Deductions
under Chapter VI-A for Assessment Year 2013-14
I would like to inform to all Salaried Employee about Income Tax Deduction sections under Chapter VI-A for the Assessment Year 2013-14 which help us to get exemption from Income Tax and remit your tax liability in the financial year 2012-13.
In
computing the taxable income of the employee, the following deductions under
Chapter VI-A of the Act are to be allowed from his gross total income:
Deduction U/s. 80C:
Deduction
in respect of Life insurance premia, deferred annuity, contributions to
provident fund, subscription to certain equity shares or debentures, etc.
(section 80C)
Section
80C, entitles an employee to deductions for the whole of amounts paid or
deposited in the current financial year in the following schemes, subject to a
limit of Rs. 1,00,000/-:
(1)
Payment of insurance premium to
effect or to keep in force an insurance on the life of the individual, the
spouse or any child of the individual.
(2)
Any payment made to effect or to
keep in force a contract for a deferred annuity, not being an annuity plan as
is referred to in item (7) herein below on the life of the individual, the
spouse or any child of the individual, provided that such contract does not
contain a provision for the exercise by the insured of an option to receive a
cash payment in lieu of the payment of the annuity;
(3)
Any sum deducted from the salary
payable by, or, on behalf of the Government to any individual, being a sum
deducted in accordance with the conditions of his service for the purpose of
securing to him a deferred annuity or making provision for his spouse or
children, in so far as the sum deducted does not exceed 1/5th of the salary;
(4)
Any contribution made :
·
by an individual to any Provident
Fund to which the Provident Fund Act, 1925 applies;
·
to any provident fund set up by the Central
Government, and notified by it in this behalf in the Official Gazette, where
such contribution is to an account standing in the name of an individual, or
spouse or children; [The Central
Government has since notified Public Provident Fund vide Notification S.O. No.
1559(E), dated 3-11-2005]
·
by an employee to a Recognized
Provident Fund;
·
by an employee to an approved
superannuation fund; It may be noted that
"contribution" to any Fund shall not include any sums in repayment of
loan;
(5)
Any subscription :-
·
to any such security of the Central
Government or any such deposit scheme as the Central Government may, by
notification in the Official Gazette, specify in this behalf;
·
to any such saving certificates as
defined under section 2(c) of the Government Saving Certificate Act, 1959 as
the Government may, by notification in the Official Gazette, specify in this
behalf. [Central Government has since
notified National Saving Certificate (VIIIth Issue) vide Notification S.O. No. 1560(E), dated 3-11-2005 and National
Saving Certificate (IXth Issue) vide
Notification S.O. No. (E), dated 29-11-2011 F. No. l-13/2011-NS-II]
(6)
Any sum paid as contribution in the
case of an individual, for himself, spouse or any child,
·
for participation in the Unit Linked
Insurance Plan, 1971 of the Unit Trust of India;
·
for participation in any unit-linked
insurance plan of the LIC Mutual Fund referred to section 10 (23D) and as
notified by the Central Government. [The
Central Government has since notified Unit Linked Insurance Plan (formerly
known as Dhanraksha, 1989) of LIC Mutual Fund vide Notification S.O. No.
1561(E), dated 3-11-2005.]
(7)
Any
subscription made to effect or keep in force a contract for such annuity plan
of the Life Insurance Corporation or any other insurer as the Central
Government may, by notification in the Official Gazette, specify; [The Central Government has since notified
New Jeevan Dhara, New Jeevan Dhara-I New Jeevan Akshay, New Jeevan, Akshay-I
and New Jeevan Akshay-II vide
Notification S.O. No. 1562(E), dated 3-11-2005 and Jeevan Akshay-III vide Notification S.O. No. 847(E),
dated 1-6-2006]
(8)
Any
subscription made to any units of any Mutual Fund, of section 10(23D), or from
the Administrator or the specified company referred to in Unit Trust of India
(Transfer of Undertaking & Repeal) Act, 2002 under any plan formulated in
accordance with any scheme as the Central Government, may, by notification in
the Official Gazette, specify in this behalf; [The Central Government has since notified the Equity Linked Saving
Scheme, 2005 for this purpose vide Notification S.O. No. 1563(E), dated
3-11-2005]
The investments made after 1-4-2006
in plans formulated in accordance with Equity Linked Saving Scheme, 1992 or
Equity Linked Saving Scheme, 1998 shall also qualify for deduction under
section 80C.
