25/11/2015 Deductionsallowabletotaxpayer

DEDUCTIONS
[AY201617]
Section Natureofdeduction Whocanclaim
(1) (2) (3)
Against'salaries'
16(ii) Entertainment allowance [actual or at the rate of 1/5th of Governmentemployees
salary,whicheverisless][limitedtoRs.5,000]
16(iii) Employmenttax Salariedassessees
Against'incomefromhouseproperties'
23(1),first Taxesleviedbylocalauthorityandbornebyownerifpaid Allassessees
proviso inrelevantpreviousyear
24(a) Standarddeduction[30%oftheannualvalue(grossannual Allassessees
valuelessmunicipaltaxes)]
24(b) Interest on borrowed capital (Rs. 30,000/Rs. 1,50,0001, Allassessees
subjecttospecifiedconditions)
25B Standard deduction of 30 per cent of arrears of rent All assessees who has
received receivedarrearsofrent
Against'profitsandgainsofbusinessorprofession'
A.Deductibleitems

30 Rent, rates, taxes, repairs (excluding capital expenditure) Allassessees

andinsuranceforpremises
31 Repairs (excluding capital expenditure) and insurance of Allassessees
machinery,plantandfurniture
32(1)(i) Depreciation2 in respect of following assets shall be Taxpayerengagedinbusiness
allowedatprescribedpercentageonactualcostofanasset of generation or generation
(i.e.,StraightLineMethod): anddistributionofpower.
i. Tangible Assets (buildings, machinery, plant or
furniture)
ii. Intangible Assets (knowhow, patents, copyrights,
trademarks,licenses,franchises,oranyotherbusiness
orcommercialrightsofsimilarnature).
However, if asset is acquired and put to use for less than
180 days during the previous year, the deduction shall be
restrictedto50%ofdepreciationcomputedabove.
Note:
Taxpayersengagedinbusinessofgenerationorgeneration
and distribution of power have the option to claim
depreciationonwrittendownvaluebasisalso
32(1)(ii) Depreciation2 in respect of following assets shall be All assessees engaged in
allowedatprescribedpercentageonwrittendownvalueof businessorprofession
eachblockofasset(asperWDVmethod):
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25/11/2015 Deductionsallowabletotaxpayer

i. Tangible Assets (buildings, machinery, plant or

furniture)
ii. Intangible Assets (knowhow, patents, copyrights,
trademarks,licenses,franchises,oranyotherbusiness
orcommercialrightsofsimilarnature).
However, if asset is acquired and put to use for less than
180 days during the previous year, the deduction shall be
restrictedto50%ofdepreciationcomputedabove.

32(1)(iia) Additional depreciation shall be allowed at 20% of actual Alltaxpayersengagedin:

costofnewplantandmachinery[otherthanships,aircraft, a) manufacture or
office appliances, second hand plant or machinery, etc.] production of any
(Subjecttocertainconditions). articleorthingor
However,ifanassetisacquiredandputtouseforlessthan b) generation or generation
180 days during the previous year, 50% of additional ordistributionofpower
depreciation shall be allowed in year of acquisition and (if taxpayer is not
balance50%wouldbeallowedinthenextyear. claiming depreciation
onstraightlinebasis).
Provisoto Additional depreciation shall be allowed at 35% of actual All taxpayers settingup an
Section costofnewplantandmachinery[otherthanships,aircraft, undertaking or enterprise for
32(1)(iia) office appliances, second hand plant or machinery, etc.] production or manufacture of
(Subjecttocertainconditions). any article or thing in any
However,ifanassetisacquiredandputtouseforlessthan notifiedbackwardareainthe
180 days during the previous year, 50% of additional state of Andhra Pradesh,
depreciation shall be allowed in year of acquisition and Bihar, Telangana or West
balance50%wouldbeallowedinthenextyear. Bengal.
Note:
1.ManufacturingunitshouldbesetuponorafterApril
1,2015.
2. New plant and machinery should be acquired and
installedonorafterApril1,2015butbeforeApril1,
2020.
32AC Investment allowance shall be allowed at 15% of actual Company engaged in
cost of new asset acquired and installed by a company business of manufacturing or
engagedinbusinessormanufacturingorproductionofany production of any article or
articleorthing(Subjecttocertainconditions) thing.
Note:
Deductionshallbeavailableifactualcostofnewplantand
machinery acquired and installed by the company during
the previous year exceeds Rs. 25/100 Crores, as the case
maybe

32AD Investment allowance shall be allowed at 15% of actual All taxpayers who acquire
costofinvestmentmadeinnewplantandmachinery(other new plant and machinery for
thanships,aircraft,vehicle,officeappliances,secondhand purpose of settingup
plantormachinery,etc.)ifmanufacturingunitissetupin manufacturingunitinnotified
notified backward area in the State of Andhra Pradesh, backwardareasintheStateof

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25/11/2015 Deductionsallowabletotaxpayer

Bihar, Telangana or West Bengal (subject to certain Andhra Pradesh, Bihar,

conditions). TelanganaorWestBengal
Note:
1.Newassetshouldbeacquiredandinstalledonorafter
April1,2015butbeforeApril1,2020.
2.ManufacturingunitshouldbesetuponorafterApril
1,2015.
3. Deduction shall be allowed under Section 32AD in
additiontodeductionunderSection32ACifassessee
fulfilsthespecifiedconditions.
33A Development allowance 50 per cent of actual cost of Assesseeengagedinbusiness
planting(subjecttocertainconditionsandlimits)(planting of growing and
shouldhavebeencompletedbefore141990) manufacturingteainIndia
33AB Tea/Coffee/Rubber Development Account Amount Assessees engaged in
depositedinaccountwithNationalBank(SpecialAccount) business of growing and
or in Deposit Account of Tea Board, Coffee Board or manufacturing
RubberBoardinaccordancewithapprovedschemeor40% tea/Coffee/RubberinIndia
ofprofitsofbusiness,whicheverisless(subjecttocertain
conditions)
33ABA Amount deposited in Special Account with SBI/Site Assessee carrying on
RestorationAccountor20percentofprofits,whicheveris business of prospecting for,
less(subjecttocertainconditions) or extraction or production
of, petroleum or natural gas
orbothinIndia
35(1)(i) Revenue expenditure on scientific research pertaining to Allassessee
business of assessee is allowed as deduction (Subject to
certainconditions).
Note:
Expenditure on scientific research incurred within 3 years
before commencement of business (in the nature of
purchase of materials and salary of employees other than
perquisite) is allowed as deduction in the year of
commencement of business to the extent certified by
prescribedauthority.

