DEDUCTIONS U/S 80C to 80U(Chapter VIA)

Main motive of  Deductions under chapter VI is to give benefit to the assessee in reducing his Total income thereby reducing taxes. 👍 ( Paramartham = saving tax while spending wisely)

• Assessee can avail the deductions from Gross Total Income (GTI) by spending money in specified modes. [GTI includes Salary , House property income , Capital gains, Business Income and Other sources.

• So GTI - Deductions = Total Income.

• There are numerous modes of investing your money to get deduction under chapter VIA, let's discuss one by one.

80C

Following are different types of Investments to avail benfit of 80C deduction...

• Life Insurance  (Ex: Aditya birla Capital)
• Children Tution fee
• Repayment of Housing loan ( Construction should complete)
• Contribution to EPF and PPF
• ULIP
• Mutual Funds (Ex:- HDFC Mutual funds, Reliance Mutual funds )

Max amount of deduction allowable = 1,50,000😳

80D - Medical Insurance premium

Mode of Expense:

• Medical Insurance Premium of Individual, Spouse, children, Parents
• Preventive health checkup

Max Deduction Allowable :-25,000 but in case of senior citizen parents limit is upto 30,000.

80DD - Treatment of Dependant disabled

Mode of Expense :

• Expenditure incurred for medical treatment of dependant who is having disability

Max Deduction Allowable :- 75,000 but in case of severe disability limit is upto 1,25,000

80DDB-

Expenditure should be incurred for medial treatment of Specified disease

Max Allowable deduction 80,000/60,000/40,000 depend upon assessee whether he is super senior citizen / Senior citizen / others

80E - Interest on Higher educational loan

Mode of Expense :

• Interest on Education loan taken for higher education (after 12th) 
• Loan should be taken for Individual / Spouse / Children

80EE - Interest on Loan borrowed for acquisition of self occupied house 

Mode of Expense :

• Loan should be of not exceeding 35 lakh
• Value of House nor exceeding 50 lakh
• He should not own more than one house.

Deduction allowable =  50,000 (Take 2,00,000 deduction while calculating income from house property and then come here)

80G - Donations

Mode of Expense :

• 100% deduction in case of donation to :- PM Relief fund, Charitable Institutions, Jawaharlal Nehru Memorial fund, Govt for promoting family planing and to any approved donee.

• 50% deduction in case of donation in case of others ( subject to some conditions)

• Donation more than 2000 shall made by other than cash.[if you want to donate more than 2000, give cheque.

80GG - Rent Paid 

Mode of expense:- 

• Rent paid for house where assessee/spouse/child shouldn't have any own house where he presently resides.

Max amount of dedction will be lowest of following:

1. Rs. 5,000/- per month
2. 25% of Adjusted Total Income
3. Rent Paid Less 10% of Adjusted Total Income

80GGB/80GGC- Political Party Contribution

Mode of expense:-

• Contribution to political parties made by other than cash

100% of contribution you can take as deduction😃

80TTA:- Deduction in repespect of Interest on Saving bank accounts.

Upto 10,000 you can take benefit of deduction

80U - Deduction for person with disability 

Direct deduction of 75,000, but in case of severe disability deduction is of 1,25,000.

TIP OF THE DAY:

 SPEND LIKE BEGGAR, INVEST LIKE A KING

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