Question

Discuss in detail about the deduction available to an individual from gross total income

Answer 1

 DEDUCTION IN RESPECT OF INVESTMENTS IN SPECIFIED ASSETS (SECTION 80C) 

Section 80C provides for a deduction of savings in specified modes of Investments form gross total income. It is available only to an Individual or HUF. The Maximum permissible deduction is Rs.1.5 lakh along with deduction u/s 80CCC & 80CCD.

Admissible Deductions:-
Ø Premium paid on insurance on life of the Individual or HUF only to the extent of such premium or other payment made not in excess of 10% (As amended by the Finance Act,2012) of Actual Capital Sum Assured. Explanation to Sec 80C (3A) has been introduced to provide that the Actual Capital Sum Assured in respect of the life insurance policies to be issued on or after 1st April, 2012 shall mean the minimum amount assured under the policy on happening of the event at any time during the term of the policy without taking into Account the following:-

· The Value of Premium to be Returned or
· Any Benefit by way of bonus or otherwise to be received over & above the sum actually assured.

Ø Sum paid under the contract for deferred on life of the Assessee or his/her spouse or children.

Ø Sum deducted by the government from the salary of an employee for securing a deferred annuity for self, spouse or children.

Ø Contribution to any PPF.

Ø Contribution by an employee to RPF.

Ø Contribution by an employee to an Approved Superannuation Fund.

Ø Contribution made to any PPF set up by the Central Government.

Ø Subscription to any deposit scheme or contribution to any Pension fund set up by the National Housing Bank.

Ø Payment of Tuition fees by an Individual Assessee at the time of admission to any university, college, school or other educational institutions within India for the purpose of full time education of any two children.

Ø Subscription to deposit scheme of Public Sector, engaged in providing housing finance.

Ø Subscription to units of Mutual funds notified u/s 10(23D).

Ø Sum deposited in Fixed Deposits (FDs) with tenure of five years.

Ø Sum deposited in 5 yrs Post Office Time Deposit (POTD) scheme