15

DEDUCTIONS TO BE MADE FROM

GROSS TOTAL INCOME WHILE
COMPUTING TOTAL INCOME
Amendments tu.e.f 2020-21
Assessment Year

Sections 80C, 80CCD, 80IBA, 80JJAA and 80LA

Insertion of new Sections 80EEA and 80EEB.
FROM INCOMES
GENERAL PRINCIPLES FOR DEDUCTIONS (Sec. 80A
shall be allowed under sections 80C to Ro
From gross total income, deductions
. under sections 80C to B0U shall not eve
2. The aggregate amount of deductions exceed the
gross total income.
short-term capital gains speciied in
deductions are not allowed against
o

However,
111A and long-term capital gains
3. f'an association of persons or a body of individuals is entitled to any of the dedu.
80IB, 80IC and 801E a memh
referred to in sections 80G, 80GGA, 80GGC, 80IA,
deduction in his own assessment in
association is not again entitled to claim such
This is to prevent duplication of dedues
of his share in the income of the association.
or 801A to 80RRB have been claima
Where deductions under sections 10AA
these sections for any assessment veon
allowed against the income specified in
shall not be allowed under any
deduction in respect of such profits and gains other
provisions of the Act.
5. Where the assessee fails to make a claim in his return of income for any deduetion in
shall be allowed to him thereunder.
sections mentioned in 4, no deduction
PAYMENTS
DEDUCTIONS IN RESPECT OF CERTAIN

>() Deduction in respect of Life Insurance

Premium, Contrlbution to Provident Fund, ele
(Sec.80C)
(A)Assessees entitled to deduction
Hindu undivided family.
(a) an individual; or (b) a
to 7 1,50,000.
(B) Quantum of deduction: Up
(C) Eligible payments and deposits:

(a) In case of an Individual

previous year by an individual:
Any sums paid or deposited in theinsurance on the life of self, spouse or his or her children
(1) to effect or to keep in force an made on an insurana
amount of any premium or other payment
i) The qualifying
policy issued before 1.4.2012 shall not
exceed 20% of the actual capital sum assured
insurance premium on an insurance policy issued on
(i) The qualifying amount of life
or after 14.2012 shall not
exceed 10% of the actual capital sum assured.
insurance premium on an insurance policy issued on
(ii) The qualifying amount of life if it is on
or after 1.4.2013 shall not
exceed 15% of the actual capital sum assured
or a person with severe
the life of a person who is (a) a person with disability
a

disability;, or(b) suffering from disease or ailment specified u/s 80DDB.

 DEDUCTIONS TO BE MADE ...
WHILE COMPUTING TOTAL INCOME 409
fect or to keep inforce
e f e c or
to f a contract of annuity on the life of self, spouse or his or her children;
to
Aed
that
(2) Provided that, such contract does not contain a
o fa n option to receive a cash
provision for the exercise by
payment in lieu of the payment of the annuity;
of v of deduction from the salary (up to 20% of
he Government:for the purpose of salary) payable by or on behalr or
tribution by an individual to securing deferred a
(4) as contril any provident fund annuity;
to which the Provident Funds
Act, 1925 applies;
contribution to public provident fund, where such contribution is to an account
6nding in the name of self, spouse or his or her child;
andir
individual deposit maximum 7 1,50,000 in a financial year in PPF in
can .
-Account and Accountís) on
An
o

of minor(s),
a taken all
the accounts together. If a person deposits the amount in excess of the prescribea
a interest shall be payable on the amount of deposits found in excess of the prescribed limit.
homacOntribution by an employee to a recognized provident fund;
(7) a Contribution by an employee to an approved superannuation fund
6) as the subscripionto any such security of the Central Government or any such deposit
scheme as that Government may, by notification in the Official Gazette, specify in this
behalf,
9)as the subscription to NSCVIII Issue and IX Issue;
10) as a contribution, in the name of self, spouse or his or her child for participation in the
Unit-linked Insurance Plan, 1971 of the Unit Trust of India;
(1) as a contribution in the name of self, spouse or his or her child for participation in any
such Unit-linked Insurance Plan of the LIC Mutual Fund referred to in Sec. 10(23D),
as the Central Government may, by notification in the Official Gazette, specify in this
behalf Dhanraksha has been notified in this behalf);
(12) sum paid to effect or to keep in force a contract for such annuity plan of LIC of India or
any other insurer as the Central Government may notify (New Jeevan Dhara, New Jeevan
Dhara Plan I, New Jeevan Akshay, New Jeevan Akshay Plan I, Plan II and Plan III of
LIC of India has been notified)
(13) sum paid as the subscription to any unit of Mutual Fund or from the Administrator
or specified company under any plan formulated in accordance with such scheme as
the Central Government may notify;
14) sum paid as contribution by an individual to any pension fund set-up by any Mutual
Fund or by the Administrator or specified company as the Central Government may
notify (UTI-Retirement Benefit Pension Fund has been notified);
(Notification dated 3.11.2005]
15)as the subscription to any such deposit seheme of or as a contribution to any such
pension a fund set up by the National Housing Bank, as the Central Government may,

