Author: rajemudhra

Deduction in respect of maintenance including medical treatment of a dependant who is a person with disability.

• Meaning: Expenditure incurred on medical treatment (including nursing), training and rehabilitation of handicapped dependant relative or the taxpayer may have deposited in a scheme of LIC or another insurer for maintenance of the dependant.
• Eligibility: Provides deduction to an assessee, who is resident in India, being Individual or Hindu undivided family.
• Quantum of deduction: The deduction is Rs 75,000 and in case of severe disability (i.e., person with 80% or more disability) the deduction shall be Rs 1,25,000
• Conditions:
  • For claiming the deduction, the assessee shall have to furnish a copy of the certificate issued by the medical authority under the Persons with Disability (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 along with the return of income under section 139.
  • Where the condition of disability requires  reassessment,  a  fresh certificate from the medical authority shall have to be obtained after the expiry of the period mentioned in the original certificate in order to continue to claim the deduction.
  • If the dependa
  • nt, being a person with disability, predeceases the individual or the member of HUF, in whose name subscription was made, then the amount paid or deposited under the said scheme would be chargeable to tax in the hands of the assessee in the previous year in which such amount is received by the assessee.

Note :

Meaning of “Dependant”:

Sl No.	Assessee	Dependant
(1)	Individual	The spouse, children, parents, brother or sister of the individual who is wholly or mainly dependant on such individual and not claimed deduction under section 80U in the computation of his income
(2)	HUF	A member of the HUF, wholly or mainly dependant on such HUF and not claimed deduction under section 80U in the computation of his income

Deduction in respect of interest on deposits in savings account.

Section 80TTA is a deduction available to an Individual and HUF to the maximum of Rs.10,000 /- on the interest income earned from:

1. Saving bank account with a bank
2. From a savings account with a co-operative society carrying on the business of banking
3. From a savings account with a post office

The Deduction is not available on the interest income earned from fixed deposit, recurring deposits and any other time deposits.

Deduction in respect of contributions given by companies to political parties.

In computing the total income of an assessee, being an Indian company, there shall be deducted any sum contributed by it, in the previous year to any political party or an electoral trust.

No deduction shall be allowed under this section in respect of any sum contributed by way of cash.

Note:
The word “contribute”, with its grammatical variation, has the meaning assigned to it under section 293A of the Companies Act, 1956

*Section 239A of Companies Act, 1956 the maximum amount or the aggregate of amounts which may be so contributed by a company in any financial year shall not exceed 5% of its average net profits determined in accordance with the provisions of sections 349 and 350 during the three immediately preceding financial years.

Deduction in respect of interest on loan taken for higher education.

Eligibility:
It provides deduction to an individual assessee in respect of any interest on loan paid by him in the previous year out of his income chargeable to tax.

Conditions:
The loan must be taken from any financial institution or approved charitable institution. Such loan is taken for pursuing his higher education or higher education of his or her relative i.e., spouse or children of the individual or the student for whom the individual is the legal guardian.

Period of Deduction:
The deduction is allowed in computing the total income in respect of the initial assessment year (i.e. the assessment year relevant to the previous year, in which the assessee starts paying the interest on the loan) and seven assessment years immediately succeeding the initial assessment year or until the interest is paid in full by the assessee, whichever is earlier.

Note:

1. “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.
2.  “approved charitable institution” means an institution specified in, or, as the case may be, an institution established for charitable purposes and approved by the prescribed authority  or an institution in section 80G(2)(a).
3.  “financial institution” means
   • a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); or
   •  any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf;