Income Tax Benefits Available to Individuals and HUF - Part 3

S. N.

Section

Particulars

Limit of exemption

Available to

1

80C

1. Life insurance premium for policy:

a) in case of individual, on life of assessee, assessee’s spouse and any child of assessee

b) in case of HUF, on life of any member of the HUF

2. Sum paid under a contract for a deferred annuity:

a) in case of individual, on life of the individual, individual’s spouse and any child of the individual (however, contract should not contain an option to receive cash payment in lieu of annuity)

b) in case of HUF, on life of any member of the HUF

3. Sum deducted from salary payable to Government servant for securing deferred annuity or making provision for his wife/children [qualifying amount limited to 20% of salary]

4. Contributions by an individual made under Employees’ Provident Fund Scheme

5. Contribution to Public Provident Fund Account in the name of:

a) in case of individual, such individual or his spouse or any child of such individual

b) in case of HUF, in the name of any member there of

6. Contribution by an employee to a recognized provident fund

7. Contribution by an employee to an approved superannuation fund

8. Subscription to any notified security or notified deposit scheme of the Central Government.

For this purpose, SukanyaSamriddhi Account Scheme has been notified vide Notification No. 9/2015, dated 21/1/2015. Any sum deposited during the year in Sukanya Samriddhi Account by an individual would be eligible for deduction.

Amount can be deposited by an individual in the name of her girl child or any girl child for whom such an individual is the legal guardian.

9. Subscription to notified savings certificates [National Savings Certificates (VIII Issue)]

10. Contribution for participation in unit-linked Insurance Plan of UTI:

a) in case of an individual, in the name of the individual, his spouse or any child of such individual

b) in case of a HUF, in the name of any member thereof

11. Contribution to notified unit-linked insurance plan of LIC Mutual Fund:

a) in the case of an individual, in the name of the individual, his spouse or any child of such individual

b) in the case of a HUF, in the name of any member thereof

12. Subscription to notified deposit scheme or notified pension fund set up by National Housing Bank [Home Loan Account Scheme/ National Housing Banks (Tax Saving) Term Deposit Scheme, 2008]

13. Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, college, school orother educational institution situated in India, for full time education of any 2 of his/her children

14. Certain payments for purchase/ construction of residential house property

15. Subscription to notified schemes of (a) public sector companies engaged in providing long-term finance for purchase/construction of houses in India for residential purposes/(b) authority constituted under any law for satisfying need for housing accommodation or for planning, development or improvement of cities, towns and villages, or for both

16. Sum paid towards notified annuity plan of LIC or other insurer

17. Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005)

18. Contribution by an individual to any pension fund set up by any mutual fund which is referred to in section 10(23D) or by the UTI (UTI Retirement Benefit Pension Fund)

19. Subscription to equity shares or debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions

20. Subscription to any units of any approved mutual fund referred to in section 10(23D), provided the amount of subscription to such units is subscribed only in ‘eligible issue of capital’ referred to above.

21. Term deposits for a fixed period of not less than 5 years with a scheduled bank, and which is in accordance with a scheme framed and notified.

22. Subscription to notified bonds issued by the NABARD.

23. Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions)

24. 5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions)

25. Contribution to Tier-II NPS account by central Government’s employees.

Up to 1,50,000 (Subject to overall limit of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD(1))

Individual and HUF

2

80CCC

Contribution to certain specified Pension Funds of LIC/ other insurer (Subject to certain conditions).

Up to 1,50,000 (Subject to overall limit of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD)

Individual

3

80CCD

Contribution to Pension Scheme (NPS) notified by the Central Government (Subject to certain conditions).

Note:-

1. Deduction under section 80CCD(2) on account of contribution made by the employer to a pension scheme is not subject to the ceiling limit of Rs. 1,50,000 as provided under section 80CCE.

