Deduction under chapter VI-A

Income tax department allows deductions specified in the Chapter VI-A of the Income Tax
Act. So, here’s the complete list of all the Income Tax Deductions for AY 2018-19 as per the
Income Tax that you can use to reduce your tax outgo (depending on your tax situation):

80C Deductions: LIC, PF, PPF etc.

80C deduction are the most popular Income Tax Deductions. The 80C deduction limit for
AY 2018-19 is ₹ 1,50,000. The various options of investments and payments that qualify for
deduction under this section are:

 Life Insurance Premium (LIP)Deduction is allowed in respect of life insurance

premium that you pay on your LIC policy but policy must be in the name of:
1. In case of an individual:Individual, spouse or any child of such individual.
2. In case of HUF:Any member of HUF.

Do note that before making the payment towards the premium, first check with agent
or read the policy description whether it is eligible for deduction for income tax
purpose.

 Public Provident Fund (PPF)Deduction is allowed in respect of Contribution made

by you towards your PPF. The limit for minimum deposit in PPF A/C is Rs. 500 and
limit for maximum deposit is Rs 1,50,000 during a year. PPF can be in the name of:
1. In case of an individual:Individual, spouse or any child of such individual.
2. In case of HUF:Any member of HUF.

The best part about PPF is that the interest you receive on your PPF account and
receipts on maturity or withdrawals is fully tax free. The PPF account matures after
15 years but part of the money can be withdrawn after 5 years.
 Unit Linked Insurance Plan (ULIP)Deduction is allowed in respect of Contribution
made by you towards your ULIP. You can make investments in the name of:
1. In case of an individual:Individual, spouse or any child of such individual.
2. In case of HUF:Any member of HUF.

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 Children's Tuition FeesYou can claim deduction for the payment of tuition fees of
your children to any university, college, school or other educational institution
situated within India for the purpose of education. However, deduction would not be
allowed for payment towards any development fees or donation or payment of
similar nature. This deduction is allowed for maximum two children.
 Principal Repayment of Housing LoanYou can claim the deduction of principal
repayment of your housing loan taken for purchase or construction of residential
house property. Deduction can also be availed in respect of stamp duty charges,
registration fee and other expenses paid for purchase of your house. This deduction
is available for both individuals and HUF.
But keep in mind that if you sell/transfer such house property in respect of which
such deduction was taken before expiry of 5 years from the end of financial year in
which possession was taken, then the deduction availed in the earlier years will be
taxable for you in that year.
 Sukanya Samriddhi SchemeIn lines with the Beti Bachao, Beti Padhao campaign,
this scheme was launched on 22nd January, 2015 by Prime Minister Narendra Modi.
You claim deduction under this scheme for any sum deposited by you in the
Sukanya Samriddhi Account of your girl child or any girl child for whom you’re her
legal guardian. The minimum limit of deposit under this account is Rs 1000 annually
and maximum Rs 1,50,000. Interest earned and money withdrawals from this
account are tax free.
 Mutual Funds (Equity Linked Saving Scheme)You can claim deduction in respect
of subscription to units of UTI or mutual funds specified u/s 10(23D) of Income Tax
India, 1961.
 Provident FundIf you're an employee, then you can claim deduction in respect of
contribution towards your Statutory Provident Fund or Recognized Provident Fund
Account.
 Bank FDR’s (Known as 5 Year Tax Saving FDR’s)Almost everyone invests in
Bank FDR’s but did you know that you can claim deduction for it too. Investment
must be made in term deposit for a fixed period of 5 years or more with scheduled
banks to avail the deduction.

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  Post Office Tax Saving FDR’s (Post Office Time Deposit Scheme)Similar to
Bank FDR’s, 5 year FDRs of Post Offices are also eligible for deduction under
section 80C.
 National Saving Certificate (NSC)Subscribe to NSC and you’ll be eligible for
deduction for the amount you contribute. These can be purchased from Post Office.
 Deferred Annuity PlanYou can claim deduction in respect of payment made by you
under Deferred Annuity Plan. This annuity may be in your name, your spouse's
name or in the name of any of your child. But to claim deduction under this annuity
plan, there should be no provision of receiving cash in lieu of annuity.
And, if you're a government employee and any sum is deducted from your salary
under deferred annuity plan, then deduction is restricted to only 1/5th of your salary.
 Others
1. Contribution towards Approved Superannuation Fund.
2. Subscription to any deposit scheme/pension fund of National Housing Bank (NHB)
3. Subscription to bonds issued by National Bank for Agriculture and Rural
Development (NABARD)
4. Deposit in an account under the Senior Citizen Savings Scheme.
5. Subscription to notified deposit scheme of:
6. Public Sector Housing Finance Company
7. Housing Development Authority of cities, towns and villages
8. Contribution towards annuity plans of LIC like Jeevan Dhara, Jeevan Akshay etc. or
any other insurer as approved by Central Government.
9. Subscription to equity shares or debentures of Public Company or any Public
financial institution forming part of any eligible issue of capital approved by Board
where proceeds are utilized for infrastructure company.

