Section 80DDB

Deduction in respect of medical treatment, etc.

  1. Eligibility –
    • The Assessee should be a resident in India, during the previous year.
    • The Assessee should be Individual or HUF.
    • The Deduction is available to an Assessee for incurring medical expenditure on himself or a dependent.
  2. Payments qualifying for deduction –
    • Any Amount actually paid by the Assessee for the medical treatment of the disease or ailment as specified by the board for himself or a dependent.
    • In case the Assessee is an individual the deduction is available to himself or dependent.
    • In case the Assessee is an HUF the deduction is available for himself or any of its members.
  3. Quantum of deduction –
    • The amount of deduction under this section is the amount actually paid or 40,000/- whichever is lower, in respect of that previous year in which that amount was actually paid.
    • In case the amount is paid in respect of the senior citizen*, then the amount of deduction is the amount actually paid or 1,00,000/- whichever is lower
  4. Condition-
    No such deduction is allowed until and unless the Assessee obtains the prescription for such medical treatment from a neurologist, or oncologist, an urologist or such other specialist, as may be prescribed

Note :

  • The deduction under this section shell be reduced by the amount received, if any, under reimbursed from an employer, or Insurance received from an insurer, for the medical treatment of the Assessee or a dependent
  • Senior Citizen means a resident individual of age 60 years or more at any time during the relevant previous year

Section 80CCD

Deduction in respect of contribution to pension scheme notified by the Central Government

Pension Scheme of Central Government:
As per the “Restructured Defined Contribution Pension System” applicable to new entrants to Government service, it is mandatory for persons entering the service of the Central Government on or after 1st January, 2004, to contribute 10% of their salary every month towards their pension account. A matching contribution is required to be made by the Government to the said account.

The benefit of this scheme is also available to individuals employed by any other employer as well as to self-employed individuals.

Quantum of deduction:

  1. Section 80CCD (1) Employee’s contribution is allowed to an individual who makes deposits to his/her pension account.
    • Maximum deduction allowed is 10% of salary (in case the taxpayer is an employee) or
    • 20% of gross total income (in case the taxpayer being self-employed)
  2. Section 80CCD(1B) provides for an additional deduction of up to Rs 50,000 in respect of the whole of the amount paid or deposited by an individual assessee under National Pension System(NPS) in the previous year, whether or not any deduction is allowed under section 80CCD(1).
  3. Section 80CCD (2) Employer’s contribution to NPS is an Additional deduction allowed to employee’s pension account of up to 10% of the salary of the employee. There is no monetary ceiling on this deduction.

Note :

  • As per Section 80CCE, the aggregate amount of deduction under section 80C,  80CCC and 80CCD(1) to Rs 1,50,000.
  • It may be noted that the deduction of upto 50,000 under section 80CCD(1B) and employer’s contribution  to  pension scheme, allowable as deduction under section 80CCD(2) in the hands of the employee, would be outside the overall limit of Rs 1,50,000  stipulated  under section 80CCE.
  • “salary” includes basic salary and dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites.

Types of Capital Assets

1. Short term capital asset:

An asset which is held for a period of 36 months or less is a short-term capital asset. The criteria of 36 months have been reduced to 24 months in the case of Unlisted Shares, immovable property being land, building, and house property, from FY 2017-18.

However, following assets held for not more than 12 months shall be treated as short-term capital assets:

  • Equity or preference shares in a company which are listed in any recognized stock exchange in India;
  • Other listed securities;
  • Units of UTI;
  • Units of equity oriented funds; or
  • Zero Coupon Bonds.

2. Long term capital asset:

Capital Asset that is held for more than 36 months or 24 months or 12 months, as the case may be, immediately preceding the date of transfer is treated as long-term capital asset.

Summary of the period of holding:

Meaning and Definitions

What is meant by Capital Gains ?

Capital Gains means, any profits arising from the transfer of Capital Asset affected in the previous year will be chargeable to income tax under the head ‘Capital Gains’. A capital gain may be short-term or long-term.

Defining Capital Assets:

As per section 2(14), a Capital Asset means –     

  1. Property of any kind held by an assessee, whether or not connected with his business or profession;
  2. Any securities held by a Foreign Institutional Investor which has invested in such securities in accordance with the SEBI regulations.

However, it does not include the following:

  1. Any stock, consumables or raw material, held for the purpose of business or profession
  2. Personal goods such as clothes and furniture held for personal use
  3. Agricultural land in rural India
  4. 6½% gold bonds (1977) or 7% gold bonds (1980) or national defence gold bonds (1980) issued by the central government
  5. Special bearer bonds (1991)
  6. Gold deposit bond issued under the gold deposit scheme (1999) or deposit certificates issued under the Gold Monetisation Scheme, 2015.

Note:

  1. However, jewellery, archaeological collections, drawings, paintings, sculptures, or any work of art are not treated as personal effects and, hence, are included in the definition of capital assets.
  2. ‘Property’ includes and shall be deemed to have always included any rights in or in relation to an Indian company, including rights of management or control or any other rights whatsoever.
  3. Rural Agriculture Land means not being land situate –
    • agricultural land situated in any area within the jurisdiction of a municipality or cantonment board having population of not less than 10,000 or
    • agricultural land situated in any area within such distance, measured aerially, in relation to the range of population as shown hereunder –
  Shortest aerial distance from the local limits of a municipality or cantonment board referred to in item Population according to the last preceding census of which the relevant figures have been published before the first day of the previous year.
(i) ≤ 2 kilometers > 10,000 ≤ 1,00,000
(ii) ≤ 6 kilometers > 1,00,000 ≤ 10,00,000
(iii) ≤ 8 kilometers > 10,00,000