Tax Planning through Investments

1. Tax Planning through Investments • DEDUCTIONS AVAILABLE • TO INDIVIDUAL TAXPAYERS CA. Rajat Mohan B.Com(H),ACA, ACS, DISA

2. SECTION 80CCC DEDUCTION IN RESPECT OF CONTRIBUTION TO CERTAIN PENSION FUNDS. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

3. (A).TAXPAYER CATEGORY- SECTION 80CCC This deduction is available to individual taxpayer only. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

4. (B).CONDITIONS SECTION 80CCC • (a) Assessee has in the previous year paid or deposited any amount. • (b) Amount so paid or deposited is out of his income chargeable to tax. • (c) Amount so paid or deposited is to effect or keep in force a contract for any annuity plan of Life Insurance Corporation of India or any other insurer for receiving pension from the fund referred to in clause (23AAB) of section 10. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

5. (B). CONDITIONS SECTION 80CCC • Surrender of annuity plan or receipt of pension criteria — Where any amount standing to the credit of the assessee in a fund, in respect of which a deduction has been allowed, together with the interest or bonus accrued or credited to the assessees account, if any, is received by the assessee or his nominee • (i) On account of the surrender of the annuity plan whether in whole or in part, in any previous year, or • (ii) As pension received from the annuity plan, • An amount equal to the whole of the amount received (in clause (i) or clause (ii)) shall be deemed to be the income of the assessee or his nominee, as the case may be, in that previous year in which such withdrawal is made or, as the case may be, pension is received. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

6. (B). CONDITIONS SECTION 80CCC (e) Dual benefit not allowed criteria — Where deduction has been allowed under this section for any amount paid or deposited by the assessee deduction with reference to such amount shall not be allowed under section 80C for any assessment year. (f) Aggregate of deductions under sections 80C, 80CCC and 80CCD shall not exceed Rs. 100000. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

7. (C). AMOUNT OF DEDUCTION- SECTION 80CCC Deduction shall be the whole of the amount paid or deposited (excluding interest or bonus accrued or credited to the assessees account, if any). However, deduction allowed shall not exceed the amount of Rs. 1,00,000 in the previous year. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

8. SECTION 80CCD DEDUCTION IN RESPECT OF CONTR IBUTION TO PENSION SCHEME OF CENTRAL GOVERNMENT MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

9. (A). TAXPAYER CATEGORY-SECTION 80CCD This deduction is available to individual taxpayer only. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

10. (B).CONDITIONS - SECTION 80CCD (a) Assessee: (i) Is employed by the Central Government or any other employer on or after 1 January, 2004, or (ii) Any other assessee (Assessee is self-employed). (b)Assesseehas in the previous year paid or deposited any amount in his account under a pension scheme notified or as may be notified by the Central Government. (c) Dual benefit not allowed criteria — Where deduction has been allowed under this section for any amount paid or deposited by the assessee deduction with reference to such amount shall not be allowed under section 80C for any assessment year. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

11. (B). CONDITIONS - SECTION 80CCD (d) Aggregate of deductions under sections 80C, 80CCC and 80CCD shall not exceed Rs. 1,00,000. (e) Withdrawal of deduction criteria — Where any amount standing to the credit of the assessee in his account, in respect of which a deduction has been allowed under this section (together with the amount accrued thereon, if any) is received by the assessee or his nominee, in whole or in part, in any previous year: (i) On account of closure or his opting out of the pension scheme; or (ii) As pension received from the annuity plan purchased or taken on such closure or opting out, MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

12. (B). CONDITIONS - SECTION 80CCD • The whole of the amount shall be deemed to be the income of the assessee or his nominee, as the case may be, in the previous year in which such amount is received. • Assessee shall be deemed not to have received any amount in the previous year if such amount is used for purchasing an annuity plan in the same previous year. • . MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

