Tax Benefits of Higher Education Loan U/s 80E, With Automated All in One TDS on Salary for Non-Govt employees for F.Y.2016-17

Tax  Benefits of Higher Education Loan U/s 80E
As we all in this day and age are aware of the concept of higher education loan but we forget the tax benefits of such a loan. As we all undertake higher education for our professional goals, taking a higher education loan to pay for the education costs can be a very helpful tool for tax planning as well. Let us one by one understand the related concepts for availing this tax deduction.
Section 80E
Under section 80E of the Income Tax Act, 1961, you can claim a deduction if you have
paid interest out of your taxable income on the loan taken for your higher education or also for your relative’s (spouse or children) higher education. In fact, as an extended benefit, the deduction for a higher education loan is also allowed to a legal guardian.
What is Higher Education
It is important to understand, for the purpose of this deduction, what is meant by a higher education. Higher education for this purpose involves full-time studies for a graduate or post-graduate course in engineering, medicine, management; or for the post-graduate course in applied sciences, or pure sciences, including mathematics and statistics. The vocational studies pursued after passing senior secondary is also included. This is how higher education is defined in Income Tax Act, 1961.
What kind of Higher Education Loans Qualify
Next step is to understand which kind of loans qualify for this deduction. It is pertinent for this deduction that the loan is taken for higher studies from any financial institution or approved charitable institution. A very important point to focus on here is that any form or kind of personal loans (could be from individuals, relatives, and friends) are not eligible for this tax deduction.
What will be the Deduction and When it will be available
Deduction for the interest paid on a qualified higher education loan as explained in the points above can be claimed for up to eight years from the start of the assessment year when repayment of this loan commences.
There is no monetary limit on the amount of interest on which deduction is allowed for education
loan. However, it is important to note that the deduction is allowed under the Act only if payment is made from taxable income.

It might be relevant though that the funds be borrowed keeping in view the rate of interest, and repayment tenure while remembering that there is no limit to the amount of interest allowed as a tax benefit.
Download All in One Income Tax preparation Excel Based Software for only Non-Govt employees for the F.Y.2016-17 & A.Y.2017-18. [This Excel Utility can prepare at a time income Tax compute sheet + Individual Salary Structure for Non-Govt employees Salary Pattern + Automatic H.R.A. Calculation + Automated Form 12 BA + Automated Form 16 Part A&B and Form 16 Part B ]

Tax  Benefits of Higher Education Loan U/s 80E
As we all in this day and age are aware of the concept of higher education loan but we forget the tax benefits of such a loan. As we all undertake higher education for our professional goals, taking a higher education loan to pay for the education costs can be a very helpful tool for tax planning as well. Let us one by one understand the related concepts for availing this tax deduction.
Section 80E
Under section 80E of the Income Tax Act, 1961, you can claim a deduction if you have
paid interest out of your taxable income on the loan taken for your higher education or also for your relative’s (spouse or children) higher education. In fact, as an extended benefit, the deduction for a higher education loan is also allowed to a legal guardian.
What is Higher Education
It is important to understand, for the purpose of this deduction, what is meant by a higher education. Higher education for this purpose involves full-time studies for a graduate or post-graduate course in engineering, medicine, management; or for the post-graduate course in applied sciences, or pure sciences, including mathematics and statistics. The vocational studies pursued after passing senior secondary is also included. This is how higher education is defined in Income Tax Act, 1961.
What kind of Higher Education Loans Qualify
Next step is to understand which kind of loans qualify for this deduction. It is pertinent for this deduction that the loan is taken for higher studies from any financial institution or approved charitable institution. A very important point to focus on here is that any form or kind of personal loans (could be from individuals, relatives, and friends) are not eligible for this tax deduction.
What will be the Deduction and When it will be available
Deduction for the interest paid on a qualified higher education loan as explained in the points above can be claimed for up to eight years from the start of the assessment year when repayment of this loan commences.
There is no monetary limit on the amount of interest on which deduction is allowed for education
loan. However, it is important to note that the deduction is allowed under the Act only if payment is made from taxable income.

It might be relevant though that the funds be borrowed keeping in view the rate of interest, and repayment tenure while remembering that there is no limit to the amount of interest allowed as a tax benefit.
Download All in One Income Tax preparation Excel Based Software for only Non-Govt employees for the F.Y.2016-17 & A.Y.2017-18. [This Excel Utility can prepare at a time income Tax compute sheet + Individual Salary Structure for Non-Govt employees Salary Pattern + Automatic H.R.A. Calculation + Automated Form 12 BA + Automated Form 16 Part A&B and Form 16 Part B ]

What Is Income Declaration Scheme (IDS) 2016? With All in One Income Tax Software for West Bengal Govt employees for F.Y.2016-17

The Income Declaration Scheme (IDS) is a new scheme from the Income Tax Department, where an individual who has not paid full taxes in the past can come forward and declare the undisclosed income and pay tax, surcharge, and penalty totalling in all to forty-five per cent of such undisclosed income declared.

Download All in One Income Tax Preparation Excel Based Software for West Bengal Govt employees for F.Y.2016-17 & A.Y.2017-18 [This Excel Utility can prepare at a time your Tax Compute Sheet + Individual Salary Structure + Individual Salary Sheet + Automated H.R.A. Calculation + Automated Form 16 Part A&B and Form 16 Part B as per Finance Bill 2016]


Note that information provided in the declaration will be confidential as in the case of return of income filed by an assessee.

All 'persons', such as individuals, HUFs, companies, firms, the association of persons (AOP) etc., are eligible to make the declaration under the Scheme. 
Declaration can be made of any undisclosed income, investment in any asset representing undisclosed income relating to any financial year up to 2015-16.

What is the tax payable by declarant?

Tax is applicable at 30% of undisclosed income, the surcharge is applicable at 7.5% of undisclosed income and penalty will be levied at 7.5% of undisclosed income. Total of 45% undisclosed income declared.


What is the last date to make payment?

A declaration should be made before 30th September 2016 as it is the last date for making a declaration under the Scheme and 30th November 2016 as the last date for which the tax, surcharge, and penalty shall be paid.


When will the declaration be considered as invalid?

In the following situations, a declaration shall be void.  If the declarant fails to pay the entire amount of tax, surcharge, and penalty within the specified date, that is September 30, 2016. Where the declaration has been made by misrepresentation or suppression of facts or information.


However, any tax, surcharge or penalty paid in pursuance of the declaration will not be refundable under any circumstances.

Declaration not eligible in certain cases such as where a notice under section 142 or section 143(2) or section 148 or section 153A or section 153C of the Income-tax Act has been issued in respect of such assessment year and the proceeding is pending before the Assessing Officer.

Also, where a search has been conducted under section 132 or requisition has been made under section 132A or a survey has been carried out under section 133A of the Income-tax Act in a previous year.

Cases which are covered under the Black Money (Undisclosed Foreign Income & Assets) and Imposition of Tax Act, 2015 are not eligible for declaration.

Conclusion:-


The declaration may be filed online on the e-filing website of the Income-tax Department using the digital signature of the declarant or through electronic verification code.

It is highly possible that in the past owing to error or deliberately, you have not declared your income correctly. This is a great opportunity to go ahead and declare your correct income and that which was concealed.

The Income Declaration Scheme (IDS) is a new scheme from the Income Tax Department, where an individual who has not paid full taxes in the past can come forward and declare the undisclosed income and pay tax, surcharge, and penalty totalling in all to forty-five per cent of such undisclosed income declared.

Download All in One Income Tax Preparation Excel Based Software for West Bengal Govt employees for F.Y.2016-17 & A.Y.2017-18 [This Excel Utility can prepare at a time your Tax Compute Sheet + Individual Salary Structure + Individual Salary Sheet + Automated H.R.A. Calculation + Automated Form 16 Part A&B and Form 16 Part B as per Finance Bill 2016]


Note that information provided in the declaration will be confidential as in the case of return of income filed by an assessee.

All 'persons', such as individuals, HUFs, companies, firms, the association of persons (AOP) etc., are eligible to make the declaration under the Scheme. 
Declaration can be made of any undisclosed income, investment in any asset representing undisclosed income relating to any financial year up to 2015-16.

What is the tax payable by declarant?

Tax is applicable at 30% of undisclosed income, the surcharge is applicable at 7.5% of undisclosed income and penalty will be levied at 7.5% of undisclosed income. Total of 45% undisclosed income declared.


What is the last date to make payment?

A declaration should be made before 30th September 2016 as it is the last date for making a declaration under the Scheme and 30th November 2016 as the last date for which the tax, surcharge, and penalty shall be paid.


When will the declaration be considered as invalid?

In the following situations, a declaration shall be void.  If the declarant fails to pay the entire amount of tax, surcharge, and penalty within the specified date, that is September 30, 2016. Where the declaration has been made by misrepresentation or suppression of facts or information.


However, any tax, surcharge or penalty paid in pursuance of the declaration will not be refundable under any circumstances.

Declaration not eligible in certain cases such as where a notice under section 142 or section 143(2) or section 148 or section 153A or section 153C of the Income-tax Act has been issued in respect of such assessment year and the proceeding is pending before the Assessing Officer.

Also, where a search has been conducted under section 132 or requisition has been made under section 132A or a survey has been carried out under section 133A of the Income-tax Act in a previous year.

Cases which are covered under the Black Money (Undisclosed Foreign Income & Assets) and Imposition of Tax Act, 2015 are not eligible for declaration.

Conclusion:-


The declaration may be filed online on the e-filing website of the Income-tax Department using the digital signature of the declarant or through electronic verification code.

It is highly possible that in the past owing to error or deliberately, you have not declared your income correctly. This is a great opportunity to go ahead and declare your correct income and that which was concealed.

At a Glance all Income Tax Deductions for the Financial Year 2016-17 and Assessment Year 2017-18 Amended

DEDUCTIONS As per Income Tax Ruls amended by the the Income Tax DepartmentAY 2017-18]
Section
Nature of deduction
              Who can claim                                          shWho can claim

(1)
(2)
                   (3)                                                                    (3)


Against 'salaries'


Entertainment allowance [actual or at the rate of 1/5th of salary, whichever is less] [limited to Rs. 5,000]
Government 
employees

Employment tax
Salaried assessees


                      Against 'income from house properties'

   23(1), first         
proviso
Taxes levied by local authority and borne by owner if paid in relevant previous year
All assessees

Standard deduction [30% of the annual value (gross annual value less municipal taxes)]
All assessees

Interest on borrowed capital (Rs. 30,000/Rs. 2,00,000, subject to specified conditions)
All assessees

Standard deduction of 30 per cent of arrears of rent or unrealised rent received
All assessees


      Against 'profits and gains of business or profession'
                          A. Deductible items

Rent, rates, taxes, repairs (excluding capital expenditure) and insurance for premises
All assessees

Repairs (excluding capital expenditure) and insurance of machinery, plant and furniture
All assessees

Depreciation1 in respect of following assets shall be allowed at prescribed percentage on actual cost of an asset (i.e., Straight Line Method):
 i.  Tangible Assets (buildings, machinery, plant or furniture);
 ii. Intangible Assets (know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature).
However, if asset is acquired and put to use for less than 180 days during the previous year, the deduction shall be restricted to 50% of depreciation computed above.
Note:
Taxpayers engaged in business of generation or generation and distribution of power have the option to claim depreciation on written down value basis also
Taxpayer engaged in 
business
 of generation or 
generation
 and distribution 
of power.

Depreciation1 in respect of following assets shall be allowed at prescribed percentage on written down value of each block of asset (as per WDV method):
 i.  Tangible Assets (buildings, machinery, plant or furniture);
ii. Intangible Assets (know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature).
However, if asset is acquired and put to use for less than 180 days during the previous year, the deduction shall be restricted to 50% of depreciation computed above.
All assessees 
engaged in
business or 
profession

Additional depreciation shall be allowed at 20% of actual cost of new plant and machinery [other than ships, aircraft, office appliances, second hand plant or machinery, etc.] (Subject to certain conditions).
However, if an asset is acquired and put to use for less than 180 days during the previous year, 50% of additional depreciation shall be allowed in year of acquisition and balance 50% would be allowed in the next year.
All taxpayers
engaged in:
a) manufacture or
production of
any article or thing;
or
b) generation, transmission
 or
distribution of power
 (if taxpayer is not claiming
depreciation on straight
line basis ).