80CCC: Pension Plan

Deposit/Payment made by you towards LIC or any other insurer in the approved annuity
plan for receiving pension from the fund referred to in section 10(23AAB) can be claimed as
deduction under this section being lower of the following:

 100% of the amount paid

 Rs 1,50,000

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However, as per section 80CCE, you can claim deduction of only Rs 1,50,000 under section
80C, 80CCC, and 80CCD (1) cumulatively.

Note: Limit available means: Rs 1,50,000 - Investment u\s 80C = Limit Available for 80CCC

Section 80CCD: [Deduction in respect of contribution to pension

scheme of Central Government]
The 80CCD deduction for AY 2018-19 can be divided into three different categories:

 80CCD (1):You can avail this deduction irrespective of whether you're in employment or self-
employed on the amount deposited under pension scheme notified by the Central
Government (NPS deduction for AY 2018-19). The deduction allowed in this section is lower
of the following 3 amounts:
1. 10% of your Salary (in case you're in employment) or 20 % of your Gross Total
Income (in case you're self-employed)
2. Limit left under section 80CCE i.e. Rs 1,50,000 - deduction u\s 80C - deduction u\s
80CCC.
3. Actual Amount paid under NPS.
 80CCD(1B):You can claim an additional deduction of up to Rs. 50,000 under this
section for investment in NPS Scheme. This is in addition to 80CCD (1).
 80CCD (2):Sec 80CCD(2) deduction for AY 2018-19 can be availed by you if you're
an employee and your employer makes contribution under NPS Scheme for
employees. It is allowed only to the extent of 10% of your salary.

80 CCG: Rajiv Gandhi Equity Scheme for Investments in

Equities
If you make any investment in the listed equity shares or listed units of an equity oriented
fund specified under the above-mentioned scheme during the previous year, then you can
avail deduction under this scheme being lower of the following:

1. 50% of the amount invested in equity shares or units

2. Rs 25,000

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However, there are certain conditions for availing deduction under this scheme:

1. Your gross total income for relevant financial year should not exceed Rs 12 Lakhs.
2. You should be a new retail investor as specified under notified scheme.
3. Minimum Lock-in period for claiming deduction under this scheme is 3 years from the date of
acquisition. So, if you sell/transfer such listed equity shares/listed units of equity oriented
funds then deduction allowed earlier will become taxable.

This deduction option is not available now for new investors from A.Y. 2018-19. However,
an assessee who has claimed deduction under this section for assessment year 2017-18
and earlier assessment years shall be allowed deduction under this section till the
assessment year 2019-20 if he is otherwise eligible to claim the deduction as per the
provisions of this section.

80 RRB: Deduction in respect of Royalty on Patents

If you're a resident of India and a patentee (true and first inventor of invention including co-
patentee), then you can claim deduction under this section being lower of the following:

1. 100% of Royalty Income from patent

2. Rs 3,00,000

80 QQB: Deduction on Royalty income to Author of certain

books
If you're an author (including joint author) of a book, then you can claim Sec 80QQB
deduction for AY 2018-19, being lower of following:

1. Lumpsum consideration for assignment or grant of any of the interest in copyright of the book
and other royalty or copyright fees in respect of such book.
2. Rs 3,00,000

Note:For the purpose of this section, Books includes work of literary, artistic or scientific
nature. However, books doesn't include brochures, commentaries, diaries, guides, journals,
magazines, newspapers, pamphlets, text books for schools, tracts and other publications of
similar nature, by whatever name they are called.

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Section 80D: (Medical Health Insurance)
Medical health insurance is important to cover yourself from financial crisis in case of any
medical emergency. This deduction is allowed in respect of Health Insurance premium paid
by you or contribution made towards CGHS or payment made for preventive health checkup
of yourself, your spouse, dependent children or dependent parents. However, there are
certain limits for availing deduction under this section:

Various Cases Maximum Deduction allowed f

Premium

Yourself, spouse & Dependent

Children

No family member is over 60 years of age Up to Rs. 25,000

Your parents are over 60 years of age and neither you nor your wife is Up to Rs. 25,000
more than 60 years.

You or your wife has attained more than 60 years of age. Up to Rs. 30,000

The above-mentioned limits include a limit of Rs. 5,000 for any expenditure made for the
purpose of Preventive Health Checkup.
If any medical expenses are incurred on a Super Senior Citizen (above 80 years of age), it
will be considered a part of the limits mentioned above provided that no policy is taken for
him/her.

The payment of premium should be made other than cash. However, for preventive health
checkup, it can be made in cash also.