(9)
Any
contribution made by an individual to any pension fund set up by any Mutual
Fund referred to in section 10(23D), or, by the Administrator or the specified
company referred to in Unit Trust of India (Transfer of Undertaking &
Repeal) Act, 2002, as the Central Government may, by notification in the
Official Gazette, specify in this behalf;
[The Central Government has since
notified UTI-Retirement Benefit Pension Fund vide Notification S.O. No. 1564(E)
dated 3-11-2005.]
(10)
Any
subscription made to any such deposit scheme of, or, any contribution made to
any such pension fund set up by, the National Housing Bank, as the Central
Government may, by notification in the Official Gazette, specify in this
behalf;
(11)
Any
subscription made to any such deposit scheme, as the Central Government may, by
notification in the Official Gazette, specify for the purpose of being floated
by (a) public sector companies engaged in providing long-term finance for
construction or purchase of houses in India for residential purposes, or, (b)
any authority constituted in India by, or, under any law, enacted either for
the purpose of dealing with and satisfying the need for housing accommodation
or for the purpose of planning, development or improvement of cities, towns and
villages, or for both.
[The Central Government has since notified the Public
Deposit Scheme of HUDCO vide Notification S.O. No. 37(E), dated 11-1-2007, for
the purposes of Section 80C(2)(xvi)(a)].
(12)
Any sums paid by an assessee for the
purpose of purchase or construction of a res dential house property, the income
from which is chargeable to tax under the head "Income from house
property" (or which would, if it has not been used for assessee's own
residence, have been chargeable to tax under that head) where such payments are
made towards or by way of any instalment or part payment of the amount due
under any self-financing or other scheme of any Development Authority, Housing
Board etc.
The
deduction will also be allowable in respect of re-payment of loans borrowed by
an assessee from the Government, or any bank or Life Insurance Corporation, or
National Housing Bank, or certain other categories of institutions engaged in
the business of providing long term finance for construction or purchase of
houses in India. Any repayment of loan borrowed from the employer will also be
covered, if the employer happens to be a public company, or a public sector
company, or a university established by law, or a college affiliated to such
university, or a local authority, or a cooperative society, or an authority, or
a board, or a corporation, or any other body established under a Central or
State Act.
The stamp
duty, registration fee and other expenses incurred for the purpose of transfer
shall also be covered. Payment towards the cost of house property, however,
will not include, admission fee or cost of share or initial deposit or the cost
of any addition or alteration to, or, renovation or repair of the house
property which is carried out after the issue of the completion certificate by
competent authority, or after the occupation of the house by the assessee or
after it has been let out. Payments towards any expenditure in respect of which
the deduction is allowable under the provisions of section 24 of the Act will
also not be included in payments towards the cost of purchase or construction
of a house property.
Where the
house property in respect of which deduction has been allowed under these
provisions is transferred by the tax-payer at any time before the expiry of
five years from the end of the financial year in which possession of such
property is obtained by him or he receives back, by way of refund or otherwise,
any sum specified in section 80C(2)(xviii), no deduction under these provisions
shall be allowed in respect of such sums paid in such previous year in which
the transfer is made and the aggregate amount of deductions of income so allowed
in the earlier years shall be added to the total income of the assessee of such
previous year and shall be liable to tax accordingly.
(13)
Tuition fees, whether at the time of
admission or thereafter, paid to any university, college, school or other
educational institution situated in India, for the purpose of full-time
education of any two children of the employee.
Full-time
education includes any educational course offered by any university, college,
school or other educational institution to a student who is enrolled full-time
for the said course. It is also clarified that full-time education includes
play-school activities, pre-nursery and nursery classes.
It is
clarified that the amount allowable as tuition fees shall include any payment
of fee to any university, college, school or other educational institution in
India except the amount representing payment in the nature of development fees
or donation or capitation fees or payment of similar nature.
