Income Tax :- 100% Deduction u/s 80G for Contribution towards disaster relief for affected people of Uttrakhand

Friends,  There was confusion for deduction u/s 80G for contribution towards disaster relief for affected people of Uttrakhand made in the Financial Year 2013-14 that either it is 100% or 50%.   Income Tax department has clearly announced that 100% deduction will be given to all donors who have made contribution towards disaster relief for affected people of Uttrakhand vide Letter No. IRSA(AON)/EC/Res./UK-DR/4 dated 05.06.2014.  PAN of CM Relief fund Uttrakhand, for claim of deduction is AAAGM0036M.

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Helpful Data for filing Income Tax Return:-

C.M. Relief Fund, Uttrakhand
PAN- AAAGM0036M 

Address: Dehradun 

Sate: Uttranchal 

Pin- 248001

Deduction for Salaried Employees

 Deduction is major question for salaried employees.  Each employee wants to know that what type of deduction can be claimed by him to avoid deduction of Income Tax from his salaries.  Keeping in view of these things all Deductions are framed below to watch the All deductions relating to Salaried Employees. 

Deductions at a Glance to Salaried assessee

Serial No’s	Sections	Particulars	Assessee to whom allowed	Quantum of Deduction
1	80CCC	Deduction in respect of contribution to certain pension funds	Only Individuals	Max. Rs. 1,00,000
2	80CCD	Deduction in respect of contribution to new pension scheme	Any employee or a self-employed person	In case of employees maximum 10% of salary and in case of self-employed persons 10% of Gross Total Income
3	80CCE	Limit of deduction u/s. 80C,80CCC and 80CCD (only employees contribution to New Pension Scheme to be included for the limit of Rs. 1,00,000)	Individual or HUF	Max. Rs. 1,00,000
4.	80CCF	Deduction in respect of Long-Term infrastructure bonds.	Individuals or HUF	Max. Rs. 20,000.  Removed w.e.f.  F.Y. 2012-13
5.	80D	Deduction in respect of medical insurance premia w.e.f. A.Y. 2011-12 any contribution made to the Central Government Health Scheme (CGHS) shall also be eligible for deduction	Individual or HUF whether resident or non-resident.	In Case of Individuals (i) For individual himself, spouse and dependent children   Rs. 15,000 (ii) For parents of the individuals, whether dependent or not. RS. 15,000 In case of HUF   Rs. 15,000 Note:- Addl. Rs. 5,000 if any of the above person insured is a senior citizen.
6.	80DD/ Rule 11A	Deduction in respect of maintenance including medical treatment of person with physical disability.	Individual or HUF resident in India: 1)      With disability 2)      With severe disability.	Rs. 50,000 Rs. 1,00,000
7.	80DDB/ Rule 11DD	Deduction in respect of medical treatment etc.	Individual or HUF resident in India For senior citizen	Rs. 40,000 Addl. Rs. 20,000
8.	80E	Deduction for interest paid on loan taken for pursuing his higher education or for the purpose of higher education of his relative.  Higher education shall cover all post schooling courses. “Relative” means the spouse and children of the individual.	Individual whether resident or not.	Actual amount paid.
9.	80G/Rules 11AA & 18AAA	Deduction in respect of donations to certain funds, charitable institutions, etc.	All assesses	(a)    100% or 50% of eligible donations, without applying qualifying limit in certain cases. (b)   100% or 50% of eligible donations, after applying Qualifying limit of 10% of adjusted GTI.
10.	80GG and Rule 11B	Deductions in respect of Rent Paid	Individual only	Max. Rs. 2,000 p.m.
11.	80GGA	Deduction in respect of certain donations for scientific research or rural development, etc. w.e.f A.Y. 2011-12 donations to any research association will be eligible for deduction.	All assesses no having business income.	100% of sum donated.
12.	80GGC	Deduction in respect of contribution to political parties/Electoral Trust	All assesses (except local authority and artificial judicial person)	100% of sum contributed.
13.	80QQE	Deduction in respect of royalty income, etc. of authors of certain books other than text books.	Individuals who are residents in India and are authors.	Actual income or Rs. 3,00,000 whichever is less.
14.	80RRB	Deduction in respect of royalty on patents.	Individual who is resident in India and is a patentee.	100% of such income or Rs. 3,00,000 whichever is less.
15.	80U/Rule 11D	Deduction in the case of permanent physical disability (including blindness)	Resident Individual:	Rs. 50,000 in case of a per with disability. Rs. 1,00,000 in case of a person with a severe disability.

