Automated Form 16 Part A and B and Part B for F.Y. 2017-18 With Income Tax Exemption From Under Chapter VI-A for the F.Y. 2017-18 [Amended by the Finance Budget 2017]

DEDUCTIONS FROM GROSS TOTAL INCOME (CHAPTER VI-A) UPDATED AS ON APRIL 1, 2017

1. DEDUCTION IN RESPECT OF INVESTMENTS IN SPECIFIED ASSETS (SECTION 80C) 

 

Section 80C provides for a deduction of savings in specified modes of Investments from gross total income. It is available only to an Individual or HUF. The Maximum permissible deduction is Rs.1.5 lakh along with deduction u/s 80CCC & 80CCD.

Admissible Deductions:-

1. Premium paid on insurance on the life of the Individual or HUF only to the extent of such premium or other payment made not in excess of 10% (As amended by the Finance Act,2012) of Actual Capital Sum Assured. Explanation to Sec 80C (3A) has been introduced to provide that the Actual Capital Sum Assured in respect of the life insurance policies to be issued on or after 1st April, 2012 shall mean the minimum amount assured under the policy on happening of the event at any time during the term of the policy without taking into Account the following:-

· The Value of Premium to be Returned or

· Any Benefit by way of bonus or otherwise to be received over & above the sum actually assured.

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2. Sum paid under the contract for deferred on the life of the Assessee or his/her spouse or children.

3. Sum deducted by the government from the salary of an employee for securing a deferred annuity for self, spouse or children.

4. Contribution to any PPF.

5. Contribution by an employee to RPF.

6. Contribution by an employee to an Approved Superannuation Fund.

7. The contribution made to any PPF set up by the Central Government.

8. Subscription to any deposit scheme or contribution to any Pension fund set up by the National Housing Bank.

9. Payment of Tuition fees by an Individual Assessee at the time of admission to any university, college, school or other educational institutions within India for the purpose of full-time education of any two children.

10. Subscription to deposit scheme of Public Sector, engaged in providing housing finance.

11. Subscription to units of Mutual Funds notified u/s 10(23D).

12. Sum deposited in Fixed Deposits (FDs) with tenure of five years.

13. Sum deposited in 5 yrs Post Office Time Deposit (POTD) scheme.

2. DEDUCTION IN RESPECT OF CONTRIBUTION TO CERTAIN PENSION FUNDS (SECTION 80CCC)

Deduction in respect of Payment of premium for annuity plan of LIC or any other Insurer is provided. The Premium must be deposited to keep in force a contract for annuity plan of LIC or any other insurer for receiving a pension from the fund. For this purpose, the Interest or Bonus accrued or credited to the Assessee’s Account shall not be reckoned as Contribution. The Maximum Deduction allowed is Rs.1.5 lakh.

3. DEDUCTION IN RESPECT OF CONTRIBUTION TO PENSION SCHEME OF CENTRAL GOVERNMENT (SECTION 80CCD)

Contribution towards NPS by Employee[80CCD(1)]: Taxpayer is an individual and he is employed by the central government (on or after January 1, 2004), or employed by any other person or self-employed. He has in the previous year deposited any amount in his account under NPS. Under this, Employee is to contribute 10% of their salary or more and deduction is available under section 80CCD(1) which is restricted to 10% of the salary and for a person other than employee deduction is restricted to 10% of GTI. For the A.Y 2015-16 amount of deductible under section 80CCD(1) cannot exceed Rs. 1 Lacs.

Contribution towards NPS by Employer [80CCD(2)]: Contribution by the employer to NPS is deductible under section 80CCD(2) in the hands of the concerned employee in the year in which contribution is made. However, no deduction is available in respect of employer’s contribution which is in excess of 10 percent of the salary of the employee.

4. LIMIT ON DEDUCTION U/S 80C, 80CCC, 80CCD 

The Limit for maximum deduction available u/s 80C, 80CCC, 80CCD (combined together) is Rs.1.5 Lakh only.

5. DEDUCTION IN RESPECT OF MEDICAL INSURANCE PREMIUM (SECTION 80D)

This Section provides for a deduction of Rs. 25000 in respect of premium paid towards a health insurance policy for the Assessee or his family (spouse and dependent children) or any contribution made to the Central Government Health Scheme in aggregate and a further deduction of Rs. 30,000 is allowed of premium paid in respect of health insurance policy for parents. An increased deduction of Rs. 30000 shall be allowed in case any of the persons mentioned above are senior citizens (i.e. of age 60 years or above). Further, it is provided that for claiming such deduction u/s 80D the payment must be by any mode other than cash.