(14)
Subscription to equity shares or
debentures forming part of any eligible issue of capital made by a public
company, which is approved by the Board or by any public finance institution.
(15)
Subscription to any units of any
mutual fund referred to in clause (23D) of Section 10 and approved by the
Board, if the amount of subscription to such units is subscribed only in
eligible issue of capital of any company.
(16)
Investment as a term deposit for a
fixed period of not less than five years with a scheduled bank, which is in
accordance with a scheme framed and notified by the Central Government, in the
Official Gazette for these purposes.
[The Central Government has since notified the Bank Term
Deposit Scheme, 2006 for this purpose vide
Notification S.O. No. 1220(E) dated 28-7-2006]
(17)
Subscription
to such bonds issued by the National Bank for Agriculture and Rural
Development, as the Central Government may, by such notification in the
Official Gazette, specify in this behalf.
(18)
Any
investment in an account under the Senior Citizens Savings Scheme Rules, 2004.
(19)
Any
investment as five year time deposit in an account under the Post Office Time
Deposit Rules, 1981.
Section 80C(3) & 80C(3A) states that in case of
Insurance Policy other than contract for a deferred annuity the amount of any
premium or other payment made is restricted to:
Policy
issued before 1st April 2012
|
20% of
the actual capital sum assured
|
Policy
issued on or after 1st April 2012
|
10% of
the actual capital sum assured
|
From
1-4-2013 actual capital sum assured in relation to a life insurance policy
means the minimum amount assured under the policy on happening of the insured
event at any time during the term of the policy, not taking into account -
i.
the value
of any premiums agreed to be returned, or
ii.
any
benefit by way of bonus or otherwise over and above the sum actually assured
which may be received under the policy by any person.
Deduction U/s. 80CCC:
Section
80CCC allows an employee deduction of an amount paid or deposited out of his
income chargeable to tax to effect or keep in force a contract for any annuity
plan of Life Insurance Corporation of India or any other insurer for receiving
pension from the Fund referred to in section 10(23AAB). However, the deduction
shall exclude interest or bonus accrued or credited to the employee's account,
if any and shall not exceed Rs. 1 lakh.
However,
if any amount is standing to the credit of the employee in the fund referred
above and deduction has been allowed as stated above and the employee or his
nominee receives this amount together with the interest or bonus accrued or
credited to this account due to the reason of :
·
Due to surrender annuity plan
whether in whole or part
·
Pension received from the annuity
plan
then the
amount so received during the Financial Years shall be the income to the
employee or his nominee for that Financial Year and accordingly will be charged
to tax.
Where any
amount paid or deposited by the employee has been taken into account for the
purposes of this section, a deduction with reference to such amount shall not
be allowed under section 80C.
Deduction U/s. 80CCD :
Section
80CCD allows an employee, being an individual employed by the Central
Government or any other employer, on or after the 1-1-2004, a deduction of an
amount paid or deposited out of his income chargeable to tax under a pension
scheme as notified or as may be notifed by the Central Government, vide
Notification F. N. 5/7/2003- ECB&PR, dated 22-12-2003. However, the
deduction shall not exceed an amount equal to 10% of his salary (includes
Dearness Allowance but excludes all other allowance and perquisites).
Further
where in the case of an employee receives any contribution in the said pension
scheme from the Central Government or any other employer then the employee
shall be allowed a deduction from his total income of the whole amount
contributed by the Central Government or any other employer subject to limit of
10% of his salary of the previous year.
However,
if any amount is standing to the credit of the employee in the pension scheme
referred above and deduction has been allowed as stated above and the employee
or his nominee receives this amount together with the amount accrued thereon,
due to the reason of
·
Closure or opting out of the pension
scheme or
·
Pension received from the annuity
plan purchased and taken on such closure or opting out
then the
amount so received during the FYs shall be the income of the employee or his
nominee for that Financial Year and accordingly will be charged to tax.
Where any
amount paid or deposited by the employee has been taken into account for the
purposes of this section, a deduction with reference to such amount shall not
be allowed under section 80C.