This deduction is allowed in respect of interest that you pay on loan taken for pursuing
higher education. This loan may be taken for yourself, your spouse, your children or for any
other children for whom you're the legal guardian.

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Deduction is available up to a maximum of 8 years. The good news is that there is no
monetary restriction on the amount of deduction that can be claimed under this section.

Changes in Budget 2018 :- For Senior citizen, limit has been increased from Rs. 30,000 to
Rs. 50,000 (Aggregate deduction if both parents and individual are senior citizen will be Rs.
1,00,000/-)

Section 80E : Only individuals are eligible for this tax

deduction.It is available on the interest component of an
educational loan.
It starts from the year when an individual starts repaying the loan.However, it is to be noted
that the deduction can be availed only for eight years, beginning from repayment from the
first year.

Section 80EE : This deduction is a boon for the first time home
buyers.
The deduction allowed under this section is over and above the deduction u/s 24. The
amount of deduction is maximum Rs 50,000 per financial year and shall be allowed until the
loan is repaid. However, for availing benefit under this section you have to fulfill the below
conditions :

 You are not the owner of any other house i.e. this is your 1st house
 Value of the property should be Rs 50 lakhs or less
 The amount of Loan shall be Rs 35 lakhs or less
 Loan has been sanctioned between 01.04.2016 to 31.03.2017

Section 80DD: Deduction in respect of maintenance including

medical treatment of a dependent with disability.

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You can claim Sec 80DD deduction for AY 2018-19 in respect of a dependent person with a
disability when you incur expenditure on their training, rehabilitation, medical treatment,
payment made to LIC, Unit Trust of India or any other specified scheme or deposit on behalf
of such dependent.

The deduction is allowed from the following two amounts:

1. Rs. 75,000 fixed, in case the dependent has 40% of more disability but less than 80%.
2. Rs. 1,25,000 fixed, in case the dependent has 80% or more disability.

Notes

1. Dependent person includes your spouse, children, parents, brothers and sisters. In case of
HUF, any member of HUF.
2. Benefit under this section is available only if the dependent person has not claimed
deduction u\s 80U.
3. A certificate of disability is required from prescribed medical authority.

Section 80DDB: Deduction in respect of medical treatment on

specified disease
Deduction u/s 80DDB for AY 2018-19 can be availed by you in respect of payment for
medical treatment of a specified disease or ailment (such as AIDS, cancer or other
neurological diseases specified under Rule 11DD). Deduction under this section can be
availed for yourself or dependent up to the amount actually paid or Rs. 40,000 (Rs. 60,000
in case of a senior citizen or Rs 80,000 in case of very senior citizen) whichever is less.

This deduction is subject to the following two conditions:

1. You must mandatorily obtain a prescription for such medical treatment from the prescribed
specialist.
2. The amount of deduction will be reduced by amount, if any `received, in respect of insurance
or reimbursement by your employer for the treatment of the person concerned.

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The basic difference between 80DD & 80 DDB is-
80 DD: It is for specified disability of dependent.
80 DDB: It is for treatment of specified diseases of dependent.

Changes in Budget 2018: In this budget, under deduction u/s 80DDB, the class of super
senior citizen has been submerged into senior citizen raising the limit of Rs.60,000/80,000
to Rs. 100,000 or the amount incurred whichever is lower.

80U: Deduction in case of a person with disability

If an individual, is certified by the medical authority or a government doctor to be a person
with disability, then he is allowed deduction of Rs. 75,000 under this section. In case the
person is certified by the medical authority to be a person with severe disability, then the
quantum of deduction allowed under this section will be Rs. 1,25,000. Sec 80U deduction
for AY 2018-19 is a fixed deduction and not based on actual expenses.

80GG: Deduction where House rent is paid and HRA not

received
You're eligible for availing deduction if you don't receive House Rent Allowance (HRA) from
your employer or if you're self-employed.

However, 80GG deduction for AY 2018-19 would not be allowed in the following cases:

1. If you, your spouse, minor child or HUF of which you're a member owns any accommodation
at the place where you're employed or doing business.
2. If you own any residential house at the place other than place of your residence, then such
property should not be assessed as self-occupied property.

Deduction allowed is lower of the following amount:

1. Rent paid minus 10% of your adjusted total income

2. 5000/- per month (as per the amendment in law)
3. 25% of your adjusted total income

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Here, adjusted total income = Gross Total Income (From All Heads) - Long Term Capital
Gain - Short Term Capital Gain - Deductions (except deduction under this section).

80GGA: Deduction in respect of certain donations for Scientific

Research or Rural Development
If you make any donation for Scientific Research or Rural Development, then you can avail
deduction under this section. Under Sec 80GGA deduction for AY 2018-19, the whole
amount of donation is allowed as deduction without any upper limit. However, cash
donations of more than Rs. 10,000 are not allowed under this section.