Proviso to 
Additional depreciation shall be allowed at 35% of actual cost of new plant and machinery [other than ships, aircraft, office appliances, second hand plant or machinery, etc.] (Subject to certain conditions).
However, if an asset is acquired and put to use for less than 180 days during the previous year, 50% of additional depreciation shall be allowed in year of acquisition and balance 50% would be allowed in the next year.
Note:
1.  Manufacturing unit should be set-up on or after April 1, 2015.
2.  New plant and machinery should be acquired and installed on or after April 1, 2015 but before April 1, 2020.
All taxpayers setting-up 
an undertaking or 
enterprise for production or 
manufacture of
 any article or thing in any
 notified
 backward area in the 
state of
Andhra Pradesh, 
Bihar,
Telangana or 
West Bengal.

Investment allowance shall be allowed at 15% of actual cost of new asset acquired and installed by a company engaged in business or manufacturing or production of any article or thing (Subject to certain conditions)
Note:
Deduction shall be available if actual cost of new plant and machinery acquired and installed by the company during the previous year exceeds Rs. 25/100 Crores, as the case may be
Company engaged in
 business
 of manufacturing or 
production
of any article or thing.

Investment allowance shall be allowed at 15% of actual cost of investment made in new plant and machinery (other than ships, aircraft, vehicle, office appliances, second hand plant or machinery, etc.) if manufacturing unit is set-up in notified backward area in the State of Andhra Pradesh, Bihar, Telangana or West Bengal (subject to certain conditions).
Note:
1.  New asset should be acquired and installed on or after April 1, 2015 but before April 1, 2020.
2.  Manufacturing unit should be set-up on or after April 1, 2015.
3.  Deduction shall be allowed under Section 32AD in addition to deduction under Section 32AC if assessee fulfils the specified conditions.
All taxpayers who acquire 
new
 plant and machinery
 for
purpose of setting-up
 manufacturing unit in
notified backward areas
 in the
State of Andhra Pradesh, 
Bihar,
 Telangana or 
West Bengal

Development allowance - 50 per cent of actual cost of planting (subject to certain conditions and limits) (planting should have been completed before 1-4-1990)
Assessee engaged in 
business
of growing and
 manufacturing
tea in India

Tea/Coffee/Rubber Development Account - Amount deposited in account with National Bank (Special Account) or in Deposit Account of Tea Board, Coffee Board or Rubber Board in accordance with approved scheme or 40% of profits of business, whichever is less (subject to certain conditions)
Assessees engaged in
 business
 of growing and 
manufacturing
 tea/Coffee/
Rubber in India

Amount deposited in Special Account with SBI/Site Restoration Account or 20 per cent of profits, whichever is less (subject to certain conditions)
Assessee carrying on 
business
 of prospecting for,
 or
extraction or 
production of,
petroleum or natural 
gas or
both in India

Revenue expenditure on scientific research pertaining to business of assessee is allowed as deduction (Subject to certain conditions).
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 prescribed authority.
All assessee

175% of contribution made to approved research association, university, college or other institution to be used for scientific research shall be allowed as deduction (Subject to certain conditions)
150% of sum paid to such association, university, college or other institution is allowed as deduction (applicable from AY 2018-19)
All assessee

125% of contribution made to an approved company registered in India to be used for the purpose of scientific research is allowed as deduction (Subject to certain conditions)
Entire sum paid to the company is allowed as deduction (applicable from AY 2018-19)
All assessee

125% of contribution made to approved research association, university, college or other institution with objects of undertaking statistical research or research in social sciences shall be allowed as deduction (Subject to certain conditions)
Entire sum paid to such association, university, college or other institution is allowed as deduction (applicable from AY 2018-19)
All assessee

35(1)(iv) read with35(2)
Capital expenditure incurred during the year on scientific research relating to the business carried on by the assessee is allowed as deduction (Subject to certain conditions)
Capital expenditure incurred within 3 years before commencement of business is allowed as deduction in the year of commencement of business.
Note:
i. Capital expenditure excludes land and any interest in land;
ii. No depreciation shall be allowed on such assets.
All assessee

200% of payment made to a National Laboratory or University or an Indian Institute of Technology or a specified person is allowed as deduction (Subject to certain conditions).
150% of payment is allowed as deduction (applicable from AY 2018-19)
The payment should be made with the specified direction that the sum shall be used in a scientific research undertaken under an approved programme.
All assessee

200% of any expenditure incurred by a company on scientific research (including capital expenditure other than on land and building) on in-house scientific research and development facilities as approved by the prescribed authorities shall be allowed as deduction (Subject to certain conditions).
150% of expenditure so incurred shall be allowed as deduction (applicable from AY 2018-19)
Note:
Company should enter into an agreement with the prescribed authority for co-operation in such research 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;
Company engaged in 
business
 of bio-technology or 
in any
 business of 
manufacturing or
production of eligible 
articles
or things

Expenditure incurred before 1-4-1998 on acquisition of patent rights or copyrights [equal to appropriate fraction of expenditure on acquisition to be deducted in fourteen equal annual instalments beginning with previous year in which such expenditure has been incurred] (subject to certain conditions)
All assessees

Lump sum payment made in any previous year relevant to assessment year commencing on or before 1-4-1998, for acquisition of technical know-how [consideration for acquisition to be deducted in six equal annual instalments (3 equal annual instalments where know-how is developed in certain laboratories, universities and institutions)] (subject to certain conditions)
All assessees

Capital expenditure incurred and actually paid for acquiring any right to use spectrum for telecommunication services shall be allowed as deduction over the useful life of the spectrum in equal instalments
All Assessee engaged
 in
telecommunication 
services

Expe nditure incurred for obtaining licence to operate telecommunication services either before commencement of such business or thereafter at any time during any previous year
All assessees

Expenditure by way of payment of any sum to a public sector company/local authority/approved association or institution for carrying out any eligible scheme or project (subject to certain conditions)
Deduction under this section is available only A.Y. 2017-2018
All assessees

Capital expenditure incurred, wholly and exclusively, for 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; laying and operating a cross-country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of such network; building and operating, anywhere in India, a hotel of two-star or above category as classified by the Central Government; building and operating, anywhere in India, a hospital with at least one hundred beds for patients; developing and building a notified housing project under a scheme for slum redevelopment or rehabilitation framed by 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-keeping and production of honey and beeswax; and setting up and operating a warehousing facility for storage of sugar. Lying and operating a slurry pipeline for the transportation of iron ore; setting-up and operating a notified semi-conductor wafer fabrication manufacturing unit; developing or maintaining and operating or developing, maintaining and operating a new infrastructure facility4, carried on by the assessee during the previous year in which such expenditure is incurred (subject to certain conditions)
All assessees
Note: Such deduction is
available to
 Indian company in
case of
following business, namely;-
 i)   Business of laying
 and
operating a cross-country
natural
gas or crude or petroleum
oil
pipeline network.
 ii)  Developing or
maintaining
and operating or
developing,
maintaining and operating
 a new
 infrastructure facility.

Payment to associations/institutions for carrying out rural development programmes (subject to certain conditions)
All assessees

Expenditure incurred before 1-4-2002 by way of payment to approved associations/institutions for carrying out approved programmes of conservation of natural resources or afforestation (subject to certain conditions)
All assessees

One and a half times of expenditure on notified agricultural extension project (subject to certain conditions)
All assessees


From the Assessment Year 2021-22, the deductionshall be restricted to 100% of the expenditure incurred.


One and a half times of expenditure on notified skill development project (subject to certain conditions)
A company


Note: From the Assessment Year 2021-22, the deduction shall be restricted to 100% of the expenditure incurred.


Amortisation of certain preliminary expenses [deductible in 5 equal annual instalments] (subject to certain conditions)
Indian companies and
 resident
 non-corporate 
assessees

Amortisation of expenditure incurred after 31-3-1999 in case of amalgamation or demerger in the hands of an Indian company (one-fifth of such expenditure for 5 successive previous years) (subject to certain conditions)
Indian Company

Amortisation of expenditure incurred under voluntary retirement scheme in 5 equal annual instalments starting with the year when the expenditure is incurred
All assessees

Expenditure on prospecting, etc., for certain minerals [deductible in ten equal annual instalments] (subject to certain conditions)
Indian companies and 
resident
 non-corporate 
assessees
engaged in prospecting, 
etc., for minerals

Insurance premium covering risk of damage or destruction of stocks/stores
All assessees

Insurance premium covering life of cattle owned by a member of co-operative society engaged in supplying milk to federal milk co-operative society
Federal milk 
co-operative
societies

Medical insurance premium paid by any mode other than cash, to insure employee's health under (a) scheme framed by GIC of India and approved by Central Government; or (b) scheme framed by any other insurer and approved by IRDA
All assessees as
 employers

Bonus or commission paid to employees
All assessees

Interest on borrowed capital2
All assessees

Pro rata amount of discount on a zero coupon bond based on life of such bond and calculated in prescribed manner
All assessees

Contributions to recognised provident fund and approved superannuation fund [subject to certain limits and conditions]
All assessees as 
employers

Any sum paid by assessee-employer by way of contribution towards a pension scheme, as referred to in section 80CCD, on account of an employee to the extent it does not exceed 10 per cent of the employee's salary in the previous year.
All assessees as 
emloyers

Contributions to approved gratuity fund [subject to certain limits and conditions]
All assessees as 
employers

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 such employees, received from employees if the same are credited to the employee's account in relevant fund or funds before due date
All assessees as 
employers

Allowance in respect of animals which have died or become permanently useless [subject to certain conditions]
All assessees

Bad debts which have been written off as irrecoverable [subject to limitation in the case of banks and financial institutions]
All assessees

Provision for bad and doubtful debts




■ up to 7½ per cent of total income before making any deduction under this clause and Chapter VI-A, and up to 10 per cent of aggregate average advances made by its rural branches
Certain
Scheduled
 banks,
non-scheduled
 banks
(but other than 
foreign banks)
 and co-operative
 bank
(other than primary
agricultural credit 
society or
primary 
co-operative
agricultural 
and rural
development 
bank)


■ up to 5 per cent (10% in case of Public Financial Institutions, State Financial Corporations and State Industrial Investment Corporations in any of the two consecutive assessment years 2003-04 and 2004-05 - subject to certain conditions) of total income before making any deduction under this clause and Chapter VI-A
Foreign banks/
Public
financial institutions/
State
financial corporations/
State
industrial investment
corporations. 
Non-Banking
Financial 
Company
Amounts transferred to special reserve [subject to certain conditions and maxi-mum of 20 per cent of profits derived from eligible business]
Specified entities, 
namely,
 financial corporations/
financial
 corporation which is
 a public
 sector company/
banking
company/co-operative
 bank
other than a primary
agricultural credit
 society or a
 primary co-operative
agricultural and
 rural
development bank/
housing
 finance company/
any other
financial 
corporation
including
 a public company

Expenditure for promoting family planning amongst employees (deductible in 5 equal annual instalments in case of capital expenditure)
Companies

Expenditure incurred wholly and exclusively by the assessee on or after the 1st April, 1999 but before the 1st April, 2000 in respect of a non-Y2K compliant system, owned by the assessee and used for the purposes of his business or profession, so as to make such system Y2K compliant computer system
All assessees

Any expenditure (not being in the nature of capital expenditure) incurred by a notified corporation or body corporate, by whatever name called, constituted or established by a Central, State or Provincial Act, for the objects and purposes authorised by the Act under which such corporation or body corporate was constituted or established
Notified corporation 
or body
 corporate, by 
whatever 
name
 called, constituted 
orestablished by a 
Central,State or 
Provincial Act

Any banking cash transaction tax paid during the previous year on taxable banking transaction entered into by the assessee
All assessees

Contribution to notified credit guarantee trust fund for small industries
Public financial 
institution

Securities Transaction Tax paid if corresponding income is included as income under the head 'Profits and gains of business or profession'
All assessees

Amount equal to commodities transaction tax paid by an assessee in respect of taxable commodities transactions entered into in the course of his business during the previous year, if the income arising from such transactions is included in the income computed under the head "Profits and gains of business or profession"
All assessees

Amount of expenditure incurred by a co-operative society for purchase of sugarcane shall be allowed as deduction to the extent of lower of following:
a) Actual purchase price of sugarcane; or
b) Price of sugarcane fixed or approved by the Government
Co-operative
 society 
engaged
in business of 
manufacturing
sugar

Any other expenditure [not being personal or capital expenditure and expenditure mentioned in sections 30 to 36] laid out wholly and exclusively for purposes of business or profession5
All assessees


B. Non-deductible items


Advertisement in souvenir, brochure, tract, pamphlet, etc., of political party
All assessees

Interest, royalty, fees for technical services or other chargeable sum payable outside India, or in India to a non-resident or foreign company, on which tax has not been paid/deducted during the previous year or in the subsequent year within time prescribed under section 200(1). Where in respect of any such sum, tax has been deducted in any subsequent year or, has been deducted in the previous year but paid in any subsequent year after the expiry of the time prescribed under sub-section (1) of section 200, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid6
All assessees

Any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work)7, on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in sub-section (1) of section 139.
All assessees


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 specified in sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid.