Further it
has been specified that w.r.e.f 1-4-2009 any amount received by the employee
from the new pension scheme shall be deemed not to have received in the previous
year if such amount is used for purchasing an annuity plan in the previous
year.
It is
emphasized that as per the section 80CCE the aggregate amount of deduction
under sections 80C, 80CCC and Section 80CCD(1) shall not exceed Rs. 1,00,000/-.
However the contribution made by the Central Government or any other employee
to a pension scheme u/s 80CCD(2) shall be excluded from the limit of
Rs.1,00,000/- provided under this Section.
Deduction U/s. 80CCF :
Section
80CCF has been withdrawn from FY 2012-13. Hence no deduction is allowable under
this section for the current FY onwards.
Deduction U/s. 80 CCG:
Newly
inserted Section 80CCG provides deduction w.e.f. assessment year 2013-14 in
respect of investment made under notified equity saving scheme. The deduction
under this section is available if following conditions are satisfied:
(a)
The
assessee is a resident individual (may be ordinarily resident or not ordinarily
resident)
(b)
His gross
total income does not exceed Rs. 10 lakhs;
(c)
He has
acquired listed shares in accordance with a notified scheme;
(d)
The
assessee is a new retail investor as specified in the above notified scheme;
(e)
The
investment is locked-in for a period of 3 years from the date of acquisition in
accordance with the above scheme;
(f)
The
assessee satisfies any other condition as may be prescribed.
Amount of deduction -The amount of deduction is at 50% of amount invested in
equity shares. However, the amount of deduction under this provision cannot
exceed Rs. 25,000. If any deduction is claimed by a taxpayer under this section
in any year, he shall not be entitled to any deduction under this section for
any subsequent year.
Withdrawal of deduction - If the assessee, after claiming the aforesaid deduction,
fails to satisfy the above conditions, the deduction originally allowed shall
be deemed to be the income of the assessee of the year in which default is
committed.
A scheme
named "Rajiv Gandhi Equity Savings Scheme (RGESS)" is being notified
for the purpose of this deduction.
Deduction U/s. 80D :
Section
80D provides for deduction available for health insurance premia paid, etc.
which is calculated as under:
Sl.
No.
|
Persons
for whom payment made
|
Nature
of payment
|
Mode
of payment
|
Allowable
Deduction (in Rs.)
|
1
|
Employee
or his family
|
♦ the whole of the amount paid to effect or to keep in force an
insurance on the health of the employee or his family or
♦
any contribution made to the CGHS or
♦
any payment on account of preventive health check-up of the employee or
family, [restricted to Rs. 5000/-; cash payment allowed here]
|
any mode
other than cash
|
Aggregate
allowable is Rs. 15,000/{For Senior Citizens it is Rs. 20000/-}.
|
2
|
Parent
or Parents of employee
|
♦ the whole of the amount paid to effect or keep in force an insurance
on the health of the parent or parents of the employee or
♦ any payment made on account of preventive health check-up of the
parent or parents of the employee [restricted to Rs. 5000/-; cash payment
allowed here]
|
any mode
other than cash
|
Aggregate
allowable is Rs. 15,000/ than {For Senior cash Citizens it is Rs. 20000/-}
|
Here
(i)
"family"
means the spouse and dependent children of the employee.
(ii)
Senior
citizen" means an individual resident in India who is of the age of sixty
years {For AY 2013-14 onwards] or more at any time during the relevant previous
year.
The DDO must ensure that the medical
insurance referred to above shall be in accordance with a scheme made in this
behalf by-
(a)
the
General Insurance Corporation of India formed under section 9 of the General
Insurance Business (Nationalization) Act, 1972 (57 of 1972) and approved by the
Central Government in this behalf; or
(b)
any other
insurer and approved by the Insurance Regulatory and Development Authority
established under sub-section (1) of section 3 of the Insurance Regulatory and
Development Authority Act, 1999(41 of 1999).