35(1)(ii) 175% of contribution made to approved research Allassessee

association, university, college or other institution to be
used for scientific research shall be allowed as deduction
(Subjecttocertainconditions)
35(1)(iia) 125% of contribution made to an approved company Allassessee
registered in India to be used for the purpose of scientific
research is allowed as deduction (Subject to certain
conditions)
35(1)(iii) 125% of contribution made to approved research Allassessee
association, university, college or other institution with
objects of undertaking statistical research or research in

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social sciences shall be allowed as deduction (Subject to

certainconditions)
35(1)(iv) Capital expenditure incurred during the year on scientific Allassessee
readwith researchrelatingtothebusinesscarriedonbytheassessee
35(2) isallowedasdeduction(Subjecttocertainconditions)
Capital expenditure incurred within 3 years before
commencement of business is allowed as deduction in the
yearofcommencementofbusiness.
Note:
i. Capital expenditure excludes land and any interest in
land
ii.Nodepreciationshallbeallowedonsuchassets.
35(2AA) 200% of payment made to a National Laboratory or Allassessee
University or an Indian Institute of Technology or a
specifiedpersonisallowedasdeduction(Subjecttocertain
conditions).
The payment should be made with the specified direction
that the sum shall be used in a scientific research
undertakenunderanapprovedprogramme.
35(2AB) 200% of any expenditure incurred by a company on Company engaged in
scientificresearch(includingcapitalexpenditureotherthan businessofbiotechnologyor
on land and building) on inhouse scientific research and in any business of
development facilities as approved by the prescribed manufacturing or production
authoritiesshallbeallowedasdeduction(Subjecttocertain ofeligiblearticlesorthings
conditions).
Note:
i. Company should enter into an agreement with the
prescribedauthorityforcooperationinsuchresearch
and development and fulfils such conditions with
regard to maintenance of accounts and audit thereof
and furnishing of reports in such manner as may be
prescribed
ii.Deductionunderthisprovisionwouldbeallowedonly
upto3132017.
35A Expenditure incurred before 141998 on acquisition of Allassessees
patentrightsorcopyrights[equaltoappropriatefractionof
expenditureonacquisitiontobedeductedinfourteenequal
annual instalments beginning with previous year in which
such expenditure has been incurred] (subject to certain
conditions)
35AB Lumpsumpaymentmadeinanypreviousyearrelevantto Allassessees
assessment year commencing on or before 141998, for
acquisition of technical knowhow [consideration for
acquisition to be deducted in six equal annual instalments
(3equalannualinstalmentswhereknowhowisdeveloped
in certain laboratories, universities and institutions)]
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(subjecttocertainconditions)
35ABB Expenditure incurred for obtaining licence to operate Allassessees
telecommunication services either before commencement
of such business or thereafter at any time during any
previousyear
35AC Expenditure by way of payment of any sum to a public Allassessees
sector company/local authority/approved association or
institution for carrying out any eligible scheme or project
(subjecttocertainconditions)
35AD Capital expenditure incurred, wholly and exclusively, for Allassessees
the purpose of any specified business [setting up and
operating a cold chain facility setting up and operating a
warehousing facility for storage of agricultural produce
layingandoperatingacrosscountrynaturalgasorcrudeor
petroleum oil pipeline network for distribution, including
storage facilities being an integral part of such network
buildingandoperating,anywhereinIndia,ahoteloftwo
star or above category as classified by the Central
Governmentbuilding and operating, anywhere in India, a
hospital with at least one hundred beds for patients
developingandbuildinganotifiedhousingprojectundera
schemeforslumredevelopmentorrehabilitationframedby
the Government, as the case may be, in accordance with
prescribed guidelines developing and building a notified
housing project under a scheme for affordable housing
framed by the Government, as the case may be, in
accordance with prescribed guidelines production of
fertilizer in India setting up and operating an inland
container depot or a container freight station which is
approved/notified under the Customs Act, 1962 bee
keepingandproductionofhoneyandbeeswaxandsetting
up and operating a warehousing facility for storage of
sugar5,carriedonbytheassesseeduringthepreviousyear
in which such expenditure is incurred (subject to certain
conditions)

35CCA Payment to associations/institutions for carrying out rural Allassessees

developmentprogrammes(subjecttocertainconditions)
35CCB Expenditure incurred before 142002 by way of payment Allassessees
to approved associations/institutions for carrying out
approvedprogrammesofconservationofnaturalresources
orafforestation(subjecttocertainconditions)
35CCC Oneandahalftimesofexpenditureonnotifiedagricultural Allassessees
extensionproject(subjecttocertainconditions)
35CCD One and a half times of expenditure on notified skill Acompany
developmentproject(subjecttocertainconditions)
35D Amortisationofcertainpreliminaryexpenses[deductiblein Indian companies and
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5equalannualinstalments](subjecttocertainconditions) resident noncorporate

assessees
35DD Amortisation of expenditure incurred after 3131999 in IndianCompany
caseofamalgamationordemergerinthehandsofanIndian
company (onefifth of such expenditure for 5 successive
previousyears)(subjecttocertainconditions)

35DDA Amortisation of expenditure incurred under voluntary Allassessees

retirement scheme in 5 equal annual instalments starting
withtheyearwhentheexpenditureisincurred
35E Expenditure on prospecting, etc., for certain minerals Indian companies and
[deductible in ten equal annual instalments] (subject to resident noncorporate
certainconditions) assessees engaged in
prospecting,etc.,forminerals
36(1)(i) Insurancepremiumcoveringriskofdamageordestruction Allassessees
ofstocks/stores
36(1)(ia) Insurance premium covering life of cattle owned by a Federal milk cooperative
memberofcooperativesocietyengagedinsupplyingmilk societies
tofederalmilkcooperativesociety
36(1)(ib) Medical insurance premium paid by any mode other than Allassesseesasemployers
cash,toinsureemployee'shealthunder(a)schemeframed
byGICofIndiaandapprovedbyCentralGovernmentor
(b) scheme framed by any other insurer and approved by
IRDA
36(1)(ii) Bonusorcommissionpaidtoemployees Allassessees
36(1)(iii) Interestonborrowedcapital3 Allassessees
36(1)(iiia) Prorataamountofdiscountonazerocouponbondbased Allassessees
onlifeofsuchbondandcalculatedinprescribedmanner
36(1)(iv) Contributions to recognised provident fund and approved Allassesseesasemployers
superannuation fund [subject to certain limits and
conditions]
36(1)(iva) Anysumpaidbyassesseeemployerbywayofcontribution Allassesseesasemloyers
towardsapensionscheme,asreferredtoinsection80CCD,
onaccountofanemployeetotheextentitdoesnotexceed
10percentoftheemployee'ssalaryinthepreviousyear.
36(1)(v) Contributionstoapprovedgratuityfund[subjecttocertain Allassesseesasemployers
limitsandconditions]
36(1)(va) Contributionstoanyprovidentfundorsuperannuationfund Allassesseesasemployers
or any fund set up under Employees' State Insurance Act,
1948 or any other fund for welfare of such employees,
received from employees if the same are credited to the
employee's account in relevant fund or funds before due
date

