Deduction in Respect of Maintenance Including Medical Treatment of a Dependent with Disability

• Where an assesse, being an individual or a Hindu undivided family, who is a resident in India, has, during the previous year,

  • incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or

  • paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability,

  the assesse shall, in accordance with and subject to the provisions of this section, be allowed a deduction of a sum of seventy-five thousand rupees from his gross total income in respect of the previous year:

  Provided that where such dependant is a person with severe disability, the provisions of this sub-section shall have effect as if for the words "seventy-five thousand rupees", the words "one hundred and twenty-five thousand rupees" had been substituted.

• The deduction under clause (b) of sub-section (1) shall be allowed only if the following conditions are fulfilled, namely:

  • the scheme referred to in clause (b) of sub-section (1) provides for payment of annuity or lump sum amount for the benefit of a dependant, being a person with disability, in the event of the death of the individual or the member of the Hindu undivided family in whose name subscription to the scheme has been made;

  • the assesse nominates either the dependant, being a person with disability, or any other person or a trust to receive the payment on his behalf, for the benefit of the dependant, being a person with disability.

• If the dependant, being a person with disability, predeceases the individual or the member of the Hindu undivided family referred to in sub-section (2), an amount equal to the amount paid or deposited under clause (b) of sub-section (1) shall be deemed to be the income of the assesse of the previous year in which such amount is received by the assesse and shall accordingly be chargeable to tax as the income of that previous year.

• The assesse, claiming a deduction under this section, shall furnish a copy of the certificate issued by the medical authority in the prescribed form and manner, along with the return of income under section 139, in respect of the assessment year for which the deduction is claimed:

  Provided that where the condition of disability requires reassessment of its extent after a period stipulated in the aforesaid certificate, no deduction under this section shall be allowed for any assessment year relating to any previous year beginning after the expiry of the previous year during which the aforesaid certificate of disability had expired, unless a new certificate is obtained from the medical authority in the form and manner, as may be prescribed, and a copy thereof is furnished along with the return of income.

  Explanation

  For the purposes of this section

  • "Administrator" means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);

  • "dependant" means—

    • in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them;

    • in the case of a Hindu undivided family, a member of the Hindu undivided family,

    dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance, and who has not claimed any deduction under section 80U in computing his total income for the assessment year relating to the previous year;

  • "disability" shall have the meaning assigned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) and includes "autism", "cerebral palsy" and "multiple disability" referred to in clauses (a), (c) and (h) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

  • "Life Insurance Corporation" shall have the same meaning as in clause (iii) of sub-section (8) of section 88;

  • "medical authority" means the medical authority as referred to in clause (p) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) or such other medical authority as may, by notification, be specified by the Central Government for certifying "autism", "cerebral palsy", "multiple disabilities", "person with disability" and "severe disability" referred to in clauses (a), (c), (h), (j) and (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

  • "person with disability" means a person as referred to in clause (t) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) or clause (j) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

  • "person with severe disability" means—

    • a person with eighty per cent or more of one or more disabilities, as referred to in sub-section (4) of section 56 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996); or

    • a person with severe disability referred to in clause (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

  • "specified company" means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002).

Deduction in Respect of Medical Treatment

Where an assesse who is resident in India has, during the previous year, actually paid any amount for the medical treatment of such disease or ailment as may be specified in the rules made in this behalf by the Board

• for himself or a dependant, in case the assesse is an individual; or

• for any member of a Hindu undivided family, in case the assesse is a Hindu undivided family,

the assesse shall be allowed a deduction of the amount actually paid or a sum of forty thousand rupees, whichever is less, in respect of that previous year in which such amount was actually paid :

Provided that no such deduction shall be allowed unless the assesse obtains the prescription for such medical treatment from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist, as may be prescribed :

Provided further that the deduction under this section shall be reduced by the amount received, if any, under an insurance from an insurer, or reimbursed by an employer, for the medical treatment of the person referred to in clause (a) or clause (b) :

Provided also that where the amount actually paid is in respect of the assesse or his dependant or any member of a Hindu undivided family of the assesse and who is a senior citizen, the provisions of this section shall have effect as if for the words "forty thousand rupees", the words "[one hundred] thousand rupees" had been substituted :

[***]

Explanation

For the purposes of this section,

• "dependant" means

  • in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them,

  • in the case of a Hindu undivided family, a member of the Hindu undivided family,

  dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance;

• [***]

• "insurer" shall have the meaning assigned to it in clause (9) of section 2 of the Insurance Act, 1938 (4 of 1938);

• "senior citizen" means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year;

• [***]

Currently one can claim deductions for the treatment of a wide range of specified diseases, which include, Ataxia, Dementia, Aphasia, Dystonia musculorumdeformans, Hemiballismus, Parkinson’s disease, Chorea, Motor neuron disease, Renal failure, Malignant cancers, Hematological disorders, Thalassaemia, Hemophilia and Acquired Immunodeficiency Syndrome (AIDS).

