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Ready Recknor : Tax Deductions

, March 22, 2012, 0 Comments

To make Tax deduction much simpler to understand we present a detail descriptions of various sections under which Tax deductions are applicable are listed.

Section

Nature

Description

80CCC

Payment of premium for annunity plan of LIC or any other insurer. Deduction is available upto a maximum of Rs.10,000/- The premium must be deposited to keep in force a contract for an annuity plan of the LIC or any other insurer for receiving pension from the fund.

80CCD

Deposit made by an employee in his pension account to the extent of 10% of his salary. Where the Central Government makes any contribution to the pension account, deduction of such contribution to the extent of 10% of salary shall be allowed. Further, in any year where any amount is received from the pension account such amount shall be charged to tax as income of that previous year.

80CCF

Subscription to long term infrastructure bonds. Subscription made by individual or HUF to the extent of Rs. 20,000 to notified long term infrastructure bonds was exempt for the financial year 2010-11 and 2011-12. However, the exemption is no longer present from financial year 2012-13.

80D

Payment of medical insurance premium. Deduction is available upto Rs.15,000/ for self/ family and also upto Rs. 15,000/- for insurance in respect of parent/ parents of the assessee. The premium is to be paid by any mode of payment other than cash and the insurance scheme should be framed by the General Insurance Corporation of India & approved by the Central Govt. or Scheme framed by any other insurer and approved by the IRDA. W.e.f. 01.04.2011, contributions made to the Central Government Health Scheme is also covered under this section.

80E

Deduction in respect of payment in the previous year of interest on loan taken from a financial institution or approved charitable institution for higher studies. This provision has been introduced to provide relief to students taking loans for higher studies. The payment of the interest thereon will be allowed as deduction over a period of upto 8 years.

80G

Donation to certain funds, charitable institutions etc. The various donations specified in Sec. 80G are eligible for deduction upto either 100% or 50% with or without restriction as provided in Sec. 80G

80U

Deduction of Rs.50,000/- to an individual who suffers from a physical disability (including blindness) or mental retardation.Further, if the individual is a person with severe disability, deduction of Rs.75,000/- shall be available u/s 80U. Certificate should be obtained on prescribed format from a notified ‘Medical authority’

 

 






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