Deductions in respect of expenditure on persons or dependants
with disability
Deduction U/s. 80DD :
Under
section 80DD, where an employee, who is a resident in India, has, during the
previous year-
(a)
incurred
any expenditure for the medical treatment (including nursing), training and
rehabilitation of a dependant, being a person with disability; or
(b)
paid or deposited any amount under a scheme
framed in this behalf by the Life Insurance Corporation or any other insurer or
the Administrator or the specified company subject to the conditions specified
in this regard and approved by the Board in this behalf for the maintenance of
a dependant, being a person with disability, the employee shall be allowed a
deduction of a sum of fifty thousand rupees from his gross total income of that
year.
However,
where such dependant is a person with severe disability, an amount of one
hundred thousand rupees shall be allowed as deduction subject to the specified
conditions.
The
deduction under (b) above shall be allowed only if the following conditions are
fulfilled:-
(i)
the scheme
referred to in (b) above provides for payment of annuity or lump sum amount for
the benefit of a dependant, being a person with disability, in the event of the
death of the individual in whose name subscription to the scheme has been made;
(ii)
the
employee nominates either the dependant, being a person with disability, or any
other person or a trust to receive the payment on his behalf, for the benefit
of the dependant, being a person with disability.
However,
if the dependant, being a person with disability, predeceases the employee, an
amount equal to the amount paid or deposited under sub-para (b) above shall be
deemed to be the income of the employee of the previous year in which such
amount is received by the employee and shall accordingly be chargeable to tax
as the income of that previous year.
Deduction U/s. 80U :
Under
section 80U, in computing the total income of an individual, being a resident,
who, at any time during the previous year, is certified by the medical
authority to be a person with disability, there shall be allowed a deduction of
a sum of fifty thousand rupees. However, where such individual is a person with
severe disability, a higher deduction of one lakh rupees shall be allowable.
DDOs
should note that section 80DD deduction is in case of the dependent of the
employee whereas section 80U deduction is in case of the employee himself.
However under both the Sections the employee shall furnish to the DDO
following:
1.
A copy of the certificate issued by
the medical authority as defined in Rule 11A(1) in the prescribed form as per
Rule 11A(2) of the Rules. The DDO has to allow deduction only after seeing that
the Certificate furnished is from the Medical Authority defined in this Rule
and the same is in the form as mentioned therein.
2.
Further In cases where the condition
of disability is temporary and requires reassessment of its extent after a
period stipulated in the aforesaid certificate, no deduction under this section
shall be allowed for any subsequent period unless a new certificate is obtained
from the medical authority as in 1 above and furnished before the DDO.
3.
For the purposes of section 80DD and
80 U some of the terms defined are as under:-
(a)
"Administrator"
means the Administrator as referred to in clause (a) of section 2 of the
Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002)
;
(b)
"dependant"
means—
(i)
in the
case of an individual, the spouse, children, parents, brothers and sisters of
the individual or any of them;
(ii)
in the
case of a Hindu undivided family, a member of the Hindu undivided family,
dependant wholly or mainly on such individual or Hindu undivided family for his
support and maintenance, and who has not claimed any deduction under section
80U in computing his total income for the assessment year relating to the
previous year;
(c)
"disability"
shall have the meaning assigned to it in clause (i) of section 2 of the Persons
with Disabilities (Equal Opportunities, Protection of Rights and Full
Participation) Act, 1995 (1 of 1996) and includes "autism",
"cerebral palsy" and "multiple disability" referred to in
clauses (a), (c) and (h) of section 2 of the National Trust for Welfare of
Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple
Disabilities Act, 1999 (44 of 1999);
(d)
"Life
Insurance Corporation" shall have the same meaning as in clause (iii) of
sub-section (8) of section 88;
(e)
"medical
authority" means the medical authority as referred to in clause (p) of
section 2 of the Persons with Disabilities (Equal Opportunities, Protection of
Rights and Full Participation) Act, 1995 (1 of 1996) or such other medical authority
as may, by notification, be specified by the Central Government for certifying
"autism", "cerebral palsy", "multiple
disabilities", "person with disability" and "severe
disability" referred to in clauses (a), (c), (h), (j) and (o) of section 2
of the National Trust for Welfare of Persons with Autism, Cerebral Palsy,
Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);
(f)
"person
with disability" means a person as referred to in clause (t) of section 2
of the Persons with Disabilities (Equal Opportunities, Protection of Rights and
Full Participation) Act, 1995 (1 of 1996) or clause (j) of section 2 of the
National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental
Retardation and Multiple Disabilities Act, 1999 (44 of 1999);
"person
with severe disability" means—
(i)
a person
with eighty per cent or more of one or more disabilities, as referred to in
sub-section (4) of section 56 of the Persons with Disabilities (Equal
Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of
1996); or
(ii)
a person
with severe disability referred to in clause (o) of section 2 of the National
Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation
and Multiple Disabilities Act, 1999 (44 of 1999);
(iii)
"specified
company" means a company as referred to in clause (h) of section 2 of the
Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of
2002).