Dy notification in the Official Gazette, specify in this behalf (Home Loan Account
Scheme has been notified);
16)
9) as the subscription to any such deposit scheme of: (a) a public sector company which
or purehase of houses in
in providing long-term finance for construction
8 engaged formed for satisfying the
any statutory authority
ndia for residential purposes; or (b) for planning and development of cities, towns or
heed of housing accommodation, orGovernment notify in this behalf,
or for both, as the Central
17 ages development fees or donation or
Dtion fees (excluding any paymentthe time ofany
towards
admission or
thereafter (a) to anv
payment of similar nature) paid at situated within India; (b) for
versity, college, school or other educational institution two children,
of his
18) Purpose of full-time education or
installment for repayment of
Payment of installment under self-financing scheme Tor the
purpose of purchase or
108n is taken from prescribed authorities/institutions
the income r o m whieh is
chargeable to
struction of a residential house property,
x under the head Income from House Property
410
INCOME TAX
9) sum
paid as the
subscription to equity shares or debentures a
financial institution
Eligible forming part of any eligible issue of of public company or
issue of Capital' means an issue made capital approved by the
n India or
a
public financial by a
public company formed pD
wholly and institution and entire
exclusively for the purposes of anythebusiness proceeds of the issueand repstd
and rer
(1)
developing, maintaining and operating an referred to in Sec.
an
are
801A
u
or
cellular
telecommunication infrastructure
services; or (ii) developingfacility,
or (i)
economic zone, or (iv) industrial providin,
(20) sum
paid as the generation and distribution of power. park or
Specified in Sec. subscription to any unit (approved by
the
eda
the eligible issue 10(23D)) provided the subscription to theseBoard) of any mutua
units is
(21) interest due on the
of capital of
any company subscribed nm fung
National Savings only in
(22) the term Certificates (VII
deposit for a fixed period of not less than five Issue) and (IX Issue):
in accordance with a scheme framed
and notified by the years with
scheduled hael a
(23) as the Central
Rural subscription to such bonds
issued by the Government:
(24) Development, as the Central Government National Bank for Agriculture
deposit in Five
Year Post Office Time may notify, and
(25) deposit in Senior Deposit
Citizen Savings Scheme, Account;
(26) deposit in
(27) by an Sukanya Samriddhi Account. 2004,
employee of the Central Government as
the pension
scheme (referred to in sec. contribution to his Tier IL.
years w.e.f. Assessment Year 80CCD) for a fixed
period of not less
account et
If the 2020-21] than thr
employee
is credited in a deposits
more than 10% ofhis
salary the pension scheme, the
in
Notes 1. separate account. This
The deduction is account is known as Tier II account. excess
available in respect of premia paid on life insurance
also including a married
2. Contribution' to any daughter. policies on the lives of major childrea
3.
fund shall not include
In the 5th year interest any sums in
(Circular No. 574 dated 22.8.190
accrued on NSC VII Issue repayment of loan-taken from
is not re-invested, that fund.
be eligible for deduction. hence, interest for 5th
year will ts
(6) In the case of Hindu Undivided Famly
Deduction shall be allowed in
family: respect of the following sums paid in the
previous year by the
(1) Premium paid for insurance on the
life of any member of the
i) The qualifying amount of
any premium or other
family.
policy issued before 1.4.2012 shall not exceed 20% payment made on an insurane
(ii) The qualifying amount of life insurance of the actual capital sum assured
or after 1.4.2012 shall not premium
exceed 10% of the actual
on an insurance
policy issued on
(ii) The qualifying amount of life insurance capital sum assured.
or after 1.4.2013 shall not premium on an insurance policy issued on
exceed 15% of the actual
the life of a person who is (a) a capital sum assured if it is on
person with disability or a person with severe
disability; or (b) suffering from disease or ailment
(2) Contribution given to Public Provident Fund in specified ws 80DDB.
the name of any member of the
(3) Subscription to the notified securities ofthe Central family
Government or a notified deposit scheme
(4) Contribution for participation in the Unit Linked
Trust of India. Insurance Plan, 1971 of the Uat
(5) Contribution for participation in notified Unit Linked Insurance Plan of the L
Mutual Fund.
(6) Sum paid to effect or to keep in force a contract for such annuity plan of LIC of lhald
or any other insurer as the Central
Government may notify.
(7) Sum paid as the subscription to any unit of Mutual Fund or from the Administrau
or specified company under
any plan formulated in accordance with such scheme
the Central Government may notify.
(8) Sum paid to notified deposit scheme or pension fund set-up by the National Housns
Bank.
 416
INCOME TAX

