Page 209 - DMGT515_PERSONAL_FINANCIAL_PLANNING

Personal Financial Planning

Notes 2 80CCC Deduction in case of contribution to pension Maximum is ` 1,00,000
fund. However, it should be noted that
surrender value or employer contribution is
considered income.
3 80CCD Deduction in respect to contribution to new Maximum is sum of employer’s and
pension scheme. Employees of central and employee’s contribution to the
others are eligible. maximum : 10 % of salary.
4 It should be noted that as per section 80CCE , the maximum amount of deduction
which can be claimed in aggregate of 80C, 80CCC & 80CCD is
` 1,00,0000
5 80D Medical insurance on self, spouse , children ` 15,000 for self , spouse & children
or parents Extra ` 15,000 for insurance on parents. IF
parents are above 65 years, extra sum
should be read as ` 20,000
Thus maximum is ` 35,000 per annum
6 80DD For maintenance including treatment or ` 50,000 . In case disability is severe, the
7insurance the lives of physical disable amount is ` 1,00,000.
dependent relatives
7 80DDB For medical treatment of self or relatives Acutal amount paid to the extent of
suffering from specified disease ` 40,000. In case of patient being
Sr Citizen , amount is ` 60,000
8 80E For interest payment on loan taken for Actual amount paid as interest and start
higher studies for self or education of spouse from the financial year in which he/she
or children starts paying interest and runs till the
interest is paid in full.
9 80G Donations to charitable institution 100% or 50% of amount of donation made
to 19 entities (National defense fund ,
Prime minister relief fund etc. )
10 80GG For rent paid. This is only for people not getting any
House Rent Allowance. Maximum is
` 2000 per month. Rule 11B is method of
computation.
11 80GGA For donation to entities in scientific research Only those tax payers who have no
or rural development business income can claim this
deduction. Maximum is equivalent to
100 % of donation.
12 80GGC For contribution to political parties 100 % of donations
13 80QQB Allowed only to resident authors for royalty Royalty income or ` 3,00,000 whichever is
income for books other than text book less.
14 80RRB For income receipt as royalty on patents of Actual royalty or ` 3,00,000 whichever is
resident individuals less.
15 80U Deduction in respect of permanent physical ` 50,000 which goes to ` 1,00,000 in case
disability including blindness to taxpayer taxpayer is suffering from severe
disability.

Section 80C

Section 80C replaced the existing Section 88 with more or less the same investment mix available
in Section 88. The new section 80C has become effective w.e.f. 1st April, 2006. Even the section
80CCC on pension scheme contributions was merged with the above 80C. However, this new
section has allowed a major change in the method of providing the tax benefit. Section 80C of
the Income Tax Act allows certain investments and expenditure to be tax-exempt. One must plan
investments well and spread it out across the various instruments specified under this section to

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