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What are the Deductions in respect of under sec. 80C ?

Normally, taxpayee did not aware about deductions under section 80C properly. The section 80C comes from the assessment year 2006-07 onwards. Section 80C provides deduction in respect of certain expenditure/investments (which are specified in this section) paid or deposited by the assessee in the previous year.

Deduction under this section is available only to individual & Hindu Undivided Family.

What is Gross Qualifying Amount ?
The following payments/investments qualify for deduction under this section. The total amount of investments made during the Previous Year under these below mentioned schemes is known as Gross Qualifying Amount (GQA):
  1. Life Insurance premium paid on a policy taken on his own life, life of the spouse or any child (child may be dependent/ independent ). In the case of a Hindu undivided family, policy may be taken on the life of any member of the family. The premium paid should be maximum of 20% of sum assured.
  2. Any sum deducted from salary payable to a Government employee for the 168 purpose of securing him a deferred annuity (subject to a maximum of 20% of salary).
  3. Contribution towards statutory provident fund and recognized provident fund.
  4. Contribution towards 15 year public provident fund (maximum of Rs 70,000).
  5. Contribution towards an approved superannuation fund.
  6. Subscription to National Savings Certificates, VIII Issue .
  7. Contribution for participating in the Unit-Linked Insurance Plan (ULIP) of Unit Trust of India.
  8. Contribution for participating in the unit-linked insurance plan (ULIP) of LIC Mutual Fund (i.e. Dhanraksha plan of LIC Mutual Fund).
  9. Payment for notified annuity plan of LIC (i.e. Jeevan Dhara, Jeevan Akshay New Jeevan Dhara ,etc ) or any other insurer.
  10. Subscription towards notified units of Mutual Fund or UTI.
  11. Contribution to notified pension fund set up by Mutual Fund or UTI.
  12. Any sum paid (including accrued interest) as subscription to Home Loan Account Scheme of the National Housing Bank.
  13. Any sum paid as tuition fees to any university/college/educational institution in India for full time education.
What is Amount of deduction ?
We add the amounts invested/spent in above mentioned schemes and this amount is known as Gross qualifying amount. The amount deductible is -
  • Gross qualifying amount; or
  • Rs 1,00,000
Whichever is less

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