Tax management (TM)- Deductions under section 80 of Income Tax act-MBA

1. A Presentation on The
Tax Management (18MS04F6)
4th Unit : Tax Management Decisions
2nd Mid Topic: Deductions U/S 80 of Income Tax Act
Presented by:
Immani Chandra Shekar
(Reg. No: 19K61E0020)
II-MBA-Finance
SITE

2. Introduction:
 Indian tax laws contain certain provisions, which are intended to act as an incentive for
achieving certain desirable socio-economic objectives.
 These provisions are contained in Chapter VIA and are in the form of deductions U/S 80C
to 80U from the Gross Income.
 By reducing the chargeable income, these provisions reduce the tax liability, increase the
post-tax income and thus induce the tax-payers to act in the desired manner.
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3. Basic Rules for Deduction:
Following are the basic rules for deduction:
 The aggregate amount of deductions under sections80C to 80U cannot exceed gross total
income (gross total income after excluding long term capital gains, short term capital gain
under section 111A, winnings from lottery, crossword puzzles etc.)
 These deductions are to be allowed only if the assessee claims these and gives the proof of
such investments/ expenditure/ income.
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4. Categories of Deductions:
There are various kinds of deductions. Some of them are to encourage savings, some are for
certain personal expenditure, a few are for socially desirable activities, and some are for
economic growth. For the sake of better understanding we have categorized them into Six
kinds. They are:
 Deductions to encourage savings
 Deductions for certain personal expenditure
 Deductions for socially desirable activities
 Deductions for Certain Industrial Undertakings & SEZ
 Deductions for Certain Incomes
 Deductions for physically disabled persons
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5. Sections Income Tax Deduction for FY
2019-20 (AY 2020-21)
Who can Invest? Limit for FY 2019-20
(AY 2020-2021)
Section 80-C Investing into very common & popular
investment options like LIC, PPF,
Sukanya Samriddhi Account, Mutual
Funds & FD etc.
Individual Or HUF
Upto Rs. 1,50,000
U/S 80CCE
Section 80-CCC Investment in Pension Funds Individuals
Section 80-CCD(1) Atal Pension Yojana and National
Pension Scheme Contribution
Individuals
Section 80-CCD(1B) Atal Pension Yojana and National
Pension Scheme Contribution
Individuals Upto Rs 50,000
Section 80-CCD(2) National Pension Scheme Contribution
by Employer
Individuals Amount Contributed
or
14% of Basic Salary + Dearness
Allowance (in case the employer is CG)
10% of Basic Salary+ Dearness
Allowance(in case of any other
employer)
- Whichever is lower
Section 80-CCF Specific infrastructure bonds, as
approved by Government.
Individual Or HUF Upto Rs 20,000
1. Deductions to Encourage Savings:
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6. Sections Income Tax Deduction for
FY 2019-20 (AY 2020-21)
Who can Invest? Limit for FY 2019-20
(AY 2020-2021)
Section 80-D Medical Insurance Premium and
Medical Expenditure
Individual Or HUF Upto Rs 1,00,000
Section 80-DD Medical Treatment of a Dependent with
Disability
Individual Or HUF Normal Disability: Rs 75,000/-
Severe Disability: Rs 1,25,000/-
Section 80-DDB Specified Diseases Individual Or HUF Senior Citizens: Upto Rs 1,00,000
Others: Upto Rs 40,000
Section 80-E Interest paid on Loan taken for Higher
Education
Individual 100% of the interest paid upto 8
assessment years
Section 80-EE Interest paid on Housing Loan Individual Upto Rs 50,000 subject to some
conditions
Section 80-EEA Interest paid on Housing Loan Individual Upto Rs 1,50,000/- subject to some
conditions
Section 80-EEB Interest paid on Electric Vehicle Loan Individual Upto Rs 1,50,000 subject to some
conditions
Section 80-GG Income Tax Deduction for House Rent
Paid
Individual Rs.60,000/-
25% of Total Income
Rent paid - 10% of Total Income
- whichever is lower
2. Deductions for certain personal expenditure:
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7. 3. Deductions for socially desirable activities:
Sections Income Tax Deduction for
FY 2019-20 (AY 2020-21)
Who can Invest? Limit for FY 2019-20
(AY 2020-2021)
Section 80-G Donation to Charitable Institutions All Assessee
(Individual, HUF,
Company etc)
100% or 50% of the Donated
amount or Qualifying limit,
Allowed donation in cash upto
Rs.2000/-
Section 80-GGA Donation to Scientific Research &
Rural Development
All assessees except
those who have an
income (or loss)
from a business
and/or a profession
100% of the amount donated.
Allowed donation in cash upto
Rs.10,000/-
Section 80-GGB Contribution to Political Parties Companies 100% of the amount contributed
No deduction available for
contribution made in cash
Section 80-GGC Individuals on contribution to
Political Parties
Individual, HUF
,AOP, BOI, Firm
100% of the amount contributed.
No deduction available for
contribution made in cash 7