Deduction in Respect of Interest on Loan Taken for Higher Education

• In computing the total income of an assesse, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education or for the purpose of higher education of his relative.

• The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the interest referred to in sub-section (1) is paid by the assesse in full, whichever is earlier.

• For the purposes of this section,

  • "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 under clause (23C) of section 10 or an institution referred to in clause (a) of sub-section (2) of section 80G;

  • "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;

  • "higher education" means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, board or university recognised by the Central Government or State Government or local authority or by any other authority authorised by the Central Government or State Government or local authority to do so;

  • "initial assessment year" means the assessment year relevant to the pre-vious year, in which the assesse starts paying the interest on the loan;

  • "relative", in relation to an individual, means the spouse and children of that individual or the student for whom the individual is the legal guardian.

Deduction in Respect of Interest on Loan Taken for Residential House Property

• In computing the total income of an assesse, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential property.

• The deduction under sub-section (1) shall not exceed fifty thousand rupees and shall be allowed in computing the total income of the individual for the assessment year beginning on the 1st day of April, 2017 and subsequent assessment years.

• The deduction under sub-section (1) shall be subject to the following conditions, namely:

  • the loan has been sanctioned by the financial institution during the period beginning on the 1st day of April, 2016 and ending on the 31st day of March, 2017;

  • the amount of loan sanctioned for acquisition of the residential house property does not exceed thirty-five lakh rupees;

  • the value of residential house property does not exceed fifty lakh rupees;

  • the assesse does not own any residential house property on the date of sanction of loan.

• Where a deduction under this section is allowed for any interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other assessment year.

• For the purposes of this section,

  • "financial institution" means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies, or any bank or banking institution referred to in section 51 of that Act or a housing finance company;

  • "housing finance company" means a public company formed or registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes.

Following sections 80EEA and 80EEB shall be inserted after section 80EE by the Act No. 23 of 2019, w.e.f. 1-4-2020:

Deduction in respect of interest on loan taken for certain house property. 80EEA

• In computing the total income of an assesse, being an individual not eligible to claim deduction under section 80EE, there shall be deducted, in accordance with and subject to the provisions of this section, interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property.

• The deduction under sub-section (1) shall not exceed one lakh and fifty thousand rupees and shall be allowed in computing the total income of the individual for the assessment year beginning on the 1st day of April, 2020 and subsequent assessment years.

• The deduction under sub-section (1) shall be subject to the following conditions, namely:

  • the loan has been sanctioned by the financial institution during the period beginning on the 1st day of April, 2019 and ending on the 31st day of March, 2020;

  • the stamp duty value of residential house property does not exceed forty-five lakh rupees;

  • the assesse does not own any residential house property on the date of sanction of loan.

• Where a deduction under this section is allowed for any interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other assessment year.

• For the purposes of this section,

  • the expression "financial institution" shall have the meaning assigned to it in clause (a) of sub-section (5) of section 80EE;

  • the expression "stamp duty value" means value adopted or assessed or assessable by any authority of the Central Government or a State Government for the purpose of payment of stamp duty in respect of an immovable property.

Dedecution in Respect of Purchase of Electric Vehicle

• In computing the total income of an assesse, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, interest payable on loan taken by him from any financial institution for the purpose of purchase of an electric vehicle.

• The deduction under sub-section (1) shall not exceed one lakh and fifty thousand rupees and shall be allowed in computing the total income of the individual for the assessment year beginning on the 1st day of April, 2020 and subsequent assessment years.

• The deduction under sub-section (1) shall be subject to the condition that the loan has been sanctioned by the financial institution during the period beginning on the 1st day of April, 2019 and ending on the 31st day of March, 2023.

• Where a deduction under this section is allowed for any interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other assessment year.

• For the purposes of this section,

  • "electric vehicle" means a vehicle which is powered exclusively by an electric motor whose traction energy is supplied exclusively by traction battery installed in the vehicle and has such electric regenerative braking system, which during braking provides for the conversion of vehicle kinetic energy into electrical energy;

  • "financial institution" means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies, or any bank or banking institution referred to in section 51 of that Act and includes any deposit taking non-banking financial company or a systemically important non-deposit taking non-banking financial company as defined in clauses (e) and (g) of Explanation 4 to section 43B.

