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Income tax Deduction | Money Tree Solution Place

 

In Case of Donations For Charity

  • Donation to certain funds, approved education institutions of national importance, charitable institutions.
  • The deduction will be 50% of the amount.
  • Deduction may be 100% if donation is given to Prime Minister Relief Funds, National Foundation for Communal Harmony, Blood Transfusion Council, The Africa Fund, Earth-quake Relief Fund.

In Case of Physically Handicapped Persons

  • A person who is suffering from permanent physical disability or mental retardation is entitled to deduction upto Rs. 40,000.
  • Handicapped must be certified by a physician, surgeon or a psychiatrist, working in a government hospital.

Under section 80DD and 80U of Income Tax Act, physical disability must be one of the following:

1. Permanent or more than 50% disability in limb
2. Permanent or more than 60% disability in 2 or more limb
3. Permanent loss of voice
4. Permanent blindness
5. Mental Retardation in which mental intelligence is less than 50% of normal required intelligence

In Case of Treatment of Handicapped Dependents

All the persons who are dependent on physically handicapped person comes under this category. There is provision of deduction in tax against expenditure on medical treatment, training & rehabilitation of handicapped dependents or amount paid in an approved scheme of LIC or UTI.

In Case of Repayment of Loan Taken For Higher Education

There is deduction in income tax in respect of repayment of loan taken by a student from a bank or any other financial institutions for higher education in India or worldwide.

In Case of Contribution To Pension Fund

Under section 80CCC there is a provision of deduction to an individual for any amount paid to keep in force annuity plan of the LIC for receiving pension from a fund set up by that corporation, as per section 10(23AAB) of Income Tax Act,1961. The amount received by assessee or his nominee will be taxable. There will be no rebate under section 88 to the persons whose deduction under this section has been approved.

In Case of Amount Paid as House Rent

Under section 80GG of the Income Tax Act there is a provision of deduction in tax on amount paid by a person (not a salaried person getting housing allowance) for residential accommodation. Deduction in tax will be measured under following parameters :-

  • The excess of actual rent paid over 10% of the total income (excluding long term capital gain & income, as per section 115A or 115D of Income Tax Act, 1961)
  • Deduction will not be allowed to an assessee who owns an residential accommodation at a place where he is temporarily residing
  • Deduction will not be allowed to an assessee who owns an residential accommodation at any place and has also claimed for deduction in respect of self occupied property

In Case of Remuneration Received in Foreign Currency by Employer

Under section 80RR an individual resident of India who is an author or writer or photographer or TV/ film cameraman or TV/ film director or musician or actor or sport person or other such artist whose source of income is foreign income and brings income to India according to foreign exchange regulation, then he is entitled to get a deduction of amount equal to 75% of such income as it is brought in India in convertible foreign exchange. This amount will be deducted from his taxable income within the period 6 months or period allowed by Chief Commissioner of Income Tax Department. It is necessary to show the documents in favor of your claim.

In Case of Remuneration Received For Services Rendered Outside India

Under section 80RRA of the income tax act, an individual who is getting remuneration in a foreign currency from an employer for his service in outside of India, will get a deduction of 75% of such income brought into India. This amount will be deducted from his taxable income within the period of 6 months or period allowed by Chief Commissioner of Income Tax Department. It is necessary to show the documents in favor of your claim.

In Case of Certain Investment

Under section of 80L of the Income Tax Act, there are few investments which are a matter of deduction in taxable amount. Here an assessee will get a deduction of amount upto Rs.12,000 - 15,000 from income on certain specified investments in government securities, UTI mutual funds, bonds and other tax saving schemes. An assessee will be entitled for deduction from his taxable income if he is getting interest or dividend on certain investment which are as follows :

  • Investment in Securities of central or state government
  • Investment in National Saving Schemes
  • Investment in Debentures or Bonds of an institution/ authority/ public sector company/ cooperative society or other such
  • organization notified by central government.
  • Investment in under National Deposit Schemes as notified by Central Government
  • Investment in under other schemes which are notified by central government like national saving schemes, time deposit schemes, recurring deposit schemes.
  • Investment in under monthly income scheme of the post office
  • Investment in units of UTI and Mutual Funds (under Section 10(23D) of the Income Tax Act)
  • Investment in with banking institutions
  • Investment in financial institution working for Industrial Development of India
  • Investment in a public company limited working for providing long term financing of housing accommodation
  • Investment in such authorities which are working for planning & development of cities and villages
  • Investment in co-operative societies
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