(V) Deduction In respect of Medical Insurance Premla

Who is entitled to deduction: Sec. 800)
i) An individual;
(ii) A Hindu undivided family.
Deduction regarding Medical Insurance Premium.
Quantum of deduction
1. Individual
(a) For self and family (spouse and dependent children) up to 25,000
(b) For parents-additional deduction up to7 25,000
Ifin (a) or (b) there is a senior citizen up to 50,000
(c) f'in (a) any member is a senior citizen and the amount is
paid on account of medical expenditure and no amount has
been paid as a health insurance premium for him/her up to 50,000
d) Ifin (b) any parent is a senior citizen and the amount is paid
amount has been
on account of medical expenditure and nohim/her
paid as a health insurance premium for up toF 50,000
The aggregate deduction under (a) and (c) shall
not

exceed up to 7 50,00
The aggregate deduction under (b) and (d) shall
not

exceed up to 50,000
22. Hindu undivided family:
of the family up to 7 25,000
(a) Medical insurance premium for the members
If any member of the family is a
senior citizen up to 50,000
senior citizen and the amount
(b) fany member of the HUF is a and no amount
is paid on account of medical expenditure for him/her
health insurance premium up to 50,000
has been paid as a
under (a) and (b) up to 7 50,000
The aggregate deduction
mode other than cash) medieal insurange
For example, an individual pays (through any

premium as under:
children 22,000.
i) For self, wife and dependant
(ii) For parentls) 7 27,000. 47,000.
allowed 7 22,000+25,000 =7
The deduction shall be
allowed 7 22,000 + 27,000=7 49,.000.
citizen the deduction shall be
Ifa parent senior
is the General
scheme for insurance must be framed by
6) The
Conditions for deduction
: other insurer
India and approved by the Central Government or any
Insurance Corporation
of
Authority.
the Insurance Regulatory and Development
and approved by to tax.
have been paid out of his income chargeable
should than cash.
i) The amount mode of payment other
should have been paid by any
in this connection
(iii) The amount health check-up ws 80D: The provisions
Deduction in respect
ofpreventive
childres
dependent
are as under
on preventive
health check-up (for self, spouse,

1. The expenditure the aggregate 7 5,000.

shall not exceed in cash.
and parents) mode of payment including
can be made by any (F 265,0
2. The payment within the overall limits prescribed
allowed
deduction shall be
3. The eligible payment.
health check-up
7 50,000) deduction in respect
of preventive
not eligible to a claim
Note : HUF is
 DEDUCTIONS TO BE MADE... WHILE COMPUTING TOTAL 417
INCOME
amount is paid in
Important Note
a lump sum in
the
here year,
hen, subject to the provisions of thisprevious
then, s u
section,
year, for health insurance
premium, more
there shall be allowed for each of the for
han
a
rs. a deduction equal to the appropriate fraction relevant
of theamount.
Mstation 7
mthe following information compute
Fro the deduction available u/s 80D
f medical insurance premium by cheque: regarding pay-

MIP for self and spouse 23,000

father aged 70 years
2. MIP for 44,000
3.Paid for preventive health checkup:
(a) Self and spouse
2,000
b) Father
6,000
soution
Computation of Deduction regarding MIP

1 Self&spouse 23,000
Preventive health checkup
2,000
25,000
Maximum deduction allowable 7 25,000 25,000
2 Father (aged 70 years)
44,000
Preventive health checkup
( 6,000-2,000) allowed deduction under 1
ormaximum7 5,000 under 1 and 2 (5,000 -2,000) 3,000 47,000
Maximum deduction allowable 50,000
Total Deduetion 72,000
(V)Deduction in respect of maintenance Including Medical Treatment of a Dependant
who is a person wlth Disabillty (Sec. 80DD)
Who is entitled to it : Resident individual and Hindu undivided family.
Items eligible for deducetion (i) Expenditure incurred on medical treatment (including
urang), training and rehabilitation of a disabled dependant; or
D) An amount paid or deposited under any scheme framed by the L.I.C. of India or s
i rnsurer or the Administrator or the specified company and approved by the Board (CBDT.
Quantum of Deduction: (a) For disability 7 75,000;
b)For severe disability7 1,25,000.
onditions: i) The scheme provides for payment of annuity or lump-sum amount for the
eit of a disabled dependant after the death of individual or member of H.U.P., in whose name
lie
deposit has been made.
he asse8see nominates the disabled dependant or any other person or a trust to receive
JDent on behalf or for the benefit of disabled dependant.
h e assessee claiming deduction shall furnish a copy ofcertificate issued by the medical
euthori
ar for the prescribed form along with the return of income in respect of the assessment
which the deduction is claimed.
l n e r e the condition of disability requires reassessment of its extent after a period
tSiheprescribed
pulated in thefor o
certificate, a new certificate shall be obtained from the medical authority in
form and a copy thereof should be furnished along with the return of income. If
iSessee fails to do so,0, no deduction shall be allowed under this section.
Disa
e d dependant dies before the death of the Assessee : In such a case the amount
sited shall be deemed to be the income of the assessee of the previous year in which the
amount is received.o
 INCOME TAX
418