Deduction in Respect of Donations to Certain Funds, Charitable Institutions, etc.

• In computing the total income of an assesse, there shall be deducted, in accordance with and subject to the provisions of this section,

  • in a case where the aggregate of the sums specified in sub-section (2) includes any sum or sums of the nature specified in sub-clause (i) or in sub-clause (iiia) or in sub-clause (iiiaa) or in sub-clause (iiiab) or in sub-clause (iiib) or in sub-clause (iiie) or in sub-clause (iiif) or in sub-clause (iiig) or in sub-clause (iiiga) or sub-clause (iiih) or sub-clause (iiiha) or sub-clause (iiihb) or sub-clause (iiihc) or sub-clause (iiihd) or sub-clause (iiihe) or sub-clause (iiihf) or sub-clause (iiihg) or sub-clause (iiihh) or sub-clause (iiihi) or sub-clause (iiihj) or sub-clause (iiihk) or sub-clause (iiihl) or sub-clause (iiihm) or in sub-clause (vii) of clause (a) or in clause (c) or in clause (d) thereof, an amount equal to the whole of the sum or, as the case may be, sums of such nature plus fifty per cent of the balance of such aggregate; and

  • in any other case, an amount equal to fifty per cent of the aggregate of the sums specified in sub-section (2).

• The sums referred to in sub-section (1) shall be the following, namely :

  • any sums paid by the assesse in the previous year as donations to

    • (i) the National Defence Fund set up by the Central Government; or

    • (ii) the Jawaharlal Nehru Memorial Fund referred to in the Deed of Declaration of Trust adopted by the National Committee at its meeting held on the 17th day of August, 1964; or

    • (iii) the Prime Minister's Drought Relief Fund; or

    • (iiia) the Prime Minister's National Relief Fund; or

    • (iiiaa) the Prime Minister's Armenia Earthquake Relief Fund; or

    • (iiiab) the Africa (Public Contributions - India) Fund; or

    • (iiib) the National Children's Fund; or

    • (iiic) the Indira Gandhi Memorial Trust, the deed of declaration in respect whereof was registered at New Delhi on the 21st day of February, 1985; or

    • (iiid) the Rajiv Gandhi Foundation, the deed of declaration in respect whereof was registered at New Delhi on the 21st day of June, 1991; or

    • (iiie) the National Foundation for Communal Harmony; or

    • (iiif) a University or any educational institution of national eminence as may be approved by the prescribed authority in this behalf; or

    • (iiig) the Maharashtra Chief Minister's Relief Fund during the period beginning on the 1st day of October, 1993 and ending on the 6th day of October, 1993 or to the Chief Minister's Earthquake Relief Fund, Maharashtra; or

    • (iiiga) any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat; or

    • (iiih) any ZilaSakshartaSamiti constituted in any district under the chairmanship of the Collector of that district for the purposes of improvement of primary education in villages and towns in such district and for literacy and post-literacy activities.

      Explanation.

      For the purposes of this sub-clause, "town" means a town which has a population not exceeding one lakh according to the last preceding census of which the relevant figures have been published before the first day of the previous year ; or

    • (iiiha) the National Blood Transfusion Council or to any State Blood Transfusion Council which has its sole object the control, supervision, regulation or encouragement in India of the services related to operation and requirements of blood banks.

      Explanation.

      For the purposes of this sub-clause,

      • "National Blood Transfusion Council" means a society registered under the Societies Registration Act, 1860 (21 of 1860) and has an officer not below the rank of an Additional Secretary to the Government of India dealing with the AIDS Control Project as its Chairman, by whatever name called;

      • "State Blood Transfusion Council" means a society registered, in consultation with the National Blood Transfusion Council, under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India and has Secretary to the Government of that State dealing with the Department of Health, as its Chairman, by whatever name called; or

    • (iiihb) any fund set up by a State Government to provide medical relief to the poor; or

    • (iiihc) the Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependants; or

    • (iiihd) the Andhra Pradesh Chief Minister's Cyclone Relief Fund, 1996; or

    • (iiihe) the National Illness Assistance Fund; or

    • (iiihf) the Chief Minister's Relief Fund or the Lieutenant Governor's Relief Fund in respect of any State or Union territory, as the case may be :

      Provided that such Fund is

      • the only Fund of its kind established in the State or the Union territory, as the case may be;