8. Sections Income Tax Deduction for
FY 2019-2020
(AY 2020-2021)
Who can Invest? Limit for FY 2019-20
(AY 2020-2021)
Section 80-IA Profits and Gains from Industrial
Undertakings engaged in
infrastructure development, etc.
Industrial Undertakings
engaged in specified
businesses
100% of the profit for 10 consecutive
years out of 15 years beginning from
year of commencement
Section 80-IAB Profits and Gains to SEZ
Developers
SEZ Developers 100% of the profit for 10 consecutive
years out of 15 years beginning from
year in which SEZ has been notified by
CG
Section 80-IAC Eligible startups Company or LLP engaged in
eligible business subject to
some conditions
100% of the profit for 3 consecutive
years out of 7 years beginning from the
year of commencement
Section 80-IB Profits and Gains from certain
Industrial Undertakings other
than infrastructure development
undertakings
Specified Industrial
Undertakings
25%, 30% or 100% of the profit for such
periods as may be specified subject to
certain conditions
Section 80-IBA Profits from Housing Projects Individual, HUF, AOP, BOI,
Company, Firm
Any other person engaged in
the business of Housing
Projects as may be specified
100% of the profit
4. Deductions for Certain Industrial Undertakings & SEZ :
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9. Sections Income Tax Deduction for
FY 2019-2020 (AY 2020-2021)
Who can Invest? Limit for FY 2019-20
(AY 2020-2021)
Section 80-IC Certain Undertakings in Special
category States
Certain Industrial
Undertakings
Sikkim - 100% of profit for 10 years
Himachal Pradesh/ Uttaranchal
100% of the profit (For first 5 years)
25%(For next 5 years), (30% in case of
Companies)
North Eastern States - 100% of the profit for
10 years
Section 80-ID Profits and Gains of
Hotels/Convention Centre’s in
specified area
Hotel or
Convention
Centre
100% of the profit for 5 consecutive years
beginning from the year of operation
Section 80-IE Certain Undertakings in North
Eastern States
Undertakings
engaged in
manufacture/
provision of
specified goods/
services or
undertake
substantial
expansion, in
North Eastern
100% of the profit for 10 consecutive years
beginning from the year of commencement or
completion of expansion, as may be applicable
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10. Sections Income Tax Deduction for
FY 2019-20 (AY 2020-21)
Who can Invest? Limit for FY 2019-20
(AY 2020-2021)
Section 80-JJA Profits and Gains of Specified
Business
Specified
Business
100% of the profit for 5 consecutive years
beginning from the year of commencement
Section 80-JJAA Employment of New Employees Employer who
was subject to tax
audit u/s 44AB
30% of additional employee cost for 3 years
including the year in which employment is
provided
Section 80-LA Certain Income of Offshore
Banking Units in SEZ and IFSC
Offshore Banking
Units in SEZ or
Unit of IFSC
Offshore Banking Unit -
100% of the income (For 5 consecutive years
50% of the income (For next 5 years)
IFSC - 100% of the income for 10 consecutive
years out of 15 years
beginning from the year in which permission
is obtained
Section 80-PA Certain income of Producer
Companies
Producer
Companies
engaged in
eligible business
100% of the profit
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11. 5. Deductions for Certain Incomes:
Sections Income Tax Deduction for
FY 2019-20 (AY 2020-21)
Who can Invest? Limit for FY 2019-20
(AY 2020-2021)
Section 80-RRB Royalty on Patents Individuals (Indian citizen
or foreign citizen being
resident in India)
Rs.3,00,000/-
Or
Specified Income
- whichever is lower
Section 80-QQB Royalty Income of Authors Individuals (Indian citizen
or foreign citizen being
resident in India)
Rs.3,00,000/-
Or
Specified Income
- whichever is lower
Section 80-TTA Interest earned on Savings Accounts Individual
Or
HUF (except senior
citizen)
Upto Rs 10,000/-
Section 80-TTB Interest Income earned on
deposits(Savings/ FDs)
Individual (60 yrs or
above)
Upto Rs 50,000/-
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12. 6. Deductions for physically disabled persons:
Sections Income Tax Deduction for
FY 2019-20 (AY 2020-21)
Who can Invest? Limit for FY 2019-20
(AY 2020-2021)
Section 80U Disabled Individuals Individuals Normal Disability: Rs. 75,000/-
Severe Disability: Rs. 1,25,000/-
Conclusion:
 Eligible assessees can claim these deductions under the income tax act. The eligible assessee
has been specified under each section for which deduction is being claimed. In some cases it is
individual, in some company or HUF, etc.
 Income tax deduction needs to be claimed at the time of filing Income Tax Return and no
separate disclosure compliances in respect of the same should be made. The amount of
deductions should be reduced form the gross income to reach at the taxable amount.
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13. Department of Management Science
Thank You Sir
2020-2021