Chapter VI deductions that ease your burden



Income Tax is a direct tax on any income earned by a person during a financial year. An individual is supposed to file a return of income and pay taxes on the same by 31st July of the next year. Paying taxes always seems like a burden to the common man. However, the issue synonymous to both Direct and Indirect Taxes that must be addressed is Chapter VI of the Income Tax Act, 1961 has offered a variety of deductions to lessen the tax burden.
A few of the major deductions enlisted under Chapter VI are presented as follows in accordance with the recent updates. It is notable that these deductions cannot exceed the Gross Total Income of the individual.
Section
Description
Maximum Deduction threshold
80C
Contribution to LIC, RPF, NSS, Tuition fees, principal repayment for purchase/construction of residential house, Sukanya Samridhi Account, ULIPS/ELSS, 5-year FD, Subscription to NABARD Bonds
80C + 80CCC+ 80CCD (1) should be less than or equal to INR 1,50,000
80CCC
Premium for Annuity plan of LIC or any insurer for pension from a fund u/s 10(23AAB).
80CCD (1)
Contribution in Government notified pension scheme to the extent of 10% of salary for employees and 10% of total income for others.
80CCD(1B)
Additional deduction for Contribution to National Pension Scheme.
INR 50,000
80CCG
Investment in Rajiv Gandhi Equity Saving Scheme
Lower of
50% of amount invested or,
INR 25,000
80D
Medical Premium for Self and parents (additional).
Age < 60 years
Age > 60 years

INR 25,000 (max.50,000)
INR 50,000(max.1,00,000)
80DD
Amount paid for maintenance including medical treatment of dependent who is a person with disability.

INR 75,000 or,
INR 1,25,000 for Severe disability
80DDB
Amount for treatment of specified disease for self or dependent relative.

INR 40,000 / INR 1,00,000 (senior citizen)
80E
Interest on loan for higher education of self or family.

No limit, till 8 years (as per the updated Direct Tax Case Laws)
80GG
House Rent (for self-employed and employees not receiving HRA)
Least of -
      Rent paid minus 10% of total income or,
             INR 5000/- pm.or,
             25% of total income
80TTA
Interest on Saving accounts
INR 10,000
80TTB
Interest from banks, post office, etc. (applicable only to senior citizens)
INR 50,000
80U
Person with disability. (oneself)
INR 75,000 or,
INR 1,25,000 for Severe disability
80RRB
Income by way of Royalty of a Patent
Lower of INR 3,00,000 or income received

Therefore, appropriate deductions have been provided for the taxpayers to ease the tax burden and increase the compliance levels pervasively. But the taxpayer also needs to be responsible and make sure that no fake deductions are availed.


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