[This post explains about tax rebates available to individuals under sections 80C, 80CCC,80CCD (1A), 80CCD(1B),80CCE,80D,80 DD,80DDB, 80E,80EE, 80EEE,80G,80U, 80TTA,80 TTB, 87A,10(13A) and section 24 of Income Tax Act 1961 which offer tax rebate and deductions to individuals]
1). Section 80 C: Individuals are eligible for the tax rebate on their investments u/s 80 (C) of IT act to the maximum limit of Rs. 150000.00 (Rupees one lakh and fifty thousand) in a financial year (applicable for FY 2015-2016). Contribution to EPF, NPS, PPF, Senior Citizen Savings Scheme,investments in NSC,/ Equity Linked Saving Schemes (ELSS), Unit Linked Insurance Policies (ULIPs), Sukanya Samriddhi Scheme, Tax Saving term deposits of banks, premium paid on Life Insurance policy, tuition fee for maximum two children (fees for private tuition/ coaching classes are not eligible) and repayment of Housing Loan, are the investments eligible for tax rebate under Sec.80 C of IT act.
2).Section 80CCC: Contribution to certain pension funds like Annuity plan of LIC and other insurers.
3).Section 80 CCD (1A): The deduction under section CCD (1A) is available to both salaried and non-salaried individuals who contribute NPS scheme to the extent of Rs.150000/- (Rupees one lakh and fifty thousand). However, the maximum amount allowed as deduction is 10% of salary in a financial year and in the case of non- salaried individuals 10% of Gross total income in a financial year.
4). Section 80 CCD (1B): Deduction towards contribution to New Pension Scheme by the employee. In the budget 2015, a contribution of Rs.50000/- to NPS qualifies for tax rebate in addition to Rs.150000/- u/s.80CCE.
5). Section 80CCE: Total limit of deduction eligible u/s -80C, u/s 80CCC 80 CCD (1) is Rs.150000/-(Rupees one lakh and fifty). In the budget 2015, an additional rebate of Rs.50000/- allowed for the contribution to NPS (u/s. 80CCD (1B) announced by the Finance Minister. Hence total limit under 80CCE for the FY 2015-16 is Rs.200000/-.
6). Section 80D: Deduction under this section is available to an individual or a HUF. A deduction of Rs. 25,000 can be claimed for insurance of self, spouse and dependent children. An additional deduction for insurance of parents is available to the extent of Rs 25,000 if they are less than 60 years of age or Rs 50,000/- if parents are more than 60 years old. In case, a taxpayers age and parents age is 60 years or above, the maximum deduction available under this section is to the extent of Rs. 100,000. .The amount spent on preventive health check-up (maximum of Rs.5000/-.) is subsumed under this limit.Payment for preventive health check-up (measures taken for disease prevention, as opposed to disease treatment like master check up etc.), however, can be made in cash.
7).Section 80 DD: Disability related tax benefit in case of the dependent spouse, child, parent or sibling who is disabled. A deduction of Rs.75000/- for partial disability and Rs.125000/- for severe disability is allowed in the FY 2015-16. The full amount of deduction will be allowed, without insisting bills/insurance premium paid by the income tax office.[For conditions for assesment of partial or full disability, read paragrph under sec. 80 U]
8). Section 80DDB: Tax rebate on medical treatment expenditure for treatment of specified diseases like malignant cancer, or AIDS for self and dependents, the deduction allowed up to Rs.40000/-(Rs.60000/- if the patient is above 60 years).
Now as per Budget 2018, from FY 2018-’19 onwards increase in deduction limit for medical expenditure for certain critical illness increased to Rs.1 lakh to for all senior citizens of above 60 years under section 80 DDB. (which is at present Rs.60000/- for senior citizen & Rs.80000/-for very senior citizen).
9). Section 80E: An individual can claim income tax deduction for interest paid on education loan availed for self, spouse or his/her children u/s 80E of IT Act. The guardian appointed by the Court for a minor student is also eligible for tax deduction under the same section. One more benefit is that no upper limit for claiming deduction either on the amount of interest paid or rate of interest paid. The deduction can be claimed up to 8 years or closure of the loan whichever is earlier.If the interest is paid during the moratorium period, the time limit of 8 years begins from the date of the first repayment of interest on the loan. It is important to note that the tax benefit is restricted for education loan availed from the bank, notified financial or charitable institutions. In the other words, the education loan availed from the employer, family and friends does not come u/s 80E. Education loan availed for studies abroad is also eligible for tax deduction u/s 80E.
10).Section 80 EE: An additional exemption of Rs.50000/- per annum towards interest paid by the first time house buyers with effect from April 1, 2016, available u/s.80EE. The Housing loans up to Rs.35 lakh sanctioned by a bank in the financial year 2016-17 and the value of the property purchased under the loan is below Rs.50 lakh is eligible for the deduction. (Announced by the Finance Minister in his budget speech on February 29, 2016).
