Income Tax 2020-21 (FY) - Exempted Income and Deductions allowed

Income Tax 2020-21 (FY) Assessment Year 2021-22 – Income eligible for Tax benefit and Deductions allowed in the Gross Total Income

Investments / Payments / Incomes on which I can get tax benefit

Section 24(b) – Deduction from Income from House Property on interest paid on housing loan & housing improvement loan. In case of self- occupied property, the upper limit for deduction of interest paid on housing loan is ₹ 2 lakh. However, this deduction is not available for person opting for New Tax Regime.

Interest on loan u/s 24(b) allowable is tabulated below

Nature of Property	When loan was taken	Purpose of loan	Allowable (Maximum limit)
Self-Occupied	On or after 1/04/1999	Construction or purchase of house property	₹ 2,00,000
	On or after 1/04/1999	For Repairs of house property	₹ 30,000
	Before 1/04/1999	Construction or purchase of house property	₹ 30,000
	Before 1/04/1999	For Repairs of house property	₹ 30,000
Let Out	Any time	Construction or purchase of house property	Actual value without any limit

Tax deductions specified under Chapter VIA of the Income Tax Act

These Deductions will not be available to a taxpayer opting for the New Tax Regime u/s 115 BAC, except for deduction u/s 80CCD (2) which will be applicable for New Tax Regime as well

80C, 80CCC, 80CCD (1)

Deduction towards payments made to

80C	Life Insurance Premium Provident Fund Subscription to certain equity shares Tuition Fees National Savings Certificate, Housing Loan Principal Other various items
80CCC	Annuity plan of LIC or other insurer towards Pension Scheme
80CCD(1)	Pension Scheme of Central Government

Combined deduction limit of ₹ 1,50,000

80CCD(1B)
Deduction towards payments made to Pension Scheme of Central Government, excluding deduction claimed under 80CCD (1)	Deduction limit of ₹ 50,000

80CCD(2)

Deduction towards contribution made by an employer to the Pension Scheme of Central Government

If Employer is a PSU, State Government or Others	Deduction limit of 10% of salary
If Employer is Central Government	Deduction limit of 14% of salary

80D

Deduction towards payments made to Health Insurance Premium & Preventive Health check up

For Self / Spouse or Dependent Children	₹ 25,000 (₹ 50,000 if any person is a Senior Citizen)
	₹ 5,000 for preventive health check up, included in above limit
For Parents	₹ 25,000 (₹50,000 if any person is a Senior Citizen)
	₹ 5,000 for preventive health check up, included in above limit

Deduction towards Medical Expenditure incurred on a Senior Citizen, if no premium is paid on health insurance coverage

For Self/ Spouse or Dependent Children	Deduction limit of ₹ 50,000
For Parents	Deduction limit of ₹ 50,000

8DD
Deduction towards payments made towards Maintenance or Medical treatment of a Disabled Dependent or Paid / Deposited any amount under relevant approved scheme	Flat deduction of ₹ 75,000 available for a person with Disability, irrespective of expense incurred
The deduction is ₹ 1,25,000 if the person has Severe Disability (80% or more).

8DD

Deduction towards payments made towards Maintenance or Medical treatment of a Disabled Dependent or Paid / Deposited any amount under relevant approved scheme

Flat deduction of

₹ 75,000

available for a person with Disability, irrespective of expense incurred

The deduction is

₹ 1,25,000

if the person has Severe Disability (80% or more).

80DDB
Deduction towards payments made towards Medical treatment of Self or Dependant for specified diseases	Deduction limit of ₹ 40,000 (₹ 1,00,000 if Senior Citizen)

80DDB

Deduction towards payments made towards Medical treatment of Self or Dependant for specified diseases

Deduction limit of
₹ 40,000
(₹ 1,00,000 if Senior Citizen)

80E
Deduction towards interest payments made on loan for higher education of Self or relative	Total amount paid towards interest on loan taken

80EE
Deduction towards interest payments made on loan taken for acquisition of residential house property where the loan is sanctioned between 1st April 2016 to 31st March 2017	Deduction limit of ₹ 50,000 on the interest paid on loan taken

80EEA
Deduction available only to individuals towards interest payments made on loan taken for acquisition of residential house property for the first time where the loan is sanctioned between 1st April 2019 to 31st March 2022 & deduction should not have been claimed u/s 80EE	Deduction limit of ₹ 1,50,000 on the interest paid on loan taken

80EEB
Deduction towards interest payments made on loan for purchase of Electric Vehicle where the loan is sanctioned between 1st April 2019 to 31st March 2023	Deduction limit of ₹ 1,50,000 on the interest paid on loan taken

80G

Deduction towards Donations made to prescribed Funds, Charitable Institutions, etc.

Donation are eligible for deduction under the below categories

Without any limit	100% deduction
	50% deduction
Subject to qualifying limit	100% deduction
	50% deduction

Note: No deduction shall be allowed under this section in respect of donation made in cash exceeding ₹ 2000/-

80GG

Deduction towards rent paid for house & applicable to only those who are self-employed or for whom HRA is not part of Salary

Least of the following shall be allowed as deduction

Rent paid reduced by 10% of Total Income before this deduction

₹ 5,000 per month

25% of Total Income (excluding long term capital gains, short term capital gains under section 111A or income under section 115A or 115D)

Note: Form 10BA to be filled for claiming this deduction.

80GGA

Deduction towards Donations made for Scientific Research or Rural Development

Donation are eligible for deduction under the below categories

Research Association or University, College or other Institution for

Scientific Research
Social Science or Statistical Research

Association or Institution for

Rural Development
Conservation of Natural Resources or for Afforestation

PSU or Local Authority or an association or institution approved by the National Committee for carrying out any eligible project

Funds notified by Central Government for

Afforestation
Rural Development

National Urban Poverty Eradication Fund as setup and notified by Central Government

Note: No deduction shall be allowed under this Section in respect of donation made in cash exceeding ₹ 2000/- or if Gross Total Income includes income from Profit / Gains of Business / Profession

80GGC
Deduction towards Donations made to Political Party or Electoral Trust	Deduction towards Donations made to Political Party or Electoral Trust

80TTA
Deduction on interest received on saving bank accounts by Non-Senior Citizens	Deduction limit of ₹ 10,000/-

80TTB
Deduction on interest received on deposits by Resident Senior Citizens	Deduction limit of ₹ 50,000/-

80U
Deductions for a resident individual taxpayer with Disability	Flat ₹ 75,000 deduction for a person with Disability, irrespective of expense incurred Flat ₹ 1,25,000 deduction for a person with Severe Disability (80% or more), irrespective of expense incurred

80U

Deductions for a resident individual taxpayer with Disability

Flat ₹ 75,000 deduction for a person with Disability, irrespective of expense incurred

Flat ₹ 1,25,000 deduction for a person with Severe Disability (80% or more), irrespective of expense incurred

Source: www.incometax.gov.in