2. Addition deduction of Rs. 50,000 shall not be allowed in respect of contribution which is considered for deduction under section 80CCD(1), i.e., limit of 10% of salary/gross total income

3. Any payment from NPS to an assessee because of closure or his opting out of the pension scheme is exempt to the extent of 60%. However, with effect from the assessment year 2017-18, the whole amount received by the nominee from NPS on death of the assessee shall be exempt from tax.

4. Any partial withdrawal from NPS shall be exempt to the extent of 25% of amount of contributions made by the employee.

Amount contributed to pension scheme or 10% of salary/gross total income*, whichever is less (subject to ceiling limit of Rs. 1,50,000 as provided under Section 80CCE) shall be allowed as deduction under section 80CCD(1).

Additional deduction to the extent of Rs. 50,000 shall also be available to the assessee under section 80CCD(1B). The additional deduction is not subject to the ceiling limit of Rs. 1,50,000 as provided under Section 80CCE.

Contribution made by the employer shall also be allowed as deduction under section 80CCD(2) while computing the total income of the employee. However, the amount of deduction could not exceed 14% of salary in case of central Govt. employees and 10% in any other employees.

*10% of salary in case of employees otherwise 20% of gross total income.

Individual

4

80CCG

Amount invested by specified resident individuals in listed shares or listed units in accordance with notified scheme for a lock-in period of 3 years (Subject to certain conditions).

Note: No deduction shall be allowed under this Section from Assessment Year 2018-19. However, an assessee who has claimed deduction under this Section earlier shall be allowed deduction till assessment year 2019-20.

Deduction of 50% of total investment subject to maximum of Rs. 25,000 is allowed for 3 consecutive assessment years, beginning with the assessment year relevant to the previous year in which the listed shares or list units of equity oriented funds are first acquired

Specified Resident Individual

5

80D

Amount paid (in any mode other than cash) by an individual or HUF to LIC or other insurer to effect or keep in force an insurance on the health of specified person*. An individual can also make payment to the Central Government health scheme and/or on account of preventive health check-up.

* specified person means:

– In case of Individual – self, spouse, dependent children or parents

– In case of HUF – Any member thereof

Note:

1. Deduction for preventive health check-up shall not exceed in aggregate Rs. 5,000.

2. Payment on account of preventive health check-up may be made in cash.

3. Within the overall limit, deduction shall also be allowed up to Rs. 50,000 towards medical expenditure incurred on the health of specified person provided such person is a senior citizen and no amount has been paid to effect or to keep in force an insurance on the health of such person.

4. ‘Senior citizen’ means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year.

In case of Individual, amount paid:

a) For self, spouse and dependent children: Up to Rs. 25,000 (Rs. 50,000 if specified person is a senior citizen)

b) For parents: additional deduction of Rs. 25,000 shall be allowed (Rs. 50,000 if parent is a senior citizen)

In case of HUF, up to Rs. 25,000 (Rs. 50,000 if specified person is a senior citizen).

Individual/ HUF

6

80DD

a) Any expenditure incurred for the medical treatment (including nursing), training and rehabilitation of a dependent, being a person with disability

b) Any amount paid or deposited under an approved scheme framed in this behalf by the LIC or any other insurer or the Administrator or the specified company for the maintenance of a dependent, being a person with disability

(Subject to certain conditions).

Rs. 75,000 (Rs. 1,25,000 in case of severe disability)

Note:

“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 HUF, any member thereof, 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.

Resident Individual and HUF

7

80DDB

Expenses actually paid for medical treatment of specified diseases and ailments for:

a) In case of Individual: Assessee himself or wholly dependent spouse, children, parents, brothers and sisters

b) In case of HUF: Any member of the family who is wholly dependent upon the family (Subject to certain conditions).

Up to Rs. 40,000 (Rs. 100,000 in case of senior citizen)

With effect from assessment year 2016-17, the prescription for medical treatment may be obtained from any specialist doctor not necessarily from a doctor working in Government hospital only.

Resident Individual and HUF