13. (C). AMOUNTOF DEDUCTION SECTION 80CCD Deduction shall be allowed of the whole of the amount so paid or deposited. However deduction shall not exceed: (a) In the case of an employee — 10% of his salary in the previous year. (b) In any other case — 10% of his gross total income in the previous year. However, in the case of an assessee being employee of Central Government or any other person — Where Central Government or any other employer makes any contribution to the account of assessee pension scheme notified or as may be notified by the Central Government, the assessee shall be allowed a deduction, of the whole of the amount contributed by the Central Government or any other employer as does not exceed 10% of his salary in the previous year. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

14. (D).MEANING -SECTION 80CCD ‘Salary’ includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

15. SECTION 80E DEDUCTION IN RESPECT OF INTEREST ON LOAN TAKEN FOR HIGHER EDUCATION. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

16. (A).TAXPAYER CATEGORY- SECTION 80E This deduction is available to individual taxpayer only. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

17. (B).CONDITIONS -SECTION 80E • (1).Assesseehad paid an amount by way of interest on loan. • (2).Loan was taken by assessee from any financial institution or any approved charitable institution for the purpose of pursuing his higher education or for the purpose of higher education of his relative • (3).The amount is paid out of the income chargeable to tax of the assessee. • (4).Deduction shall be allowed in 8 assessment year (starting from the year in which assessee starts paying the interest on the loan) or until the interest is paid in full. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

18. (E). MEANING – SECTION 80E • ‘Higher education’ means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, board or university recognized by the Central Government or State Government or local authority or by any other authority authorized by the Central Government or State Government or local authority to do so. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

19. SECTION 80GG DEDUCTIONS IN RESPECT OF RENTS PAID MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

20. (A).TAXPAYER CATEGORY-SECTION 80GG This deduction is available to individual taxpayer only. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

21. (B). CONDITIONS- SECTION 80GG • (1).Assesseeincurs expenditure towards payment of rent. • (2).Assesseeis a self-employed person or if he is employed, then he does not get House rent allowance any time during the year. • (3).Assesseeor his spouse or minor child or Hindu undivided family (of which assessee is a member) shall not own any residential house at the place where he ordinarily resides or performs duties of his office or employment or carries on his business or profession; or • (4).Assesseeshall not own any accommodation at any other place, the value of which is to be determined under Section 23(4)(a) or Section 23(2)(a). MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

22. (C).AMOUNT OF DEDUCTION-SECTION 80GG • Deduction shall be lower of following: • 1. Rs. 2000 months; • 2. 25% of Total income; • 3. Rent paid — 10% of Total income MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

23. SECTION-80U DEDUCTION IN CASE OF A PERSON WITH DISABILITY. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

24. (A). TAXPAYER CATEGORY SECTION-80U This deduction is available to individual taxpayer only. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

25. (B). CONDITIONS SECTION-80U (i)Assessee is resident of India. (ii)Assessee is at any time during the previous year, is certified by the medical authority to be a person with disability or severe disability. (iii)Assessee shall furnish a copy of the certificate issued by the medical authority in Form no. 10-IA (Rule 11A) along with the return of income under section 139. (iv) Disability requires reassessment —If condition of disability requires reassessment after a period stipulated Form No. 10-IA, no deduction under this section shall be allowed beginning after the expiry of the previous year during which the aforesaid certificate of disability had expired unless a new certificate is obtained from the medical authority and a copy thereof is furnished along with the return of income under section 139. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

26. (C). MEANING- SECTION 80U ‘Disability’ shall have the meaning assigned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995, and includes autism, cerebral palsy and multiple disabilities referred to in clauses (a), (c) and (h) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants

27. THANKYOU Your comments and suggestions are of utmost importance and are always welcomed. CA. Rajat Mohan B.Com(H), ACA, ACS, DISA MOHAN AGGARWAL & ASSOCIATES Chartered Accountants Head Office F-31 D.B. Gupta Market, Karol Bagh, New Delhi-110005 Office Phone: 011-23672609 / 23535809 Branch Office 18A, IInd Floor, North Avenue Road, West Punjabi Bagh, New Delhi-110026 office Phone: 011-4732696/97 Website: www.delhicamohan.com E-mail: rajat.mohan@icai.org