Income Tax :- Savings /Deduction > 1,00,000 u/s 80CCG

Friends,  Income Tax Department has notified new Notification Dated 23.11.2012 regarding Rajiv Gandhi Equity Savings Scheme, 2012.   Earlier benefit of investment in infrastructure bond was taken by an Individual etc. But now w.e.f.. A.Y. 2013-14 or Financial Year 2012-13,  deduction in investment in Infrastructure bond has been stopped and a new deduction u/s 80CCG as investment in Rajiv Gandhi Equity Savings Scheme 2012 has been started. 

                The benefit of this scheme can bet availed under some conditions. 

1. Eligibility .- The deduction under the Scheme shall be available to a new retail investor who complies with the conditions of the Scheme and whose gross total income for the financial year in which the investment is made under the Scheme is less than or equal to  ten lakh rupees.

2. Procedure at time of opening demat account.-The new retail investor shall  follow the following procedure at the time of opening or designating a demat account  :- 

    (a) the new retail investor  shall open a new demat account or designate his existing demat account for the purpose of availing  the benefit under the Scheme; 

   (b)  the new retail investor shall submit a declaration in Form A to the  depository participant  who will forward the same to the depository for  verifying the status of the new retail investor; 

   (c) the new retail investor shall furnish his Permanent Account Number (PAN)  while opening the demat account or designating the  existing account as a  Rajiv Gandhi Equity Savings Scheme eligible account, as the case may be.

3) Procedure for investment under Scheme.-  A new retail investor shall make  investments under the Scheme in the following manner :- 

               (a) the new retail investor may make investment in eligible securities in one or more than one transactions during the year in which the deduction has to be claimed;  

               (b) the new retail investor may make any amount of investment in the demat account but the amount  eligible for deduction, under the Scheme shall not exceed  fifty thousand rupees; 

                    (c) the eligible securities brought into the demat account, as declared or  designated by the new retail investor, will automatically be subject to lock-in  during its first year, as per the provisions of paragraph 7, unless the new retail investor specifies otherwise and for such specification, the new retail  investor shall submit a declaration in Form B indicating that such securities  are not to be included within the above limit of investment; 

                (d) the new retail investor shall be  eligible for a  deduction under subsection (1) of section 80CCG of the Act in respect  of   the actual amount invested in eligible securities , in the first financial year in respect of which a declaration in Form B has not been made, subject to the maximum  investment limit of fifty thousand rupees;

                    (e)  the new retail investor who has claimed a deduction under sub- section (1) of section 80CCG of the Act, in any assessment  year, shall not be allowed any deduction under the Scheme for any subsequent assessment year;  

                       (f) the new retail investor shall be permitted a  grace period of three trading days from the end of the financial year so  that the eligible securities purchased on the last trading day of the financial year also get credited in the demat account and such securities shall be deemed to have been purchased in the financial year itself; 

                      (g) the new retail investor may  also keep securities other than the eligible securities covered under the Scheme in the demat account through which benefits under the Scheme are availed;  

                        (h) the new retail investor can make investments in securities other than the eligible securities covered under the Scheme and such investments shall not be subject to the conditions of the Scheme nor shall they be counted for availing the benefit under the Scheme; 

                (i) the investment under the Scheme shall consist of all eligible securities covered under the Scheme that are initially bought by the investor under the Scheme or that are bought subsequently by the investor as per the provisions of the Scheme; 

                    (j) the deduction claimed shall be withdrawn if the lock-in period requirements of the investment are not complied with or any other condition of the Scheme is violated. 