Further Deduction of Rs. 5000 shall be allowed in respect of payment made on Account of preventive health check-up of self, spouse, children or parents made during the previous year. This deduction is within the overall limit of Rs. 25000 or Rs.30000, as the case may be. For claiming this deduction payment can be by any mode including cash.

6. DEDUCTION IN RESPECT OF REHABILITATION OF HANDICAPPED DEPENDENT RELATIVE (SECTION 80DD)

It provides for a deduction to an Assessee being an individual or HUF who is a resident in India. Deduction of Rs. 75,000  is available in respect of any Amount paid for the medical treatment (including nursing), training and rehabilitation of a dependent, or any amount paid or deposited under a scheme framed in this behalf.

In the case of severe disability (i.e. a person with 80% or more disability), the deduction of Rs. 1,25,000 (Rs. 1,00,000  for the assessment year 2010 -11 to 2015-16 Rs. 75,000 up to the assessment year 2009-10) shall be available.

Dependent means In the case of an Individual the spouse, children, parents, brothers, sisters, of the individual and in the case of HUF, any member who is wholly dependent on the assessee.

7. DEDUCTION IN RESPECT OF MEDICAL TREATMENT (SECTION 80DDB)

The deduction of Rs. 40000 or Amount actually paid whichever is less shall be allowed to an Assessee who is resident in India being an Individual or HUF. A deduction shall be allowed of any amount paid for the medical treatment of such disease or ailment as may be specified in the rules. In case the Amount is paid in respect of a senior citizen (i.e. of age 60 years or above) then the deduction would be Rs.60000 or the Amount actually paid whichever is less.

8. DEDUCTION IN RESPECT OF INTEREST ON LOAN TAKEN FOR HIGHER EDUCATION (SECTION 80E)

This section provides deduction to an Individual in respect of any interest paid on loan taken for the purpose of pursuing his higher education or the for the purpose of higher education [i.e all fields of studies (including vocational studies)pursued after passing the senior secondary examination] of his/her relative i.e. spouse or children of the Individual or the student for whom the Individual is the legal guardian. The loan must have been taken from any financial institution or approved charitable institution. The amount of deduction is amount is paid by the individual during the previous year and such amount is paid out of his income chargeable to income tax.

9. DEDUCTION IN RESPECT OF INTEREST ON LOAN TAKEN FOR RESIDENTIAL HOUSE PROPERTY APPLICABLE FORM a.y 2017-18 (SECTION 80EE)

The following conditions should be satisfied in order to claim deduction under section 80EE:-

1. The assessee is an individual. He may be the resident or non-resident.
2. He has taken a loan and loan is taken for acquisition of residential house property. The loan is taken from the bank or a housing finance company and loan has been sanctioned during April 1, 2016, and March 31, 2017.
3. The amount of loan sanctioned for residential house property does not exceed Rs. 35 lakhs and value of residential house property does not exceed Rs. 50 lakhs.
4. Assessee does not own any residential house property on the date of sanction of loan.
5. This deduction is over and above the Rs, 2 lakh limit under section 24 of the income tax act.

If above conditions are satisfied, the assess can claim deduction under section 80EE of the interest payable on the above loan or Rs. 50,000 whichever is less. This deduction is available for the assessment year 2017-18 and subsequent assessment years.

10. DEDUCTION  IN RESPECT OF DONATIONS TO CERTAIN FUNDS, CHARITABLE INSTITUTIONS ETC. (SECTION 80G)

The deduction under section 80G is available to any taxpayer (may be individual, company, firm or any other person, may be resident or non -resident). The various donations specified under this section are eligible for deduction up to either 50% or 100% with or without restrictions. Sub-Section 5D has been inserted in section 80G to provide that no deduction shall be allowed in respect of donation of any sum exceeding Rs.10000 unless such sum is paid by any mode other than cash.

12. DEDUCTION IN RESPECT OF RENT PAID (SECTION 80GG)

Admissible deduction:-

The deduction will be least of the following:-

· Actual Rent paid less 10% of the total income before allowing such deduction, or

· 25% of such total income or

· Rs. 5000 per month

Total income will not include long-term capital gains and any income referred to in sections 115A to 115D.