      • under the overall control of the Chief Secretary or the Department of Finance of the State or the Union territory, as the case may be;

      • administered in such manner as may be specified by the State Government or the Lieutenant Governor, as the case may be; or

    • (iiihg) the National Sports Fund to be set up by the Central Government; or

    • (iiihh) the National Cultural Fund set up by the Central Government; or

    • (iiihi) the Fund for Technology Development and Application set up by the Central Government; or

    • (iiihj) the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities constituted under sub-section (1) of section 3 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999); or

    • (iiihk) the Swachh Bharat Kosh, set up by the Central Government, other than the sum spent by the assesse in pursuance of Corporate Social Responsibility under sub-section (5) of section 135 of the Companies Act, 2013 (18 of 2013); or

    • (iiihl) the Clean Ganga Fund, set up by the Central Government, where such assesse is a resident and such sum is other than the sum spent by the assesse in pursuance of Corporate Social Responsibility under sub-section (5) of section 135 of the Companies Act, 2013 (18 of 2013); or

    • (iiihm) the National Fund for Control of Drug Abuse constituted under section 7A of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985); or

      • (iv) any other fund or any institution to which this section applies; or

      • (v) the Government or any local authority, to be utilised for any charitable purpose other than the purpose of promoting family planning; or

      • (vi) an authority constituted in India by or under any law enacted either 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 and villages, or for both;

      • (via) any corporation referred to in clause (26BB) of section 10; or

      • (vii) the Government or to any such local authority, institution or association as may be approved in this behalf by the Central Government, to be utilised for the purpose of promoting family planning;

  • any sums paid by the assesse in the previous year as donations for the renovation or repair of any such temple, mosque, gurdwara, church or other place as is notified by the Central Government in the Official Gazette to be of historic, archaeological or artistic importance or to be a place of public worship of renown throughout any State or States;

  • any sums paid by the assesse, being a company, in the previous year as donations to the Indian Olympic Association or to any other association or institution established in India, as the Central Government may, having regard to the prescribed guidelines, by notification in the Official Gazette, specify in this behalf for

    • the development of infrastructure for sports and games; or

    • the sponsorship of sports and games,

    in India;

  • any sums paid by the assesse, during the period beginning on the 26th day of January, 2001 and ending on the 30th day of September, 2001, to any trust, institution or fund to which this section applies for providing relief to the victims of earthquake in Gujarat.

• [Omitted by the Finance Act, 1994, w.e.f. 1-4-1994.]

• Where the aggregate of the sums referred to in sub-clauses (iv), (v), (vi), (via) and (vii) of clause (a) and in clauses (b) and (c) of sub-section (2) exceeds ten per cent of the gross total income (as reduced by any portion thereof on which income-tax is not payable under any provision of this Act and by any amount in respect of which the assesse is entitled to a deduction under any other provision of this Chapter), then the amount in excess of ten per cent of the gross total income shall be ignored for the purpose of computing the aggregate of the sums in respect of which deduction is to be allowed under sub-section (1).

• This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely :

  • where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of sections 11 and 12 or clause (23AA) or clause (23C) of section 10 :

    Providedthat where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable to inclusion in its total income under the provisions of section 11 shall not apply in relation to such income, if

    • the institution or fund maintains separate books of account in respect of such business;

    • the donations made to the institution or fund are not used by it, directly or indirectly, for the purposes of such business; and

    • the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business;

  • the instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose;

  • the institution or fund is not expressed to be for the benefit of any particular religious community or caste;

  • the institution or fund maintains regular accounts of its receipts and expenditure;

  • the institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India or under section 25 of the Companies Act, 1956 (1 of 1956), or is a University established by law, or is any other educational institution recognised by the Government or by a University established by law, or affiliated to any University established by law, or is an institution financed wholly or in part by the Government or a local authority;

  • in relation to donations made after the 31st day of March, 1992, the institution or fund is for the time being approved by the Commissioner in accordance with the rules made in this behalf; and

  • where any institution or fund had been approved under clause (vi) for the previous year beginning on the 1st day of April, 2007 and ending on the 31st day of March, 2008, such institution or fund shall, for the purposes of this section and notwithstanding anything contained in the proviso to clause (15) of section 2, be deemed to have been,

    • established for charitable purposes for the previous year beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2009; and

    • approved under the said clause (vi) for the previous year beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2009.

  • Where a deduction under this section is claimed and allowed for any assessment year in respect of any sum specified in sub-section (2), the sum in respect of which deduction is so allowed shall not qualify for deduction under any other provision of this Act for the same or any other assessment year.