To read complete Notification No. 51 dated 23.11.2012 (Click Here)

Consequences if Deductor do not Deduct or Pay Income Tax

 Major Changes in Section 201 w.e.f. 01.07.2012

  
    Person who fails to deduct or pay on the payment to a resident shall now not be deemed to be an assessee in default in respect of such tax if such resident 

(i) has furnished his return of income under section 139; 

(ii) has taken into account such sum for computing income in such return of income; and

(iii) has paid the tax due

(iv) furnishes a Certificate from CA Interest shall be payable from the date on which such tax was deductible to the date of furnishing of return of income by such resident.

Period of Limitation extended to 6 years from 4 years. 

Words as per Chapter-III of Income Tax Act.

In section 201 of the Income-tax Act,—

   (A) with effect from the 1st day of July, 2012,—

            (i) in sub-section (1),—

                      (a) before the proviso, the following proviso shall be inserted, namely:—

                      “Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee in default in respect of such tax if such resident—-

                 (i) has furnished his return of income under section 139;

                 (ii) has taken into account such sum for computing income in such return of income; and

                (iii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed:”;

            (b) in the proviso, for the words “Provided that”, the words “Provided further that” shall be  substituted;

       (ii) after sub-section (1A), the following proviso shall be inserted, namely:—

        “Provided that in case any person, including the principal officer of a company fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum  paid to a resident or on the sum credited to the account of a resident but is not deemed to be an assessee in default under the first proviso of sub-section (1), the interest under clause (i) shall be payable from the date on which such tax was deductible to the date of furnishing of return of income by such resident.”;

  (B) in sub-section (3), in clause (ii), for the words “four years”, the words “six years” shall be substituted and shall be deemed to have been substituted with effect from the 1st day of April, 2010;

  (C) after sub-section (4), the following Explanation shall be inserted with effect from the 1st day of

July, 2012, namely:—

           “Explanation.—For the purposes of this section, the expression “accountant” shall have the meaning assigned to it in the Explanation to sub-section (2) of section 288.”.

Deductions Available for Salaried Employee

Friends,  The gross total income of an individual has to be computed under the following heads of income :-

1. Income from Salaries;
2. Income from House Property;
3. Profit or Gains of Business and Profession;
4. Income from Capital Gains;
5. Income from Other Sources,

          Besides the above incomes, sometimes income of other persons is included in the assessee's Total Income due to clubbing provisions enumerated under section 60 to 64.

         Since Income-Tax is a composite tax on Total Income of a person earned during a period of one previous year, it may so happen that the net result from a particular source/head may be a loss.   This loss can be set off against other source/head as per the provisions for sett off or carry forward and set off of losses contained in sections 70 to 80 of the Income-Tax Act.

          The aggregate of income computed under each head, after giving effect to the provisions for clubbing of incomes and set off of losses, is known as "Gross Total Income ".   In computing the total income of an assessee, certain deductions are permissible under section 80C to 80U from Gross Total Income.   These deductions are however not allowed from the following incomes although these incomes are part of Gross Total Income:

• Long-Term Capital Gains. 
• Short-Term Capital Gain on transfer of equity shares and units of equity oriented fund on or after 01-10-2004 through a recognised stock exchange i.e. short-term capital gain covered under section 111A.
• Winnings of lotteries, races, etc. 
• Incomes referred to in sections 115A,115AB,115AC, 115AD, 115BBA AND 115D.

     These deductions are of two types"-

1. deductions on account of certain payments and investments covered under section 80C to 80GGC.
2. Deductions on account of certain incomes which are already included under Gross total Income covered under sections 80IA to 80U> 

          The income arrived at, after claiming the above deductions from Gross Total Income, is known as Total Income.   It may also be called Taxable Income.   The Total Income thus calculated, should be rounded off to the nearest of Rs. 10/-.