Explanation: 'Dependant' means parents, brothers and sisteers of e

( i n the case of an individual, the spouse, children,
individual or any of them;
(11) in the case member of the HUF,
of HUF, a and maintenan
individual/HUF for his support
wholly or mainly on such
Dependant computing his
income tor the assessmen
has not claimed any deduction ws 8OU in
who
relating to the previous year.
Illustration8
Amarnath for the Previous Year 2019.2
Following are the particulars of the income of Shri 20
(i) Salary (Gross) 5,10 0
(ii) Rental Income from House Property 36,0
(i) Profits of Business 2,20,00
the insurance aft
27,000 as premium on
During the previous year, he paid by chequeassessee
?

health of himself and wife. During the year the claimed ? 1,500 for the illness n
The unmarried disabled sise
wife, which were duly received from the insurance company.
on him. Shri
Amarnath spent 7 19,000 on her treattmen
Shri Amarnath is dependant wholly
and training during the previous year.
the Assessment Year 2020-21
Compute the total income of Shri Amarnath for
Solution
Computation of Total Income
2020-21)
for the Assessment Year
1 Gross Salary
5,10,000
Less:Standard Deduction 50,000 4,6000
2. Income from House Property (A.V.) 36,000
Less 30% of A.V. 10,800 25.20
3. Profits of Business 2,20 00
Gross Total Income 7,05.20
Less Deductions Ws 80D (Max. deduction ? 25,000) 25,000
ws80DD 75,000 1,00,0
Total Income 6,06,20
(Sec. 80DDB
Deduction in respect of Medical Treatment, etc.
(VIl)It provides for a deduction to a resident individual or a resident Hindu Undivided Family ir
expenditure actually paid on the medical treatment of individual himself or a dependant or any membe
of Hindu Undivided Pamily in respect of diseases or alments which may be specified in the Rules.
Quantum of deduction: (i) Amount paid or? 40,000, whichever is less.
(ii) Where the payment is in relation to a senior citizen of the age of 60 years or more, the
deduction allowed shall be, amount paid or ? one lakh (w.e.f. the Assessment Year 2019-20
whichever is less.
i ) Where the payment is in relation to a very senior citizen of the age of 80 years or more
the deduction allowed shall be, amount paid or 7 one lakh ( w.e.f. the Asse8ament Year 2019-20
whichever is less.
However, the deduction shall be reduced by the amount received,if any, under an insura
from an insurer or reimbursed by the employer for the medical treatment of person mentionel
in this section.
Conditions for deduction i) The assessee has actually paid the amount for the medew
() The
treatment for himself or any dependant or in case of H.U.F. any member of the family
assessee shall obtain the prescription for medical treatment from a neurologist, an oncologul.
urologist, a hematologist, an immunologist as the case may be.
Explanation: 'Dependant'means
i n the case ofan individual, the spouse, children, parents, brothers and sistersot
individual or any of them;
 420
INCOME TAX
Relative:
individual or theRelative in relation to an individual means the
student for whom the spouse and children
>(1X) Deduction in
Assessment Year respect
individual is the legal guardian.
2017-18) of interest on loan Is taken for resldential house
children of the
Who is entitled to
property (we:
deduction? An individual:
Deduction regarding: Sec. 8OEE
Interest loan taken for residential house
Quantum of deduction: Up to on
7 ifty thousand every property.
continues. year till the repayment
of th
Conditions
(1) The
for deduction
loan has been
sanctioned by the financial institution between
31.3.2017. l14.2010
(2) The amount of
loan sanctioned for
acquisition of the residential and
not exceed 7
thirty-five house pronerh
(3) The value of the lakh.
house property does not exceed 7 fifty lakh. roperty dbes
(4) The assessee does
not own any residential house
the loan. property
on the date of
saniction d
Where deduction under this section is allowed
a
allowed in respect of such for such interest, deduction shall
interest under any other
provisions
.

