INTRODUCTION

In order to further the government policy of attracting investment and activity in the desired direction and to provide stimulus to growth or to meet social objectives, concession in the form of ‘deduction’ from taxable income is allowed. Chapter VI-A of the Income-tax Act, 1961 contains such deduction provisions with the advent of new philosophy of giving direct assistance to the desired goal and avoiding indirect route of tax concessions, the number of deductions are being omitted. this is also with a view to avoid complexity of tax law.

In computing total income of an assessee deductions under sections 80CCC to 80U are permissible from “Gross total Income”. [80A(1)]

“Gross total Income” means the aggregate of income computed under each head as per provisions of the Act, after giving effect to the provisions for clubbing of incomes (Sections 60 to 64) and set off of losses and but before making any deductions under this chapter. [Section 80B(5)]
The deductions under chapter VIA are not available from the following incomes though these are included in the “Gross total Income”:

(i) long term Capital gains;

(ii) winnings from lotteries, cross word puzzles etc.;

(iii) incomes referred to in sections 115A to AD, 115BBA and 115D.

The aggregate amount of deductions under chapter VIA [Sections 80CCC to 80U] shall not exceed the “Gross total Income” of the assessee.

Deductions under Chapter VIA available for 

  • In respect of expenditure or investment made by assessee [Sec. 80C to 80GGA] which are as below :
  1. Deduction in respect of LIP, contributions to PF, etc [Sec. 80C]
  2. Deduction in respect of Contribution to Pension Fund of LIC or any other Pension fund [Sec. 80CCC]
  3. Deduction in respect of contribution to pension scheme of Central Government. [Sec. 80CCD]
  4. Section 80CCE and Sec. 80CCF
  5. Deduction in respect of Medical Insurance Premium. [80D]
  6. Deduction in respect of Medical treatment of Handicapped dependent. [80DD]
  7. Deduction in respect of Medical treatment, etc. [Sec. 80DDB]
  8. Deduction in respect of Loan taken for higher education. [Sec. 80E]
  9. Deduction in respect of Donation to certain Funds, Charitable Institutions etc. [Sec 80G]
  10. Deduction in respect of Rent Paid [Sec. 80GG]
  11. Deduction in respect of certain donation to Scientific Research or Rural Development. [Sec. 80GGA]
  • Deduction in respect of Certain Income [Sec. 80GGB to 80 RRB]
  1. Deductions by Companies to Political Parties. [Sec. 80GGB]
  2. Donation to Political Parties. [Sec. 80 GGC]
  3. Deduction in respect of Profit Gains from Industrial Undertaking or Enterprises engaged in Infrastructure development. [Sec. 80 IA]
  4. Deduction in respect of Profit and Gains by an undertaking or enterprise engaged in development of Special Economic Zone. [Sec. 80IAB]
  5. Deduction in respect of Profit Gains from Industrial Undertaking other than Infrastructure development Undertaking . [Sec. 80 IB]
  6. Special provisions in respect of certain undertakings or enterprises in certain special category States [Sec. 80-IC]
  7. Deduction in respect of profits and gains from business of hotels and convention centres in specified area [Sec.80ID]
  8. Special provisions in respect of certain undertakings in North- Eastern States[Sec. 80IE]
  9. Deduction in respect of Profit and Gains from business of Collecting and Processing of Bio – Degradable waste. [Sec. 80JJA]
  10. Deduction in respect of Employment of New Workmen. [80 JJAA]
  11. Deductions in respect of certain incomes of Offshore Banking Units and International Financial Services Centre [Sec. 80LA]
  12. Deductions in respect of Co-operative Society. [80P]
  13. Deduction in respect of Royalty of Authors. [80QQB]
  14. Deduction in respect of Royalty on Patents. [80RRB]
  15. Deduction in respect of Interest on savings account. [80TTA]
  16. Deduction in respect of Totally Blind or Mentally Retarded or Physically Handicapped Person. [80U]