36(1)(vi) Allowance in respect of animals which have died or Allassessees

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becomepermanentlyuseless[subjecttocertainconditions]
36(1)(vii)4 Bad debts which have been written off as irrecoverable Allassessees
[subject to limitation in the case of banks and financial
institutions]
36(1)(viia) Provisionforbadanddoubtfuldebts
upto7percentoftotalincomebeforemakingany Certain scheduled banks,
deductionunderthisclauseandChapterVIA,andup nonscheduled banks (but
to10percentofaggregateaverageadvancesmadeby otherthanforeignbanks)and
itsruralbranches cooperativebank(otherthan
primary agricultural credit
society or primary co
operative agricultural and
ruraldevelopmentbank)
up to 5 per cent (10% in case of Public Financial Foreign banks/Public
Institutions, State Financial Corporations and State financial institutions/State
Industrial Investment Corporations in any of the two financial corporations/State
consecutive assessment years 200304 and 200405 industrial investment
subject to certain conditions) of total income before corporations
making any deduction under this clause and Chapter
VIA
36(1)(viii) Amounts transferred to special reserve [subject to certain Specified entities, namely,
conditionsandmaximumof20percentofprofitsderived financial
fromeligiblebusiness] corporations/financial
corporationwhichisapublic
sector company/banking
company/cooperative bank
other than a primary
agriculturalcreditsocietyora
primary cooperative
agricultural and rural
development bank/housing
finance company/any other
financial corporation
includingapubliccompany
36(1)(ix) Expenditure for promoting family planning amongst Companies
employees(deductiblein5equalannualinstalmentsincase
ofcapitalexpenditure)
36(1)(xi) Expenditure incurred wholly and exclusively by the Allassessees
assessee on or after the 1st April, 1999 but before the 1st
April, 2000 in respect of a nonY2K compliant system,
owned by the assessee and used for the purposes of his
business or profession, so as to make such system Y2K
compliantcomputersystem
36(1)(xii) Any expenditure (not being in the nature of capital Notified corporation or body
expenditure) incurred by a notified corporation or body corporate, by whatever name
corporate, by whatever name called, constituted or called, constituted or
established by a Central, State or Provincial Act, for the established by a Central,
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objects and purposes authorised by the Act under which StateorProvincialAct

such corporation or body corporate was constituted or
established
36(1)(xiii) Anybankingcashtransactiontaxpaidduringtheprevious Allassessees
year on taxable banking transaction entered into by the
assessee
36(1)(xiv) Contribution to notified credit guarantee trust fund for Publicfinancialinstitution
smallindustries
36(1)(xv) SecuritiesTransactionTaxpaidifcorrespondingincomeis Allassessees
included as income under the head 'Profits and gains of
businessorprofession'
36(1)(xvi) Amount equal to commodities transaction tax paid by an Allassessees
assessee in respect of taxable commodities transactions
entered into in the course of his business during the
previousyear,iftheincomearisingfromsuchtransactions
isincludedintheincomecomputedunderthehead"Profits
andgainsofbusinessorprofession"
36(1)(xvii) Amount of expenditure incurred by a cooperative society Cooperativesocietyengaged
forpurchaseofsugarcaneshallbeallowedasdeductionto in business of manufacturing
theextentofloweroffollowing: sugar
a)Actualpurchasepriceofsugarcaneor
b) Price of sugarcane fixed or approved by the
Government

37(1) Any other expenditure [not being personal or capital Allassessees

expenditure and expenditure mentioned in sections 30 to
36] laid out wholly and exclusively for purposes of
businessorprofession6
B.Nondeductibleitems
37(2B) Advertisement in souvenir, brochure, tract, pamphlet, etc., Allassessees
ofpoliticalparty
40(a)(i) Interest, royalty, fees for technical services or other Allassessees
chargeablesumpayableoutsideIndia,orinIndiatoanon
resident or foreign company, on which tax has not been
paid/deductedduringthepreviousyearorinthesubsequent
yearwithintimeprescribedundersection200(1).Wherein
respect of any such sum, tax has been deducted in any
subsequentyearor,hasbeendeductedinthepreviousyear
butpaidinanysubsequentyearaftertheexpiryofthetime
prescribed under subsection (1) of section200, such sum
shallbeallowedasadeductionincomputingtheincomeof
thepreviousyearinwhichsuchtaxhasbeenpaid7
40(a)(ia) Any interest, commission or brokerage, rent, royalty, fees Allassessees
for professional services or fees for technical services
payabletoaresident,oramountspayabletoacontractoror
subcontractor, being resident, for carrying out any work
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(includingsupplyoflabourforcarryingoutanywork)8,on
which tax is deductible at source under Chapter XVIIB
andsuchtaxhasnotbeendeductedor,afterdeduction,has
not been paid on or before the due date specified in sub
section(1)ofsection139.
However, where in respect of any such sum, tax has been
deducted in any subsequent year, or has been deducted
during the previous year but paid after the due date
specifiedinsubsection(1)ofsection139, such sum shall
beallowedasadeductionincomputingtheincomeofthe
previousyearinwhichsuchtaxhasbeenpaid.
40(a)(ii) Rateortaxleviedontheprofitsorgainsofanybusinessor Allassessees
profession
40(a)(iia) Wealthtaxpaid Allassessees
40(a)(iib) Amount paid by way of royalty, licence fee, service fee, StateGovt.undertakings
privilegefee,servicechargeoranyotherfeeorcharge,by
whatever name called, which is levied exclusively on, or
any amount which is appropriated, whether directly or
indirectly, from a State Government undertaking by the
StateGovernment

40(a)(iii) SalariespayableoutsideIndia,orinIndiatoanonresident, Allassesseesasemployers

onwhichtaxhasnotbeenpaid/deductedatsource
40(a)(iv) Payments to provident fund/other funds for employees' Allassesseesasemployers
benefit for which no effective arrangements are made to
secure that tax is deducted at source on payments made
fromsuchfundswhicharechargeabletotaxas'salaries'
40(a)(v) Tax actually paid by an employer referred to in section Allassesseesasemployers
10(10CC)
40(b) Interest,salary,bonus,commissionorremunerationpaidto Firms
partners(subjecttocertainconditionsandlimits)
40(ba) Interest,salary,bonus,commissionorremunerationpaidto Association of persons or
members(subjecttocertainconditionsandlimits) bodyofindividuals(excepta
company or a cooperative
society, society registered
under Societies Registration
Act,etc.)
40A(2) Expenditure involving payment to Allassessees
relative/director/partner/substantially interested person,
etc., which, in the opinion of the Assessing Officer, is
excessiveorunreasonable
40A(3) 100% of payments exceeding Rs. 20,000 (Rs. 35,000 in Allassessees
case of payment made for plying, hiring or leasing goods
carriages) made to a person in a day otherwise than by
account payee cheque/bank draft (subject to certain
conditions)
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40A(7) Anyprovisionforpaymentofgratuitytoemployees,other Allassesseesasemployers

than a provision made for purposes of contribution to
approvedgratuityfundorforpaymentofgratuitythathas
become payable during the year (subject to specified
conditions)
40A(9) Any sum paid for setting up or formation of, or as Allassesseesasemployers
contribution to, any fund, trust, company, AOP, BOI,
Societyorotherinstitution,otherthanrecognisedprovident
fund/approved superannuation fund/pension scheme
referredtoinsection80CCD/approvedgratuityfund