80GGC: Deduction in respect of contributions given by any

person to Political Parties
If you make donations towards any political party or electoral trust, then you can avail
deduction under this section of the total amount you pay. However, Sec 80GGC deduction
for AY 2018-19 is not allowed when donation is made in the form of cash. However, local
authorities and every artificial judicial person cannot claim deduction under this section.

80TTA: Deduction in respect of interest on deposits in Savings

Account
Under this section, you can avail deduction in respect of income by the way of interest on
deposits in Savings Bank Accounts of Banks, Co-Operatives Banks or Post Office. The
quantum of deduction allowed under this section is Rs. 10,000 or the actual interest earned,
whichever is lower. This deduction can be availed by both individual and HUF.

80TTB: Deduction in respect of interest from deposits held by

Senior Citizens

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Section 80TTB allows a deduction upto Rs 50,000/- in respect of interest income from
deposits held by senior citizens. Consequently, limit of tds deduction u/s 194A for senior
citizen has been raised to Rs. 50,000. However, no deduction under section 80TTA shall be
allowed in these cases.

80G: DONATIONS
The deduction under section 80G for AY 2018-19 is available in respect of donations made
by you towards certain specified funds, charitable institutions etc.

For claiming donation under this section following conditions must be fulfilled:

 The donation should be made in any mode of payment other than cash if it exceeds Rs.
10,000.(For F.Y.2016-17, from F.Y. 2017-18 the limit for cash
 donations is Rs.2000) Donations in kind are not eligible for deduction under this section.

The donation should be made only to specified funds or institutions.

Specified Funds or Institutions can be divided into 4 components for the purpose of this
section. Here is a complete lists of charitable trust/institutions for which you can tax tax
benefit under section 80G of the Income Tax:

Donations eligible for 100% deduction without qualifying limit:

1. Prime Minister's National Relief Fund

2. National Defense Fund set up the Central Government
3. Prime Minister's Armenia Earthquake Relief Fund
4. Africa (Public Contributions India) Fund
5. National Foundation for Communal Harmony
6. University/Educational Institution of National Eminence approved by Prescribed Authority
7. Maharashtra Chief Minister's Earthquake Relief Fund
8. Fund set up by the State Government of Gujarat, for providing relief to Gujarat earthquake
victims
9. Zila Saksharta Samiti

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 10. The National Blood Transfusion Council or a State Blood Transfusion Council.
11. Any fund to provide medical relief to the poor, set up by the State Government.
12. The Army Central Welfare Fund or the Indian Naval Benevolent Fund or The Air Force
Central Welfare Fund.
13. The Andhra Pradesh Chief Minister's Cyclone Relief Fund, 1996
14. National Illness Assistance Fund
15. Chief Minister's Relief Fund or Lieutenant Governor's Relief Fund for any State or UT.
16. National Sports Fund set up the Central Government
17. National Cultural Fund set up the Central Government
18. Central Government's Fund for Technology Development & Application
19. National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation &
Multiple Disabilities
20. National Children's Fund (From AY 2014-15)
21. Swachh Bharat Kosh and Clean Ganga Fund set up by Central government ( Any amount
paid in pursuance of Corporate Social Responsibilities as per The Companies Act will not be
eligible for deduction) (From AY 2015-16)
22. National fund for control of drug abuse. (From AY 2016-17)

Donations eligible for 50% deduction of donation amount without qualifying

limit:

1. Jawaharlal Nehru Memorial Fund

2. Prime Minister's Drought Relief Fund
3. Indira Gandhi Memorial Trust
4. Rajiv Gandhi Foundation

Donations eligible for 100% deduction of donation amount with qualifying limit:

1. To Government or any approved local authority/institution/association for the purposes of

family planning.
2. Donations by a company to Indian Olympic Association or other notified association or
institution for the development of infrastructure or sponsorship for sports & games.

Donations eligible for 50% deductions of donation amount with qualifying limit:

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 1. To Government or any approved local authority/institution/association for purposes other
than family planning.
2. Any other fund or institution which fulfills the conditions of section 80G(5)
3. To any Indian authority for the purpose of satisfying the need for housing accommodation or
for planning development of cities, towns villages.
4. To any corporation (specified under section 10(26BB)) for promoting interest of members of
a minority community
5. Donations to any notified temple, mosque, gurdwara, church or any other place notified by
the Central Government for the purpose of repair and renovation.

Qualifying limit for the purpose of this section is 10% of Adjusted Gross Total Income which
is;

Gross Total Income

1. (-) Long Term Capital Gains and Short Term Capital Gains u/s 111A
2. (-) Deductions from 80C to 80U (except deduction under this section)
3. (-) Income of NRIs and Foreign companies
4. (-) Income on which income tax is not payable i.e. Share from AOP.

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