Section 80 Deductions

Deduction Under Section 80 of the Income Tax Act.

Section 80 TTA: Deduction from gross total income for Interest on Savings bank account

A deduction of maximum Rs 10,000 can be claimed against interest income from a savings bank account. Interest from savings bank account should be first included in other income and deduction can be claimed of the total interest earned or Rs 10,000, whichever is less. This deduction is allowed to an individual or HUF. And it can be claimed for interest on deposits in savings account with a bank, co-operative society or post office. Section 80TTA deduction is not available on interest income from fixed deposits or recurring deposits or interest income from corporate bonds.

Section 80GG: Deduction for House Rent Paid where HRA is not received

  • This deduction is available for rent paid when HRA is not received. Taxpayer or his spouse or minor child should not own residential accommodation at the place of employment.
  • Taxpayer should not have self-occupied residential property in any other place.
  • Taxpayer must be living on rent and paying rent.

Deduction available is the minimum of

1. Rent paid minus 10% of total income
2. Rs. 2000/- per month
3. 25% of total income

For Financial year 2016-17 – For calculating deduction above, Rs 2,000 per month has been raised to Rs 5,000 per month. Therefore a maximum of Rs 60,000 per annum can be claimed as a deduction.

Section 80E: Deduction for Interest on Education Loan for Higher Studies

Deduction is allowed for interest on loan taken for pursuing higher education. This loan may have been taken for the taxpayer, spouse or children or for a student for whom the taxpayer is a legal guardian. The deduction is available for a maximum of 8 years or till the interest is paid, whichever is earlier. There is no restriction on the amount that can be claimed.

Section 80EE: Deductions on Home Loan Interest for First Time Home Owners

For Financial Year 2013-14 and Financial Year 2014-15

This section provided deduction on the Home Loan Interest paid. The deduction under this section is available only to Individuals for first house purchased where the value of the house is Rs 40lakhs or less and loan taken for the house is Rs 25lakhs or less. And the Loan has been sanctioned between 01.04.2013 to 31.03.2014. The aggregate deduction allowed under this section cannot exceed Rs 1,00,000 and is allowed for financial years 2013-14 & 2014-15 (Assessment year 2014-15 and 2015-16).

This deduction is not available for financial year 2015-16 (assessment year 2016-17).

For Financial Year 2016-17

This section was revived in Budget 2016 and is applicable starting FY 2016-17. The deduction under this section is available only to an Individual who is a first time home owner. The value of the property purchased must be less than Rs 50 Lakhs and home loan must be less than Rs 35 lakhs. And the Loan must be taken from a financial institution and must be sanctioned between 01.04.2016 to 31.03.2017. Under this section, an additional deduction of Rs 50,000 can be claimed on home loan interest. This is in addition to deduction of Rs 2,00,000 allowed under section 24 of the income tax act for a self-occupied house property. There is no restriction on the number of years for which this deduction can be claimed.

Section 80CCG: Rajiv Gandhi Equity Saving Scheme (RGESS)

The Rajiv Gandhi Equity Saving Scheme (RGESS) was launched after the 2012 Budget. Investors whose gross total income is less than Rs. 12 lakhs can invest in this scheme. Upon fulfilment of conditions laid down in the section, the deduction is lower of, 50% of amount invested in equity shares or Rs 25,000.

Section 80D: Deduction for premium paid for Medical Insurance

For financial year 2014-15 - Deduction is available up to Rs. 15,000/- to a taxpayer for insurance of self, spouse and dependent children. If individual or spouse is more than 60 years old the deduction available is Rs 20,000. An additional deduction for insurance of parents (father or mother or both) is available to the extent of Rs. 15,000/- if less than 60 years old and Rs 20,000 if parents are more than 60 years old. Therefore, the maximum deduction available under this section is to the extent of Rs. 40,000/-. (From AY 2013-14, within the existing limit a deduction of up to Rs. 5,000 for preventive health check-up is available).

For financial year 2015-16– Deduction is raised from Rs 15,000 to Rs 25,000. The deduction for senior citizens is raised from Rs 20,000 to Rs 30,000. For uninsured super senior citizens (more than 80 years old) medical expenditure incurred up to Rs 30,000 shall be allowed as a deduction under section 80D. However, total deduction for health insurance premium and medical expenses for parents shall be limited to Rs 30,000.

Section 80U: Deduction for Person suffering from Physical Disability

Deduction of Rs. 50,000/- to an individual who suffers from a physical disability (including blindness) or mental retardation. In case of severe disability, deduction of Rs. 100,000 can be claimed. Certificate should be obtained from a Govt. Doctor. The relevant rule is Rule 11D. This is a fixed deduction and not based on bills or expenses.

For financial year 2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs 1,25,000.

Section 80RRB: Deduction with respect to any Income by way of Royalty of a Patent

Deduction for any income by way of royalty for a patent registered on or after 01.04.2003 under the Patents Act 1970 shall be available up to Rs. 3 lakhs or the income received, whichever is less. The taxpayer must be an individual resident of India who is a patentee. The taxpayer must furnish a certificate in the prescribed form duly signed by the prescribed authority.