C.Otherdeductibleitems
42(1) In case of mineral oil concerns allowances specified in Assessees engaged in
agreement entered into by Central Government with any prospecting for or extraction
person (subject to certain conditions and terms of orproductionofmineraloils
agreement)
42(2) In case of mineral oil concerns expenditure incurred Assessee whose business
remainingunallowedasreducedbyproceedsoftransfer consistsofprospectingforor
extraction or production of
petroleumandnaturalgasand
who transfers any interest in
suchbusiness
43B Any sum which is actually paid, relating to (i) Allassessees
tax/duty/cess/fee levied under anylaw,(ii) contribution to
providentfund/superannuationfund/gratuityfund/anyfund
for employees' welfare, (iii) bonus/commission to
employees,(iv)interestonloan/borrowingfromanypublic
financial institution, State Financial Corporation or State
Industrial Investment Corporation/interest payments to
scheduledbanks/Cooperativebanksonloansoradvances,
and (v) sum payable by employers by way of leave
encashmenttoemployees.Deductionwillnotbeallowedin
year in which liability to pay is incurred unless actual
payment is made in that year or before the due date of
furnishingofreturnofincomeforthatyear
44A Expenditure in excess of subscription, etc., received from Trade,professionalorsimilar
members(subjecttocertainconditionsandlimits) association
44C Head office expenditure (subject to certain conditions and Nonresident
limits)
Against'capitalgains'
48(i) Expenditureincurredwhollyandexclusivelyinconnection Allassessees
withtransferofcapitalasset
48(ii) Costofacquisitionofcapitalassetandofanyimprovement Allassessees
thereto (indexed cost of acquisition and indexed cost of
improvement,incaseoflongtermcapitalassets)

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54 Longterm capital gains on sale of residential house and Individual/HUF

land appurtenant thereto invested in purchase/construction
ofanotherresidentialhouse9(subjecttocertainconditions
andlimits)
54B Capital gains on transfer of land used for agricultural Individual/HUF
purposes, by an individual or his parents or a HUF,
invested in other land for agricultural purposes (subject to
certainconditionsandlimits)
54D Capitalgainsoncompulsoryacquisitionoflandorbuilding Anyassessee
forming part of an industrial undertaking invested in
purchase/constructionofotherland/buildingforshifting/re
establishing said undertaking or setting up new industrial
undertaking(subjecttocertainconditionsandlimits)
54EA Net consideration on transfer of longterm capital asset Anyassessee
made before 142000 invested in specified bonds,
debentures,sharesofapubliccompanyorunitsofnotified
mutualfunds(subjecttocertainconditionsandlimits)
54EB Longtermcapitalgainsontransferofanylongtermcapital Anyassessee
asset made before 142000 invested in specified long
termassets(subjecttocertainconditionsandlimits)
54EC Longterm capital gains invested in longterm specified Anyassessee
asset (bond redeemable after 3 years) (maximum
investmentinafinancialyearisRs.50lakhs)10issuedby
National Highways Authority of India or by the Rural
Electrification Corporation Limited (subject to certain
conditionsandlimits)
54ED Longterm capital gains on transfer before 142006 of Anyassessee
certain listed securities or units invested in equity shares
forming part of an eligible issue of capital (subject to
certainconditionsandlimits)
54F Net consideration on transfer of longterm capital asset Individual/HUF
otherthanresidentialhouseinvestedinresidentialhouse11
(subjecttocertainconditionsandlimits)
54G Capital gain on transfer of machinery, plant, land or Anyassessee
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 nonurban
area)investedinnewmachinery,plant,buildingorland,in
thesaidnonurbanarea,expensesonshifting,etc.(subject
tocertainconditionsandlimits)

54GA Exemptionofcapitalgainsontransferofassetsincasesof Allassessees

shifting of industrial undertaking from urban area to any
Special Economic Zone (subject to certain conditions and
limits)

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54GB Exemption in respect of capital gain arising from the Individual/HUF

transfer of a longterm capital asset, being a residential
property(ahouseoraplotofland),ownedbytheeligible
assessee, and such assessee before the due date of
furnishing of return of income under subsection (1) of
section139utilisesthenetconsiderationforsubscriptionin
theequitysharesofaneligiblecompanyandsuchcompany
has,withinoneyearfromthedateofsubscriptioninequity
sharesbytheassessee,utilisedthisamountforpurchaseof
specified new asset (subject to certain conditions and
limits).
Against'incomefromothersources'
A.Deductibleitems

57(i) Any reasonable sum paid by way of commission or Allassessees

remunerationforpurposeofrealisingdividend(otherthan
dividendsreferredtoinsection115O)
57(i) Any reasonable sum paid by way of commission or Allassessees
remuneration for the purpose of realising interest on
securities
57(ia) Contributionstoanyprovidentfundorsuperannuationfund Allassessees
or any fund set up under Employees' State Insurance Act,
1948 or any other fund for welfare of employees, if the
samearecreditedtoemployees'accountsinrelevantfunds
beforeduedate
57(ii) Repairs,insurance,anddepreciationofbuilding,plantand Assessees engaged in
machineryandfurniture business of letting out of
machinery, plant and
furniture and buildings on
hire
57(iia) Incaseoffamilypension,331/3percentofsuchpensionor Assesseesinreceiptoffamily
Rs.15,000,whicheverisless pensionondeathofemployee
being member of assessee's
family
57(iii) Any other expenditure (not being capital expenditure) Allassessees
expendedwhollyandexclusivelyforearningsuchincome

57(iv) In case of interest received on compensation or on Allassessees

enhanced compensation referred to in section 145A(2), a
deductionof50percentofsuchincome(subjecttocertain
conditions)
B.Nondeductibleitems
58(1)(a)(i) Personalexpenses Allassessees
58(1)(a) InterestchargeabletotaxwhichispayableoutsideIndiaon Allassessees
(ii) whichtaxhasnotbeenpaidordeductedatsource
58(1)(a) 'Salaries' payable outside India onwhichno taxispaidor Allassessees
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(iii) deductedatsource
58(1A) Wealthtax Allassessees
58(2) Expenditureofthenaturespecifiedinsection40A Allassessees
58(4) Expenditure in connection with winnings from lotteries, Allassessees
crosswordpuzzles,races,games,gamblingorbetting
Forcertainpayments
80C Lifeinsurancepremiumforpolicy: Individual/HUF
in case of individual, on life of assessee,
assessee'sspouseandanychildofassessee
incaseofHUF,onlifeofanymemberofthe
HUF
Sumpaidunderacontractforadeferredannuity:
incaseofindividual,onlifeoftheindividual,
individual's spouse and any child of the
individual (however, contract should not
contain an option to receive cash payment in
lieuofannuity)
incaseofHUF,onlifeofanymemberofthe
HUF
Sum deducted from salary payable to Government
servant for securing deferred annuity or making
provision for his wife/children [qualifying amount
limitedto20%ofsalary]
Contributions by an individual made under
Employees'ProvidentFundScheme
ContributiontoPublicProvidentFundAccountinthe
nameof:
in case of individual, such individual or his
spouseoranychildofsuchindividual
incaseofHUF,anymemberofHUF
Contribution by an employee to a recognised
providentfund
Contribution by an employee to an approved
superannuationfund
Subscription to any notified security or notified
deposit scheme of the Central Government. For this
purpose, SukanyaSamriddhi Account Scheme has
been notified vide Notification No. 9/2015, dated
21.01.2015. Any sum deposited during the year in
SukanyaSamriddhi Account by an individual would
beeligiblefordeduction.
Amount can be deposited by an individual or in the
nameofgirlchildofanindividualorinthenameof
thegirlchildforwhomsuchanindividualisthelegal
guardian.
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25/11/2015 Deductionsallowabletotaxpayer