Conditions to be satisfied:-

· Assessee should not be in receipt of House Rent Allowance.

· The expenditure incurred by him on rent of any furnished or unfurnished accommodation should exceed 10% of his total income arrived at after all deductions under Chapter VI-A except section 80GG.

· The Accommodation should be occupied by the Assessee for the purpose of his own residence.

· The Assessee should not have self-occupied residential premises in any other place.

· Assessee should file a declaration in form 10BA, confirming the details of rent paid.

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Download Automated Master of Form 16 Part A and B for f.Y. 2016-7-18 and A.Y.2018-19, Plus Best Tax Saving Options Other Than 80C For F.Y.2017-18

Before planning your taxes one should be aware of the total income and tax liability in order to be smart tax saver. The government has provided with many plans using which individuals can make better investment decision along with tax saving options. Individuals often get stuck with 80C tax benefits only during tax planning. While there is little doubt 80C investments are best for tax saving purposes, there are other investment options which can help you save tax if invested smartly.

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 Here are some best tax saving options other than Sec 80C.

 NPS The Government of India (GOI) launched the National Pension System for individuals in May of 2009. Under the NPS, each Subscriber will open an account with Central Record keeping Agency (CRA) which will be identified through unique Permanent Retirement Account Number (PRAN).

The NPS offers you an additional tax deduction for the investment up to Rs. 50,000 in under subsection 80CCD (1B). This is over and above the deduction of Rs. 1.5 lakh available under sec 80C of Income Tax Act. 1961. Returns would depend on the asset class that you choose. For example, you could select equity, which is a high-risk instrument or corporate debt or government debt.

Interest on education loan (Section 80E) The deduction is allowed only on the interest repayment part, not on the principal amount of education loan. Means that only interest repayment is available for the tax deduction while filing income tax return. This deduction is over and above the 80C limit and there is no maximum limit on claiming deduction under 80E. Not many are aware of the scheme, and one needs to educate people more on this section and its benefits.

House rent allowance (Section 80GG) If you are staying in a rented apartment or house and paying rent, you can claim tax deduction under Sec 80GG of the Income Tax Act. The amount of deduction is based on the city that you are residing. Again, some cities need to be revamped to factor in increased rentals in this city, but that has not happened so far. More details and exact break-up cannot be sought from your company, so it is best talking to the HR department on the exact tax benefits that you would get.

Home Loans In the Union Budget last year, Finance Minister Arun Jaitley increased the limit on deduction on home loan interest under Section 24 to Rs 2 lakhs.

An additional deduction of Rs 50,000 on home loan interest can be claimed to start the financial year 2016-17 under Sec 80EE of the Income Tax Act. However, to be able to claim this deduction, you must meet certain conditions. 

The principal amount continues to be a part of the overall benefits under Sec 80C Max Rs. 1.5 Lakhs.

Health Insurance (Section 80D) Individuals should take a health insurance policy, which would enable them to save tax up to Rs 25,000 in the case of ordinary citizens and Rs 30,000 in the case of senior citizens.

So, one can go ahead and take a good health insurance policy. This is again a tax option that you have apart from the usual 80C benefits. The Sec 80D benefits also include the benefits on expenses incurred towards preventive health check-ups.

Donations (Section 80G) Section 80G of income tax law provides tax benefits on the amount donated to NGO's. So, it maybe time to be a little more generous than before. However, the deduction can be made only if you are donating by cash or draft. The deduction can be either 50 per cent or 100 per cent. You have to claim this deduction when filing your tax returns and quoting of PAN number to the institution where you donated is a must. There is an entire list of institutions and establishments where you can donate.

Medical treatment under Sec 80DDB For certain specific diseases, Income Tax Act offers tax benefits to an individual under section 80DDB on the basis of expenses incurred by him for the treatment of such diseases or ailment.

This is not only for the person filing the tax returns but, also for individuals dependents of such an individual. However, this tax benefit is not available for Non-Resident Indians. In case it is a Hindu Undivided Family one can claim it for members of such an HUF.

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Download Automated Master of Form 16 Part B for F.Y.2016-17 +Income Tax Deductions under chapter VI A for F.Y.2017-18 and A.Y.2018-19

Income Tax Deductions are allowed by the Income Tax Act as an instrument for tax saving and reducing the liability to pay tax. The act provides a list of deductions.