Any sum paid or payable to a non-resident which is subject to a deduction of Equalisation levy would attract disallowance if such sum was paid without deduction of such levy or if it was deducted but not deposited with the Central Government till the due date of filing of return.
All assessees


However, where in respect of any such sum, Equalisation levy is deducted or deposited in subsequent year, as the case may be, the expenditure so disallowed shall be allowed as deduction in that year.



Note: This provision has been inserted by the Finance Act, 2016, w.e.f. 1-6-2016


Rate or tax levied on the profits or gains of any business or profession
All
assessees

Wealth-tax paid
All 
assessees

Amount paid by way of royalty, licence fee, service fee, privilege fee, service charge or any other fee or charge, 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 State Government
State Govt. 
undertakings

Salaries payable outside India, or in India to a non-resident, on which tax has not been paid/deducted at source
All assessees 
as employers

Payments to provident fund/other funds for employees' benefit for which no effective arrangements are made to secure that tax is deducted at source on payments made from such funds which are chargeable to tax as 'salaries'
All assessees 
as employers

Tax actually paid by an employer referred to in section 10(10CC)
All assessees 
as employers

Interest, salary, bonus, commission or remuneration paid to partners (subject to certain conditions and limits)
Firms

Interest, salary, bonus, commission or remuneration paid to members (subject to certain conditions and limits)
Association of 
persons 
or  body of 
individuals
 (except a company 
or a co-operative 
society,
society registered 
under
Societies 
Registration
Act, etc.)

Expenditure involving payment to relative/director/partner/substantially interested person, etc., which, in the opinion of the Assessing Officer, is excessive or unreasonable
All 
assessees

100% of payments exceeding Rs. 20,000 (Rs. 35,000 in 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)
All
assessees

Any provision for payment of gratuity to employees, other than a provision made for purposes of contribution to approved gratuity fund or for payment of gratuity that has become payable during the year (subject to specified conditions)
All 
assessees as 
employers

Any sum paid for setting up or formation of, or as contribution to, any fund, trust, company, AOP, BOI, Society or other institution, other than recognised provident fund/approved superannuation fund/pension scheme referred to insection 80CCD/approved gratuity fund
All 
assessees as 
employers


C. Other deductible items


In case of mineral oil concerns allowances specified in agreement entered into by Central Government with any person (subject to certain conditions and terms of agreement)
Assessees 
engaged in
prospecting 
for or 
extraction
or production 
of mineral oils

In case of mineral oil concerns expenditure incurred remaining unallowed as reduced by proceeds of transfer
Assessee whose 
business
consists of 
prospecting 
for or extraction or 
production
 of petroleum and 
natural gas
and who transfers
 any interest in such 
business

Any sum which is actually paid, relating to (i) tax/duty/cess/fee levied under any law, (ii) contribution to provident fund/superannuation fund/gratuity fund/any fund for employees' welfare, (iii) bonus/commission to employees, (iv) interest on loan/borrowing from any public financial institution, State Financial Corporation or State Industrial Investment Corporation/interest payments to scheduled banks/Co-operative banks on loans or advances, and (v) sum payable by employers by way of leave encashment to employees. (vi) sum payable to the Indian Railways for the use of railway assets. Deduction will not be allowed in year in which liability to pay is incurred unless actual payment is made in that year or before the due date of furnishing of return of income for that year
All assessees

Expenditure in excess of subscription, etc., received from members (subject to certain conditions and limits)
Trade, 
professional or
similar association

Head office expenditure (subject to certain conditions and limits)
Non-resident


Against 'capital gains'


Expenditure incurred wholly and exclusively in connection with transfer of capital asset
All assessees

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

Long-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

Capital 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

Capital 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

Net consideration on transfer of long-term capital asset made before 1-4-2000 invested in specified bonds, debentures, shares of a public comp-any or units of notified mutual funds (subject to certain conditions and limits)
Any 
assessee

Long-term capital gains on transfer of any long-term capital asset made be-fore 1-4-2000 invested in specified long-term assets (subject to certain conditions and limits)
Any 
assessee

Long-term capital gains invested in long-term specified asset (bond redeemable after 3 years) (maximum investment in a financial year is Rs. 50 lakhs)9 issued by National Highways Authority of India; or by the Rural Electrification Corporation Limited (subject to certain conditions and limits)
Any 
assessee

Long-term capital gains on transfer before 1-4-2006 of certain listed securities or units invested in equity shares forming part of an eligible issue of capital (subject to certain conditions and limits)
Any 
assessee

Long-term capital gain invested in long-term specified assets being units of such fund as may be notified by Central Government to finance start-ups
All 
assesses

Net consideration on transfer of long-term capital asset other than residential house invested in residential house10(subject to certain conditions and limits)
Individual/
HUF

Capital 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 
assessee

Exemption 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

Exemption 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


W.e.f. April 1, 2017, eligible start-up is also included in definition of eligible company.



                                 Against 'income from other sources'
                                       A. Deductible items

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

Any reasonable sum paid by way of commission or remuneration for the purpose of realising interest on securities
All 
assessees

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 date
All
 assessees

Repairs, insurance, and depreciation of building, plant and machinery and furniture
Assessees engaged
 in business
of letting out of
 machinery,
plant and furniture
and buildings 
on hire

In case of family pension, 331/3 per cent of such pension or Rs. 15,000, whichever is less
Assessees in receipt of
family
 pension on death 
of employee
 being member
 of assessee's
family

Any other expenditure (not being capital expenditure) expended wholly and exclusively for earning such income
All 
assessees

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


                     B. Non-deductible items

Personal expenses
All 
assessees

Interest chargeable to tax which is payable outside India on which tax has not been paid or deducted at source
All 
assessees

'Salaries' payable outside India on which no tax is paid or deducted at source
All 
assessees

Wealth-tax
All 
assessees

 Expenditure of the nature specified in section 40A
All 
assessees

Expenditure in connection with winnings from lotteries, crossword puzzles, races, games, gambling or betting
All 
assessees


                        For certain payments

 ■  Life insurance premium for policy :
 -    in case of individual, on life of assessee, assessee's spouse and any child of assessee
 -    in case of HUF, on life of any member of the HUF
 ■  Sum paid under a contract for a deferred annuity :
 -    in case of individual, on life of the individual, individual's spouse and any child of the individual (however, contract should not contain an option to receive cash payment in lieu of annuity)
 -     in case of HUF, on life of any member of the HUF
 ■  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]
 ■  Contributions by an individual made under Employees' Provident Fund Scheme
 ■  Contribution to Public Provident Fund Account in the name of:
 -    in case of individual, such individual or his spouse or any child of such individual
 -    in case of HUF, any member of HUF
 ■  Contribution by an employee to a recognised provident fund
 ■  Contribution by an employee to an approved superannuation fund
 ■  Subscription to any notified security or notified deposit scheme of the Central Government. For this purpose, Sukanya Samriddhi Account Scheme has been notified vide Notification No. 9/2015, dated 21.01.2015. Any sum deposited during the year in Sukanya Samriddhi Account by an individual would be eligible for deduction.
 ■  Amount can be deposited by an individual or in the name of girl child of an individual or in the name of the girl child for whom such an individual is the legal guardian.
 ■  Subscription to notified savings certificates [National Savings Certificates (VIII Issue)]
 ■  Contribution for participation in unit-linked Insurance Plan of UTI :
 -    in case of an individual, in the name of the individual, his spouse or any child of such individual
 -    in case of a HUF, in the name of any member thereof
 ■  Contribution to notified unit-linked insurance plan of LIC Mutual Fund [Dhanaraksha 1989]
 -    in the case of an individual, in the name of the individual, his spouse or any child of such individual
 -    in the case of a HUF, in the name of any member thereof
 ■  Subscription to notified deposit scheme or notified pension fund set up by National Housing Bank [Home Loan Account Scheme/National Housing Banks (Tax Saving) Term Deposit Scheme, 2008]
 ■  Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, 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 residential house property
 ■  Subscription to notified schemes of (a) public sector companies engaged in providing long-term 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 improvement of cities, towns and villages, or for both
 ■  Sum paid towards notified annuity plan of LIC (New Jeevan Dhara/New Jeevan Dhara-I/New Jeevan Akshay/New Jeevan Akshay-I/New Jeevan Akshay-II/Jeewan Akshay-III plan of LIC) or other insurer
 ■  Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005)
 ■  Contribution by an individual to any pension fund set up by any mutual fund which is referred to in section 10(23D) or by the UTI (UTI Retirement Benefit Pension Fund)
 ■  Subscription to equity shares or debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions
 ■  Subscription to any units of any approved mutual fund referred to in section 10(23D), provided amount of subscription to such units is subscribed only in 'eligible issue of capital' referred to above.
 ■  Term deposits for a fixed period of not less than 5 years with a scheduled bank, and which is in accordance with a scheme11 framed and notified.
 ■  Subscription to notified bonds issued by the NABARD.
 ■  Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions)
 ■  5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions)
Individual/
HUF

Notes:
 1.  Deduction is limited to whole of the amount paid or deposited subject to a maximum of Rs. 1,50,00012. This maximum limit of Rs. 1,50,00012 is the aggregate of 
the deduction that may be claimed under sections 80C, 80CCC and 80CCD.
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 available on so much of the aggregate of sums as 
do not exceed the total income chargeable to tax during the previous year.
 3.  Life Insurance premium is part of gross qualifying amount for the 
purpose of deduction under section 80C. Payment of premium which is in excess
 of 10 per cent (if policy is issued on or after 1-4-2013, 15% in case of insurance 
on life of person with disability referred to in section 80U or suffering from 
disease or ailment specified in section 80DDB/rule 11DD) of actual capital sum 
assured shall not be included in gross qualifying amount. The value of any 
premiums agreed to be returned or of any benefit by way of bonus or otherwise,
 over and above the sum actually assured, which is to be or may be received under
 the policy by any person, shall not be taken into account for the purpose of 
calculating the actual capital sum assured.
The limit of 10 per cent will be applicable only in the case of policies 
issued on or after 1-4-2012. In respect of policies issued prior to 1-4-2012,
 the old limit of 20 per cent of actual sum assured will be applicable.
With effect from 1-4-2013, 'actual capital sum assured' in relation to a 
life insurance policy shall mean the minimum amount assured under the 
policy on happening of the insured event at any time during the term of 
the policy, not taking into account—
 (i)  the value of any premium agreed to be returned; or
(ii) any benefit by way of bonus or otherwise over and above the
 sum actually assured, which is to be or may be received under the 
policy by any person.
 4.  Where, in any previous year, an assessee—
 (i)  terminates his contract of insurance, by notice to that effect or 
where the contract ceases to be in force by reason of failure to pay any 
premium, by not reviving contract of insurance,—
(a) in case of any single premium policy, within two years after the 
date of commencement of insurance; or
(b) in any other case, before premiums have been paid for two years; or
(ii) terminates his participation in any unit-linked insurance plan (ULIP), 
by notice to that effect 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 paid for five 
years; or
(iii) transfers the house property before the expiry of five years from the 
end of the financial year in which possession of such property is obtained
 by him, or receives back, whether by way of refund or otherwise, 
any sum specified in that clause,
then,—
(a) no deduction shall be allowed to the assessee with reference to any 
of such sums, paid in such previous year; and
(b) the aggregate amount of the deductions of income so allowed in respect 
of the previous year or years preceding such previous year, shall be deemed 
to be the income of the assessee of such previous year and shall be liable to 
tax in the assessment year relevant to such previous year.
If any equity shares or debentures, with reference to the cost of which a 
deduction is allowed, 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 
allowed in respect of such equity shares or debentures in the previous year 
or years preceding the previous year in which such sale or transfer has 
taken place shall be deemed to be the income of the assessee of such 
previous year and shall be liable to tax in the assessment year relevant 
to such previous year.
A person shall be treated as having acquired any shares or debentures on the 
date on which his name is entered in relation to those shares or debentures 
in the register of members or of debenture-holders, as the case may be, of 
the public company.
 5.  If any amount, including interest accrued thereon, is withdrawn by the assessee
 from his deposit account made under (a) Senior Citizen Saving Scheme or
 (b) Post Office Time Deposit Rules, before the expiry of the period of five 
years from the date of its deposit, the amount so withdrawn shall be deemed 
to be the income of the assessee of the previous year in which the amount is 
withdrawn and shall be liable to tax in the assessment year relevant to 
such previous year.
The amount liable to tax shall not include the following amounts, namely:—
 (i)  any amount of interest, relating to deposits referred to above, which 
has been included in the total income of the assessee of the previous year
 or years preceding such previous year; and
(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 income of the assessee for the previous 
year or years preceding such previous year.
Section
Nature of deduction
                    Who can calim                                                            Who can claim
(1)
(2)
(3)
Contributions to certain pension funds of LIC or any other insurer (up to Rs. 1,50,000) (subject to certain conditions)14
Individual
Contribution 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 10% of salary of the employee
Individual
50 per cent of amount invested by specified resident individuals in notified equity savings scheme16(subject to certain conditions and limits) (maximum deduction : Rs. 25,000)
Specified resident
 individuals
 (new retail investors)
Amount 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.

