Chapter VIA under Income tax provisions provided deductions for assessee from his income. Deductions are provided based on investments/payments made, income and in certain other cases.
Following are some of the major Chapter VIA deductions through which taxes can be saved:
Section – 80C: Deduction in respect of life insurance premium & certain investments
80C allows deduction for investment made in PPF, EPF, LIC premium , Equity linked saving scheme, principal amount payment towards home loan, stamp duty and registration charges for purchase of property, Sukanya smriddhi yojana (SSY) , National saving certificate (NSC) , Senior citizen savings scheme (SCSS), ULIP, tax saving FD for 5 years, Infrastructure bonds etc. It allows a maximum deduction of Rs 1.5 lakh every year from the taxpayer’s total income.
Section – 80CCC: Deduction in respect of contribution to certain pension funds
80CCC allows deduction for payment towards annuity pension plans. It allows a maximum deduction of Rs 1.5 lakh every year from the taxpayer’s total income.
Section – 80CCD: Deduction in respect of contribution to National pension scheme
80CCD (1) Deduction for NPS- Employee’s contribution under section 80CCD (1) Maximum deduction allowed is least of the following:
80CCD (1b) Deduction for NPS- Additional deduction of Rs 50,000 is allowed for amount deposited to NPS account
80CCD (2) Deduction for NPS- Employers contribution is allowed for deduction up to 10% of (basic salary + DA (dearness allowance)) under this section. Benefit in this section is allowed only to salaried individuals and not self-employed.
Overall limit under 80C and 80CCD is limited to Rs. 1,50,000 except for additional NPS deduction of Rs.50,000 u/s 80CCD (1b).
Section – 80D: Deduction in respect of health insurance premium and preventive health check up
Deduction is allowed in respect of insurance for self, spouse and dependent children up to a limit of Rs.25,000. An additional deduction for insurance of parents is available up to Rs. 25,000, if they are less than 60 years of age. If the parents are aged above 60, the deduction amount is available up to Rs 50,000.
In case, both taxpayer and parent(s) are 60 years or above, the maximum deduction available under this section is up to Rs.1 lakh.
Section – 80E: Deduction in respect of interest on loan taken for higher education
A deduction is allowed to an individual for interest on loans taken for pursuing higher education. This loan may have been taken for the taxpayer, spouse or children or for a student for whom the taxpayer is a legal guardian.
80E deduction is available for a maximum of 8 years (beginning the year in which the interest starts getting repaid) or till the entire interest is repaid, whichever is earlier. There is no restriction on the amount that can be claimed.
Section – 80EEA: Deduction in respect of interest on loan taken for residential house property
The deduction under this section is available only to individuals if the housing loan has been taken during the period starting on the 1st April, 2019 and ending on the 31st March, 2022 and he does not own any residential house property on the date of sanction of loan. The value of the property must be less than Rs 45 lakh.
Under Section 24, homeowners can claim a deduction for interest payments up to Rs 2 lakh on their home loan, if the owner or his family resides in the house property. Deduction under 80EEA is over and above the deduction u/s 24.
Therefore, taxpayers can claim a total deduction of Rs 3.5L for interest on home loan, if they meet the conditions of section 80EEA.
Section – 80EEB: Deduction in respect of interest paid on loan taken for purchase of electric vehicle
The deduction under this section is available only to individuals on interest payments up to Rs 1,50,000. An individual taxpayer may take loan to purchase an electric vehicle for personal use or for business use to avail deduction under this section.
Section – 80G: Deduction in respect of donations to certain funds, charitable institutions, etc
There are various donations specified in u/s 80G eligible for deduction up to either 100% or 50% with or without restriction of 10% of adjusted total income. The donations above Rs 2,000/- should be made in any mode other than cash to qualify for 80G deduction.
Section – 80GGB: Deduction in respect of contributions given by companies to political parties
Section 80GGB deduction is allowed to an Indian company for the amount contributed by it to any political party or an electoral trust. Deduction is allowed for contribution done by any way other than cash.
Section – 80GGC: Deduction in respect of contributions given by any person to political parties
Deduction under section 80GGC is allowed to an individual taxpayer for any amount contributed to a political party or an electoral trust. It is not available for companies, local authorities and an artificial juridical person wholly or partly funded by the government. Deduction is allowed for contribution done by any way other than cash.
Section – 80GG: Deduction in respect of rent paid when HRA (House rent allowance) is not received
Section 80GG deduction is available for rent paid when HRA is not received by individual and also for HUF.
To avail the deduction, the taxpayer, spouse or minor child should not own residential accommodation at the place of employment and assessee shall not own any residential accommodation in any other place which is self-occupied.
The limit of deduction allowed u/s 80GG is least of the following amounts:
Section – 80TTA: Deduction in respect of interest on deposits in savings account
Deduction is available to individual/HUF in respect of interest income from savings account with a bank, co-operative society, or post office up to Rs 10,000.
Section – 80TTB: Deduction in respect of interest on deposits in case of senior citizens
Deduction is available to senior citizens in respect of interest income from savings account with a bank, co-operative society, or post office up to Rs 50,000.
Section – 80RRB: Deduction in respect of royalty on patents
Deduction for any income by way of royalty for a patent, registered on or after 1 April 2003 under the Patents Act 1970, shall be available for up to Rs.3 lakh or the income received, whichever is less. The taxpayer must be an individual patentee and an Indian resident.
Section – 80IAC: Deduction in respect of profits of eligible start up
Section 80-IAC provides for a deduction of an amount equal to 100% of the profits and gains derived from an eligible business by an eligible start-up for 3 consecutive assessment years out of 10 years, beginning from the year of incorporation, at the option of the assessee subject to the conditions that-
In Finance bill 2023 it was proposed to extend the date of incorporation to 1st April 2024 to extend the benefits to another year.
Section – 80-IAB: Deductions in respect of profits and gains by an undertaking or enterprise engaged in development of Special Economic Zone
The deduction shall be allowed for an amount equal to 100% of the profits and gains derived from such business for 10 consecutive assessment years, subject to the conditions that-
The deduction shall be claimed at the option of the assessee for any 10 consecutive assessment years, out of 15 years beginning from the year in which a Special Economic Zone has been notified by the Central Government.
Section – 80M: Deduction in respect of certain inter-corporate dividends
Sec 80M deduction available to domestic companies in respect of intercorporate dividends distributed. This provision was introduced in Finance Act 2020 as the incidence of taxation of dividends was shifted from payer to the recipient.
The deduction allowed is least of the following-
Section – 80JJAA: Deduction in respect of employment of new employees
Sec 80JJAA allows deduction of 30% on incremental and additional employee cost for employees having total emoluments of Rs.25,000 or less for a period of 3 years. This deduction is available to assessee to whom tax audit u/s 44AB applies. It must be noted that deductions can be claimed only if a report by CA certifying the deduction is furnished along with the return of income in form 10DA.
Filing income tax returns
Chapter VIA deductions
Capital gains taxation
Taxation of business
NRI income
GST returns and due dates
Input tax credit claim
GST Refund
GST TCS
GST TDS
Capital Gains Taxation