Income Tax

Income Tax- Section wise Deductions for A.Y. 2020-21/F.Y. 2019-20

section wise income tax deductions for fy 2019-20
SectionNature of DeductionWho can claim ?
Against Salaries
16(ia)Standard Deduction [Rs. 50,000 or the amount of salary, whichever is lower]Individual – Salaried Employee & Pensioners
16(ii)Entertainment allowance [actual or at the rate of 1/5th of salary, whichever is less] [limited to Rs. 5,000]Government employees
16(iii)Professional Tax upto Rs 2500Salaried assessees
Against income from House Property
23(1), first provisoTaxes levied by local authority and borne by owner if paid in relevant previous yearAll assessees
24(a)Standard deduction [30% of the annual value (gross annual value less municipal taxes)]All assessees
24(b)Interest on borrowed capital (Rs. 30,000/Rs. 2,00,000, subject to specified conditions)All assessees
25A(2)Standard deduction of 30 per cent of arrears of rent or unrealised rent receivedAll assessees
Against Capital Gains
48(i)Expenditure incurred wholly and exclusively in connection with transfer of capital assetAll assessees
48(ii)Cost of acquisition of capital asset and of any improvement thereto (indexed cost of acquisition and indexed cost of improvement, in case of long-term capital assets)All assessees
54Long-term capital gains on sale of residential house and land appurtenant thereto invested in purchase/construction of another residential house8 (subject to certain conditions and limits)Individual/HUF
54BCapital gains on transfer of land used for agricultural purposes, by an individual or his parents or a HUF, invested in other land for agricultural purposes (subject to certain conditions and limits)Individual/HUF
54DCapital gains on compulsory acquisition of land or building forming part of an industrial undertaking invested in purchase/construction of other land/building for shifting/re-establishing said undertaking or setting up new industrial undertaking (subject to certain conditions and limits)Any assessee
54EELong-term capital gain invested in long-term specified assets being units of such fund as may be notified by Central Government to finance start-upsAll assesses
54FNet consideration on transfer of long-term capital asset other than residential house invested in residential house10 (subject to certain conditions and limits)Individual/HUF
54GCapital gain on transfer of machinery, plant, land or building used for the purposes of the business of an industrial undertaking situate in an urban area (transfer being effected for shifting the undertaking to a non-urban area) invested in new machinery, plant, building or land, in the said non-urban area, expenses on shifting, etc. (subject to certain conditions and limits)Any assessees
54GAExemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area to any Special Economic Zone (subject to certain conditions and limits)All assessees
54GBExemption in respect of capital gain arising from the transfer of a long-term capital asset, being a residential property (a house or a plot of land), owned by the eligible assessee, and such assessee before the due date of furnishing of return of income under sub-section (1) of section 139 utilises the net consideration for subscription in the equity shares of an eligible company and such company has, within one year from the date of subscription in equity shares by the assessee, utilised this amount for purchase of specified new asset (subject to certain conditions and limits)Individual/HUF
Against Income from Other Sources
I. Deductible Items
57(i)Any reasonable sum paid by way of commission or remuneration for purpose of realising dividend (other than dividends referred to in section 115-O)All assessees
57(i)Any reasonable sum paid by way of commission or remuneration for the purpose of realising interest on securitiesAll assessees
57(ia)Contributions to any provident fund or superannuation fund or any fund set up under Employees’ State Insurance Act, 1948 or any other fund for welfare of employees, if the same are credited to employees’ accounts in relevant funds before due dateAll assessees
57(ii)Repairs, insurance, and depreciation of building, plant and machinery and furnitureAssessees engaged in business of letting out of machinery, plant and furniture and buildings on hire
57(iia)In case of family pension, 331/3 per cent of such pension or Rs. 15,000, whichever is lessAssessees in receipt of family pension on death of employee being member of assessee’s family
57(iii)Any other expenditure (not being capital expenditure) expended wholly and exclusively for earning such incomeAll assessees
57(iv)In case of interest received on compensation or on enhanced compensation referred to in section 145A(2), a deduction of 50 per cent of such income (subject to certain conditions)All assessees
Against Income from Other Sources
II. Non-Deductible Items
58(1)(a)(i)Personal expensesAll assessees
58(1)(a)(ii)Interest chargeable to tax which is payable outside India on which tax has not been paid or deducted at sourceAll assessees
58(1)(a)(iii)‘Salaries’ payable outside India on which no tax is paid or deducted at sourceAll assessees
58(1A)Disallowance due to TDS default
(Covered by section 40(a)(ia) and 40(a)(iia))
All assessees
58(2)Expenditure of the nature specified in section 40AAll assessees
58(4)Expenditure in connection with winnings from lotteries, crossword puzzles, races, games, gambling or bettingAll assessees
For specific payments
80Ca. Life insurance premium for policy
b. Sum paid under a contract for a deferred annuity
c. Sum deducted from salary payable to Government servant for securing deferred annuity or making provision for his wife/children [qualifying amount limited to 20% of salary]
d. Contributions by an individual made under Employees’ Provident Fund Scheme
e. Contribution to Public Provident Fund Account
f. Contribution by an employee to a recognized provident fund
g. Contribution by an employee to an approved superannuation fund
h. Subscription to any notified security or notified deposit scheme of the Central Government
i. Tuition fees
j. Certain payments for purchase/construction of residential house property
k. Term deposits for a fixed period of not less than 5 years with a scheduled bank
l. Subscription to notified bonds issued by the NABARD
m. Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004
n. 5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions)
Individual/HUF
80CCCContributions to certain pension funds of LIC or any other insurer (up to Rs. 1,50,000)Individual
80CCDContribution to pension scheme notified by Central Government up to 10% of salary (subject to certain conditions and limits)15
Contribution made by employer shall also be allowed as deduction under section 80CCD(2) while computing total income of the employee. However, amount of deduction could not exceed 14% of salary where contribution is made by central government and 10% of salary. Where contribution is made by any other employee.
Individual
80DAmount paid (in any mode other than cash) by an individual or HUF to LIC or other insurer to effect or keep in force an insurance on the health of specified person. An individual can also make payment to the Central Government health scheme and/or on account of preventive health check-up (subject to limit)Individual/HUF
■ specified person means:
– In case of Individual – self, spouse, dependent children or parents