Subscriptiontonotifiedsavingscertificates[National
SavingsCertificates(VIIIIssue)]
ContributionforparticipationinunitlinkedInsurance
PlanofUTI:
in case of an individual, in the name of the
individual, his spouse or any child of such
individual
incaseofaHUF,inthenameofanymember
thereof
Contributiontonotifiedunitlinkedinsuranceplanof
LICMutualFund[Dhanaraksha1989]
inthecaseofanindividual,inthenameofthe
individual, his spouse or any child of such
individual
in the case of a HUF, in the name of any
memberthereof
Subscription to notified deposit scheme or notified
pension fund set up by National Housing Bank
[Home Loan Account Scheme/National Housing
Banks(TaxSaving)TermDepositScheme,2008]
Tuitionfees(excludingdevelopmentfees,donations,
etc.)paidbyanindividualtoanyuniversity,college,
school or other educational institution situated in
India, for full time education of any 2 of his/her
children
Certain payments for purchase/construction of
residentialhouseproperty
Subscriptiontonotifiedschemesof(a)publicsector
companies engaged in providing longterm finance
for purchase/construction of houses in India for
residential purposes/(b) authority constituted under
any law for satisfying need for housing
accommodation or for planning, development or
improvementofcities,townsandvillages,orforboth
SumpaidtowardsnotifiedannuityplanofLIC(New
Jeevan Dhara/New Jeevan DharaI/New Jeevan
Akshay/New Jeevan AkshayI/New Jeevan Akshay
II/JeewanAkshayIIIplanofLIC)orotherinsurer
Subscriptiontoanyunitsofanynotified[u/s10(23D)]
Mutual Fund or the UTI (Equity Linked Saving
Scheme,2005)
Contributionbyanindividualtoanypensionfundset
upbyanymutualfundwhichisreferredtoinsection
10(23D) or by the UTI (UTI Retirement Benefit
PensionFund)
Subscription to equity shares or debentures forming
partofanyapprovedeligibleissueofcapitalmadeby

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25/11/2015 Deductionsallowabletotaxpayer

apubliccompanyorpublicfinancialinstitutions
Subscriptiontoanyunitsofanyapprovedmutualfund
referred to in section 10(23D), provided amount of
subscription to such units is subscribed only in
'eligibleissueofcapital'referredtoabove.
Term deposits for a fixed period of not less than 5
years with a scheduled bank, and which is in
accordancewithascheme12framedandnotified.
Subscription to notified bonds issued by the
NABARD.
Deposit in an account under the Senior Citizen
Savings Scheme Rules, 2004 (subject to certain
conditions)
5year term deposit in an account under the Post
Office Time Deposit Rules, 1981 (subject to certain
conditions)

Notes:
1. Deduction is limited to whole of the amount paid or deposited subject to a maximum of Rs.
1,50,00013.ThismaximumlimitofRs.1,50,00013istheaggregateofthedeductionthatmaybe
claimedundersections80C,80CCCand80CCD.
2. The sums paid or deposited need not be out of income chargeable to tax of the previous year.
Amount may be paid or deposited any time during the previous year, but the deduction shall be
availableonsomuchoftheaggregateofsumsasdonotexceedthetotalincomechargeabletotax
duringthepreviousyear.
3. Life Insurance premium is part of gross qualifying amount for the purpose of deduction under
section80C.Paymentofpremiumwhichisinexcessof10percent(ifpolicyisissuedonorafter
142013,15%incaseofinsuranceonlifeofpersonwithdisabilityreferredtoinsection80Uor
suffering from disease or ailment specified in section 80DDB/rule 11DD) of actual capital sum
assuredshallnotbeincludedingrossqualifyingamount.Thevalueofanypremiumsagreedtobe
returnedorofanybenefitbywayofbonusorotherwise,overandabovethesumactuallyassured,
whichistobeormaybereceivedunderthepolicybyanyperson,shallnotbetakenintoaccount
forthepurposeofcalculatingtheactualcapitalsumassured.
Thelimitof10percentwillbeapplicableonlyinthecaseofpoliciesissuedonorafter142012.
Inrespectofpoliciesissuedpriorto142012,theoldlimitof20percentofactualsumassured
willbeapplicable.
Witheffectfrom142013,'actualcapitalsumassured'inrelationtoalifeinsurancepolicyshall
meantheminimumamountassuredunderthepolicyonhappeningoftheinsuredeventatanytime
duringthetermofthepolicy,nottakingintoaccount
(i)thevalueofanypremiumagreedtobereturnedor
(ii)anybenefitbywayofbonusorotherwiseoverandabovethesumactuallyassured,whichis
tobeormaybereceivedunderthepolicybyanyperson.
4.Where,inanypreviousyear,anassessee
(i)terminateshiscontractofinsurance,bynoticetothateffectorwherethecontractceasesto
beinforcebyreasonoffailuretopayanypremium,bynotrevivingcontractofinsurance,
(a) in case of any single premium policy, within two years after the date of
commencementofinsuranceor
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25/11/2015 Deductionsallowabletotaxpayer

(b)inanyothercase,beforepremiumshavebeenpaidfortwoyearsor
(ii)terminateshisparticipationinanyunitlinkedinsuranceplan(ULIP),bynoticetothateffect
or where he ceases to participate by reason of failure to pay any contribution, by not
reviving his participation, before contributions in respect of such participation have been
paidforfiveyearsor
(iii)transfersthehousepropertybeforetheexpiryoffiveyearsfromtheendofthefinancialyear
inwhichpossessionofsuchpropertyisobtainedbyhim,orreceivesback,whetherbyway
ofrefundorotherwise,anysumspecifiedinthatclause,
then,
(a)nodeductionshallbeallowedtotheassesseewithreferencetoanyofsuchsums,paidinsuch
previousyearand
(b)theaggregateamountofthedeductionsofincomesoallowedinrespectofthepreviousyear
oryearsprecedingsuchpreviousyear,shallbedeemedtobetheincomeoftheassesseeof
suchpreviousyearandshallbeliabletotaxintheassessmentyearrelevanttosuchprevious
year.
Ifanyequitysharesordebentures,withreferencetothecostofwhichadeductionisallowed,are
sold or otherwise transferred by the assessee to any person at any time within a period of three
years from the date of their acquisition, the aggregate amount of the deductions of income so
allowedinrespectofsuchequitysharesordebenturesinthepreviousyearoryearsprecedingthe
previousyearinwhichsuchsaleortransferhastakenplaceshallbedeemedtobetheincomeofthe
assessee of such previous year and shall be liable to tax in the assessment year relevant to such
previousyear.
A person shall be treated as having acquired any shares or debentures on the date on which his
nameisenteredinrelationtothosesharesordebenturesintheregisterofmembersorofdebenture
holders,asthecasemaybe,ofthepubliccompany.
5.Ifanyamount,includinginterestaccruedthereon,iswithdrawnbytheassesseefromhisdeposit
account made under (a) Senior Citizen Saving Scheme or (b) Post Office Time Deposit Rules,
beforetheexpiryoftheperiodoffiveyearsfromthedateofitsdeposit,theamountsowithdrawn
shall be deemed to be the income of the assessee of the previous year in which the amount is
withdrawnandshallbeliabletotaxintheassessmentyearrelevanttosuchpreviousyear.
Theamountliabletotaxshallnotincludethefollowingamounts,namely:
(i)anyamountofinterest,relatingtodepositsreferredtoabove,whichhasbeenincludedinthe
totalincomeoftheassesseeofthepreviousyearoryearsprecedingsuchpreviousyearand
(ii) any amount received by the nominee or legal heir of the assessee, on the death of such
assessee, other than interest, if any, accrued thereon, which was not included in the total
incomeoftheassesseeforthepreviousyearoryearsprecedingsuchpreviousyear.
Section Natureofdeduction Whocanclaim
(1) (2) (3)
80CCC14 ContributionstocertainpensionfundsofLICoranyother Individual
insurer (up to Rs. 1,50,000) (subject to certain
conditions)15
1580CCD Contribution to pension scheme notified by Central Individual
Government up to 10% of salary (subject to certain
conditionsandlimits)16
Contribution made by employer shall also be allowed as

