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Cracking the Code of Chapter VI A: Tips and Tricks for Tax Optimization

Tips and Tricks for Tax Optimization
Author name: Vipin Sharma
Created date: 09-05-2024 09:54 AM
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Earning money in today’s time is important, filing ITR is also important for being compliance tension free, but saving tax is more important than all these things to keep more money with you. You can save so much of money by saving taxes with help of deductions and exemptions. There are so many deductions and exemptions in Income Tax Act, 1961. These all deductions are covered in chapter VI (A) of Income Tax Act.

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What is Chapter VI (A)?

Chapter VI (A) of income tax covers sub sections of section 80, these sections allows tax payers to get relief from tax burden by get some deductions and exemptions in tax. You can avail these deductions by investing money in tax saving schemes, eligible expense, charities or donations and so more. These deductions are covered in section 80C, 80CCC, 80CCD, 80CCE, 80D to 80U

Sections Income Tax Deduction Eligible person Maximum deduction
Section 80C Investing in options like LIC,
PPF, Sukanya Samriddhi
Account, Mutual Funds, FD,
child tuition fee, ULIP, etc
Individual Or HUF Upto Rs 1,50,000
Section
80CCC
Investment in Pension
Funds
Individuals Upto Rs 1,50,000
Section
80CCD (1)
Atal Pension Yojana and
National Pension Scheme
Contribution
Individuals Upto Rs 1,50,000
Section
80CCD(1B)
Atal Pension Yojana and
National Pension Scheme
Contribution (additional
deduction)
Individuals Upto Rs 50,000
Section
80CCD(2)
National Pension Scheme
Contribution by Employer
Individuals Amount Contributed or 14% of Basic
Salary + Dearness Allowance (in
case the employer is Government)
10% of Basic Salary+ Dearness
Allowance(in case of any other
employer) - Whichever is lower
Section 80D Medical Insurance
Premium, preventive health
checkup and Medical
Expenditure
Individual Or HUF Upto Rs 25,000 and Up to 50,000
for Senior Citizen Parents
Section
80DD
Medical Treatment of a
Dependent with Disability
Individual Or HUF Normal Disability (atleast 40% or
more but less than 80%): Rs 75000/-
Severe Disability (atleast 80% or
more) : Rs 125000/-
Section Medical expenditure for Individual Or HUF Senior Citizens: Upto Rs 1,00,000
80DDB

treatment of Specified

Diseases

Individual Or HUF Others: Upto Rs 40,000
Section 80E Interest paid on Loan taken for Higher Education Individual No limit (Any amount of interest
paid on education loan)upto 8
assessment years
Section
80EE
Interest paid on Housing
Loan
Individual

Upto Rs 50,000 subject to some

conditions

Section
80EEA
Interest Paid on Housing
Loan
Individual

Upto Rs 1,50,000/- subject to some

conditions

Section
80EEB
Interest paid on Electric
Vehicle Loan
Individual

Upto Rs 1,50,000 subject to some

conditions

Section 80G Donation to specified
funds/institutions.
Institutions
All Assessee
(Individual, HUF,
Company, etc)
100% or 50% of the Donated
amount or Qualifying limit,
Allowed donation in cash upto
Rs.2000/-
Section
80GG
Income Tax Deduction for
House Rent Paid
Individual

Rs. 5000 per month

25% of Adjusted Total Income
Rent paid - 10% of Adjusted Total
Income - whichever is lower

Section
80GGA
Donation to Scientific
Research & Rural
Development
All assessees except
those who have an
income (or loss) from
a business and/or a
profession
100% of the amount donated.
Allowed donation in cash upto
Rs.10,000/-
Section
80GGB
Contribution to Political
Parties
Companies 100% of the amount contributed
No deduction available for the
contribution made in cash
Section
80GGC
Individuals on contribution
to Political Parties
Individual
HUF
AOP
BOI
Firm
100% of the amount contributed.
No deduction available for the
contribution made in cash
Section
80RRB
Royalty on Patents Individuals (Indian
citizen or foreign
citizen being resident
in India)
Rs.3,00,000/- Or Specified Income
- whichever is lower
Section
80QQB
Royalty Income of Authors Individuals (Indian
citizen or foreign
citizen being resident
Rs.3,00,000/- Or Specified Income
- whichever is lower
Section
80TTA
Interest earned on Savings
Accounts
Individual Or HUF
(except senior
citizen)
Upto Rs 10,000/-
Section
80TTB
Interest Income earned on
deposits(Savings/ FDs)
Individual (60 yrs or
above)
Upto Rs 50,000/-
Section 80U Disabled Individuals Individuals Normal Disability: Rs. 75,000/-
Severe Disability: Rs. 1,25,000/-

 

 

 

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