– In case of HUF – Any member thereof

■ Deduction for preventive health check-up shall not exceed in aggregate Rs. 5,000.

■ Payment on account of preventive health check-up may be made in cash.
Individual/HUF
80DDBExpenses actually paid for medical treatment of specified diseases and ailments subject to certain conditionsResident Individual/HUF
80EAmount paid out of income chargeable to tax by way of payment of interest on loan taken from financial institution/approved charitable institution for pursuing higher educationIndividual
80EEInterest payable on loan taken by an individual from any financial institution for the purpose of acquisition of a residential house property subject to certain condition. (Maximum deduction 50,000)Individual
80EEAInterest payable on loan taken by an individual, who is not eligible to claim deduction under section 80EE, from any financial institution for the purpose of acquisition of a residential house property subject to certain condition. (Maximum deduction 1,50,000)Individual
80EEBInterest payable on loan taken by an individual from any financial institution for the purpose of purchase of an electric vehicle subject to certain condition. (Maximum deduction 1,50,000)Individual
80GGRent paid in excess of 10% of total income for furnished/unfurnished resi-dential accommodation (subject to maximum of Rs. 5,000 p.m. or 25% of total income, whichever is less)Individuals not receiving any house rent allowance
80GGACertain donations for scientific, social or statistical research or rural development programme or for carrying out an eligible project or scheme or National Urban Poverty Eradication FundAll assessees not having any income chargeable under the head ‘Profits and gains of business or profession’
80GGBSum contributed to any political party/electoral trustIndian company
80GGCSum contributed to any political party/electoral trustAll assessees, other than local authority and artificial juridical person wholly or partly funded by Government
80QQBRoyalty income of author of certain specified category of books (up to Rs. 3,00,000)Resident Individual – Author
80TTA Interest on deposits in savings bank accounts (up to Rs. 10,000 per year)Individuals/HUFs (except Senior Citizen)
80TTBInterest on deposit in saving account or fixed deposit (upto Rs. 50,000 per year)Senior citizen
87ATax rebate in case of individual resident in India, whose total income does not exceed Rs. 5,00,000 quantum of rebate shall be an amount equal to hundred per cent of such income-tax or an amount of Rs. 12,500, whichever is less.Individual