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DEDUCTIONS [AY 2017-18]


Posted on September 30 2020

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DEDUCTIONS [AY 2017-18]

Section Nature of deduction Who can claim
(1) (2) (3)
  Against 'salaries'  
16(ii) Entertainment allowance [actual or at the rate of 1/5th of salary, whichever is less] [limited to Rs. 5,000] Government employees
16(iii) 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
24(a) Standard deduction [30% of the annual value (gross annual value less municipal taxes)] All assessees
24(b) Interest on borrowed capital (Rs. 30,000/Rs. 2,00,000, subject to specified conditions) All assessees
25A(2) Standard deduction of 30 per cent of arrears of rent or unrealised rent received All assessees
 

Against 'profits and gains of business or profession'

A. Deductible items

30 Rent, rates, taxes, repairs (excluding capital expenditure) and insurance for premises All assessees
31 Repairs (excluding capital expenditure) and insurance of machinery, plant and furniture All assessees
32(1)(i)

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.
32(1)(ii)

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
32(1)(iia)

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 Section 32(1)(iia)

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.
32AC

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.
32AD

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
33A 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
33AB 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
33ABA 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
35(1)(i)

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
35(1)(ii)26

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
35(1)(iia)

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
35(1)(iii)

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 with 35(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
35(2AA)26

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
35(2AB)26

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
35A 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
35AB 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
35ABA 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
35ABB 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
35AC

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
35AD 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.

35CCA Payment to associations/institutions for carrying out rural development programmes (subject to certain conditions) All assessees
35CCB 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
35CCC 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.  
35CCD 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.  
35D Amortisation of certain preliminary expenses [deductible in 5 equal annual instalments] (subject to certain conditions) Indian companies and resident non-corporate assessees
35DD 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
35DDA Amortisation of expenditure incurred under voluntary retirement scheme in 5 equal annual instalments starting with the year when the expenditure is incurred All assessees
35E 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
36(1)(i) Insurance premium covering risk of damage or destruction of stocks/stores All assessees
36(1)(ia) 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
36(1)(ib) 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
36(1)(ii) Bonus or commission paid to employees All assessees
36(1)(iii) Interest on borrowed capital2 All assessees
36(1)(iiia) Pro rata amount of discount on a zero coupon bond based on life of such bond and calculated in prescribed manner All assessees
36(1)(iv) Contributions to recognised provident fund and approved superannuation fund [subject to certain limits and conditions] All assessees as employers
36(1)(iva) 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
36(1)(v) Contributions to approved gratuity fund [subject to certain limits and conditions] All assessees as employers
36(1)(va) 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
36(1)(vi) Allowance in respect of animals which have died or become permanently useless [subject to certain conditions] All assessees
36(1)(vii)3 Bad debts which have been written off as irrecoverable [subject to limitation in the case of banks and financial institutions] All assessees
36(1)(viia) 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
36(1)(viii) 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
36(1)(ix) Expenditure for promoting family planning amongst employees (deductible in 5 equal annual instalments in case of capital expenditure) Companies
36(1)(xi) 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
36(1)(xii) 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 or established by a Central, State or Provincial Act
36(1)(xiii) Any banking cash transaction tax paid during the previous year on taxable banking transaction entered into by the assessee All assessees
36(1)(xiv) Contribution to notified credit guarantee trust fund for small industries Public financial institution
36(1)(xv) Securities Transaction Tax paid if corresponding income is included as income under the head 'Profits and gains of business or profession' All assessees
36(1)(xvi) 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
36(1)(xvii)

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
37(1) 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  
37(2B) Advertisement in souvenir, brochure, tract, pamphlet, etc., of political party All assessees
40(a)(i) 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
40(a)(ia) 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.  
40(a)(ib) 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  
40(a)(ii) Rate or tax levied on the profits or gains of any business or profession All assessees
40(a)(iia) Wealth-tax paid All assessees
40(a)(iib) 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
40(a)(iii) 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
40(a)(iv) 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
40(a)(v) Tax actually paid by an employer referred to in section 10(10CC) All assessees as employers
40(b) Interest, salary, bonus, commission or remuneration paid to partners (subject to certain conditions and limits) Firms
40(ba) 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.)
40A(2) 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
40A(3) 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

40A(7) 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
40A(9) 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 in section 80CCD/approved gratuity fund All assessees as employers
  C. Other deductible items  
42(1) 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
42(2) 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
43B 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
44A Expenditure in excess of subscription, etc., received from members (subject to certain conditions and limits) Trade, professional or similar association
44C Head office expenditure (subject to certain conditions and limits) Non-resident
  Against 'capital gains'  
48(i) Expenditure incurred wholly and exclusively in connection with transfer of capital asset All assessees
48(ii) Cost of acquisition of capital asset and of any improvement thereto (indexed cost of acquisition and indexed cost of improvement, in case of long-term capital assets) All assessees
54 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
54B 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
54D 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
54EA 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
54EB 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
54EC 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
54ED 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
54EE 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
54F 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
54G 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
54GA 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
54GB 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

57(i) Any reasonable sum paid by way of commission or remuneration for purpose of realising dividend (other than dividends referred to in section 115-O) All assessees
57(i) Any reasonable sum paid by way of commission or remuneration for the purpose of realising interest on securities All assessees
57(ia) Contributions to any provident fund or superannuation fund or any fund set up under Employees' State Insurance Act, 1948 or any other fund for welfare of employees, if the same are credited to employees' accounts in relevant funds before due date All assessees
57(ii) 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
57(iia) 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
57(iii) Any other expenditure (not being capital expenditure) expended wholly and exclusively for earning such income All assessees
57(iv) In case of interest received on compensation or on enhanced compensation referred to in section 145A(2), a deduction of 50 per cent of such income (subject to certain conditions) All assessees
  B. Non-deductible items
58(1)(a)(i) Personal expenses All assessees
58(1)(a)(ii) Interest chargeable to tax which is payable outside India on which tax has not been paid or deducted at source All assessees
58(1)(a)(iii) 'Salaries' payable outside India on which no tax is paid or deducted at source All assessees
58(1A) Wealth-tax All assessees
58(2)  Expenditure of the nature specified in section 40A All assessees
58(4) Expenditure in connection with winnings from lotteries, crossword puzzles, races, games, gambling or betting All assessees
  For certain payments
80C

 ■  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 80C80CCC 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


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