Deduction of Rs. 75,000 (Rs. 1,25,000 in case of severe 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, being a person with disability [as defined under Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995] (w.e.f. assessment year 2005-06 including autism, cerebral palsy and multiple disability as referred to in National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities Act, 1999), or (b) any amount is paid or deposited under an approved scheme framed in this behalf by the LIC or any other insurer or the Administrator or the specified company for the maintenance of a dependent, being a person with disability (subject to certain conditions)
Resident 
Individual/HUF
Expenses actually paid for medical treatment of specified diseases and ailments subject to certain conditions18
Resident
 Individual/HUF
Amount 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 education19 (subject to certain conditions) (maximum period : 8 years)
Individual
Interest 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
Donations to certain approved funds, trusts, charitable institutions/donations for renovation or repairs of notified temples, etc. [amount of deduction is 50 per cent of net qualifying amount]. 100 per cent of qualifying donations to National Defence Fund, Prime Minister's National Relief Fund, Prime Minister's Armenia Earthquake Relief Fund, Africa (Public Contributions - India) Fund, National Children's Fund (from 1-4-2014), Government or approved association for promoting family planning, universities and 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's Relief Fund or the Lt. Governor's Relief Fund in respect of any State or Union Territory, National Sports Fund, National Cultural Fund, Fund for Technology Development and Application, Indian Olympic Association, etc.20, 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 26-1-2001 and 30-9-2001 to any eligible trust, institution or fund for providing relief to Gujarat earthquake victims21, the Swachh Bharat Kosh and the Clean Ganga Fund (from assessment year 2015-16) and National Fund for Control of Drug Abuse (from assessment year 2016-17) [subject to certain conditions and limits]22
All assessees
Rent 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) (subject to certain conditions)
Individuals not 
receiving any house
 rent allowance
Certain 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 Fund (subject to certain conditions)
All assessees not 
having any
 income
 chargeable under t
he head
 'Profits
 and gains of 
business or 
profession'
Sum contributed to any political party/electoral trust24
Indian company
Sum contributed to any political party/electoral trust24
All assessees, other 
than local
authority and artificial
 juridical
 person wholly or partly
 funded 
by Government

For certain incomes

Profits and gains from industrial undertakings engaged in infrastructure facility, telecommunication services, industrial park, development of Special Economic Zone, power undertakings, etc. (subject to certain conditions and limits)25
All assessees

No deduction under this section shall be available to an enterprise which starts the development or operation and maintenance of the infrastructure facility on or after the 1st day of April, 2017.

Profits and gains derived by undertaking/enterprise from business of developing a Special Economic Zone notified on or after 1-4-2005 (subject to certain conditions and limits)
Assessee being Developer
 of SEZ

No deduction under this section shall be available to an assessee, being a developer, where the development of Special Economic Zone begins on or after the 1st day of April, 2017.

Profit and gains derived by an eligible start-up from specified business on or after 1-4-2017(subject to certain conditions)
Company and LLP
Profits and gains from industrial undertakings, cold storage plant, hotel, scientific research & development, mineral oil concern, housing projects, cold chain facility, multiplex theatres, convention centres, ships, etc. (subject to certain conditions and limits)
All assessees
No deduction shall be 

available to
an enterprise which 
commence the
 business activity on or
 after 1-4-2017.
Profits and gains derived by an undertaking or an enterprise in special category States (Himachal Pradesh, Uttaranchal, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura) (subject to certain limits, time limits and conditions),
(a) which has begun or begins to manufacture or produce 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 Schedule and undertakes substantial expansion during the specified period.
(b) which has begun or begins to manufacture or produce 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 during the specified period
All assessees
Profits and gains from business of hotels and convention centres in specified areas (subject to certain conditions).
All assessees
Deduction in respect of certain undertakings in North Eastern States.
All assessees
Entire income from business of collecting and processing or treating of bio-degradable waste for generating power, or producing bio-fertilizers, bio-pesticides or other biological agents or for producing bio-gas, making pellets or briquettes for fuel or organic manure (for 5 consecutive assessment years)
All assessees
Deduction of 30% of additional employee cost in respect of employment of new employees.
Assessee to whom
 section 44AB
applies

Additional employee cost means total emoluments paid or payable to additional employees employed during the previous year.


Deduction shall be allowed for first three Assessment Years including the Assessment Year relevant to previous year in which such employment is provided.


(Subject to certain other condition)

Certain incomes of Scheduled banks/banks incorporated outside India having Offshore Banking Units in a Special Economic Zone/Units of International Financial Services Centre (subject to certain conditions and limits)
Scheduled Banks/banks
 incorporated
 outside India/
Units of International
 Financial Services Centre
Specified incomes [subject to varying limits specified in sub-section (2)]
Co-operative societies
Royalty income of author of certain specified category of books (up to Rs. 3,00,000) (subject to certain conditions)
Resident Individual 
- Author
Royalty on patents up to Rs. 3,00,000 in the case of a resident individual who is a patentee and is in receipt of income by way of royalty in respect of a patent registered on or after 1-4-2003 (subject to certain conditions).
Resident 
individuals
 Interest on deposits in savings bank accounts (up to Rs. 10,000 per year)
Individuals/HUFs
Deduction of Rs. 75,000 to a resident individual who, at any time during the previous year, is certified by the medical authority to be a person with disability [as defined under Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995] [w.e.f. assessment year 2005-06 including autism, cerebral palsy, and multiple disabilities as defined under National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities Act, 1999] [in the case of a person with severe disability, allowable deduction is Rs. 1,25,000] (subject to certain conditions).
Resident individuals

Rebates

Tax rebate in case of individual resident in India, whose total income does not exceed five hundred thousand rupees; quantum of rebate shall be an amount equal to hundred per cent of such income-tax or an amount of five thousand rupees, whichever is less.
Individual

 1.  Provisions of section 32 shall apply whether or not the assessee has claimed depreciation.
 2.  If sum is borrowed for acquiring a capital asset, interest thereon pertaining to the period
 before asset is first put to use shall not be allowed as deduction.
 3.  W.e.f. assessment year 2016-17, bad-debts shall be allowed as deduction even if they
 are not written-off from books of accounts. Such deduction shall be allowed if amount of
debt or part thereof has been taken into account in computing income on the basis of
Income Computation and Disclosure Standards notified under section 145(2) without
recording the same in the accounts.
 4.  With effect from assessment year 2018-19 business of developing or maintaining and
operating or developing, maintaining and operating a new infrastructure facility, has been
included.
  ♦   Section 35AD was amended by Finance (No. 2) Act, 2014 with effect from
assessment year 2015-16 :
With a view to ensure that the capital asset on which investment linked deduction
 has been claimed is used for the purposes of the specified business, sub-section
 (7A) has been inserted in section 35AD to provide that any asset in respect of
which a deduction is claimed and allowed under section 35AD, shall be used
only for the specified business for a period of 8 years beginning with the previous
 year in which such asset is acquired or constructed. Moreover, if such asset is
 used for any purpose other than the specified business, the total amount of
deduction so claimed and allowed in any previous year in respect of such
asset (as reduced by the amount of depreciation allowable in accordance
with the provisions of section 32 as if no deduction had been allowed under
section 35AD), shall be deemed to be income of the assessee chargeable under
the head "Profits and gains of business or profession" of the previous year in
which the asset is so used. However, this provision will not apply to a company
 which has become a sick industrial company under section 17(1) of the
Sick Industrial Companies (Special Provisions) Act within the time period
of 8 years as stated above.
  ♦   Where any deduction under section 35AD has been availed of by the assessee
on account of capital expenditure incurred for the purposes of specified business
 in any assessment year, no deduction under section 10AA shall be available to
the assessee in the same or any other assessment year in respect of such specified
business.
 5.  With effect from assessment year 2015-16 a new Explanation 2 has been inserted
in section 37(1) to clarify that expenditure incurred by the assessee on Corporate
 Social Responsibility activities in accordance with section 135 of the Companies
Act, 2013 will not be considered as expenditure incurred by the assessee for the
purposes of the business or profession.
 6.  Following chart explains amendments made in section 40(a)(i) with effect from the
 assessment year 2015-16 :

TDS default pertaining to any sum (other than salary) payable outside India or payable to a non-resident which is taxable in the hands of recipient in India
Law applicable up to the 
assessment
year 2014-15
Law applicable from the assessment year 2015-16

1. Tax is deductible but it is not deducted
Expenditure is not
deductible. If,
however, TDS is deposited
 in a subsequent
 year, it will be deducted
 in that year
No amendment. The law which is applicable for the assessment year 2014-15 will apply for assessment year 2015-16 onwards

2. Tax is deductible (and it is so deducted during April 1 and February 28/29 of the financial year) but it is not deposited up to March 31 of the financial year
Expenditure is not deductible.
If, however,
 TDS is deposited in a
 subsequent year,
it will be deducted in
that year
Disallowance provisions will not be applicable if TDS is deposited up to the due date of submission of return of income under section 139(1). If TDS is deposited after this date, expenditure will be deductible in the year in which TDS is deposited.

3. Tax is deductible (and it is so deducted during the month of March) but it is not deposited up to April 30 falling immediately after the end of the financial year
Expenditure is not deductible. If,
 however,
TDS is deposited in a
subsequent year,
it will be deducted in
 that year
Disallowance provisions will not be applicable if TDS is deposited up to the due date of submission of return of income under section 139(1). If TDS is deposited after this date, expenditure will be deductible in the year in which TDS is deposited.
 7.  Following amendments have been made in section 40(a)(ia) with effect from the
assessment year 2015-16 :
   •  Coverage of disallowance extended - Before amendment, disallowance
provisions of section 40(a)(ia), covered TDS default under sections
193, 194A, 194C, 194D, 194H, 194-I and 194J. After amendment,
disallowance under section 40(a)(ia), will cover any amount payable to a 
resident which is subject to TDS.
   •  Only 30 per cent expenditure to be disallowed - In case of TDS default,
30 per cent of expenditure (not 100 per cent) will be disallowed.
 8.  One residential house in India with effect from assessment year 2015-16.
 9.  With effect from assessment year 2015-16 limit of Rs. 50 lakhs applies to total
amount invested during financial year in which original asset is transferred and in
subsequent financial year.
 10.  One residential house in India with effect from assessment year 2015-16.
 11.  See Bank Term Deposits Scheme, 2006.
 12.  with effect from assessment year 2015-16.
 13.  Where deduction is claimed under this section, deduction in relation to same amount
cannot be claimed under section 80C.
 14.  Section 80CCE provides that the aggregate amount of deductions under section 80C,
 section 80CCC and section 80CCD shall not, in any case, exceed Rs. 1,50,000
With effect from assessment year 2015-16, amended sub-section (1) has clarified
that a non-government employee can claim deduction under section 80CCD even
 if his date of joining is prior to January 1, 2004.
 15.  With effect from the assessment year 2012-13 section 80CCE is amended so as to
provide that contribution made by the Central Government or any other employer to
a pension scheme under sub-section (2) of section 80CCD shall not be included
in the limit of deduction of Rs. 1,50,000 provided under section 80CCE.
With effect from assessment year 2016-17, sub-section (1A) of Section
80CCD which laid down maximum deduction limit of Rs. 1,00,000
(under sub-section (1)) has been deleted.
Further, a new sub-section (1B) is inserted to provide for additional deduction to
the extent of Rs. 50,000. The additional deduction is not subject to ceiling limit
of Rs. 1,50,000 as provided under Section 80CCE.
However, it is to be noted that addition deduction of Rs. 50,000 shall not be allowed
in respect of contribution which is considered for deduction under
Section 80CCD(1), i.e., within limit of 10% of salary/gross total income
Any payment from NPS to an employee because of closure or his opting out
of the pension scheme is chargeable to tax. However, with effect from the
 assessment year 2017-18, the whole amount received by the nominee
from NPS on death of the assessee shall be exempt from tax.
 16.  Rajiv Gandhi Equity Savings Scheme, 2012/2013.
With effect from assessment year 2014-15 (a) investment in listed units of an equity
 oriented fund is also permitted; (b) deduction shall be allowed for three consecutive
assessment years, beginning with the assessment year relevant to previous year in
which the listed equity shares or listed units of equity oriented fund were first acquired
and (c) gross total income of the assessee for relevant assessment year shall not exceed
 twelve lakh rupees.
 17.  Section 80D is amended by the Finance Act, 2015. From assessment year 2016-17
onwards the deduction under Section 80D will be available as per the limit specified below:

Individual
HUF

For self, spouse and dependent children : Rs. 25,000 (Rs. 30,000 if person insured is a senior citizen* or very senior citizen**);
Premium up to
Rs. 25,000 (Rs. 30,000 if
member insured is
a senior citizen or
very senior citizen)
paid to insure any
member of the family.

