What are the deductions allowed under Chapter (VIA) of Income tax Act, 1961

[Sparsh wadhwa]

Chapter VIA of the Income Tax Act, 1961 provides for various deductions that can be claimed by individuals and Hindu Undivided Families (HUFs) while computing their taxable income. The following are the deductions allowed under Chapter VIA of the Income Tax Act, 1961:

1. Section 80C: This section allows deductions for various investments, such as contributions to Employees’ Provident Fund (EPF), Public Provident Fund (PPF), National Savings Certificate (NSC), Equity Linked Saving Scheme (ELSS), and payment of life insurance premiums, etc. The maximum deduction limit under Section 80C is Rs. 1.5 lakhs per annum.

2. Section 80CCC: This section provides for deductions for contributions to pension plans, such as the National Pension System (NPS). The maximum deduction limit under Section 80CCC is Rs. 1.5 lakhs per annum.

3. Section 80CCD: This section provides for additional deductions for contributions made by an individual or an employer to the National Pension System (NPS). The maximum deduction limit under Section 80CCD is Rs. 2 lakhs per annum.

4. Section 80D: This section allows deductions for payment of health insurance premiums for self, spouse, dependent children, and parents. The maximum deduction limit under Section 80D is Rs. 25,000 per annum, which can be increased to Rs. 50,000 in case of senior citizens.

5. Section 80E: This section allows deductions for payment of interest on education loans for higher studies. The deduction can be claimed for a maximum of 8 years.

6. Section 80G: This section allows deductions for donations made to charitable organizations, trusts, and political parties. The deduction limit varies depending on the type of donation made.

7. Section 80TTA: This section provides for deductions for interest earned on savings accounts. The maximum deduction limit under Section 80TTA is Rs. 10,000 per annum.

8. Section 80TTB: This section provides for deductions for interest income earned by senior citizens on deposits with banks, post offices, and co-operative societies. The maximum deduction limit under Section 80TTB is Rs. 50,000 per annum.

The author is a GST and Income Tax Practisioner and can be contacted at 9024915488.