loan for his three children’s education ( one for full time MBA, another twos part time
MBA). Principal amount paid is Rs 2,00,000 and Interest portion is Rs 1,50,000 per student in 2020-21
p.y. What is the deduction allowed ?
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• Deduction in respect of interest of loan taken for residential house property
(Sec 80EE)
• The assessee is an individual . He may be resident or non-resident.
• He has taken a loan
• Loan is taken for acquisition of residential HP.
• Loan is taken from a bank or Housing Finance Company.(HFC)
• The loan sanctioned amount should not exceed Rs 35 Lakh
• The amount of loan sanctioned by the bank/HFC during April 1, 2016 and March
31, 2017.
• The value of residential house property does not exceed Rs 50 Lakh.
• The assessee does not own any residential house property on the date of
sanction of loan.
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• Amount of deduction- If the above conditions are satisfied , the assessee can claim deduction under section
80EE.Deduction is available in respect of interest payable on the above loan or Rs.50,000, whichever is less.
Deduction is available for the assessment year 2017-18 and subsequent assessment years. DOUBLE DEDUCTION
IS NOT ALLOWED IF AN ASSEESSEE CLAIMED UNDER THIS ACT , UNDER ANY OTHER PROVISIONS OF THE ACT.
• Deduction in respect of interest on loan taken for certain house property (80EEA- Applicable from A.Y 2020-21)
• The assessee is individual
• He is not eligible to claim any deduction u/s 80EE
• Loan has been taken to purchase residential HP.
• Loan sanctioned by a Financial Institution during April 1, 2019 and March 31. 2020.
• Stamp duty value of residential HP does not exceed Rs. 45 Lakh
• The assessee does not own any residential HP on the date of sanction of loan.
• Amount of deduction- Interest amount Rs 1,50,000 or actual , whichever is lower.
• Same interest is not deductible twice- If interest is deductible u/s 80EEA, such interest is not again deductible
under section 24 (b) or any other provision of the Act.
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Deduction in respect of interest on loan taken for purchase of electric vehicle- 80EEB
• The assessee is an individual
• He has taken loan for the purpose of an electric vehicle
• Loan is taken from Financial Intuitions.
• Loan is sanctioned during 1 Apr 2019 and March 31, 2023.
• Amount of deduction- Interest payable or Rs. 1,50,000, whichever is less. Deduction is allowed for the
assessment year 2020-21 and subsequent assessment years.
• Same interest is not deductible twice.
Deduction in respect of donations to Certain Funds, Charitable institutions, etc ( 80G)
• Deduction is allowed to any taxpayer ( company, Individual, Non-Resident, etc)
• Mode of payment: Cash/ Cheque/ Draft
• However, if donation exceeding Rs. 2,000/- is made in cash, no deduction is allowed.
• Further, contributions made in kind also do not qualify for any deduction under this section.
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How much deduction can be claimed under section 80G?
• Deduction of the amount contributed/ donated from Gross Total Income
of the assessee for the previous year depends on the kind of funds/
organizations where such amount is contributed/ donated. Deduction is
available as a certain percentage of contributions/ donations made. For
the purpose of calculation of the amount that is available as a deduction
from Gross Total Income, we can classify the deductions available as:
• 1. Deduction without any limit.
• 2. Deduction subject to limit.
Deduction available for amount contributed under section 80G without any limit.
• Contributions/ Donations to certain Funds as set up and notified by the Government are eligible for
100% or 50% deduction from Gross Total Income of the assessee. 
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• Without Limit Donations are- National Defense Fund set up by the Central Government, Prime Minister’s National Relief
Fund(100%), PM Care ( 100%)Jawaharlal Nehru Memorial Fund (50% of the amount), Indira Gandhi Memorial Fund (50% of the
amount). [ Refer Book for details of institutions].
Deduction available for amount contributed under section 80G subject to the limit ( Total 7 institutions, Two under
100% and five under 50%)
• Contribution/ donation made to any other institution or fund notified under section 80G is also eligible as deduction from Gross
Total Income. However, the deduction in respect of such donations/ contributions is restricted to 50% or 100% of the Net
Qualifying Amount.
• Such fund where 100% of Net qualifying amount allowed are- Donation to Government or any approved local authority,
institution or association to be utilized for the purpose of promoting family planning, Donation by a company to the Indian
Olympic Association or to any other association or institution notified for the development of infrastructure for sports and
games in India or the sponsorship of sports and games in India.( Only Corporate Assessee).