other assessment year. of the Act for the same o

X) Deduction in respect of interest on loan taken for residential house
Assessment Year 2020-21) property twa
Who is entitled to deduction An individual Sec. 808RA
80EE provided he is not eligible for deductin
Deduction regarding : Interest on loan taken for residential house
Quantum of deduction Upto F one property.
lakh and fifty thousand every year till the repavme
of loan continues.
yTment
Conditions for deduction
(1) The loan has been sanctioned by the financial institution between
31.3.2020/31.3.2021 (w.e.f. Assessment Year 2021-22) 1.4.2019 andAn
(2) The stamp duty value of the house
property does not exceed 7 forty-five lakh.
(3) The assessee does not own any residential house
the loan.
property on the date of sanction
Where a deduction under this section is allowed for such interest, deduction
allowed in respect of such interest under any other provisions of the Act for the same not
shall
or any
other assessment year.
(XA) Deduction in respect of interest on loan taken to purchase electric vehicle (wel
Assessment Year 2020-21) (Sec. 80 EEB
Who is entitled to deduction. An individual:
Deduction regarding: Interest on loan taken for electric vehichle.
Quantum of deduction: Upto 7 one lakh and fifty thousand every year till the repayment
of loan continues.
Condition for deduction:
The loan has been sanctioned by the financial institution between 14-2019 and 314-2023
Where a deduction under this section is allowed for such interest, deduction shall note
allowed in respect of such interest under any other provisions of the Act for the same or any
other assessment Year.
>(XI) Deduction in respect of donations to certain funds, charltable institution, etc.
(Sec. 80G
charitable donations andit
This section allows a deduction in respect of amounts given as

is allowed to all types of assessees.

 DEDUCTIONS TO BE MADE . .
WHILE COMPUTING TOTAL 421
INCOME
Where the amount of donation exceeds two
2018-1
thousand rupees (w.e.f
it shouldibe paid by any mode other than cash. e.f. the Assessment Year
ofstatement of Donatnon by donee to cross check claim of
: Filingofs
SThedonations can be classified as under: donation by donor (w.ef. 1.6.2020). (Sec. 80

No limit do.
1) donations,
i.e., the whole amount
Such donations can further be classified asqualify for the deduction.
deduction allowed @ 100% of qualifying amount; and
deduction allowed@ 50% of qualifying amount.
)With limit donations, L.e., the qualifying amount for deduction shall not exceed 10% of
gross total income after deducting the
(a) Short-term capital gains specified infollowing:
Sec. 111A;
(b) Long-term capital gains;
(c) Deductions under sections 80C to 80U
except u/s 80G.
Such donations can further be classified as
G) deduction allowed @ 100% of qualifying
amount;
) deduction allowed@ 50% of qualifying amount.
(A)No limit donations where deduction is allowed 100% are as under
1) the National Defence Fund set-up by the Central Government; or
2) the Prime Minister's National Relief Fund; or
(3) the Prime Minister's Armenia Earthquake Relief Fund; or
4) the Prime Minister's Citizen Assistance and Relief in
PM-CARES Fund); or Emergency Situations Fund*
(5) the Africa (Public Contributions-India) Fund; or
(6) the National Foundation for Communal Harmony; or
(7) a University or Educational Institution of national eminence
the prescribed authority in this behalf; or
as may be approved by
8) the Maharashtra Chief Minister's Relief Fund or Chief Minister's
Fund, Maharashtra; or Earthquake Relief
(9) Zila Saksharta Samitis constituted under the
for the purpose of
Chairmanship of Collector of District
improvement of primary education and for literary and post-literary
efforts in villages and towns with a
population not exceeding one lakh according to the
latest census; or
10) the National Blood Transfusion Council or
any State Blood Transfusion Council; or
any Fund set-up by State Govt. to provide medical relief to the poor; or
12) the Central Welfare Fund of
the Army and Air Force and the Indian Naval Benevolent
Pund established for the welfare of the past and present members of such forces or
their dependants; or
5) the Andhra Pradesh Chief Minister's Cyclone Relief Fund; or
14) the National llness Assistance Fund; or
the Chief Minister's Relief Fund or the Lt. Governor's Relief Fund; or
4National Sports Fund to be set-up by the Central Govt., or
National Cultural Fund set-up by the Central Govt.; or
0he fund for Technology Development and Application set-up by the Central Government; or
Any fund set-up by the State Government of Gujarat exclusively for providing relief
(0n the victims of the earthquake in Gujarat; or
0) The Nati
National Trust for the welfare of persons with Autism, Cerebral Palsy, Mental
(etardation and Multiple Disabilities.
21 National
22) Swachh Children's Fund
Bharat Kosh set up by the Central Government.
3) Sum donated by aresident assessee to the Clean Ganga Funds
axation and other up by the Central Govt.
Note:Donations madeLawsPM-CARES
S
made to
(Relaxation of Certain Provisions) Ordinance,
Fund upto June 30, 2020 shall be
2020 dated
eligible for
31.3.2020.
deduction from income of F.Y.
2019-20
422 INCOME TAXx

However, under (22) or (23) the payment should not be made from Corporat
or pornte Socul
Responsibility Fund.
(24) National Fund for Control of Drug Abuse.
(B) No limit donations where the deduetion is allowed 50% are as undor

(1) Jawahar Lal Nehru Memorial Pund;