11).Section 80EEE: First time home buyers (the person who does not already own a house property in his name), who has availed a housing loan of Rs.25 lakhs or below on or after 01.04.2013, can claim additional tax deduction of Rs.100000.00 (Rupees one lakh) on interest paid on that loan under section 80EEE subject to condition that the value of residential property should not exceed Rs.40 lakh (Rupees forty lakh). If the interest paid is less than Rs.100000.00 (one lakh), in the first year, the unclaimed deduction can be utilised in the subsequent year.(It is important to note that a deduction up to Rs.200000.00 (Rupees two lakh) on taxable income separately allowed under section 24.
12). Section 80G: Tax rebate can be claimed on specific donations to make prescribed funds and institutions. Tax benefit u/s 80G is eligible for the amount of donation within 10% of gross income. Donation in excess of 10% gross income in a financial year is not eligible for tax exemption. It is essential to make cash or cheque payment towards the donation to be eligible for tax exemption.
13).Section 80GG: The individual tax assessees who do not get House Rent Allowance from their employers were eligible for the rent paid on their house up to a maximum limit of Rs.2000/- per month (Rs.24000/-per annum). With effect from April 1, 2016, the above limit of deduction allowed is increased from Rs.24000/- p.a to Rs.60000/- p.a.
14). Section 80 U: Disability related tax benefit to an individual: A deduction of Rs.75000/- for partial disability and Rs.125000/- for severe disability is allowed in the FY 2015-16. The full amount of deduction will be allowed irrespective of the amounts of expenses incurred or insurance premium paid. An individual suffering from disability himself gets tax benefit under Section 80U, while an individual gets tax benefits under Section 80DD if any dependent family member of the individual is suffering from a disability.
[Every individual claiming deduction u/s 80DD or 80U shall produce a copy of medical certificate issued by the appropriate authority in the form and manner as may be prescribed along with the return of income u/s.139 of IT act. Where the condition of disability requires the reassessment of its extent after a period is stipulated in the certificate, deductions are allowed after the expiry period mentioned in the certificate only after the new certificate is obtained. The disabled means above 40% of disabilities to a person ( above 80% is considered as severe disability) due to diseases like blindness, low vision, leprosy-cured, hearing impairment, locomotor disability, mental retardation, mental illness, Autism, cerebral palsy etc.]
15).Section 80 TTA:Threshold for TDS on interest income from deposits with banks and post offices increased from Rs.10000/- to 40000/- u/s 80 TTA in the interim budget 2019.
16) Section 80 TTB: From Financial year 2018-19, Senior citizens who have received deposit interest (including SB and Recurring Deposits interest) up to Rs.50000/- in a finacial year are exempted from tax under Sec.80TTB. However, Senior Citizens whose aggregate annual deposit interest income exceeds Rs 50,000/- need to pay Income tax only for deposit interest income over and above Rs 50,000/-. Further, aggregate annual deposit interest income upto Rs 50,000/- for Senior Citizens is also exempted from TDS and they need not submit form 15 H for the annual deposit interest income up to Rs 50,000/-.With the introduction of Sec 80 TTB, Sec 80 TTA will not be applicable to Senior Citizens –ie SB interest exemption of Rs 10,000/- is not separately available to senior citizens. Exemption under Section 80 TTA is available to others who are not Senior r Citizens.
A). Actual House Rent received from the employer
B). Actual House rent paid to the landlord minus 10% of basic salary*
C). 50% of employee’s basic salary if he/she leaves in Metro cities or 40%of basic salary* in non-metro areas.
*Basic Salary is inclusive of DA (wherever commission received by the employee on the basis of fixed percentage of turnover achieved by the employee that income also to be included in basic salary).
The deduction will be available only for the period of occupying the rented house, not for the entire year. At least two rent receipts to be produced as evidence of rent- paid, one rent receipt at the beginning of the financial year and another one receipt at the end of the financial year. The rent paid receipts should duly on the revenue stamp by the landlord. People who pay rent less than Rs.3000/-per month need not produce rent receipt.Section 87(A)
17). Section 87(A) : Full tax rebate on taxable income (after all applicable deductions) up to Rs. 5 Lakh under section 87 A.
Previously for FY 2017- 18, tax rebate of 10 % up to the limit of Rs.350000/- maximum Rs.2500/- and for the FY 2016-17) an assessee whose taxable income is less than Rs.5 lakh was eligible for tax credit of 10% of taxable income. (Maximum of Rs. 5000/-) u/s.87A
18).Section 24: In addition to the rebate on repayment of housing loan principal amount under section 80 C, the interest portion paid on housing loan offers a deduction up to Rs.200000.00 (Rupees two lakh) on taxable income separately under section 24.
If the house is not self-occupied: The entire amount of interest paid on housing loan is eligible for deduction under section 24 for the FY 2016-17. For the year 2017-18, claim under this head is restricted to Rs.2 lakh.
The Method of computation of Income/Loss from House property under Sec 24(If the house is not self-occupied):