Deduction U/s. 80DDB :
Section
80DDB allows a deduction in case of employee, who is resident in India, during
the previous year, actually paid any amount for the medical treatment of such
disease or ailment as may be specified in the rules HDD (1) (see Annexure)
for himself or a dependant. The deduction allowed is equal to the amount
actually paid or Rs. 40,000 whichever is less. Further the amount paid should
also be reduced by the amount received if any under insurance from an insurerer
or reimbursed by an employer. In case of a senior citizen (an individual
resident in India who is of the age of sixty years or more at any time during
the relevant previous year) the amount of deduction allowed is Rs. 60,000/-.
DDO must
ensure that the employee furnishes a certificate in Form 10-I from a
neurologist, an oncologist, a urologist, nephrologist, a haematologist, an
immunologist or such other specialist, as mentioned in proviso rule 11(2) of
the Rules.
For the
purpose of this section in the case of an employee "dependant" means
individual, the spouse, children, parents, brothers and sisters of the individual
or any of them,
Deduction U/s. 80E :
Section
80E allows deduction in respect of repayment of interest on loan taken from any
financial institution or any approved charitable institution for higher
education for the purpose of pursuing his higher education or for the purpose
of higher education of his spouse or his children or the student for whom he is
the legal guardian.
The
deduction shall be allowed in computing the total income for the Financial year
in which the employee starts repaying the interest on the loan was taken and
immediately succeeding seven Financial years or until the Financial year the
interest is paid in full by the taxpayer, whichever is earlier.
For the
purpose of this section -
(a)
"approved
charitable institution" means an institution established for charitable
purposes and approved by the prescribed authority section 10(23C), or an
institution referred to in Section 80G(2)(a);
(b)
"financial
institution" means a banking company to which the Banking Regulation Act,
1949 (10 of 1949) applies (including any bank or banking institution referred
to in section 51 of that Act); or any other financial institution which the
Central Government may, by notification in the Official Gazette, specify in
this behalf;
(c)
"higher
education" means any course of study pursued after passing the Senior
Secondary Examination or its equivalent from any school, board or university
recognized by the Central Government or State Government or local authority or
by any other authority authorized by the Central Government or State Government
or local authority to do so;
Deduction U/s. 80G :
Section
80G provides for deductions on account of donation made to various funds ,
charitable organizations etc. In cases where employees make donations to the
Prime Minister's National Relief Fund, the Chief Minister's Relief Fund or the
Lieutenant Governor's Relief Fund through their respective employers, it is not
possible for such funds to issue separate certificate to every such employee in
respect of donations made to such funds as contributions made to these funds
are in the form of a consolidated cheque. An employee who makes donations
towards these funds is eligible to claim deduction under section 80G. It is,
hereby, clarified that the claim in respect of such donations as indicated
above will be admissible under section 80G on the basis of the certificate
issued by the Drawing and Disbursing Officer (DDO)/Employer in this behalf-
Circular No. 2/2005, dated 12-1-2005.
No
deduction under this section is allowable in case of amount of donation if
exceeds Rs. 10000/- unless the amount is paid by any mode other than cash.
Deductions U/s. 80GG :
Section
80GG allows the employee to a deduction in respect of house rent paid by him
for his own residence. Such deduction is permissible subject to the following
conditions :-
(a)
the
employee has not been in receipt of any House Rent Allowance specifically granted
to him which qualifies for exemption under section 10(13A) of the Act;
(b)
the
employee files the declaration in Form No. 10BA. (Annexure VIII)
(c)
He will be
entitled to a deduction in respect of house rent paid by him in excess of 10%
of his total income, subject to a ceiling of 25% thereof or Rs. 2,000/- per
month, whichever is less. The total income for working out these percentages
will be computed before making any deduction under section 80GG.
