section 24

Income Tax Saving Under Section 24, 80E, 80G, 80TTA and 80RRB

Section 80 C is related to savings, Investment and retirement planning.

While section 80 D and 80 U are related to health. Individuals saving money in Health insurance as well as making expenses in health related issue are covered under this section.

Now remaining sections applicable for middle class are Section 24, 80E, 80GG, 80TTA, 80G, 80GGB, 80GGC and 80RRB are explained in following article:

Section 24: Income Tax Benefit on Interest on Home Loan

Deduction is allowed for the payment of interest on home loan under Section 24 of the Income Tax Act. Income from House Property shall be reduced by the amount of Interest paid on Home Loan.

Maximum Rs. 2 Lakhs tax deduction allowed under Section 24 of a self-occupied property.

Section 80E: Interest on Education Loan for Higher Studies

If educational loan is taken for self, spouse or child for the purpose of pursuing higher education than interest paid on this amount during financial year, deduction can be claimed for the interest paid on loan. Principal Part cannot be claimed for deduction under this section.

This loan may have been also taken for a student for whom the taxpayer is a legal guardian.

The deduction is available for a maximum of 8 years or till the interest is paid, whichever is earlier.

Section 80GG: House Rent Paid Where HRA is not Received

This deduction can be claimed for rent paid when HRA is not received.

Conditions are:

  1. The taxpayer, spouse or minor child should not own residential accommodation at the place of employment.
  2. The taxpayer should not have self-occupied residential property in any other place.
  3. The taxpayer must be living on rent and paying rent.

Deduction available is the minimum of:

  1. Rent paid minus 10% of total income
  2. Rs 5000/- per month
  3. 25% of total income

Maximum of Rs 60,000 per annum can be claimed under this section.

Section 80 TTA: Gross Total Income for Interest on Savings Bank Account

A deduction can be claimed minimum of the total interest earned or Rs 10,000 against interest income from a savings bank account.

Section 80TTA deduction is not available on interest income from fixed deposits, recurring deposits, or interest income from corporate bonds.

Section 80G: Donations towards Social Causes

The various donations towards social Causes specified in Sec. 80G are eligible for deduction up to 50% or 100%, with or without restriction. 80G deduction not applicable in case donation is done in form of cash for amount over Rs 2000

Donations with 100% deduction without any qualifying limit:

  • Africa (Public Contributions — India) Fund
  • An approved university/educational institution of National eminence
  • Chief Minister’s Earthquake Relief Fund, Maharashtra
  • Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
  • Clean Ganga Fund (applicable from financial year 2014-15)
  • Fund for Technology Development and Application
  • Fund set up by a State Government for the medical relief to the poor
  • National Blood Transfusion Council or to any State Blood Transfusion Council
  • National Children’s Fund
  • National Cultural Fund
  • National Defence Fund set up by the Central Government
  • National Foundation for Communal Harmony
  • National Fund for Control of Drug Abuse (applicable from financial year 2015-16)
  • National Illness Assistance Fund
  • National Sports Fund
  • National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
  • Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
  • Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat (contribution made during January 26, 2001 and September 30, 2001) or
  • Prime Minister’s Armenia Earthquake Relief Fund
  • Prime Minister’s National Relief Fund
  • Swachh Bharat Kosh (applicable from financial year 2014-15)
  • The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
  • The Maharashtra Chief Minister’s Relief Fund during October 1, 1993 and October 6,1993
  • Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district

Donations with 50% deduction without any qualifying limit:

  • Indira Gandhi Memorial Trust
  • Jawaharlal Nehru Memorial Fund
  • Prime Minister’s Drought Relief Fund
  • The Rajiv Gandhi Foundation

Donations with 100% deduction subject to 10% of gross total income:

  • Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India.
  • Government or any approved local authority, institution or association to be utilised for the purpose of promoting family planning

Donations with 50% deduction, subject to 10% of gross total income:

  • Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both
  • Any corporation referred in Sec 10(26BB) for promoting interest of minority community
  • Any other fund or any institution which satisfies conditions mentioned in Sec 80G(5)
  • For repairs or renovation of any notified temple, mosque, gurudwara, church or other place.
  • Government or any local authority to be utilised for any charitable purpose other than the purpose of promoting family planning

Section 80GGB: Contributions given by companies to Political Parties

Claim is allowed to an Indian company for amount contributed by it to any political party registered under section 29A or an electoral trust. Contribution should be done by any way other than cash.

Section 80GGC: Contributions given by any person to Political Parties

Deduction is allowed to a taxpayer for any amount contributed to any political party or an electoral trust. Deduction is allowed for contribution done by any way other than cash.

Section 80RRB: Income by way of Royalty of a Patent

Income by way of royalty for a patent registered on or after 01.04.2003 under the Patents Act 1970 can be claimed up to Rs. 3,00,000/- or the income received, whichever is less.

Deduction for The taxpayer (patentee) must be an individual resident of India. The taxpayer must have a certificate in the prescribed form duly signed by the authority.

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