(2) Prime Minister's Drought Relief Fund;
(3) Indira Gandhi Memorial Trust;
(4) Rajiv Gandhi Foundation.
(C)With limit donations where the deduction is allowed 100% of qualitying amoun
unt
(1) The Government or to any such local authority, institution or association as ma
approved in this behalf by the Central Government to be utilized for the pur
Ose
promoting family planning.
(2) Sums paid by a company to the Indian Olympic Association or any other associa
or institution established in ndia and as notified by the Central Government f
i) developnment of infrastructure for sports and games in India; or
ii) for sponsorship of sports and games in India.
(DWith limit donations whero the deduetion is allowed 50% of qualifying amount:
i) The Government or any local authority to be utilized for any charitable purpose othe
than the purpose of promoting family planning;
or
(i) Any other fund or any institution which is established in lndia for a charitable purnne
ifit fulfils the following conditions
(a) its income is not included in total income under sections 11 and 12 of the Incom
Tax Act, or it is the Regimental Fund established by armed forces of the Union te
the welfare of the past and present members of the force or their dependants
(b)under the rules governing the institution or fund no part of the income or assetsoft
institution or fund can be used for non-charitable purpose;
(C) the institution or fund is not expressed to bo for the benefit ofany partieularreliginu
community or caste;
d) the institution orfund maintains regular accounts of its receipt and expenditur,
(e) the institution or fund is a public charitable trust or is registered under the Societies
Registration Act, 1860 or under section 8 of the Companies Act, 2013, or is a
University established by law, or is any other educational institution recognizedby
the Government or by a University established by law, or it is an institutior
established in India for the control and supervision of the games of ericket, hockey
football, tennis or any other game approved by the Central Government, or is an
institution financed wholly or in part by the Government or local authority; and
(D the fund or institution is approved by the Commissioner;
(iii) Any authority constituted in India by or under any law enacted either for the
of dealing with and satisfying the need for housing accommodation or
purprw
for the purp
ofplanning development or improvement of cities, towns and villages or for both; or
(iv) Any corporation established by the Central Govt. or
any State Govt. for promoting th
interests of the members of a minority community; or
(v) The sums paid by the assessee in the
previous year as donations for the
repair of any temple, mosque, gurudwara, church or any other place whichrenovation
is notified a
the Central Government in the Official Gazette to be of historic, archaeological or artitr
importance or to be a place of public worship of renoWn throughout any State or States
Conditions for allowing deduction under this section:
i) Not in kind. No deduction will be allowed under section
80G unless the donation 15
a sum of money. It should not be
given in kind.
(i) Donation shoulad not be given for the benefit of
any particular nligion, cla,
community, etc. Donation given for the benefit of scheduled castes, scheduled tneu
backward class or women or children is not for
any particular religious community 0r
 DEDUCTIONS TO BE MADE.. WHILE COMPUTING TOTAL 423
INCOME
re an institution or fund incurs an expenditure of a
()
5 ofits totaliincome religious nature, not excee
during any previous year, such institution
for deduction under this section. or fund shall be eligible
on
(v) An association institution having as its object the
or
r encouragement in India of such games or sports ascontrol, supervision, regulation
the Central Government may
necify by notif+cation, shall be deemed to be an institution established in India for a
charitable purpose.
Step by step Procedure of ealeulating deduction uls 80G:
Add up al approved donations uws 80G.
Find out the maxXimum limit of qualifying amount by calculating 10% of G.T.I. less
deductions Wss 80C to 80U except u/s 80G; (ii) LTCG; (ii) STCG u/s 111A.
3) The qualitying amount for with limit donations will be restricted to the limit deter-
mined as per (2) above.
4) Add to the amount determined under (3), the total of all donations which qualify
without limit.
) The aggregate amount as per (4) above is the total qualifying amount.
6) From the figure arrived at in (5) above, pick out those donations which are 100%
deductible and total them up.
(7 Deduct the total of (6) from the total of (5) and find out the difference.
8) On the figure obtained in (7), find out 50% of it.
9) Addtheamount as per (6) and as per (8), the resultant figure is the amount of deduction
allowable under section 80G.
ustration 11
Mr. Vivek's G.TI. for the Previous Year 2019-20 was 7 5,00,000. He made the following
tonations by cheques
(a) Maharashtra Chief Minister's Earthquake Relief Fund 10,000.
b) National Foundation for Communal Harmony- 15,000.
(c) 10,000 to an Educational Institution of National Eminence.
d)5,000to National Children's Fund.
ey To Municipal Corporation for promotion of family planning 40,000.
To Minority Community Corporation (Notified) 2020-21.
25,000.
Compute his taxable income for the Assessment Year
oustion Computation of Taxable Income
for the As8e8sment Year 2020-21)
Gross Total Income 5,00,000
Les8:Deduction u/s 80G
Noa)limitdonation,
MCMERF
deduction allowed 100%:
10,000
b)N F for CH 15,000
) EI of NE 10,000
22) (d)NCF 5,000 5,000
With limit donation +25,000
40,000
Qualifying
a)
mount 10% ofGTI? 50,000 10,000
(b)TDeduction
for family planning ? 40,000 000
Deduction 100%
50% for Minority Community? 10,000 5,000 85,000
Taxable Income 4,16,000
MustShration 12 makes the following donations h
total income is ? 48 lakh,
theques except
rasad, whose gross
mentioned in (xii) during the
Previous Year 2019-20
)50 Onation
50,000
to Rajiv Gandhi Foundation.
ht Relief Funamony
1 lakh to Prime Minister's Drought Relief Fund.
Harmony
,000 to National Foundation for Communal
Relief Fund.
25,000 to Prime Minister's National
 DEDUCTIONS TO BE MADE... WHILE COMPUTING TOTAL INCOME 409

