Taxes collected by the Government make up the major portion of the government’s income. These taxes are then utilized to provide the basic services to the public like building infrastructure, providing health care etc. Every citizen of the country, with a yearly income of Rupees 2.5 Lakhs or more, should pay the taxes expected of them. This can be draining on the bank account of the individual. The Indian government has, therefore, come up with various schemes and policies which provide a deduction on these taxes.
The Various Income Tax Deductions Under Section 80 in India Get Details
A tax deduction is a reduction in the total amount payable to the Income Tax Department of India. The government allows provision for tax benefits which can be availed by individuals and Hindu Undivided Families (HUF) as per Section 80C of Income Tax Act, an act which came into action on 1st April 2006.
There are many similarities between Section 80C and Section 88. But unlike Section 88, in Section 80C there is no sub-limit and it does not categorize individuals based on income or the tax bracket under which they fall. To avail the maximum benefits, one must plan his/her investment wisely and utilize various instruments available for a tax deduction.
The various investment schemes that are eligible for tax deduction are
Taxes page Index
Income Tax must be filed against income that is earned from the following:
Get the detail process of Direct Tax in India Get Details
There is an extensive list of eligible investments for tax deduction under Section 80C. Due to this, the Section has been divided into various sub-sections.
Tax deduction schemes provided under these sub-sections are as follows
Subdivisions of Section 80D
Section D is further divided into two parts that contain detailed information for taxpayers to better understand the tax deduction schemes offered.
This deduction can be claimed depending upon the following expenditures:
Deduction of Rupees 75,000 is made for minor disability and Rupees 1.25 Lakh for severely disabled people. This deduction is open for both individuals and HUFs if the dependent party is the spouse, parents, siblings or children.
Section 80E of Income Tax Act has provision to ensure that education does not become an additional tax burden. Under this Section, a taxpayer can claim a deduction on the repayment of interest on education loan taken to pursue higher education. This deduction can be utilized by a taxpayer to either sponsor his/her child or ward’s education or for himself/herself. Only those individuals who have taken a loan from approved charitable organizations and financial institutions which are permitted for tax benefits, are eligible for this tax deduction.
Sub-Sections of Section 80E: Only those individual taxpayers who pay interest on the loan taken by them to buy a residential property are eligible for tax deduction under Section 80 EE. A sum of Rupees 3 Lakhs is the maximum amount permitted for deduction under this section.
Under Section 80G tax deduction is provided by Government on monetary donations. It is done to encourage people to make donations towards funds and charitable institutions. Every taxpayer qualifies for this tax deduction provision if they have a proof of payment made.
The limit of deduction on taxes under this section is based on the following factors
Subdivisions of Section 80G
Section 80G is further divided into four sections to simplify the terms.
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Under Section 80 IA there are provisions for all taxpayers to utilize and claim tax deduction on the gains or profits generated via industrial activities. These industrial enterprises may include various fields like telecommunication, power generation, industrial parks, SEZ s (Special Economic Zone) etc.
The following are subsections of Section 80-IA
Section 80J of the Income Tax Act was amended to further include two subsections -80JJA and 80 JJAA
Banks which have offshore banking units in Special Economic Zones, entities of International Financial Services Centres and banks which have been established outside India can avail tax deduction under Section 80 LA, in accordance with the laws of a foreign nation. As per the rules of the country, the assessees are eligible for 100% equivalent deduction on the income for the first five consecutive years and 50% deduction after five years, on the income generated through these transactions.Permission must be granted to such entities under the SEBI Act (Security and Exchange Board of India Act), Banking Regulation Act or entities should be registered under any such relevant law.
Section 80P is for the cooperative societies, under which as per certain qualifying condition, 100% tax deduction is permitted on the income earned by them. Cooperative societies that earn income through fishing, banking, cottage industries, milk supplied by members and sale of agricultural harvest grown by members qualify for this benefit.
Cooperative societies that are involved in other forms of business can qualify for tax deduction between Rupees 50,000 to Rupees 1 Lakh (depending on the type of work they are involved in).
Listed below are the deductions which can be claimed by all cooperative societies
The tax deduction can be claimed on the royalty earned from the sale of books under Section 80 QQB. A maximum limit of Rupees 3 Lakhs can be claimed for deduction only by resident, Indian authors. Royalties from textbooks, journals, diaries etc. do not qualify for tax benefits, the royalties on literary, artistic and scientific books are tax deductible. In case the author earned royalties on his literature from a foreign country, the earning must be brought into the country within a specified time to avail tax benefits.
Section 80RRB caters to patent holders, offering them tax incentive. Under this Section, tax benefits are provided to resident individuals who earn income by means of royalty on their patents. Royalty of up to Rupees 3 Lakhs can be claimed under the condition that the patent is registered after 31st March 2003. If taxpayers receive royalties from abroad, then the money should be brought in the country within a specified period to qualify for tax deduction.
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Tax benefits as per Section 80TTA is available for Hindu United Families and individual taxpayers. The tax benefit of up to Rupees 10,000 can be obtained on the interest earned from the money invested in a savings account in banks within India.
Individual taxpayers in India with disabilities can claim tax deduction under this section. Individuals who are certified as ‘Person with Disability’ by a qualified medical professional can obtain a deduction of maximum Rupees 75,000 per year. In the case of people with severe disabilities, a maximum sum of Rupees 1.25 Lakhs can be claimed on the medical bills, providing they fill certain criteria. Some of the disabilities which are eligible for tax deduction are autism, mental retardation, cerebral palsy etc.
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Web India 123: Remember the video showing Indian army men showing determined restraint while pushing back Chinese incursions into our borders! All India ITR salutes these warriors by announcing income tax filing services to all members of the national armed forces free of charge. All the eligible person would have to do is submit his/her documents and a CA will ensure their taxes are done in the proper manner.
18th July 2017
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