For parents of the assessee : (Additional) Rs. 25,000 (Rs. 30,000 if person insured is a senior citizen or very senior citizen)
NA

Medical expenditure if no amount is paid in respect of health insurance-Rs.30,000 (only in case of very senior citizen)
Medical expenditure if no
amount is paid
 in respect of
health insurance-
Rs.30,000
(only in case of very
 senior citizen)

Aggregate amount of deduction cannot exceed Rs.60,000 in any case
Aggregate amount of
 deduction cannot
 exceed Rs.30,000 
in any case.
*‘Senior citizen’ means an individual resident in India who is of the age of sixty
years or more at any time during the relevant previous year.
**‘Very senior citizen’ means an individual resident in India who is of the age
of eighty years or more at any time during the relevant previous year. 
 18.  Maximum deduction is Rs. 40,000 (Rs. 60,000 where expenditure is incurred
for a senior citizen and Rs. 80,000 in case of very senior citizen[w.e.f assessment
year 2016-17])
 With effect from assessment year 2016-17, the taxpayer shall be required
to obtain a prescription from a specialist doctor (not necessarily from a doctor
working in a Government hospital) for availing this deduction.
 19.  Scope of 'higher education' is enlarged with effect from assessment year 2010-11 to
 cover any course of study pursued after passing the Senior Secondary Examination
 or its equivalent from any school, Board or university recognised by the Central
 Government or State Government or local authority or by any other authority
authorized by the Central Government or State Government or local authority to do so.
With effect from 1-4-2010 the scope of expression 'relative' has also been enlarged to cover the student for whom the taxpayer is the legal guardian.
 20.  Donation of any sums paid by the assessee, being a company, in the previous year as
donations to the Indian Olympic Association or to any other association or institution
established in India, as the Central Government may, having regard to the prescribed
 guidelines, by notification in the Official Gazette, specify in this behalf for—
 (i)  the development of infrastructure for sports and games; or
(ii)  the sponsorship of sports and games,
in India;
is eligible for the purpose of deduction under section 80G [this is in consequence of
omission of section 10(23)].
 21.  Donation made to an authority constituted in India by or under any law enacted either
 for the purpose of dealing with and satisfying the need for housing accommodation or
for the purpose of planning, development or improvement of cities, towns and villages,
 or for both is also eligible for the purpose of deduction under section 80G from the
 assessment year 2003-04 [this is in consequence of omission of section 10(20A)].
 22.  With effect from 1-4-2013 no deduction shall be allowed in respect of donation
 of any sum exceeding ten thousand rupees unless such sum is paid by any mode other
 than cash.
 23.  With effect from 1-4-2013 no deduction shall be allowed under this section in
respect of any sum exceeding ten thousand rupees unless such sum is paid by any mode
 other than cash.
 24.  With effect from 1-4-2014 deduction will not be allowed if sum is contributed in cash.
 25.  Time limits stated under section 80-IA(4)(iv) have been extended
from 31-3-2014 to 31-3-2017.
 26.  100% deduction shall be allowed from the AY beginning on or after the
1st day of April, 2021.


[As amended by Finance Act, 201

Source from Income Tax Department of India.

DEDUCTIONS As per Income Tax Ruls amended by the the Income Tax DepartmentAY 2017-18]
Section
Nature of deduction
              Who can claim                                          shWho can claim

(1)
(2)
                   (3)                                                                    (3)


Against 'salaries'


Entertainment allowance [actual or at the rate of 1/5th of salary, whichever is less] [limited to Rs. 5,000]
Government 
employees

Employment tax
Salaried assessees


                      Against 'income from house properties'

   23(1), first         
proviso
Taxes levied by local authority and borne by owner if paid in relevant previous year
All assessees

Standard deduction [30% of the annual value (gross annual value less municipal taxes)]
All assessees

Interest on borrowed capital (Rs. 30,000/Rs. 2,00,000, subject to specified conditions)
All assessees

Standard deduction of 30 per cent of arrears of rent or unrealised rent received
All assessees


      Against 'profits and gains of business or profession'
                          A. Deductible items

Rent, rates, taxes, repairs (excluding capital expenditure) and insurance for premises
All assessees

Repairs (excluding capital expenditure) and insurance of machinery, plant and furniture
All assessees

Depreciation1 in respect of following assets shall be allowed at prescribed percentage on actual cost of an asset (i.e., Straight Line Method):
 i.  Tangible Assets (buildings, machinery, plant or furniture);
 ii. Intangible Assets (know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature).
However, if asset is acquired and put to use for less than 180 days during the previous year, the deduction shall be restricted to 50% of depreciation computed above.
Note:
Taxpayers engaged in business of generation or generation and distribution of power have the option to claim depreciation on written down value basis also
Taxpayer engaged in 
business
 of generation or 
generation
 and distribution 
of power.

Depreciation1 in respect of following assets shall be allowed at prescribed percentage on written down value of each block of asset (as per WDV method):
 i.  Tangible Assets (buildings, machinery, plant or furniture);
ii. Intangible Assets (know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature).
However, if asset is acquired and put to use for less than 180 days during the previous year, the deduction shall be restricted to 50% of depreciation computed above.
All assessees 
engaged in
business or 
profession

Additional depreciation shall be allowed at 20% of actual cost of new plant and machinery [other than ships, aircraft, office appliances, second hand plant or machinery, etc.] (Subject to certain conditions).
However, if an asset is acquired and put to use for less than 180 days during the previous year, 50% of additional depreciation shall be allowed in year of acquisition and balance 50% would be allowed in the next year.
All taxpayers
engaged in:
a) manufacture or
production of
any article or thing;
or
b) generation, transmission
 or
distribution of power
 (if taxpayer is not claiming
depreciation on straight
line basis ).

Proviso to 
Additional depreciation shall be allowed at 35% of actual cost of new plant and machinery [other than ships, aircraft, office appliances, second hand plant or machinery, etc.] (Subject to certain conditions).
However, if an asset is acquired and put to use for less than 180 days during the previous year, 50% of additional depreciation shall be allowed in year of acquisition and balance 50% would be allowed in the next year.
Note:
1.  Manufacturing unit should be set-up on or after April 1, 2015.
2.  New plant and machinery should be acquired and installed on or after April 1, 2015 but before April 1, 2020.
All taxpayers setting-up 
an undertaking or 
enterprise for production or 
manufacture of
 any article or thing in any
 notified
 backward area in the 
state of
Andhra Pradesh, 
Bihar,
Telangana or 
West Bengal.

Investment allowance shall be allowed at 15% of actual cost of new asset acquired and installed by a company engaged in business or manufacturing or production of any article or thing (Subject to certain conditions)
Note:
Deduction shall be available if actual cost of new plant and machinery acquired and installed by the company during the previous year exceeds Rs. 25/100 Crores, as the case may be
Company engaged in
 business
 of manufacturing or 
production
of any article or thing.

Investment allowance shall be allowed at 15% of actual cost of investment made in new plant and machinery (other than ships, aircraft, vehicle, office appliances, second hand plant or machinery, etc.) if manufacturing unit is set-up in notified backward area in the State of Andhra Pradesh, Bihar, Telangana or West Bengal (subject to certain conditions).
Note:
1.  New asset should be acquired and installed on or after April 1, 2015 but before April 1, 2020.
2.  Manufacturing unit should be set-up on or after April 1, 2015.
3.  Deduction shall be allowed under Section 32AD in addition to deduction under Section 32AC if assessee fulfils the specified conditions.
All taxpayers who acquire 
new
 plant and machinery
 for
purpose of setting-up
 manufacturing unit in
notified backward areas
 in the
State of Andhra Pradesh, 
Bihar,
 Telangana or 
West Bengal

Development allowance - 50 per cent of actual cost of planting (subject to certain conditions and limits) (planting should have been completed before 1-4-1990)
Assessee engaged in 
business
of growing and
 manufacturing
tea in India

Tea/Coffee/Rubber Development Account - Amount deposited in account with National Bank (Special Account) or in Deposit Account of Tea Board, Coffee Board or Rubber Board in accordance with approved scheme or 40% of profits of business, whichever is less (subject to certain conditions)
Assessees engaged in
 business
 of growing and 
manufacturing
 tea/Coffee/
Rubber in India

Amount deposited in Special Account with SBI/Site Restoration Account or 20 per cent of profits, whichever is less (subject to certain conditions)
Assessee carrying on 
business
 of prospecting for,
 or
extraction or 
production of,
petroleum or natural 
gas or
both in India

Revenue expenditure on scientific research pertaining to business of assessee is allowed as deduction (Subject to certain conditions).
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 prescribed authority.
All assessee

175% of contribution made to approved research association, university, college or other institution to be used for scientific research shall be allowed as deduction (Subject to certain conditions)
150% of sum paid to such association, university, college or other institution is allowed as deduction (applicable from AY 2018-19)
All assessee

125% of contribution made to an approved company registered in India to be used for the purpose of scientific research is allowed as deduction (Subject to certain conditions)
Entire sum paid to the company is allowed as deduction (applicable from AY 2018-19)
All assessee

125% of contribution made to approved research association, university, college or other institution with objects of undertaking statistical research or research in social sciences shall be allowed as deduction (Subject to certain conditions)
Entire sum paid to such association, university, college or other institution is allowed as deduction (applicable from AY 2018-19)
All assessee

35(1)(iv) read with35(2)
Capital expenditure incurred during the year on scientific research relating to the business carried on by the assessee is allowed as deduction (Subject to certain conditions)
Capital expenditure incurred within 3 years before commencement of business is allowed as deduction in the year of commencement of business.
Note:
i. Capital expenditure excludes land and any interest in land;
ii. No depreciation shall be allowed on such assets.
All assessee

200% of payment made to a National Laboratory or University or an Indian Institute of Technology or a specified person is allowed as deduction (Subject to certain conditions).
150% of payment is allowed as deduction (applicable from AY 2018-19)
The payment should be made with the specified direction that the sum shall be used in a scientific research undertaken under an approved programme.
All assessee

200% of any expenditure incurred by a company on scientific research (including capital expenditure other than on land and building) on in-house scientific research and development facilities as approved by the prescribed authorities shall be allowed as deduction (Subject to certain conditions).
150% of expenditure so incurred shall be allowed as deduction (applicable from AY 2018-19)
Note:
Company should enter into an agreement with the prescribed authority for co-operation in such research 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;
Company engaged in 
business
 of bio-technology or 
in any
 business of 
manufacturing or
production of eligible 
articles
or things

Expenditure incurred before 1-4-1998 on acquisition of patent rights or copyrights [equal to appropriate fraction of expenditure on acquisition to be deducted in fourteen equal annual instalments beginning with previous year in which such expenditure has been incurred] (subject to certain conditions)
All assessees

