Introduction:

In order to encourage the savings and investment amongst the taxpayers IT department has provided deduction deductions from gross total income under various sections of the Income Tax Act 1961.Which helps the tax payers to reduce their tax liability. In this article we shall see what are the deductions that are eligible to reduce the tax liabilities.

 What are the Deductions from Gross Total Income?

There are mainly three types of Deductions form Gross Total Income is allowed under different sections, namely

1. Deductions in respect of certain payments
2. Deductions in respect of certain Incomes
3. Deductions in respect of other incomes.

Deductions from Gross Total Income in respect of certain payments

1. Deductions in respect of investments in specified assets –  under Section 80C  –  Every individual or HUF having PAN no. who has made contribution to Public provident fund, payment of Life Insurance  premium,  repayment of housing loan, Tuition fees to any Indian university, college, school for full-time education of any two children, Term deposit for fixed deposit for a fixed period of not less than 5 years with schedule bank, Five years post office time deposit, Subscription to notified bonds of NABARD etc. and the Maximum limit of deduction is restricted to 150000.
2.  Under Section 80CCC  –  Every individual contribution to certain pension funds, any amount paid or deposited subject to a maximum of Rs.150000
3. Under Section 80CCD  – Contribution to pension scheme of central Govt.
4.  Under Section 80D – Medical insurance premium and the eligible limit is Maximum Rs.25000, in case of senior citizen Rs.50000
5. Under Section 80DD – Maintenance including medical treatment of dependent disabled , deduction will be flat deduction of Rs.75000 it may be extended to 125000
6. Under Section 80DDB – Deduction for medical treatment of specified diseases of aliment.
7. Under Section 80E –  Interest on loan taken for higher education
8. Under Section 80EE – Deduction for interest on loan borrowed from any Financial institution, deduction up to 50000 would be allowed.
9. Under Section 80EEA – Deduction in respect of interest payable on loan taken from a financial institution for acquisition of residential house property.
10. Under Section 80EEB – Deduction in respect of interest payable on loan taken from a financial institution for purchase of electric vehicle
11. Under Section 80G – Donation to certain funds, charitable institutions etc.
12.  Under Section 80GG – Rent paid for residential accommodation

Deductions from Gross Total Income in respect of certain Incomes

1. Under Section 80JJAA – Deduction in respect of employment of new employees
2. Under Section 80QQB – Royalty income of authors of certain books otherthan text books
3. Under Section 80RRB – Royalty on patents

Deductions from Gross Total Inocme in respect of other Incomes

1. Under Section 80TTA  – Interest on deposits in savings account up to Rs.10000
2. Under Section 80TTB –  Interest on deposits of senior citizen up to Rsa.50000

Conclusion:

As per income tax Act 1961, deductions from gross total income is allowed under various sections, which have been briefly explained in this article. Most of these deductions are allowed to individuals and HUF. One has to be aware of the deduction available under various heads in order to claim the deduction from gross total income before paying the tax. Section 80C is the most popular head were every individual try to get the deduction under this head, which is limited to Rs.150000. And 80D is medical insurance which allowed maximum of Rs.75000, which is in addition to 80C of 150000. And 80TTA & 80TTB is for Interest from savings account allowed as deductions from Gross total income.

Disclaimer: The content and views stated in this article is solely for informational purpose only.

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