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Deductions to be made in
Computing total income
DEDUCTIONS
in computing total income of an assessee the
deductions under sections 80-C to 80-U are to be
allowed from GTI
Gross total means: the total income computed in
accordance with the provisions of this act before
making any deduction under the u/s 80-C to 80-U.
BASIC RULES GOVERNING DEDUCTIONS
Deductible from GTI
Aggregate deduction not to exceed GTI ( excluding
LTCG, STCG taxable under section 111A, casual
income)
Double deduction is not possible in respect of the same
business income
DEDUCTIONS IN RESPECT OF CERTAIN PAYMENT
Section 80-C
Specified qualifying amount deposited by the assessee
in the previous year. LIC premium, contribution to
EPF, PPF, NSS, tuition fees of child paid to school and
collage in India.
(a) Available to an individual or a HUF only.
(b) Maximum amount of deduction under this section
is Rs. 150000.
(c) Available on actual payment basis
SECTION 80-CCC
Deduction contribution to certain pension fund
Available only to an individual
Qualifying payment- any amount towards any annuity
plan for LIC of India or Any other insurer for receiving of
the whole amount deposited not exceeding 150000
Set-off
“The process of adjusting or written- off of losses against
income"
When loss of one source is set-off against the income of other
source, means set-off losses within the sources.
SECTION 70-79 OF THE INCOME TAX 1961.
Loss from one source is set off against the incomes of other
sources or heads and thus the total income of an Assessee is
ascertained
Note-
3 Non- Speculation Any income except salary Profit or gain from business 8
business loss
4 Short term capital Both short term and long Both short term and long term 8
loss term
5 Long term capital Long term capital gain Long term capital gain
loss
6 Loss of the activity income from activity of income from activity of owning and 4
of owning and owning and maintaining maintaining race horse
maintaining race race horse
CLUBBING OF INCOME
Income of other person included in assessee’s total
income.
Certain cases where income of one person is required
to be included in the income of another person if some
conditions are satisfied.
CLUBBING OF INCOME
Transfer of Income Without Transfer Of Asset
(Sec. 60)
Section 60 is applicable if the following conditions are
satisfied:
The taxpayer owns an asset
2. adequate consideration
3. agreement to live apart
CLUBBING OF INCOME OF MINOR CHILD
Income earned by a miner child is clubbed in the
income of that parent whose income is higher.
However, if the minor’s parents are separated, his/her
income clubbed with the income of the parent who
maintained the minor.