Lump sum payment made in any previous year relevant to assessment year commencing on or before 1-4-1998, for acquisition of technical know-how [consideration for acquisition to be deducted in six equal annual instalments (3 equal annual instalments where know-how is developed in certain laboratories, universities and institutions)] (subject to certain conditions)
All assessees

Capital expenditure incurred and actually paid for acquiring any right to use spectrum for telecommunication services shall be allowed as deduction over the useful life of the spectrum in equal instalments
All Assessee engaged
 in
telecommunication 
services

Expe nditure incurred for obtaining licence to operate telecommunication services either before commencement of such business or thereafter at any time during any previous year
All assessees

Expenditure by way of payment of any sum to a public sector company/local authority/approved association or institution for carrying out any eligible scheme or project (subject to certain conditions)
Deduction under this section is available only A.Y. 2017-2018
All assessees

Capital expenditure incurred, wholly and exclusively, for 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; laying and operating a cross-country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of such network; building and operating, anywhere in India, a hotel of two-star or above category as classified by the Central Government; building and operating, anywhere in India, a hospital with at least one hundred beds for patients; developing and building a notified housing project under a scheme for slum redevelopment or rehabilitation framed by 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-keeping and production of honey and beeswax; and setting up and operating a warehousing facility for storage of sugar. Lying and operating a slurry pipeline for the transportation of iron ore; setting-up and operating a notified semi-conductor wafer fabrication manufacturing unit; developing or maintaining and operating or developing, maintaining and operating a new infrastructure facility4, carried on by the assessee during the previous year in which such expenditure is incurred (subject to certain conditions)
All assessees
Note: Such deduction is
available to
 Indian company in
case of
following business, namely;-
 i)   Business of laying
 and
operating a cross-country
natural
gas or crude or petroleum
oil
pipeline network.
 ii)  Developing or
maintaining
and operating or
developing,
maintaining and operating
 a new
 infrastructure facility.

Payment to associations/institutions for carrying out rural development programmes (subject to certain conditions)
All assessees

Expenditure incurred before 1-4-2002 by way of payment to approved associations/institutions for carrying out approved programmes of conservation of natural resources or afforestation (subject to certain conditions)
All assessees

One and a half times of expenditure on notified agricultural extension project (subject to certain conditions)
All assessees


From the Assessment Year 2021-22, the deductionshall be restricted to 100% of the expenditure incurred.


One and a half times of expenditure on notified skill development project (subject to certain conditions)
A company


Note: From the Assessment Year 2021-22, the deduction shall be restricted to 100% of the expenditure incurred.


Amortisation of certain preliminary expenses [deductible in 5 equal annual instalments] (subject to certain conditions)
Indian companies and
 resident
 non-corporate 
assessees

Amortisation of expenditure incurred after 31-3-1999 in case of amalgamation or demerger in the hands of an Indian company (one-fifth of such expenditure for 5 successive previous years) (subject to certain conditions)
Indian Company

Amortisation of expenditure incurred under voluntary retirement scheme in 5 equal annual instalments starting with the year when the expenditure is incurred
All assessees

Expenditure on prospecting, etc., for certain minerals [deductible in ten equal annual instalments] (subject to certain conditions)
Indian companies and 
resident
 non-corporate 
assessees
engaged in prospecting, 
etc., for minerals

Insurance premium covering risk of damage or destruction of stocks/stores
All assessees

Insurance premium covering life of cattle owned by a member of co-operative society engaged in supplying milk to federal milk co-operative society
Federal milk 
co-operative
societies

Medical insurance premium paid by any mode other than cash, to insure employee's health under (a) scheme framed by GIC of India and approved by Central Government; or (b) scheme framed by any other insurer and approved by IRDA
All assessees as
 employers

Bonus or commission paid to employees
All assessees

Interest on borrowed capital2
All assessees

Pro rata amount of discount on a zero coupon bond based on life of such bond and calculated in prescribed manner
All assessees

Contributions to recognised provident fund and approved superannuation fund [subject to certain limits and conditions]
All assessees as 
employers

Any sum paid by assessee-employer by way of contribution towards a pension scheme, as referred to in section 80CCD, on account of an employee to the extent it does not exceed 10 per cent of the employee's salary in the previous year.
All assessees as 
emloyers

Contributions to approved gratuity fund [subject to certain limits and conditions]
All assessees as 
employers

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 such employees, received from employees if the same are credited to the employee's account in relevant fund or funds before due date
All assessees as 
employers

Allowance in respect of animals which have died or become permanently useless [subject to certain conditions]
All assessees

Bad debts which have been written off as irrecoverable [subject to limitation in the case of banks and financial institutions]
All assessees

Provision for bad and doubtful debts




■ up to 7½ per cent of total income before making any deduction under this clause and Chapter VI-A, and up to 10 per cent of aggregate average advances made by its rural branches
Certain
Scheduled
 banks,
non-scheduled
 banks
(but other than 
foreign banks)
 and co-operative
 bank
(other than primary
agricultural credit 
society or
primary 
co-operative
agricultural 
and rural
development 
bank)


■ up to 5 per cent (10% in case of Public Financial Institutions, State Financial Corporations and State Industrial Investment Corporations in any of the two consecutive assessment years 2003-04 and 2004-05 - subject to certain conditions) of total income before making any deduction under this clause and Chapter VI-A
Foreign banks/
Public
financial institutions/
State
financial corporations/
State
industrial investment
corporations. 
Non-Banking
Financial 
Company
Amounts transferred to special reserve [subject to certain conditions and maxi-mum of 20 per cent of profits derived from eligible business]
Specified entities, 
namely,
 financial corporations/
financial
 corporation which is
 a public
 sector company/
banking
company/co-operative
 bank
other than a primary
agricultural credit
 society or a
 primary co-operative
agricultural and
 rural
development bank/
housing
 finance company/
any other
financial 
corporation
including
 a public company

Expenditure for promoting family planning amongst employees (deductible in 5 equal annual instalments in case of capital expenditure)
Companies

Expenditure incurred wholly and exclusively by the assessee on or after the 1st April, 1999 but before the 1st April, 2000 in respect of a non-Y2K compliant system, owned by the assessee and used for the purposes of his business or profession, so as to make such system Y2K compliant computer system
All assessees

Any expenditure (not being in the nature of capital expenditure) incurred by a notified corporation or body corporate, by whatever name called, constituted or established by a Central, State or Provincial Act, for the objects and purposes authorised by the Act under which such corporation or body corporate was constituted or established
Notified corporation 
or body
 corporate, by 
whatever 
name
 called, constituted 
orestablished by a 
Central,State or 
Provincial Act

Any banking cash transaction tax paid during the previous year on taxable banking transaction entered into by the assessee
All assessees

Contribution to notified credit guarantee trust fund for small industries
Public financial 
institution

Securities Transaction Tax paid if corresponding income is included as income under the head 'Profits and gains of business or profession'
All assessees

Amount equal to commodities transaction tax paid by an assessee in respect of taxable commodities transactions entered into in the course of his business during the previous year, if the income arising from such transactions is included in the income computed under the head "Profits and gains of business or profession"
All assessees

Amount of expenditure incurred by a co-operative society for purchase of sugarcane shall be allowed as deduction to the extent of lower of following:
a) Actual purchase price of sugarcane; or
b) Price of sugarcane fixed or approved by the Government
Co-operative
 society 
engaged
in business of 
manufacturing
sugar

Any other expenditure [not being personal or capital expenditure and expenditure mentioned in sections 30 to 36] laid out wholly and exclusively for purposes of business or profession5
All assessees


B. Non-deductible items


Advertisement in souvenir, brochure, tract, pamphlet, etc., of political party
All assessees

Interest, royalty, fees for technical services or other chargeable sum payable outside India, or in India to a non-resident or foreign company, on which tax has not been paid/deducted during the previous year or in the subsequent year within time prescribed under section 200(1). Where in respect of any such sum, tax has been deducted in any subsequent year or, has been deducted in the previous year but paid in any subsequent year after the expiry of the time prescribed under sub-section (1) of section 200, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid6
All assessees

Any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work)7, on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in sub-section (1) of section 139.
All assessees


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 specified in sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid.


Any sum paid or payable to a non-resident which is subject to a deduction of Equalisation levy would attract disallowance if such sum was paid without deduction of such levy or if it was deducted but not deposited with the Central Government till the due date of filing of return.
All assessees


However, where in respect of any such sum, Equalisation levy is deducted or deposited in subsequent year, as the case may be, the expenditure so disallowed shall be allowed as deduction in that year.



Note: This provision has been inserted by the Finance Act, 2016, w.e.f. 1-6-2016


Rate or tax levied on the profits or gains of any business or profession
All
assessees

Wealth-tax paid
All 
assessees

Amount paid by way of royalty, licence fee, service fee, privilege fee, service charge or any other fee or charge, 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 State Government
State Govt. 
undertakings

Salaries payable outside India, or in India to a non-resident, on which tax has not been paid/deducted at source
All assessees 
as employers

Payments to provident fund/other funds for employees' benefit for which no effective arrangements are made to secure that tax is deducted at source on payments made from such funds which are chargeable to tax as 'salaries'
All assessees 
as employers

Tax actually paid by an employer referred to in section 10(10CC)
All assessees 
as employers

Interest, salary, bonus, commission or remuneration paid to partners (subject to certain conditions and limits)
Firms

Interest, salary, bonus, commission or remuneration paid to members (subject to certain conditions and limits)
Association of 
persons 
or  body of 
individuals
 (except a company 
or a co-operative 
society,
society registered 
under
Societies 
Registration
Act, etc.)

Expenditure involving payment to relative/director/partner/substantially interested person, etc., which, in the opinion of the Assessing Officer, is excessive or unreasonable
All 
assessees

100% of payments exceeding Rs. 20,000 (Rs. 35,000 in 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)
All
assessees

Any provision for payment of gratuity to employees, other than a provision made for purposes of contribution to approved gratuity fund or for payment of gratuity that has become payable during the year (subject to specified conditions)
All 
assessees as 
employers

Any sum paid for setting up or formation of, or as contribution to, any fund, trust, company, AOP, BOI, Society or other institution, other than recognised provident fund/approved superannuation fund/pension scheme referred to insection 80CCD/approved gratuity fund
All 
assessees as 
employers


C. Other deductible items


In case of mineral oil concerns allowances specified in agreement entered into by Central Government with any person (subject to certain conditions and terms of agreement)
Assessees 
engaged in
prospecting 
for or 
extraction
or production 
of mineral oils

In case of mineral oil concerns expenditure incurred remaining unallowed as reduced by proceeds of transfer
Assessee whose 
business
consists of 
prospecting 
for or extraction or 
production
 of petroleum and 
natural gas
and who transfers
 any interest in such 
business

Any sum which is actually paid, relating to (i) tax/duty/cess/fee levied under any law, (ii) contribution to provident fund/superannuation fund/gratuity fund/any fund for employees' welfare, (iii) bonus/commission to employees, (iv) interest on loan/borrowing from any public financial institution, State Financial Corporation or State Industrial Investment Corporation/interest payments to scheduled banks/Co-operative banks on loans or advances, and (v) sum payable by employers by way of leave encashment to employees. (vi) sum payable to the Indian Railways for the use of railway assets. Deduction will not be allowed in year in which liability to pay is incurred unless actual payment is made in that year or before the due date of furnishing of return of income for that year
All assessees

Expenditure in excess of subscription, etc., received from members (subject to certain conditions and limits)
Trade, 
professional or
similar association

Head office expenditure (subject to certain conditions and limits)
Non-resident


Against 'capital gains'


Expenditure incurred wholly and exclusively in connection with transfer of capital asset
All assessees

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

Long-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

Capital 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

Capital 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

Net consideration on transfer of long-term capital asset made before 1-4-2000 invested in specified bonds, debentures, shares of a public comp-any or units of notified mutual funds (subject to certain conditions and limits)
Any 
assessee

Long-term capital gains on transfer of any long-term capital asset made be-fore 1-4-2000 invested in specified long-term assets (subject to certain conditions and limits)
Any 
assessee

Long-term capital gains invested in long-term specified asset (bond redeemable after 3 years) (maximum investment in a financial year is Rs. 50 lakhs)9 issued by National Highways Authority of India; or by the Rural Electrification Corporation Limited (subject to certain conditions and limits)
Any 
assessee

Long-term capital gains on transfer before 1-4-2006 of certain listed securities or units invested in equity shares forming part of an eligible issue of capital (subject to certain conditions and limits)
Any 
assessee

Long-term capital gain invested in long-term specified assets being units of such fund as may be notified by Central Government to finance start-ups
All 
assesses

Net consideration on transfer of long-term capital asset other than residential house invested in residential house10(subject to certain conditions and limits)
Individual/
HUF

Capital 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 
assessee

Exemption 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

Exemption 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


W.e.f. April 1, 2017, eligible start-up is also included in definition of eligible company.