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25/11/2015 Deductionsallowabletotaxpayer

deduction under section 80CCD(2) while computing total

income of the employee. However, amount of deduction
couldnotexceed10%ofsalaryoftheemployee
80CCF Amount up to Rs. 20,000, paid or deposited, during the Individual/HUF
previous years relevant to assessment year 201112 or
201213, as subscription to notified longterm
infrastructurebonds
80CCG 50 per cent of amount invested by specified resident Specifiedresidentindividuals
individuals in notified equity savings scheme17(subject to (newretailinvestors)
certain conditions and limits) (maximum deduction : Rs.
25,000)
80D Amount paid (in any mode other than cash) by an Individual/HUF
individualorHUFtoLICorotherinsurertoeffectorkeep
inforceaninsuranceonthehealthofspecifiedperson.An
individual can also make payment to the Central
Governmenthealthschemeand/oronaccountofpreventive
healthcheckup(subjecttolimit)
specifiedpersonmeans:
IncaseofIndividualself,spouse,dependent
childrenorparents
IncaseofHUFAnymemberthereof
Deduction for preventive health checkup shall not
exceedinaggregateRs.5,000.
Payment on account of preventive health checkup
maybemadeincash.
80DD Deduction of Rs. 75,000 (Rs. 1,25,000 in case of severe ResidentIndividual/HUF
disability) to a resident individual/HUF where (a) any
expenditure has been incurred for the medical treatment
(including nursing), training and rehabilitation of a
dependant,beingapersonwithdisability[asdefinedunder
Persons with Disabilities (Equal Opportunities, Protection
of Rights and Full Participation) Act, 1995] (w.e.f.
assessment year 200506 including autism, cerebral palsy
and multiple disability as referred to in National Trust for
Welfare of Persons with Autism, Cerebral Palsy, Mental
Retardation&MultipleDisabilitiesAct,1999),or(b) any
amount is paid or deposited under an approved scheme
framedinthisbehalfbytheLICoranyotherinsurerorthe
Administrator or the specified company for the
maintenanceofadependent,beingapersonwithdisability
(subjecttocertainconditions)
80DDB Expenses actually paid for medical treatment of specified ResidentIndividual/HUF
diseasesandailmentssubjecttocertainconditions19
80E Amount paid out of income chargeable to tax by way of Individual
payment of interest on loan taken from financial

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25/11/2015 Deductionsallowabletotaxpayer

institution/approved charitable institution for pursuing

higher education20 (subject to certain conditions)
(maximumperiod:8years)
80EE Interest payable on loan taken by him from any financial Individual
institution for the purpose of acquisition of a residential
houseproperty(Maximumdeduction:Rs.3,00,000)
80G Donations to certain approved funds, trusts, charitable Allassessees
institutions/donations for renovation or repairs of notified
temples, etc. [amount of deduction is 50 per cent of net
qualifyingamount].100percentofqualifyingdonationsto
National Defence Fund, Prime Minister's National Relief
Fund, Prime Minister's Armenia Earthquake Relief Fund,
Africa (Public Contributions India) Fund, National
Children'sFund(from142014),Governmentorapproved
associationforpromotingfamilyplanning,universitiesand
approved educational institutions of national eminence,
National Foundation for Communal Harmony, Chief
Minister's Earthquake Relief Fund (Maharashtra), Zila
Saksharta Samitis, National or State Blood Transfusion
Council, Fund set up by State Government to provide
medical relief to the poor, Army Central Welfare Fund,
Indian Naval Benevolent Fund and Air Force Central
Welfare Fund, Andhra Pradesh Chief Minister's Cyclone
Relief Fund, National Illness Assistance Fund, Chief
Minister'sReliefFundortheLt.Governor'sReliefFundin
respect of any State or Union Territory, National Sports
Fund, National Cultural Fund, Fund for Technology
Development and Application, Indian Olympic
Association, etc.21, fund set up by State Government of
Gujarat exclusively for providing relief to victims of
earthquake in Gujarat, National Trust for Welfare of
Persons with Autism, Cerebral palsy, Mental retardation
and Multiple Disabilities, and sums paid between 261
2001and3092001toanyeligibletrust,institutionorfund
for providing relief to Gujarat earthquake victims22, the
Swachh Bharat Kosh and the Clean Ganga Fund (from
assessmentyear201516)andNationalFundforControlof
Drug Abuse (from assessment year 201617) [subject to
certainconditionsandlimits]23
80GG Rent paid in excess of 10% of total income for Individuals not receiving any
furnished/unfurnished residential accommodation (subject houserentallowance
to maximum of Rs. 2,000 p.m. or 25% of total income,
whicheverisless)(subjecttocertainconditions)
80GGA24 Certaindonationsforscientific,socialorstatisticalresearch All assessees not having any
or rural development programme or for carrying out an income chargeable under the
eligible project or scheme or National Urban Poverty head 'Profits and gains of
EradicationFund(subjecttocertainconditions) businessorprofession'

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25/11/2015 Deductionsallowabletotaxpayer

80GGB Sumcontributedtoanypoliticalparty/electoraltrust25 Indiancompany

80GGC Sumcontributedtoanypoliticalparty/electoraltrust25 Allassessees,otherthanlocal
authority and artificial
juridical person wholly or
partlyfundedbyGovernment
Forcertainincomes
80IA Profits and gains from industrial undertakings engaged in Allassessees
infrastructure facility, telecommunication services,
industrial park, development of Special Economic Zone,
powerundertakings,etc.(subjecttocertainconditionsand
limits)26
80IAB Profits and gains derived by undertaking/enterprise from Assessee being Developer of
business of developing a Special Economic Zone notified SEZ
on or after 142005 (subject to certain conditions and
limits)
80IB Profitsandgainsfromindustrialundertakings,coldstorage Allassessees
plant,hotel,scientificresearch&development,mineraloil
concern, housing projects, cold chain facility, multiplex
theatres, convention centres, ships, etc. (subject to certain
conditionsandlimits)
80IC Profitsandgainsderivedbyanundertakingoranenterprise Allassessees
inspecialcategoryStates(HimachalPradesh,Uttaranchal,
Arunachal Pradesh, Assam, Manipur, Meghalaya,
Mizoram,NagalandandTripura)(subjecttocertainlimits,
timelimitsandconditions),
(a)whichhasbegunorbeginstomanufactureorproduce
any article or thing, not being any article or thing
specified in the Thirteenth Schedule, or which
manufactures or produces any article or thing, not
being any article or thing specified in the Thirteenth
Scheduleandundertakessubstantialexpansionduring
thespecifiedperiod.
(b)whichhasbegunorbeginstomanufactureorproduce
any article or thing specified in the Fourteenth
Schedule or commences any operation specified in
that Schedule, or which manufactures or produces
any article or thing, specified in the Fourteenth
Schedule or commences any operation specified in
that Schedule and undertakes substantial expansion
duringthespecifiedperiod
80ID Profits and gains from business of hotels and convention Allassessees
centresinspecifiedareas(subjecttocertainconditions).
80IE Deduction in respect of certain undertakings in North Allassessees
EasternStates.
80JJA Entire income from business of collecting and processing Allassessees
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25/11/2015 Deductionsallowabletotaxpayer

ortreatingofbiodegradablewasteforgeneratingpower,or
producing biofertilizers, biopesticides or other biological
agents or for producing biogas, making pellets or
briquettes for fuel or organic manure (for 5 consecutive
assessmentyears)
80JJAA 30 per cent of additional wages27 paid to new regular Indian company having
workmen employed in the previous year for 3 assessment profits and gains derived
yearsincludingtheassessmentyearrelevanttotheprevious frommanufactureofgoodsin
year in which such employment is provided (subject to afactory28
certainconditions)