Indian Income Tax Act, 1961 provides various income tax deductions. The income tax deductions can be reduced from the gross taxable income while filing the income tax return. These deductions help in tax saving and reducing the tax liability of a person. The income tax is imposed on the total income as per the income tax slab rates after claiming the income tax deductions.

The list of the income tax deductions is as under.

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Section 80C: Deduction, u/s 80C, is the most ordinary income tax deduction available for individuals and HUFs. One can claim deduction under this part by making an investment in some specified instruments like Provident Funds, National Saving Certificates, Life Insurance Policy, Mutual Funds, etc. The maximum limit for claiming deduction under Section 80C is Rs. 150000.

Section 80CCC: This deduction is available to Individuals for contributing to certain pension funds. The deduction is allowed for the amount paid as premium for annuity plan of any insurance company. The limit for this deduction is Rs. 150000 maximum.

Section 80CCD: The deduction is available for individuals contributing to the pension scheme of Central Government, i.e., depositing in a notified pension scheme. The limit u/s 80CCD for a salaried person is 10% of his salary. In other cases, the contribution is restricted to 10% of the total gross income.

Note: The maximum limit of Rs. 150000 is a cumulative limit for section 80C and section 80CCC for every Financial Year. Additionally, an amount of Rs. 50000 is allowed as a deduction over and above this limit of Rs. 150000, if invested in National Pension Scheme. Hence, it can be concluded that the maximum limit for the above three sections cumulatively is Rs. 200000.

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Section 80CCG: A resident individual being a retail investor can claim a deduction for investments made in notified equity savings scheme. The total gross income of the individual must be less than or equal to Rs. 12 lakhs for availing this exemption. The deduction is limited to lower of 50% of the amount invested in the scheme or Rs. 25000. The assessee can claim a deduction for three years consecutively starting with the assessment year in which acquisition took place.

Section 80DD: Any resident individual or HUF can claim a deduction for an amount spent on the medical treatment of a disabled dependent. It also includes rehabilitation expenses or amounts contributed in any scheme made for this. The person can claim a flat deduction of Rs. 75000. However, a person with a disability of 80% or more can claim a deduction of Rs. 125000.

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Section 80D: Any individual or HUF is eligible for deduction u/s 80D for contributing toward medical health insurance and health check-up. The deduction can be claimed for himself along with spouse, children (dependent). A maximum of Rs. 25000 or Rs. 30000 (if an individual or its spouse is a senior citizen) can be claimed as a deduction.

Section 80DDB: Any amount contributed towards medical treatment of specified diseases by an individual or HUF is allowed as a deduction under this section. Individual also include dependent spouse, children, siblings or parents. The maximum amount is lower of the actual sum paid or Rs. 40000 minus the reimbursement of the insurance company. In the case of senior citizen the limit of Rs. 40000 is replaced by Rs. 60000 whereas, for super senior citizen it is amended by replacing Rs. 80000.

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Section 80E: The interest on the loan is taken for higher education of an individual or its spouse or children, by the person from financial institutions is allowed for deduction. The deduction can be claimed for interest payment starting from the year of interest payment commencement and seven years immediately following it or until the full interest is paid, whichever is earlier.

Section 80G: All the assesses donating an amount in certain specified funds or charitable institutions or whatever named called, can claim deduction under this section. Firstly, qualifying amount is calculated and based on that category of deduction is identified. However, if any sum paid in cash is more than Rs. 10000, then no deduction is allowed.

Section 80GG: The individuals who don't receive house rent allowance can claim the deduction for the rent paid, amount being least of the following:               

             ·    25% of the total income;      

             ·   Rent paid minus 10% of the total income;      

             ·    Rs. 5000 per month.

No deduction is allowed if any residential accommodation is owned by the city of work by the individual or his spouse or minor child or his HUF.

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Section 80TTA: Any individual or HUF receiving interest on the savings account deposits can claim a deduction for the amount received subject to a maximum of Rs. 10000. Interest earned on time deposits is excluded.

Section 80U: A resident individual is allowed a deduction if he is certified as disabling by the medical authority. A flat deduction of Rs. 75000 or Rs. 125000 (80% or more disability) can be claimed.

Tax Rebate U/s 87A: The Tax Rebate can be allowed up to Rs. 2500/- who’s taxable income less than 3.5 Lakh.

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