                                 Against 'income from other sources'
                                       A. Deductible items

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

Any reasonable sum paid by way of commission or remuneration for the purpose of realising interest on securities
All 
assessees

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 date
All
 assessees

Repairs, insurance, and depreciation of building, plant and machinery and furniture
Assessees engaged
 in business
of letting out of
 machinery,
plant and furniture
and buildings 
on hire

In case of family pension, 331/3 per cent of such pension or Rs. 15,000, whichever is less
Assessees in receipt of
family
 pension on death 
of employee
 being member
 of assessee's
family

Any other expenditure (not being capital expenditure) expended wholly and exclusively for earning such income
All 
assessees

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


                     B. Non-deductible items

Personal expenses
All 
assessees

Interest chargeable to tax which is payable outside India on which tax has not been paid or deducted at source
All 
assessees

'Salaries' payable outside India on which no tax is paid or deducted at source
All 
assessees

Wealth-tax
All 
assessees

 Expenditure of the nature specified in section 40A
All 
assessees

Expenditure in connection with winnings from lotteries, crossword puzzles, races, games, gambling or betting
All 
assessees


                        For certain payments

 ■  Life insurance premium for policy :
 -    in case of individual, on life of assessee, assessee's spouse and any child of assessee
 -    in case of HUF, on life of any member of the HUF
 ■  Sum paid under a contract for a deferred annuity :
 -    in case of individual, on life of the individual, individual's spouse and any child of the individual (however, contract should not contain an option to receive cash payment in lieu of annuity)
 -     in case of HUF, on life of any member of the HUF
 ■  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]
 ■  Contributions by an individual made under Employees' Provident Fund Scheme
 ■  Contribution to Public Provident Fund Account in the name of:
 -    in case of individual, such individual or his spouse or any child of such individual
 -    in case of HUF, any member of HUF
 ■  Contribution by an employee to a recognised provident fund
 ■  Contribution by an employee to an approved superannuation fund
 ■  Subscription to any notified security or notified deposit scheme of the Central Government. For this purpose, Sukanya Samriddhi Account Scheme has been notified vide Notification No. 9/2015, dated 21.01.2015. Any sum deposited during the year in Sukanya Samriddhi Account by an individual would be eligible for deduction.
 ■  Amount can be deposited by an individual or in the name of girl child of an individual or in the name of the girl child for whom such an individual is the legal guardian.
 ■  Subscription to notified savings certificates [National Savings Certificates (VIII Issue)]
 ■  Contribution for participation in unit-linked Insurance Plan of UTI :
 -    in case of an individual, in the name of the individual, his spouse or any child of such individual
 -    in case of a HUF, in the name of any member thereof
 ■  Contribution to notified unit-linked insurance plan of LIC Mutual Fund [Dhanaraksha 1989]
 -    in the case of an individual, in the name of the individual, his spouse or any child of such individual
 -    in the case of a HUF, in the name of any member thereof
 ■  Subscription to notified deposit scheme or notified pension fund set up by National Housing Bank [Home Loan Account Scheme/National Housing Banks (Tax Saving) Term Deposit Scheme, 2008]
 ■  Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, 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 residential house property
 ■  Subscription to notified schemes of (a) public sector companies engaged in providing long-term 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 improvement of cities, towns and villages, or for both
 ■  Sum paid towards notified annuity plan of LIC (New Jeevan Dhara/New Jeevan Dhara-I/New Jeevan Akshay/New Jeevan Akshay-I/New Jeevan Akshay-II/Jeewan Akshay-III plan of LIC) or other insurer
 ■  Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005)
 ■  Contribution by an individual to any pension fund set up by any mutual fund which is referred to in section 10(23D) or by the UTI (UTI Retirement Benefit Pension Fund)
 ■  Subscription to equity shares or debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions
 ■  Subscription to any units of any approved mutual fund referred to in section 10(23D), provided amount of subscription to such units is subscribed only in 'eligible issue of capital' referred to above.
 ■  Term deposits for a fixed period of not less than 5 years with a scheduled bank, and which is in accordance with a scheme11 framed and notified.
 ■  Subscription to notified bonds issued by the NABARD.
 ■  Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions)
 ■  5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions)
Individual/
HUF

Notes:
 1.  Deduction is limited to whole of the amount paid or deposited subject to a maximum of Rs. 1,50,00012. This maximum limit of Rs. 1,50,00012 is the aggregate of 
the deduction that may be claimed under sections 80C, 80CCC and 80CCD.
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 available on so much of the aggregate of sums as 
do not exceed the total income chargeable to tax during the previous year.
 3.  Life Insurance premium is part of gross qualifying amount for the 
purpose of deduction under section 80C. Payment of premium which is in excess
 of 10 per cent (if policy is issued on or after 1-4-2013, 15% in case of insurance 
on life of person with disability referred to in section 80U or suffering from 
disease or ailment specified in section 80DDB/rule 11DD) of actual capital sum 
assured shall not be included in gross qualifying amount. The value of any 
premiums agreed to be returned or of any benefit by way of bonus or otherwise,
 over and above the sum actually assured, which is to be or may be received under
 the policy by any person, shall not be taken into account for the purpose of 
calculating the actual capital sum assured.
The limit of 10 per cent will be applicable only in the case of policies 
issued on or after 1-4-2012. In respect of policies issued prior to 1-4-2012,
 the old limit of 20 per cent of actual sum assured will be applicable.
With effect from 1-4-2013, 'actual capital sum assured' in relation to a 
life insurance policy shall mean the minimum amount assured under the 
policy on happening of the insured event at any time during the term of 
the policy, not taking into account—
 (i)  the value of any premium agreed to be returned; or
(ii) any benefit by way of bonus or otherwise over and above the
 sum actually assured, which is to be or may be received under the 
policy by any person.
 4.  Where, in any previous year, an assessee—
 (i)  terminates his contract of insurance, by notice to that effect or 
where the contract ceases to be in force by reason of failure to pay any 
premium, by not reviving contract of insurance,—
(a) in case of any single premium policy, within two years after the 
date of commencement of insurance; or
(b) in any other case, before premiums have been paid for two years; or
(ii) terminates his participation in any unit-linked insurance plan (ULIP), 
by notice to that effect 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 paid for five 
years; or
(iii) transfers the house property before the expiry of five years from the 
end of the financial year in which possession of such property is obtained
 by him, or receives back, whether by way of refund or otherwise, 
any sum specified in that clause,
then,—
(a) no deduction shall be allowed to the assessee with reference to any 
of such sums, paid in such previous year; and
(b) the aggregate amount of the deductions of income so allowed in respect 
of the previous year or years preceding such previous year, shall be deemed 
to be the income of the assessee of such previous year and shall be liable to 
tax in the assessment year relevant to such previous year.
If any equity shares or debentures, with reference to the cost of which a 
deduction is allowed, 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 
allowed in respect of such equity shares or debentures in the previous year 
or years preceding the previous year in which such sale or transfer has 
taken place shall be deemed to be the income of the assessee of such 
previous year and shall be liable to tax in the assessment year relevant 
to such previous year.
A person shall be treated as having acquired any shares or debentures on the 
date on which his name is entered in relation to those shares or debentures 
in the register of members or of debenture-holders, as the case may be, of 
the public company.
 5.  If any amount, including interest accrued thereon, is withdrawn by the assessee
 from his deposit account made under (a) Senior Citizen Saving Scheme or
 (b) Post Office Time Deposit Rules, before the expiry of the period of five 
years from the date of its deposit, the amount so withdrawn shall be deemed 
to be the income of the assessee of the previous year in which the amount is 
withdrawn and shall be liable to tax in the assessment year relevant to 
such previous year.
The amount liable to tax shall not include the following amounts, namely:—
 (i)  any amount of interest, relating to deposits referred to above, which 
has been included in the total income of the assessee of the previous year
 or years preceding such previous year; and
(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 income of the assessee for the previous 
year or years preceding such previous year.
Section
Nature of deduction
                    Who can calim                                                            Who can claim
(1)
(2)
(3)
Contributions to certain pension funds of LIC or any other insurer (up to Rs. 1,50,000) (subject to certain conditions)14
Individual
Contribution 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 10% of salary of the employee
Individual
50 per cent of amount invested by specified resident individuals in notified equity savings scheme16(subject to certain conditions and limits) (maximum deduction : Rs. 25,000)
Specified resident
 individuals
 (new retail investors)
Amount 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.

Deduction of Rs. 75,000 (Rs. 1,25,000 in case of severe 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, being a person with disability [as defined under Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995] (w.e.f. assessment year 2005-06 including autism, cerebral palsy and multiple disability as referred to in National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities Act, 1999), or (b) any amount is paid or deposited under an approved scheme framed in this behalf by the LIC or any other insurer or the Administrator or the specified company for the maintenance of a dependent, being a person with disability (subject to certain conditions)
Resident 
Individual/HUF
Expenses actually paid for medical treatment of specified diseases and ailments subject to certain conditions18
Resident
 Individual/HUF
Amount 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 education19 (subject to certain conditions) (maximum period : 8 years)
Individual
Interest 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
Donations to certain approved funds, trusts, charitable institutions/donations for renovation or repairs of notified temples, etc. [amount of deduction is 50 per cent of net qualifying amount]. 100 per cent of qualifying donations to National Defence Fund, Prime Minister's National Relief Fund, Prime Minister's Armenia Earthquake Relief Fund, Africa (Public Contributions - India) Fund, National Children's Fund (from 1-4-2014), Government or approved association for promoting family planning, universities and 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's Relief Fund or the Lt. Governor's Relief Fund in respect of any State or Union Territory, National Sports Fund, National Cultural Fund, Fund for Technology Development and Application, Indian Olympic Association, etc.20, 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 26-1-2001 and 30-9-2001 to any eligible trust, institution or fund for providing relief to Gujarat earthquake victims21, the Swachh Bharat Kosh and the Clean Ganga Fund (from assessment year 2015-16) and National Fund for Control of Drug Abuse (from assessment year 2016-17) [subject to certain conditions and limits]22
All assessees
Rent 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) (subject to certain conditions)
Individuals not 
receiving any house
 rent allowance
Certain 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 Fund (subject to certain conditions)
All assessees not 
having any
 income
 chargeable under t
he head
 'Profits
 and gains of 
business or 
profession'
Sum contributed to any political party/electoral trust24
Indian company
Sum contributed to any political party/electoral trust24
All assessees, other 
than local
authority and artificial
 juridical
 person wholly or partly
 funded 
by Government

For certain incomes

Profits and gains from industrial undertakings engaged in infrastructure facility, telecommunication services, industrial park, development of Special Economic Zone, power undertakings, etc. (subject to certain conditions and limits)25
All assessees

No deduction under this section shall be available to an enterprise which starts the development or operation and maintenance of the infrastructure facility on or after the 1st day of April, 2017.

Profits and gains derived by undertaking/enterprise from business of developing a Special Economic Zone notified on or after 1-4-2005 (subject to certain conditions and limits)
Assessee being Developer
 of SEZ

No deduction under this section shall be available to an assessee, being a developer, where the development of Special Economic Zone begins on or after the 1st day of April, 2017.

Profit and gains derived by an eligible start-up from specified business on or after 1-4-2017(subject to certain conditions)
Company and LLP
Profits and gains from industrial undertakings, cold storage plant, hotel, scientific research & development, mineral oil concern, housing projects, cold chain facility, multiplex theatres, convention centres, ships, etc. (subject to certain conditions and limits)
All assessees
No deduction shall be 

available to
an enterprise which 
commence the
 business activity on or
 after 1-4-2017.
Profits and gains derived by an undertaking or an enterprise in special category States (Himachal Pradesh, Uttaranchal, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura) (subject to certain limits, time limits and conditions),
(a) which has begun or begins to manufacture or produce 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 Schedule and undertakes substantial expansion during the specified period.
(b) which has begun or begins to manufacture or produce 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 during the specified period
All assessees
Profits and gains from business of hotels and convention centres in specified areas (subject to certain conditions).
All assessees
Deduction in respect of certain undertakings in North Eastern States.
All assessees
Entire income from business of collecting and processing or treating of bio-degradable waste for generating power, or producing bio-fertilizers, bio-pesticides or other biological agents or for producing bio-gas, making pellets or briquettes for fuel or organic manure (for 5 consecutive assessment years)
All assessees
Deduction of 30% of additional employee cost in respect of employment of new employees.
Assessee to whom
 section 44AB
applies

Additional employee cost means total emoluments paid or payable to additional employees employed during the previous year.