80LA Certain incomes of Scheduled banks/banks incorporated Scheduled Banks/banks

outside India having Offshore Banking Units in a Special incorporated outside
Economic Zone/Units of International Financial Services India/Units of International
Centre(subjecttocertainconditionsandlimits) FinancialServicesCentre
80P Specified incomes [subject to varying limits specified in Cooperativesocieties
subsection(2)]
80QQB Royalty income of author of certain specified category of ResidentIndividualAuthor
books(uptoRs.3,00,000)(subjecttocertainconditions)
80RRB Royalty on patents up to Rs. 3,00,000 in the case of a Residentindividuals
resident individual who is a patentee and is in receipt of
incomebywayofroyaltyinrespectofapatentregistered
onorafter142003(subjecttocertainconditions).
80TTA Interest on deposits in savings bank accounts (up to Rs. Individuals/HUFs
10,000peryear)
80U Deduction of Rs. 75,000 to a resident individual who, at Residentindividuals
any time during the previous year, is certified by the
medicalauthoritytobeapersonwithdisability[asdefined
under Persons with Disabilities (Equal Opportunities,
Protection of Rights and Full Participation) Act, 1995]
[w.e.f.assessmentyear200506includingautism,cerebral
palsy, and multiple disabilities as defined under National
TrustforWelfareofPersonswithAutism,CerebralPalsy,
Mental Retardation & Multiple Disabilities Act, 1999] [in
the case of a person with severe disability, allowable
deductionisRs.1,25,000](subjecttocertainconditions).
Rebates
87A Tax rebate in case of individual resident in India, whose Individual
totalincomedoesnotexceedfivehundredthousandrupees
quantumofrebateshallbeanamountequaltohundredper
cent of such incometax or an amount of two thousand
rupees,whicheverisless.

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25/11/2015 Deductionsallowabletotaxpayer

1.Rs.2,00,000witheffectfromassessmentyear201516.
2.Provisionsofsection32shallapplywhetherornottheassesseehasclaimeddepreciation.
3. If sum is borrowed for acquiring a capital asset, interest thereon pertaining to the period before
assetisfirstputtouseshallnotbeallowedasdeduction.
4. W.e.f. assessment year 201617, baddebts shall be allowed as deduction even if they are not
writtenoff from books of accounts. Such deduction shall be allowed if amount of debt or part
thereofhasbeentakenintoaccountincomputingincomeonthebasisofIncomeComputationand
DisclosureStandardsnotifiedundersection145(2)withoutrecordingthesameintheaccounts.
5.Witheffectfromassessmentyear201516businessoflayingandoperatingaslurrypipelineforthe
transportation of iron ore and the business of setting up and operating a notified semiconductor
waferfabricationmanufacturingunit,havebeenincluded.
Following amendments are also made in section 35AD with effect from assessment year
201516:
Withaviewtoensurethatthecapitalassetonwhichinvestmentlinkeddeductionhasbeen
claimed is used for the purposes of the specified business, subsection (7A) has been
insertedinsection35ADtoprovidethatanyassetinrespectofwhichadeductionisclaimed
andallowedundersection35AD,shallbeusedonlyforthespecifiedbusinessforaperiod
of8yearsbeginningwiththepreviousyearinwhichsuchassetisacquiredorconstructed.
Moreover,ifsuchassetisusedforanypurposeotherthanthespecifiedbusiness,thetotal
amountofdeductionsoclaimedandallowedinanypreviousyearinrespectofsuchasset
(as reduced by the amount of depreciation allowable in accordance with the provisions of
section32asifnodeductionhadbeenallowedundersection35AD),shallbedeemedtobe
income of the assessee chargeable under the head "Profits and gains of business or
profession"ofthepreviousyearinwhichtheassetissoused.However,thisprovisionwill
notapplytoacompanywhichhasbecomeasickindustrialcompanyundersection17(1)of
theSickIndustrialCompanies(SpecialProvisions)Actwithinthetimeperiodof8yearsas
statedabove.
Whereanydeductionundersection35ADhasbeenavailedofbytheassesseeonaccountof
capitalexpenditureincurredforthepurposesofspecifiedbusinessinanyassessmentyear,
nodeductionundersection10AAshallbeavailabletotheassesseeinthesameoranyother
assessmentyearinrespectofsuchspecifiedbusiness.
6.Witheffectfromassessmentyear201516anewExplanation2hasbeeninsertedinsection37(1)
toclarifythatexpenditureincurredbytheassesseeonCorporateSocialResponsibilityactivitiesin
accordance with section 135 of the Companies Act, 2013 will not be considered as expenditure
incurredbytheassesseeforthepurposesofthebusinessorprofession.
7.Followingchartexplainsamendmentsmadeinsection40(a)(i)witheffectfromtheassessmentyear
201516:
TDS default pertaining to Law applicable up Law applicable from the assessment year
any sum (other than salary) to the assessment 201516
payable outside India or year201415
payable to a nonresident
whichistaxableinthehands
ofrecipientinIndia
1.Tax is deductible but it is Expenditure is not Noamendment.Thelawwhichisapplicable
notdeducted deductible. If, for the assessment year 201415 will apply
however, TDS is forassessmentyear201516onwards
deposited in a
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25/11/2015 Deductionsallowabletotaxpayer

