Download the Automated Master of Form 16 Part A&B for Financial Year2016-17 and Assessment Year 2017-18 as per the Finance Budget 2016 [ This Excel Utility can prepare at a time 50 or 100 employees Form 16 Part A&B for F.Y.2016-17]
The deduction under section 80C is allowed from your Gross Total Income. These are available to an Individual or a HUF. The deduction is allowed for various investments, expenses and payments.
Total Deduction under section 80C, 80CCC and 80CCD together cannot exceed Rs 1,50,000 for the financial year 2016-17.
Deduction U/s 80C FOR FINANCIAL YEAR 2016-17
- Investments in PPF – Under the PPF scheme, Rs 1,50,000 is allowed to be invested in one financial year. The minimum investment required is Rs 500. Interest earned on PPF account is tax free. The PPF account matures after 15 years. Receipts on Maturity or withdrawals are tax free. Money is allowed to be withdrawn after 5 years. Contribution to PPF for individual can be in the name of the assessee, the spouse or any child. For a HUF, it can be in the name of any member of the family
- Employee’s share of PF Contribution – Amount deducted from your salary as your contribution in Employee’s Provident Fund Scheme or Recognized Provident Fund.
- Purchase of NSCs – National Savings Certificate e.g. NSC VIII issue and IX issue are eligible for deduction in the year of purchase. These can be bought from designated Post Office. Accrued Interest (which is considered reinvested) qualifies for deduction during the term of the NSCs (except the last year).
- Life Insurance Premium Payment – The policy must be in the assessee’s or spouse’s or any child’s name (child may be dependent/independent, minor/major, or married/unmarried). For a HUF, it may be on life of any member of HUF. The 80C deduction is valid on insurance policies purchased after 1st April, 2012 only if the premium is less than 10% of sum assured. Benefits for existing purchased policies continue. The deduction is also allowed on payments made by Government employees to Central Govt Employees Insurance Scheme.
- Children’s Tuition Fee Payment – Tuition fees paid to any school, college, university or other educational institution situated within India for the purpose of full time education of any two children (including payments for play school, pre nursery and nursery).
- Principal Repayments on Loan for purchase of House Property – Payments of installments or part payments or repayment of loan taken for buying or constructing residential house property. Also allowed for stamp duty, registration fees and other expenses for purpose of transfer of such property to the assessee. However, if 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.
- Investment in Sukanya Samridhi account – A maximum of Rs 1,50,000 can be deposited in the Sukanya Samridhi Account for a girl child. The amount deposited shall earn an interest of 9.1% (for financial year 2016-17). This interest is fully exempt from tax. A minimum of Rs 1,000 must be deposited in a year. Receipts on maturity from the account are tax free.
- ULIPS or Unit Linked Insurance Plan – ULIPS sold with life insurance cover for deduction under section 80C. Includes Contribution to Unit Linked Insurance Plan of LIC Mutual Fund e.g. Dhanraksha 1989 and contribution to Other Unit Linked Insurance Plan of UTI.
- Investment in ELSS – ELSS or Equity Linked Savings Scheme is an Equity Fund. ELSS funds are eligible to be claimed as a deduction under section 80C. These funds have a 3 year lock in period.
- Sum paid for securing Deferred Annuity – Sum paid under non commutable deferred annuity for an individual on the life of the assessee, spouse or any child. Also allowed on sum deducted from salary payable to Govt. Servant for securing deferred annuity for self-spouse or child. Payment limited to 20% of salary.
- Sum deposited in Five Year Deposit Scheme in Post Office.
- Amount deposited under Senior Citizens Saving Scheme.
- Subscription to any notified securities/notified deposits scheme. e.g. NSS
- Contribution to notified Pension Fund set up by Mutual Fund or UTI.
- Sum paid as subscription to Home Loan Account Scheme of the National Housing Bank or contribution to any notified deposit scheme/pension fund set up by National Housing Bank.
- Subscription to deposit scheme of a public sector, company engaged in providing housing finance (public deposit scheme of HUDCO).
- Contribution to notified annuity Plan of LIC (e.g. Jeevan Dhara and Jeevan Akshay) or Units of UTI / notified Mutual Funds.
- Subscription to equity shares/ debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions.
- Subscription to any notified bonds of NABARD (National Bank for Agriculture and Rural Development).
Section 80CCC: Deduction in respect of Premium Paid for Annuity Plan of LIC or Other Insurer
This section provides deduction to an Individual for any amount paid or deposited in any annuity plan of LIC or any other insurer for receiving pension from a fund referred to in Section 10(23AAB).
In case the annuity is surrendered before the date of its maturity, the surrender value is taxable in the year of receipt.
Section 80CCD: Deduction in respect of Contribution to Pension Account
Total Deduction under Section 80C, 80CCC and 80CCD(1) cannot exceed Rs 1,50,000. For FY 2016-17 (assessment year 2017-18)
A new section 80CCD(1B) has been introduced to provide for additional deduction for amount contributed to NPS of up to Rs 50,000. As per the Finance Budget 2015 as the previous Financial Year U/s 80CCD(1) was max Rs.1 Lakh. Hence the additional amount Rs. 50,000/- is include in this Section i.e. total deduction is Rs. 1.5 Lakh + 50 Thousand = 2Lakh U/s 80CCD(1B) and U/s 80CCD(1) HAS REPLACE WITH 80CCD (1B)
Therefore for financial year 2015-16, Total Deduction under Section 80C, 80CCC, 80 CCD(1B) cannot exceed Rs 1,50,000, Under Section 80CCE where maximum deduction Rs.2 Lakh.