Deduction shall be allowed for first three Assessment Years including the Assessment Year relevant to previous year in which such employment is provided.


(Subject to certain other condition)

Certain incomes of Scheduled banks/banks incorporated outside India having Offshore Banking Units in a Special Economic Zone/Units of International Financial Services Centre (subject to certain conditions and limits)
Scheduled Banks/banks
 incorporated
 outside India/
Units of International
 Financial Services Centre
Specified incomes [subject to varying limits specified in sub-section (2)]
Co-operative societies
Royalty income of author of certain specified category of books (up to Rs. 3,00,000) (subject to certain conditions)
Resident Individual 
- Author
Royalty on patents up to Rs. 3,00,000 in the case of a resident individual who is a patentee and is in receipt of income by way of royalty in respect of a patent registered on or after 1-4-2003 (subject to certain conditions).
Resident 
individuals
 Interest on deposits in savings bank accounts (up to Rs. 10,000 per year)
Individuals/HUFs
Deduction of Rs. 75,000 to a resident individual who, at any time during the previous year, is certified by the medical authority to be a person with disability [as defined under Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995] [w.e.f. assessment year 2005-06 including autism, cerebral palsy, and multiple disabilities as defined under National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities Act, 1999] [in the case of a person with severe disability, allowable deduction is Rs. 1,25,000] (subject to certain conditions).
Resident individuals

Rebates

Tax rebate in case of individual resident in India, whose total income does not exceed five hundred thousand rupees; quantum of rebate shall be an amount equal to hundred per cent of such income-tax or an amount of five thousand rupees, whichever is less.
Individual

 1.  Provisions of section 32 shall apply whether or not the assessee has claimed depreciation.
 2.  If sum is borrowed for acquiring a capital asset, interest thereon pertaining to the period
 before asset is first put to use shall not be allowed as deduction.
 3.  W.e.f. assessment year 2016-17, bad-debts shall be allowed as deduction even if they
 are not written-off from books of accounts. Such deduction shall be allowed if amount of
debt or part thereof has been taken into account in computing income on the basis of
Income Computation and Disclosure Standards notified under section 145(2) without
recording the same in the accounts.
 4.  With effect from assessment year 2018-19 business of developing or maintaining and
operating or developing, maintaining and operating a new infrastructure facility, has been
included.
  ♦   Section 35AD was amended by Finance (No. 2) Act, 2014 with effect from
assessment year 2015-16 :
With a view to ensure that the capital asset on which investment linked deduction
 has been claimed is used for the purposes of the specified business, sub-section
 (7A) has been inserted in section 35AD to provide that any asset in respect of
which a deduction is claimed and allowed under section 35AD, shall be used
only for the specified business for a period of 8 years beginning with the previous
 year in which such asset is acquired or constructed. Moreover, if such asset is
 used for any purpose other than the specified business, the total amount of
deduction so claimed and allowed in any previous year in respect of such
asset (as reduced by the amount of depreciation allowable in accordance
with the provisions of section 32 as if no deduction had been allowed under
section 35AD), shall be deemed to be income of the assessee chargeable under
the head "Profits and gains of business or profession" of the previous year in
which the asset is so used. However, this provision will not apply to a company
 which has become a sick industrial company under section 17(1) of the
Sick Industrial Companies (Special Provisions) Act within the time period
of 8 years as stated above.
  ♦   Where any deduction under section 35AD has been availed of by the assessee
on account of capital expenditure incurred for the purposes of specified business
 in any assessment year, no deduction under section 10AA shall be available to
the assessee in the same or any other assessment year in respect of such specified
business.
 5.  With effect from assessment year 2015-16 a new Explanation 2 has been inserted
in section 37(1) to clarify that expenditure incurred by the assessee on Corporate
 Social Responsibility activities in accordance with section 135 of the Companies
Act, 2013 will not be considered as expenditure incurred by the assessee for the
purposes of the business or profession.
 6.  Following chart explains amendments made in section 40(a)(i) with effect from the
 assessment year 2015-16 :

TDS default pertaining to any sum (other than salary) payable outside India or payable to a non-resident which is taxable in the hands of recipient in India
Law applicable up to the 
assessment
year 2014-15
Law applicable from the assessment year 2015-16

1. Tax is deductible but it is not deducted
Expenditure is not
deductible. If,
however, TDS is deposited
 in a subsequent
 year, it will be deducted
 in that year
No amendment. The law which is applicable for the assessment year 2014-15 will apply for assessment year 2015-16 onwards

2. Tax is deductible (and it is so deducted during April 1 and February 28/29 of the financial year) but it is not deposited up to March 31 of the financial year
Expenditure is not deductible.
If, however,
 TDS is deposited in a
 subsequent year,
it will be deducted in
that year
Disallowance provisions will not be applicable if TDS is deposited up to the due date of submission of return of income under section 139(1). If TDS is deposited after this date, expenditure will be deductible in the year in which TDS is deposited.

3. Tax is deductible (and it is so deducted during the month of March) but it is not deposited up to April 30 falling immediately after the end of the financial year
Expenditure is not deductible. If,
 however,
TDS is deposited in a
subsequent year,
it will be deducted in
 that year
Disallowance provisions will not be applicable if TDS is deposited up to the due date of submission of return of income under section 139(1). If TDS is deposited after this date, expenditure will be deductible in the year in which TDS is deposited.
 7.  Following amendments have been made in section 40(a)(ia) with effect from the
assessment year 2015-16 :
   •  Coverage of disallowance extended - Before amendment, disallowance
provisions of section 40(a)(ia), covered TDS default under sections
193, 194A, 194C, 194D, 194H, 194-I and 194J. After amendment,
disallowance under section 40(a)(ia), will cover any amount payable to a 
resident which is subject to TDS.
   •  Only 30 per cent expenditure to be disallowed - In case of TDS default,
30 per cent of expenditure (not 100 per cent) will be disallowed.
 8.  One residential house in India with effect from assessment year 2015-16.
 9.  With effect from assessment year 2015-16 limit of Rs. 50 lakhs applies to total
amount invested during financial year in which original asset is transferred and in
subsequent financial year.
 10.  One residential house in India with effect from assessment year 2015-16.
 11.  See Bank Term Deposits Scheme, 2006.
 12.  with effect from assessment year 2015-16.
 13.  Where deduction is claimed under this section, deduction in relation to same amount
cannot be claimed under section 80C.
 14.  Section 80CCE provides that the aggregate amount of deductions under section 80C,
 section 80CCC and section 80CCD shall not, in any case, exceed Rs. 1,50,000
With effect from assessment year 2015-16, amended sub-section (1) has clarified
that a non-government employee can claim deduction under section 80CCD even
 if his date of joining is prior to January 1, 2004.
 15.  With effect from the assessment year 2012-13 section 80CCE is amended so as to
provide that contribution made by the Central Government or any other employer to
a pension scheme under sub-section (2) of section 80CCD shall not be included
in the limit of deduction of Rs. 1,50,000 provided under section 80CCE.
With effect from assessment year 2016-17, sub-section (1A) of Section
80CCD which laid down maximum deduction limit of Rs. 1,00,000
(under sub-section (1)) has been deleted.
Further, a new sub-section (1B) is inserted to provide for additional deduction to
the extent of Rs. 50,000. The additional deduction is not subject to ceiling limit
of Rs. 1,50,000 as provided under Section 80CCE.
However, it is to be noted that addition deduction of Rs. 50,000 shall not be allowed
in respect of contribution which is considered for deduction under
Section 80CCD(1), i.e., within limit of 10% of salary/gross total income
Any payment from NPS to an employee because of closure or his opting out
of the pension scheme is chargeable to tax. However, with effect from the
 assessment year 2017-18, the whole amount received by the nominee
from NPS on death of the assessee shall be exempt from tax.
 16.  Rajiv Gandhi Equity Savings Scheme, 2012/2013.
With effect from assessment year 2014-15 (a) investment in listed units of an equity
 oriented fund is also permitted; (b) deduction shall be allowed for three consecutive
assessment years, beginning with the assessment year relevant to previous year in
which the listed equity shares or listed units of equity oriented fund were first acquired
and (c) gross total income of the assessee for relevant assessment year shall not exceed
 twelve lakh rupees.
 17.  Section 80D is amended by the Finance Act, 2015. From assessment year 2016-17
onwards the deduction under Section 80D will be available as per the limit specified below:

Individual
HUF

For self, spouse and dependent children : Rs. 25,000 (Rs. 30,000 if person insured is a senior citizen* or very senior citizen**);
Premium up to
Rs. 25,000 (Rs. 30,000 if
member insured is
a senior citizen or
very senior citizen)
paid to insure any
member of the family.

For parents of the assessee : (Additional) Rs. 25,000 (Rs. 30,000 if person insured is a senior citizen or very senior citizen)
NA

Medical expenditure if no amount is paid in respect of health insurance-Rs.30,000 (only in case of very senior citizen)
Medical expenditure if no
amount is paid
 in respect of
health insurance-
Rs.30,000
(only in case of very
 senior citizen)

Aggregate amount of deduction cannot exceed Rs.60,000 in any case
Aggregate amount of
 deduction cannot
 exceed Rs.30,000 
in any case.
*‘Senior citizen’ means an individual resident in India who is of the age of sixty
years or more at any time during the relevant previous year.
**‘Very senior citizen’ means an individual resident in India who is of the age
of eighty years or more at any time during the relevant previous year. 
 18.  Maximum deduction is Rs. 40,000 (Rs. 60,000 where expenditure is incurred
for a senior citizen and Rs. 80,000 in case of very senior citizen[w.e.f assessment
year 2016-17])
 With effect from assessment year 2016-17, the taxpayer shall be required
to obtain a prescription from a specialist doctor (not necessarily from a doctor
working in a Government hospital) for availing this deduction.
 19.  Scope of 'higher education' is enlarged with effect from assessment year 2010-11 to
 cover any course of study pursued after passing the Senior Secondary Examination
 or its equivalent from any school, Board or university recognised by the Central
 Government or State Government or local authority or by any other authority
authorized by the Central Government or State Government or local authority to do so.
With effect from 1-4-2010 the scope of expression 'relative' has also been enlarged to cover the student for whom the taxpayer is the legal guardian.
 20.  Donation of any sums paid by the assessee, being a company, in the previous year as
donations to the Indian Olympic Association or to any other association or institution
established in India, as the Central Government may, having regard to the prescribed
 guidelines, by notification in the Official Gazette, specify in this behalf for—
 (i)  the development of infrastructure for sports and games; or
(ii)  the sponsorship of sports and games,
in India;
is eligible for the purpose of deduction under section 80G [this is in consequence of
omission of section 10(23)].
 21.  Donation made to an authority constituted in India by or under any law enacted either
 for the purpose of dealing with and satisfying the need for housing accommodation or
for the purpose of planning, development or improvement of cities, towns and villages,
 or for both is also eligible for the purpose of deduction under section 80G from the
 assessment year 2003-04 [this is in consequence of omission of section 10(20A)].
 22.  With effect from 1-4-2013 no deduction shall be allowed in respect of donation
 of any sum exceeding ten thousand rupees unless such sum is paid by any mode other
 than cash.
 23.  With effect from 1-4-2013 no deduction shall be allowed under this section in
respect of any sum exceeding ten thousand rupees unless such sum is paid by any mode
 other than cash.
 24.  With effect from 1-4-2014 deduction will not be allowed if sum is contributed in cash.
 25.  Time limits stated under section 80-IA(4)(iv) have been extended
from 31-3-2014 to 31-3-2017.
 26.  100% deduction shall be allowed from the AY beginning on or after the
1st day of April, 2021.


[As amended by Finance Act, 201

Source from Income Tax Department of India.

 
Related Posts Plugin for WordPress, Blogger...