• Such fund where 50% of Net Qualifying amount allowed are-Funds/ Institutions which satisfies conditions mentioned under
section 80G(5), Donation to Government or any local authority for the purpose of utilization for any charitable purpose other
than promoting family planning, Any authority constituted in India for dealing with and satisfying the needs for housing
accommodation or for the purpose of planning/development of  towns, villages, etc, Any corporation specified in
section10(26BB) for promoting the interest of minority community, Any notified temple, mosque, gurdwara, church or other
places for the purpose of renovation or repairs.
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• Net Qualifying Amount means 10% of Adjusted GTI . And adjusted GTI =“ Gross Total Income (-)
amount deduction under section 80C to 80U (but not section 80G) (-) exempted Income (-) LTCG (-)
STCG from equity linked MF taxed at 15% (-) Income from foreign currency coming under Capital Gain.
• Amount of deduction - whichever is less from the below
• Actual Contribution or
• Net Qualifying Amount. ( 100% or 50% as the case may be)
• Example- Mr. X has adjusted GTI is Rs. 5,00,000. Gross Total Income Rs. 7,00,000. He has donated to
temple for the purpose of renovation and the temple is approved under section 80G.The donation
amount Rs. 70,000. Find out eligible amount for deduction under section 80G? What would be your
answer if donation is to a State Govt for promoting Family Planning. ( Amount remained same , i.e Rs
70,000)
• Solution-(a) Whichever is less- Rs. 70,000 or 25,000 ( 5,00,000*10%*50%). So deduction allowed is Rs
25,000.
(b) Whichever is less – Rs. 70,000 or Rs. 50,000, so deduction allowed is Rs. 50,000.
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• Deduction in respect of rent paid – 80(GG)

• Who can claim- Only Individual can claim. He can be a self-employed person. He can be an employee who does not
get HRA from employer.
• What is qualifying expenditure- Only an individual who gets rent for a residential accommodation for himself( and
family) can avail deduction provided he gives a declaration electronically in Form No. 10BA.
• Following persons should not own any residential accommodation at the place where taxpayer resides, performs the
duties of his office, or employment or carries on his/her business or profession-
• The taxpayer ( himself)
• His/Her spouse
• His/Her minor child
• What is amount of deduction- The amount deductible is least of the following-
• Rs. 5,000 per month
• 25% of “total income”
• Excess of actual rent paid over 10% of “ total income”.
• Total Income= GTI(-)LTCG (-) STCG (-) 80C to 80U (not being section 80GG)
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FORM NO. 10BA [See rule 11B]
Declaration to be filed by the assessee claiming deduction under section 80GG
• I/We (Name of the assessee with Permanent Account Number or Aadhaar Number)
do hereby certify that during the previous year I/we had occupied the premise (full
address of the premise) for the purpose of my/our own residence for a period of
months and have paid Rs. in cash/through crossed cheque, bank draft towards
payment of rent to Shri/Ms/ M/s (Name and complete address of the landlord). It is
further certified that no other residential accommodation is owned by (a) me/my
spouse/my minor child/our family (in case the assessee is HUF), at where I/we
ordinarily reside/perform duties of office or employment or carry on business or
profession, or (b) me/us at any other place, being accommodation in my occupation,
the value of which is to be determined u/s 23(2)(a)(i) or u/s 23(2)(b
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• Deduction in respect of eligible start-up ( 80-IAC)
• Conditions are-
• The asessee is a company or a LLP ( Limited Liability Partnership) and engaged in an eligible business ( eligible
business means a business carried out by an eligible start-up engaged in innovation, development or
improvement of products or processes or services or a scalable model with a high potential of employment
generation or wealth creation)
• The above company or LLP is incorporated after Mar 31, 2016 but before Apr 1, 2021.
• The annual business turnover of the company or LLP does not exceed Rs. 25 Crore in the previous year( Rs.
100 Crore for AY 2021-22) relevant to the assessment year for which deduction is claimed.
• It holds a certificate of eligible business from the Inter-Ministerial Board of Certificate as notified in the
Official Gazette by CG
• Amount Deduction- If the above conditions are satisfied, 100% of the profits and gains derived from eligible
business is deductible for 3 consecutive AYs. However, this deduction may , at the option of the assessee , be
claimed by it for any 3 consecutive Ays out of 5 Years.( 7 years /10 years)
• There are certain documents to be submitted to claim this deduction