No Deduction to Members if Allowed to AOP or BOI
Section 80A prescribes that if an AOP or BOI is allowed deduction under Section 80G, 80GGA, 80GGC, 80-IA, 80-IB, 80-IC or 80-IE, no deduction shall be allowed to members of such AOP or BOI on income shares.
Investment Linked Deductions [Section 80C]
- An Individual or Hindu Undivided Family (HUF) is eligible to claim deduction up to Rs. 1,50,000 for specified investments, deposits, or payments under this provision.
- Deduction covers payments for life insurance, education expenses, contributions to provident fund, housing loan repayment, small savings schemes, pension funds, and fixed deposits, etc.
- Deduction allowed on an actual payment basis in the year of payment, irrespective of the year to which the payment relates.
- Deduction allowed for amounts paid/deposited in the following categories:
|
Nature of Investment or Payment |
Description |
Other Conditions |
|---|---|---|
|
Insurance Schemes |
Life Insurance, ULIPs, Deferred Annuity, Annuity Plans |
• Individual can claim deduction for self, spouse, or children. • Deduction is not available for annuity plans purchased for family members. • HUFs can claim for members except deferred annuity schemes and annuity plans. • Deduction is restricted to a specified percentage of the actual capital sum assured: o Policies issued between 01-04-2003 and 31-03-2012: 20% of sum assured. o Policies issued on or after 01-04-2012: 10% of sum assured. • Minimum holding period for LIC is 2 years and for ULIP is 5 years. • If not held, deduction already allowed in the earlier years shall be deemed as income of the previous year in which insurance policy is terminated or ceased. |
|
Education Expenses |
Tuition fees for two children (full-time education only) |
No deduction in respect of payment of any development fees, donation, or payment of a similar nature. |
|
Employee Provident Fund |
Contribution to statutory or recognized provident funds |
• Employer’s contribution to employee’s provident fund is not deductible. |
|
Public Provident Fund |
Contribution to PPF accounts |
• Individual can claim deduction for making deposit in the PPF account maintained for himself, spouse or children. • HUF can claim deduction for making deposit in the PPF account of any member. |
|
Superannuation Fund |
Contribution to approved superannuation funds |
• Excess employer contribution over Rs, 7,50,000 to PF, NPS, and superannuation is taxable as salary. |
|
Equity Linked Saving Scheme (ELSS) |
Investment in ELSS or notified mutual funds |
• Minimum deposit of Rs. 500 • Lock-in period is 3 years from the date of allotment of units. • Post lock-in, units can be tendered for repurchase. • In case of the death of the assessee, nominee or legal heir can withdraw the investment only after 1 year from allotment date. • Units are transferable, pledgeable, or assignable after 3 years. |
|
Securities of Infrastructure Companies |
Investment in equity shares/debentures of eligible companies |
• Minimum holding period is 3 years from the date of acquisition. • If not held, deduction already allowed in the earlier years shall be deemed as income of the previous year in which securities are transferred. |
|
Housing Loan |
Repayment of principal and associated expenses on housing loans |
• Sum paid for the stamp duty, registration fee or other sum in lieu of transfer of a residential house property is also eligible for deduction. • Deductions not allowed for costs towards addition, alteration, renovation, or repair after issue of completion certificate, occupation of house by assessee or others, or if house has been let out. • Minimum holding period is 5 years from the end of the financial year in which possession is obtained. • If not held, deduction already allowed in the earlier years shall be deemed as income of the previous year in which the house property is transferred. |
|
Contribution to Pension Schemes |
Investment in the pension fund set-up by a Mutual Fund or Tier-II account of the NPS |
• The deduction for contribution to the NPS (Tier-II account) shall be available to the Central Government employee only. • Minimum initial contribution: Rs. 1,000; subsequent: Rs. 250 • Contributions in Tier-II account must be locked in for 3 years; during this period, assignments, pledges, or hypothecations are not permitted. |
|
NABARD Bonds |
Investment in NABARD Rural Bonds |
– |
|
National Saving Certificates (NSC) |
Investment in NSC and reinvested interest |
• Interests earned on deposits made during the tenure of NSC are deemed to be reinvested in NSC. • The amount of interest so re-invested is charged to tax as income from other sources. |
|
Senior Citizen Saving Scheme |
Deposits under Senior Citizen Saving Scheme |
• If the accountholder closes the account before expiry of 5 years from the date of its deposit, the amount withdrawn shall be deemed as the income of the assessee for the previous year in which amount is withdrawn. • Only that amount shall be taxable which has been claimed as deduction under section 80C. • Where the amount is received by the nominee or the legal heirs on death of the assessee, it shall not be chargeable to tax. |
|
Time Deposit with Post Office |
Time deposits with Post Office |
|
|
Sukanya Samriddhi Scheme |
Contributions to accounts for any 2 girl children |
– |
|
Fixed Deposits |
Fixed deposits with minimum 5-year maturity |
The term deposits cannot be pledged to secure loans or as security to any other asset. |