Boet or to keep in force a contract of annuity on the life of self, spouse or his or her children
(2
toend
Provided that
toe

that ssuch contract does not contain a provision for the rcise by the insured
option to. receive
a cash payment in lieu of the payment of the annuity;
ofan ofded eduction from the salary (up to 20% of
of salary) payable by or on behalf of behalf
by way
8by
(3) the G
vernment for the purpose of securing a deferred annuity;
ontribution by an individual to any provident fund to which the Provident Funds
Act, 1925 applies;
ibution to public provident fund, where such contribution is to an account
contrib
as a
(5) ctanding in the name of self, spouse or his or her child;
An i
ividual can deposit maximum7 1,50,000 in a financial year in PPF in Self-Account and Accounts o
NaRE ahalf of a minor(s), taken all the accounts together. If a person deposits the. of the prescribed
amount in excess

beh.
interest l
shall be payable on the amount of deposits found in excess of the prescribed limit.
no
limit,

(6) as a
contribut by an employee to a recognized provident fund;
as
)as
a contribution by an employee to an approved superannuation fund;
(8 a5 the subscription to any such security of the Central Government or anysuch depost
as that Government may, by notification in the Official Gazette, specity in t s

behalf
to NSC VIII Issue and IX Issue:
9)asthe subscription the
10) as a contribution, in the name of self, spouse or his or her child for participation in
Unit-linked Insurance Plan, 1971 of the Unit Trust of India;
) as a contribution in the name of self, spouse or his or her child for participation in any
suchUnit-linked Insurance Plan of the LIC Mutual Fund referred to in Sec. 10(23D),
as the Central Government may, by notification in the
Official Gazette, specify in this
behalf (Dhanraksha has been notified in this behalf);
(12) sum paid to effect or to keep in force a contract for such annuity plan of
LIC of India or
any other insurer as the Central Government may notify
New Jeevan Dhara, New Jeevan
Dhara Plan I, New Jeevan Akshay, New Jeevan Akshay Plan I, Plan II and Plan II of
LIC of India has been notified);
(13) sum paid as the subscription to any unit of Mutual Fund or from the Administrator
or specified company under any plan formulated in accordance with such scheme as
the Central Government may notify;
14) sum paid as contribution by an individual to any pension fund set-up by any Mutual
Fund or by the Administrator or specified company as the Central Government may
notify (UTI-Retirement Benefit Pension Fund has been notified);
(Notification dated 3.11.2005]
15) as the subscription to any such deposit scheme of or as a contribution to any such
as the Central Government may.
pension a fund set up by the National Housing Bank,
in this behalf (Home Loan Account
by notification in the Official Gazette, specify
Scheme has been notified);
16) asthe subscription to any such deposit seheme of
(a) a public sector company which
:

finance for construction or purchase of houses in

1s engaged in providing long-term
formed for satisfying the
any statutory authority
ndia for residential purposes; or (b) for and development of cities, towns or
eed of
accommodation, or
housing planning
for the Central Government notify in this behalf;
(17 ages
ultio
both, as or
n fees (excluding any payment towards any development fees or donation or
payment of similar nature) paid at the time ot admission or thereafter : (a) to any
versity, college, school or other educational institution sit 1iated within India; (b) for
two children
Purpose
18)Payment of full-time education of his
of installment under self-financing scheme or nstallnent tor repayment of
a10an is taken from prescribed authorities/institutio1s tor the purpose of purchase or
s t r u c t i o n of a residential house property, the ncome r o t which 1s chargeable to

der the head Income from House Property'

 439
DEDUCTIONS TO BE MADE..WHILE COMPUTING TOTAL INCOME

Sohton Computation of Deduction /s 80QQB

(for the Assessment Year 2020-21)
B
C

- 5,00,000
(a) Amount received inconvertible foreign exchange 9,00,000
b) Lumpsum consideration

