Page 113 - DCOM301_INCOME_TAX_LAWS_I

Income Tax Laws – I

Notes 28. The ……………………..of the political party is required to file a return of income if the
total income exceeds the maximum amount which is not chargeable to income-tax.
29. …………………………..means a trust so approved by the Board in accordance with the
scheme made in this regard by the Central Government.

4.8 Allowable Deductions from Gross Total Income

There are different tax saving options i.e. Allowable Deductions or Exemption under Income
Tax, are given under chapter VIA of the Income Tax Act, 1961. Summary of different tax saving
section under which person can claim deduction or exemption from total Income are given
below:
1. Section 80C: This section has been introduced by the Finance Act 2005. Broadly speaking,
this section provides deduction from total income in respect of various investments or
expenditures or payments in respect of which tax rebate u/s 88 was earlier available. The
total deduction under this section (along with section 80CCC and 80CCD) is limited to
` 1 lakh only. These include:
(a) Life Insurance Premium for individual, policy must be in self or spouse’s or any
child’s name. For HUF, it may be on life of any member of HUF.
(b) Sum paid under contract for deferred annuity for individual, on life of self, spouse
or any child.
(c) Sum deducted from salary payable to Govt. Servant for securing deferred annuity
for self-spouse or child Payment limited to 20% of salary.

(d) Contribution made under Employee’s Provident Fund Scheme.
(e) Contribution to PPF for individual can be in the name of self/spouse, any child and
for HUF, it can be in the name of any member of the family.

(f) Contribution by employee to a Recognised Provident Fund.
(g) Sum deposited in 10 year/15 year account of Post Office Saving Bank
(h) Subscription to any notified securities/notified deposits scheme. e.g. NS
(i) Subscription to any notified savings certificate, Unit Linked Savings certificates. E.g.
NSC VIII issue.
(j) Contribution to Unit Linked Insurance Plan of LIC Mutual Fund e.g. Dhanrakhsa
1989
(k) Contribution to notified deposit scheme/Pension fund set up by the National
Housing Scheme.

(l) Certain payment made by way of instalment or part payment of loan taken for
purchase or construction of residential house property.

!

Caution Condition has been laid that in case the property is transferred before the expiry
of 5 years from the end of the financial year in which possession of such property is
obtained by him, the aggregate amount of deduction of income so allowed for various
years shall be liable to tax in that year.

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