subsequent year, it
will be deducted in
thatyear
2.Taxisdeductible(anditis Expenditure is not Disallowance provisions will not be
so deducted during April 1 deductible. If, applicableifTDSisdepositeduptothedue
and February 28/29 of the however, TDS is dateofsubmissionofreturnofincomeunder
financial year) but it is not deposited in a section139(1).IfTDSisdepositedafterthis
depositeduptoMarch31of subsequent year, it date, expenditure will be deductible in the
thefinancialyear will be deducted in yearinwhichTDSisdeposited.
thatyear
3.Taxisdeductible(anditis Expenditure is not Disallowance provisions will not be
so deducted during the deductible. If, applicableifTDSisdepositeduptothedue
monthofMarch)butitisnot however, TDS is dateofsubmissionofreturnofincomeunder
deposited up to April 30 deposited in a section139(1).IfTDSisdepositedafterthis
falling immediately after the subsequent year, it date, expenditure will be deductible in the
endofthefinancialyear will be deducted in yearinwhichTDSisdeposited.
thatyear
8.Followingamendmentshavebeenmadeinsection40(a)(ia)witheffectfromtheassessmentyear
201516:
CoverageofdisallowanceextendedBeforeamendment,disallowanceprovisionsofsection
40(a)(ia), covered TDS default under sections 193, 194A, 194C, 194D, 194H, 194I and
194J. After amendment, disallowance under section 40(a)(ia), will cover any amount
payabletoaresidentwhichissubjecttoTDS.
Only 30 per cent expenditure to be disallowed In case of TDS default, 30 per cent of
expenditure(not100percent)willbedisallowed.
9.OneresidentialhouseinIndiawitheffectfromassessmentyear201516.
10.Witheffectfromassessmentyear201516limitofRs.50lakhsappliestototalamountinvested
duringfinancialyearinwhichoriginalassetistransferredandinsubsequentfinancialyear.
11.OneresidentialhouseinIndiawitheffectfromassessmentyear201516.
12.SeeBankTermDepositsScheme,2006.
13.witheffectfromassessmentyear201516.
14.Wheredeductionisclaimedunderthissection,deductioninrelationtosameamountcannotbe
claimedundersection80C.
15. Section 80CCE provides that the aggregate amount of deductions under section 80C, section
80CCCandsection80CCDshallnot,inanycase,exceedRs.1,50,000
With effect from assessment year 201516, amended subsection (1) has clarified that a non
governmentemployeecanclaimdeductionundersection80CCDevenifhisdateofjoiningisprior
toJanuary1,2004.
16.Witheffect from the assessment year 201213 section 80CCE is amended so as to providethat
contribution made by the Central Government or any other employer to a pension scheme under
subsection(2)ofsection80CCDshallnotbeincludedin the limit of deduction of Rs. 1,50,000
providedundersection80CCE.
Witheffectfromassessmentyear201617,subsection(1A)ofSection80CCDwhichlaiddown
maximumdeductionlimitofRs.1,00,000(undersubsection(1))hasbeendeleted.
Further,anewsubsection(1B)isinsertedtoprovideforadditionaldeductiontotheextentofRs.
50,000.TheadditionaldeductionisnotsubjecttoceilinglimitofRs.1,50,000asprovidedunder
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25/11/2015 Deductionsallowabletotaxpayer

Section80CCE.
However,itistobenotedthatadditiondeductionofRs.50,000shallnotbeallowedinrespectof
contributionwhichisconsideredfordeductionunderSection80CCD(1),i.e.,withinlimitof10%
ofsalary/grosstotalincome
17.RajivGandhiEquitySavingsScheme,2012/2013.
Witheffectfromassessmentyear201415(a)investmentinlistedunitsofanequityorientedfund
isalsopermitted(b)deductionshallbeallowedforthreeconsecutiveassessmentyears,beginning
withtheassessmentyearrelevanttopreviousyearinwhichthelistedequitysharesorlistedunits
ofequityorientedfundwerefirstacquiredand(c)grosstotalincomeoftheassesseeforrelevant
assessmentyearshallnotexceedtwelvelakhrupees.
18.Section80DisamendedbytheFinanceAct,2015.Fromassessmentyear201617onwardsthe
deductionunderSection80Dwillbeavailableasperthelimitspecifiedbelow:
Individual HUF
Forself,spouseanddependentchildren:Rs. PremiumuptoRs.25,000(Rs.30,000ifmember
25,000 (Rs. 30,000 if person insured is a insured is a senior citizen or very senior citizen)
seniorcitizen*orveryseniorcitizen**) paidtoinsureanymemberofthefamily.
Forparentsoftheassessee:(Additional)Rs. NA
25,000 (Rs. 30,000 if person insured is a
seniorcitizenorveryseniorcitizen)
Medical expenditure if no amount is paid in Medical expenditure if no amount is paid in
respect of health insuranceRs.30,000 (only respect of health insuranceRs.30,000 (only in
incaseofveryseniorcitizen) caseofveryseniorcitizen)
Aggregate amount of deduction cannot Aggregate amount of deduction cannot exceed
exceedRs.60,000inanycase Rs.30,000inanycase.
*SeniorcitizenmeansanindividualresidentinIndiawhoisoftheageofsixtyyearsormoreat
anytimeduringtherelevantpreviousyear.
**VeryseniorcitizenmeansanindividualresidentinIndiawhoisoftheageofeightyyearsor
moreatanytimeduringtherelevantpreviousyear.
19.MaximumdeductionisRs.40,000(Rs.60,000whereexpenditureisincurredforaseniorcitizen
andRs.80,000incaseofveryseniorcitizen[w.e.fassessmentyear201617])
Witheffectfromassessmentyear201617,thetaxpayershallberequiredtoobtainaprescription
from a specialist doctor (not necessarily from a doctor working in a Government hospital) for
availingthisdeduction.
20. Scope of 'higher education' is enlarged with effect from assessment year 201011 to cover any
courseofstudypursuedafterpassingtheSeniorSecondaryExaminationoritsequivalentfromany
school, Board or university recognised by the Central Government or State Government or local
authorityorbyanyotherauthorityauthorizedbytheCentralGovernmentorStateGovernmentor
localauthoritytodoso.
With effect from 142010 the scope of expression 'relative' has also been enlarged to cover the
studentforwhomthetaxpayeristhelegalguardian.
21.Donationofanysumspaidbytheassessee,beingacompany,inthepreviousyearasdonationsto
theIndianOlympicAssociationortoanyotherassociationorinstitutionestablishedinIndia,asthe
CentralGovernmentmay,havingregardtotheprescribedguidelines,bynotificationintheOfficial
Gazette,specifyinthisbehalffor
(i)thedevelopmentofinfrastructureforsportsandgamesor
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25/11/2015 Deductionsallowabletotaxpayer

(ii)thesponsorshipofsportsandgames,
inIndia
iseligibleforthepurposeofdeductionundersection80G[thisisinconsequenceofomissionof
section10(23)].
22. Donation made to an authority constituted in India by or under any law enacted either for the
purposeofdealingwithandsatisfyingtheneedforhousingaccommodationorforthepurposeof
planning,developmentorimprovementofcities,townsandvillages,orforbothisalsoeligiblefor
the purpose of deduction under section 80G from the assessment year 200304 [this is in
consequenceofomissionofsection10(20A)].
23. With effect from 142013 no deduction shall be allowed in respect of donation of any sum
exceedingtenthousandrupeesunlesssuchsumispaidbyanymodeotherthancash.
24.Witheffectfrom142013nodeductionshallbeallowedunderthissectioninrespectofanysum
exceedingtenthousandrupeesunlesssuchsumispaidbyanymodeotherthancash.
25.Witheffectfrom142014deductionwillnotbeallowedifsumiscontributedincash.
26.Timelimitsstatedundersection80IA(4)(iv)havebeenextendedfrom3132014to3132017.
27.Additionalwagesmeansthewagespaidtothenewregularworkmaninexcessof50workmen
employedduringthepreviousyear.
In case of an existing factory, the additional wages shall be nil, if increase in number of regular
workmenemployedduringtheyearislessthan10%ofexistingnumberofworkmenemployedin
suchfactoryasonthelastdayoftheprecedingyear.
28.WitheffectfromAssessmentYear201617,thedeductionshallbeavailabletoallassessees[not
justIndiancompanies]engagedinthebusinessofmanufacturingofgoodsinafactory.


[AsamendedbyFinanceAct,2015]

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