To know more regarding summary of Deductions under section 80C to 80U (Click Here)

Tata Easy Retire Annuity Plan

Friends, As per notification dated 19th October, 2010, now Tata Easy Retire Annuity Plan of the Tata AIG Lif insurance Company Limited as approved by Insurance Regulatory and Development Authority vide its letter dated 23rd November, 2007 as the annuity plan of the ICICI Prudential Life Insurance Company Limited for the purposes of the said clause (xii).

To Read complete notification in detail (Click Here)

Mandatory PAN

         To avail benefit of  50% deduction under section 80G where donee is required to be approved under section 80G(5) (vi), Permanent Account Number (PAN) is mandatory in e-filing. Without PAN of donee e-filing can not be completed.  

        While reading above information, it is a common question that what is 80G (vi).  To know regarding 80G (5) (vi), the detail of section 80G as per Income Tax Act  is given as under :- 

80G (5) (vi) can be read as below

(5) This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of  Sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely :—

     (vi) in relation to donations made after the 31st day of March, 1992, the institution or fund is for the time being approved by the Commis-sioner in accordance with the rules15 made in this behalf 

         Picture view of e-filing sheet showing PAN mandatory is marked  as under: -  

        

To read complete information of deduction under section 80G (Click Here)

Deductions from Gross Total Income

Friends,

                 In case your income exceeds the exemption limit of Income Tax. This chapter is much helpful for you.  Everyone want to know the nature of all deductions which can be deducted from his income  so that proper amount of Income Tax can be deposited.  Keeping in view this fact this post has been given.  Click below to see the all nature of Deductions. 

All Deductions from Gross Total Income

Post Office Time Deposit (T.D.) for Deduction u/s 80C

Friends,

Post Office provide us to deposit your money for 1,2,3 or 5 years. It is called T.D. (Time Deposit). T.D. gives us interest on annual basis. After one year when we do not withdraw interest amount. Postal department keeps the amount of interest as it is. I mean to say no further interest on one year interest. Some example to clarify the same is given as under :-

Example

Our Deposit Amount in 2 Year T.D. = 1,00,000/-

Interest Rate for 2 Year T.D. =6.50 % w.e.f. 01.03.2003

Annual Interest Amount = 6,660.00

How to calculate Interest

Interest Rate is = 6.50% annual

Quarterly Rate will be = 1.625 % each quarter

Formula = (Quarterly Rate/100) + 1 = (1.625/100 )+1 = 1.01625

Total Interest Rate will be = 1.01625 x 1.01625 x 1.01625 x 1.01625 = 1.0666015

Now Interest Amount = (Principal x 1.06666015 ) - Principal

= ( 100000 x 1.0666015 ) - 100000

= 106660 - 100000 = 6660.00

in this way interest is Rs. 6660.00

The above calculation has been done like as calculation of Interest of F.D.R.'s in bank.

Who can Invest

An individual can invest in T.D. as single or joint in the multiple of Rs. 200/-. There is no maximum limit for deposit the amount in T.D.

Interest Rates of Time Deposit on or after 01.03.2003.

Period of Deposit Rate of Interest

1 year 6.25 %

2 years 6.50 %

3 years 7.25 %

5 years 7.50 %

It is already clarified in above example that rates are compounded on quarterly basis.

Withdrawal Facility

Withdrawal can be made after 6 months of deposit. Interest will not be payable if withdrawal is made after 6 month but before 1 year. If withdrawal is made after 1 year (in case 2, 3 , 5 yearly T.D.) interest shall be payable at a rate 2% less than the rate applicable to the period for which the deposit has run.

Income Tax Benefit

Amount invested in post office Time Depsoit (T.D.) for five (5) years is eligible to deduction u/s 80 C. When account is opened as joint. The first name holder of the deposit can avail the benefit u/s 80C.

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Deduction of Entertainment Allowance from Salary

Friends,

                In case of Government Service,  when an employee receive any allowance in the nature of Entertainment Allowance, deduction from salary will be allowed whichever is less in the below list.

1)   1/5 or 20% of  the salary  (excluding all other allowances, benefit or any other perquisites)
2)   Rs. 5000/- (Rupess five thousand only)

Deduction will be  allowed whichever is less in above. 

Other important deductions (click here)