15% 3,75,000
Royalty not exceeding 90,000
c) (c) 3,75,0000 5,00,000
Lowest (a), (b) 90,000
or

d) Expenditure incurred 30,000 3,00,000

20,000
(e)
Amount deductible u/s 80QQB (d) (e) but subject to
-

( maximum of F 3,00,000] 70,000 3,00,000 2,00,000

(Sec. 80RRB)
(X)
Deduction in respect of Royalty on Patents
An individual, who is:
Who is entitled to deduction:
>

resident in India;
(a)
(b) a patentee;
31.3.2003
of royalty in respect of a patent registered after
(c)in receipt of income by way
under the Patents Act, 1970. is less.
Whole of such income or three lakh rupees, whichever
guantum of deduction:
Patents Act, 1970,
licence is granted in respect of any patent under the
Where a compulsory the terms
deduction shall not exceed the amount of royalty under
e income from royalty forsettled the Controller under the Patents Act.
ndconditions of a licence by
so much of the income shall be
taken into account for the
Ifincome is earned outside India,
in convertible
into India by, or on behalf of, the assessee
arpose of deduction as is brought the end of the previous year or within the period
reign exchange within six months from
tended by the competent authority. must furnish a certificate in the prescribed form,
Conditions for deduction: (i) The assessee with the return of income.
y signed by the prescribed authority, along
the must furnish a certificate in the
assessee
i) If income is earned outside India, return of income.
authority/authorities, along with the
sCribed form, from the prescribed Account (Sec. 80TTA)
(XIV) Deduction in respect of Interest on Savings
or a Hindu undivided family.
Who is entitled to deduction? An individual
on deposits in a savings account with:
Deduction shall be allowed in respectof interest
in carrying on the business of banking; or

1) a Bank, (i) a co-operative society engaged

Post office.
income 7 10,000 in aggregate, whichever is less.
Yuantum of deduction: Whole of such
or

behalf of a firm, AOP o r BOI, no deduction shall

the savings account is held by or on
here of the firm o r any member of the AOP o r
wed in respect of such income to any partner
this section w.e.f. the Assessment Year 2019-20. However.
Deduc senior citizen under
tion shall not be allowed to a
section 80TTB.
gner deduction shall be allowed to him under
case of a senior citizen (w.e.f.
in respect of interest on deposits in
eduction (Sec. 80TTB)
Bsessment Year 2019-20)
8 entitled to deduction? A senior citizen.
with:
be allowed in res pect of interest on deposits
0nshall carrying on the
business
in ofbanking; or (iii)
,(1) a co-operative society engaged
fice.
 440 INCOME TAX

Quantum of deduction: Whole of such income or 7 50,000 in aggregate, whichever is

Where the account is held by or on behalf of a firm, AOP or BO1, no deduction shall
allowed in respect of such income to any partner of the firm or any member of the AOP Or
Explanation: "Senior citizen" means an individual resident in India who is of the a
BOL
SIXTy years or more at any time during the relevant previous year.
age ci
(XVI) Deduction in the case ofa person with Disability (Sec. 800
Who is entitled to deduction? An individual resident in India, and who is certified by t
medical authority to be a person with a disability.
Quantum of deduction: (i) Disability? 75,000; (i) Severe disability 7 1,25,000.
Conditions for the deduction: (i) The assessee shall furnish a copy ofthe certificate isuei
by the medical authority in the prescribed form along with the return of income in respect g
the assessment year for which the deduction is claimed.
i) Where the condition of disability requires a reassessment of its extent after a petid
stipulated in the certificate, a new certificate shall be obtained from the medical authority in
ARY the prescribed form and a copy thereof should be furnished along with the return of income.
lustration 18
1. Income under the head salaries of Mr. Ram is 7 7,65,000.
2. He deposited 90,000 in PPE, 7 20,000 in RPF and paid tuition fee of hiss
7 18,000.
3. He deposited 7 25,000 in the pension fund of LIC of India.
4. He paid interest 7 15,000 on loan taken from a financial institution for his higbs
education.
Compute his total income for Assessment Year 2020-21
Solution
Computation of Total Income
for the Assessment Year 2020-21)

Salary being G. T. I 7,65.00

Less Deduction u/s 80C:
PPF, RPF and Tuition fee
Deduction w/s 80CCC:
1,28,000
Pension Fund
25,000
Deduction /s 80CCE
1.53,000
Max.7 1,50,000
1,50,000
Deduction /s 80E
Interest on loan 1 , 6 5 , 0 0

15,000 6,00,0

Total Income
Ilustration 19
1. Gross Total Income of Mrs. Sita is ? 6,75,000.
2. She deposited in RPF * 50,000.
3. She paid a donation to a
Political Party 10,000 by cheque and Prime
i m e Minister:

National Relief Pund ? 15,000 by cheque.

y e a r s7 27,00
4. She paid medical insurance premia on the
health of her spouse aged 47
by cheque. yea
Compute her total income for Assessment Year 2020-21