Income tax exemptions for the year 2010-11

Sl No

Section

Details of deductions

Quantum

80C

Maximum Rs 1 ,00,000 is allowed. General deduction for investment in PPF,PF,Life Insurance, ULIP, Stamp duty on house, Fixed deposits for 5 years Investment need not be from taxable , bonds etc income. Deduction in case of contribution to pension fund. However, it should be noted that surrender valueor employer contribution is considered income. Deduction in respect to contribution to new pension scheme. Employees of central and others are eligible.

80CCC

Maximum is Rs 1,00,000 Maximum is sum of employers and employees contribution to the maximum : 10 % of salary.

80CCD

It should be noted that as per section 80CCE , the maximum amount of deduction which can be claimed in aggregate of 80C ,80CCC & 80CCD is Rs 1,00,0000 Rs 15,000 for self , spouse & children Extra Rs 15,000 for insurance on parents. IF parents are above 65 years, extra sum should be read as Rs 20,000 Thus maximum is RS 35,000 per annum

80D

Medical insurance on self, spouse , children or parents

80DD

For maintenance including treatment or 7insurance the lives of physical Rs 50,000 . In case disability is severe , disable dependent relatives the amount is Rs 1,00,000. For medical treatment of self or relatives suffering from specified disease Acutal amount paid to the extent of Rs 40,000. In case of patient being Sr Citizen , amount is Rs 60,000

80DDB

80E

Actual amount paid as interest and start For interest payment on loan taken for from the financial year in which he /she higher studies for self or education of starts paying interest and runs till the spouse or children interest is paid in full. 100% or 50% of amount of donation made to 19 entities (National defense fund , Prime minister relief fund etc. )

80G

Donations to charitable institution

10

80GG

For rent paid.

This is only for people not getting any House Rent Allowance. Maximum is Rs 2000 per month. Rule 11B is method of computation. Only those tax payers who have no business incomecan claim this deduction .Maximum is equivalent to 100 % of donation. 100 % of donations Royalty income or Rs 3,00,000 whichever is less. Actual royalty or Rs 3,00,000 whichever is less.

11 12

80GGA 80GGC

For donation to entities in scientific research or rural development f For contribution to political parties Allowed only to resident authors for royalty income for books other than text book For income receipt as royalty on patents of resident individuals

13 14

80QQB 80RRB

15

80U

Deduction in respect of permanent RS 50,000 which goes to Rs 1,00,000 physical disability including blindness in case taxpayer is suffering from to taxpayer severe disability

Exemptions: 1) 80 C Limit Unchanged (Rs. 1,00,000)(refer to our earlier blog for all options under section 80 C (http://bit.ly/4px5hz) 2) 80 CCF Additional Rs. 20,000 on investments towards approved Infrastructure bonds 3) 80CCD: Contribution to NPS and returns on NPS tax free, but withdrawal still taxable 4) 80 D

Mediclaim Premium on the Health of Investment limit a) b) c) Self Spouse and Children Parent/Parents If Parent/ Parents Senior citizen Rs. 15,000 Rs. 15,000 Rs. 20,000

5) Section 80DD Deduction under section 80DD Exemption given for Expenditure made for a disabled dependant towards Medical Treatment/Training/Rehabilitation. It also includes the LIC/Insurance premium paid towards maintenance of such dependant.

Maximum deduction allowed is Rs. 50,000/- in case of normal disability and Rs. 1 Lakh in case of severe disability. 6) 80DDB Deduction under section 80DDB Exemption given for expenditure incurred on specified disease or ailments such as cancer/aids. Maximum deduction allowed is Rs. 40,000/-. In case of Senior Citizens, maximum deduction allowed is Rs. 60,000/7) Section 80E Deduction under section 80E Deduction is allowed for repayment of interest component of Higher Education loan. All education after Class 12 is allowed, either vocational or Fulltime. But should be from a school/institute/university recognized by the government. 8 ) Section 80G Contribution to exempt charities 25/50/75/100% depending on the charity and as per approval 100% exemption on donation to political parties 9) 80U Deduction under section 80U Deduction upto Rs. 50,000/- is allowed in case of Permanent Disability. In case of Permanent Disability exceeding 80%, maximum deduction allowed is Rs. 75,000/-. 10) Section 24(1)(vi) Housing loan interest. Maximum Investment Limit Rs. 1,50,000 (for loans taken after 1 April 1999, for loans before that Maximum Investment Limit 30,000). 11) Superannuation Any contribution made by a company to superannuation fund upto Rs. 1,00,000 tax free in the hands of the employee 12) Conveyance/Transport Allowance Any Conveyance / Transport Allowance given to an employee is tax free upto Rs. 9,600 /- (No Supporting Bills required) 13) Medical Allowance Any Medical Allowance given to an employee is tax free upto Rs. 15,000 /- (Supporting Bills required) 14) HRA Any House Rent Allowance given to an employee is tax free upto the minimum value of the following conditions (subject to when an employee can produce rent paid receipts from landlord for the period and if the employee has not availed of tax exemptions for home loan interest / principal repayment): a) 50% of Annual Basic (40% of Annual Basic in case of non-metros) b) Actual HRA received c) Rent Paid (10% of Annual Basic)

15) Professional Tax Any Professional Tax deducted from an employees salary can be reduced from the annual salary income to arrive at taxable salary 16) Provident Fund Provident Fund contributions (under section 80 C and subject to an overall investment limit of Rs. 1,00,000 ) deducted from an employees salary are tax exempt.