Employer’s contribution under section 80CCD(2) towards NPS is excluding the monetary ceiling mentioned above.
Deductions on Savings Bank Account
Section 80 TTA: Deduction from gross total income with respect to any Income by way of Interest on Savings account
Deduction from gross total income of an individual or HUF, up to a maximum of Rs. 10,000/-, in respect of 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.
Deductions on House Rent Paid who have not received HRA.
Section 80GG: Deduction with respect to House Rent Paid :- Max Rs.60,000/-P.A.
- This deduction is available for rent paid when HRA is not received. Assessee or his spouse or minor child should not own residential accommodation at the place of employment.
- Assessee should not be in receipt of house rent allowance.
- He should not have self occupied residential premises in any other place.
Deduction available is the least of
- Rent paid minus 10% of total income
- Rs. 5000/- per month
- 25% of total income
Deductions on Loan for Higher Studies
Section 80E: Deduction with respect to Interest on Loan for Higher Studies
Deduction in respect of interest on loan taken for pursuing higher education. This loan is taken for higher education for the assessee, spouse or children or for a student for whom the assessee is a legal guardian.
Deduction for First Time Home Owners
Section 80EE: Deductions on Home Loan Interest for First Time Home Owners
This section provided deduction on the Home Loan Interest paid and is valid for financial years 2016-17 (Assessment year 2017-18). 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 25 lakhs or less. And the Loan has been sanctioned From 01.04.2016 .The total deduction allowed under this section is Rs 1,50,000.
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 fulfillment of conditions laid down in the section, the deduction is lower of – 50% of amount invested in equity shares or Rs 25,000.
Deductions on Medical Insurance
Section 80D: Deduction in respect of Medical Insurance
For financial year 2016-17 – Deduction is raised from Rs 25,000 to Rs 30,000. 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.
Deductions on Medical Expenditure for a Handicapped Relative
Section 80DD: Deduction in respect of Rehabilitation of Handicapped Dependent Relative
Deduction is available on:
- expenditure incurred on medical treatment, (including nursing), training and rehabilitation of handicapped dependent relative
- Payment or deposit to specified scheme for maintenance of dependent handicapped relative.
Where disability is 40% or more but less than 80% – fixed deduction of Rs 75,000. Where there is severe disability (disability is 80% or more) – fixed deduction of Rs 1,50,000.A certificate of disability is required from prescribed medical authority.
Note: A person with ‘severe disability’ means a person with 80% or more of one or more disabilities as outlined in section 56(4) of the ‘Persons with disabilities (Equal opportunities, protection of rights and full participation)’ Act.
Section 80DDB: Deduction in respect of Medical Expenditure on Self or Dependent Relative
A deduction to the extent of Rs. 80,000/- or the amount actually paid, whichever is less is available for expenditure actually incurred by resident assessee on himself or dependent relative for medical treatment of specified disease or ailment. The diseases have been specified in Rule 11DD. A certificate in form 10 I is to be furnished by the assessee from any Registered Doctor.
In case of senior citizen the deduction can be claimed up to Rs 80,000 or amount actually paid, whichever is less.
For financial year 2016-17 – for very senior citizens Rs 80,000 is the maximum deduction that can be claimed.
Deductions on Person suffering from Physical Disability
Section 80U: Deduction with respect to Person suffering from Physical Disability
Deduction of Rs. 75,000/- to an individual who suffers from a physical disability (including blindness) or mental retardation. Further, if the individual is a person with severe disability, deduction of Rs. 1,25,000/- shall be available u/s 80U. Certificate should be obtained from a Govt. Doctor. The relevant rule is Rule 11D.
Section 80G: Deduction for donations towards Social Causes
The various donations specified in Sec. 80G are eligible for deduction up to either 100% or 50% with or without restriction as provided in Sec. 80G. 80G deduction not applicable in case donation is done in form of cash for amount over Rs 10,000.
Donations with 100% deduction without any qualifying limit:
- National Defence Fund set up by the Central Government
- Prime Minister’s National Relief Fund
- National Foundation for Communal Harmony
- An approved university/educational institution of National eminence
- Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
- Fund set up by a State Government for the medical relief to the poor
- National Illness Assistance Fund
- National Blood Transfusion Council or to any State Blood Transfusion Council
- National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
- National Sports Fund
- National Cultural Fund
- Fund for Technology Development and Application
- National Children’s Fund
- Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
- the Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
- The Maharashtra Chief Minister’s Relief Fund during October 1, 1993 and October 6,1993
- Chief Minister’s Earthquake Relief Fund, Maharashtra
- Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
- Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat (contribution made during January 26, 2001 and September 30, 2001) or
- Prime Minister’s Armenia Earthquake Relief Fund
- Africa (Public Contributions — India) Fund
- Swachh Bharat Kosh (applicable from financial year 2014-15)
- Clean Ganga Fund (applicable from financial year 2014-15)
- National Fund for Control of Drug Abuse (applicable from financial year 2015-16)
Donations with 50% deduction without any qualifying limit.
- Jawaharlal Nehru Memorial Fund
- Prime Minister’s Drought Relief Fund
- Indira Gandhi Memorial Trust
- The Rajiv Gandhi Foundation
Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income
- Government or any approved local authority, institution or association to be utilised for the purpose of promoting family planning
- Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India.
Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income
- Any other fund or any institution which satisfies conditions mentioned in Section 80G(5)
- Government or any local authority to be utilised for any charitable purpose other than the purpose of promoting family planning
- Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both
- Any corporation referred in Section 10(26BB) for promoting interest of minority community
- For repairs or renovation of any notified temple, mosque, gurudwara, church or other place.