(d)
The
employee does not own:
(i)
any
residential accommodation himself or by his spouse or minor child or where such
employee is a member of a Hindu Undivided Family, by such family, at the place
where he ordinarily resides or performs duties of his office or carries on his
business or profession; or
(ii)
at any
other place, any residential accommodation being accommodation in the
occupation of the employee, the value of which is to be determined under
Section 23(2)(a) or Section 23(4)(a) as the case may be.
The
Drawing and Disbursing Authorities should satisfy themselves that all the
conditions mentioned above are satisfied before such deduction is allowed by
them to the employee. They should also satisfy themselves in this regard by
insisting on production of evidence of actual payment of rent.
Deductions U/s. 80 GGA :
Section
80GGA allows deduction from total income of employee in respect of donations of
any sum as given in the Table below:
Sl.
No.
|
Donations
made to persons
|
Approval
/Notification under Section
|
Authority
granting approval/ Notification
|
1
|
To a
research association which has as its object the undertaking of scientific
research or to a University, college or other institution to be used for
scientific research
|
u/s
35(l)(ii)
|
Central
Government
|
2
|
To a
research association which has as its object the undertaking of research in
social science or statistical research or to a University, college or other
institution to be used for research in social science or statistical research
|
u/s35(l)(iii)
|
Central
Government
|
3
|
To an
association or institution, which has as its object the undertaking of any
programme of rural development, to be used for carrying out any programme of
rural development approved for the purposes of section 35CCA
|
furnishes
the certificate u/s 35CCA (2)
|
Prescribed
Authority under Rule 6AAA
|
4
|
an
association or institution which has as its object the training of persons
for implementing programmes of rural development.
|
furnishes
the certificate u/s 35CCA (2)
|
Prescribed
Authority under Rule 6AAA
|
5
|
To a
public sector company or a local authority or to an association or
institution approved by the National Committee, for carrying out any eligible
project or scheme.
|
furnishes
the certificate u/s 35AC(2)(a)
|
National
Committee for Promotion of Social & Economic Welfare
|
7
|
To a
rural development fund
|
notified
u/s 35CCA (1)(c)
|
set up
and notified by the Central Government
|
8
|
To
National Urban Poverty Eradication Fund
|
notified
u/s 35CCA(l)(d)
|
set up
and notified by the Central Government
|
No
deduction under this section is allowable in case:
(i)
The
employee has gross total income which includes income which is chargeable under
the head "Profits and gains of business or profession".
(ii)
The amount
of donation exceeds Rs. 10000 and is paid in cash.
The
Drawing and Disbursing Authorities should satisfy themselves that all the
conditions mentioned above are satisfied before such deduction is allowed by
them to the employee. They should also satisfy themselves in this regard by
insisting on production of evidence of actual payment of donation and a receipt
from the person to whom donation has been made and ensure that the
approval/notification has been issued by the right authority. DDO must ensure a
self-declaration from the employee that he has no income from "Profits and
gains of business or profession".
Deduction U/s. 80TTA :
Section
80TTA has been introduced from this Financial Year [2012-13] and it allows to
an employee from his gross total income if it includes any income by way of
interest on deposits (not being time deposits) in a savings account a deduction
amounting to :
(i)
in a case
where the amount of such income does not exceed in the aggregate ten thousand
rupees, the whole of such amount; and
(ii)
in any other case, ten thousand rupees.
If such
savings account is maintained in a
(a)
banking
company to which the Banking Regulation Act, 1949 (10 of 1949), applies
(including any bank or banking institution referred to in section 51 of that
Act);
(b)
co-operative
society engaged in carrying on the business of banking (including a cooperative
land mortgage bank or a co-operative land development bank); or
(c)
Post
Office as defined in clause (k) of section 2 of the Indian Post Office Act,
1898 (6 of 1898),
For this
section, "time deposits" means the deposits repayable on expiry of
fixed periods.