  • Notwithstanding anything contained in clause (ii) of sub-section (5) and Explanation 3, an institution or fund which incurs expenditure, during any previous year, which is of a religious nature for an amount not exceeding five per cent of its total income in that previous year shall be deemed to be an institution or fund to which the provisions of this section apply.

  • This section applies in relation to amounts referred to in clause (d) of sub-section (2) only if the trust or institution or fund is established in India for a charitable purpose and it fulfils the following conditions, namely :

    • it is approved in terms of clause (vi) of sub-section (5);

    • it maintains separate accounts of income and expenditure for providing relief to the victims of earthquake in Gujarat;

    • the donations made to the trust or institution or fund are applied only for providing relief to the earthquake victims of Gujarat on or before the 31st day of March, 2004;

    • the amount of donation remaining unutilised on the 31st day of March, 2004 is transferred to the Prime Minister's National Relief Fund on or before the 31st day of March, 2004;

    • it renders accounts of income and expenditure to such authority and in such manner as may be prescribed, on or before the 30th day of June, 2004.

  • No deduction shall be allowed under this section in respect of donation of any sum exceeding two thousand rupees unless such sum is paid by any mode other than cash.

    Explanation 1

    An institution or fund established for the benefit of Scheduled Castes, backward classes, Scheduled Tribes or of women and children shall not be deemed to be an institution or fund expressed to be for the benefit of a religious community or caste within the meaning of clause (iii) of sub-section (5).

    Explanation 2

    For the removal of doubts, it is hereby declared that a deduction to which the assesse is entitled in respect of any donation made to an institution or fund to which sub-section (5) applies shall not be denied merely on either or both of the following grounds, namely

    • that, subsequent to the donation, any part of the income of the institution or fund has become chargeable to tax due to non-compliance with any of the provisions of section 11, section 12 or section 12A;

    • that, under clause (c) of sub-section (1) of section 13, the exemption under section 11 or section 12 is denied to the institution or fund in relation to any income arising to it from any investment referred to in clause (h) of sub-section (2) of section 13 where the aggregate of the funds invested by it in a concern referred to in the said clause (h) does not exceed five per cent of the capital of that concern.

    Explanation 3

    In this section, "charitable purpose" does not include any purpose the whole or substantially the whole of which is of a religious nature.

    Explanation 4

    For the purposes of this section, an association or institution having as its object the control, supervision, regulation or encouragement in India of such games or sports as the Central Government may, by notification in the Official Gazette, specify in this behalf, shall be deemed to be an institution established in India for a charitable purpose.

    Explanation 5

    For the removal of doubts, it is hereby declared that no deduction shall be allowed under this section in respect of any donation unless such donation is of a sum of money.

• [* * *]

Deduction in Respect of Rent Paid

In computing the total income of an assesse, not being an assesse having any income falling within clause (13A) of section 10, there shall be deducted any expenditure incurred by him in excess of ten per cent of his total income towards payment of rent (by whatever name called) in respect of any furnished or unfurnished accommodation occupied by him for the purposes of his own residence, to the extent to which such excess expenditure does not exceed five thousand rupees per month or twenty-five per cent of his total income for the year, whichever is less, and subject to such other conditions or limitations as may be prescribed, having regard to the area or place in which such accommodation is situated and other relevant considerations :

Provided that nothing in this section shall apply to an assesse in any case where any residential accommodation is

• owned by the assesse or by his spouse or minor child or, where such assesse is a member of a Hindu undivided family, by such family at the place where he ordinarily resides or performs duties of his office or employment or carries on his business or profession; or

• owned by the assesse at any other place, being accommodation in the occupation of the assesse, the value of which is to be determined under clause (a) of sub-section (2) or, as the case may be, clause (a) of sub-section (4) of section 23.

Explanation

In this section, the expressions "ten per cent of his total income" and "twenty-five per cent of his total income" shall mean ten per cent or twenty-five per cent, as the case may be, of the assesse's total income before allowing deduction for any expenditure under this section.

Dedection in Respect of Certain Donations for Scientific Research or Rural Development

• In computing the total income of an assesse, there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2).

• The sums referred to in sub-section (1) shall be the following, namely:

  • (a) any sum paid by the assesse in the previous year to a research association which has as its object the undertaking of scientific research or to a University, college or other institution to be used for scientific research :

    Provided that such association, University, college or institution is for the time being approved for the purposes of clause (ii) of sub-section (1) of section 35;

  • (aa) any sum paid by the assesse in the previous year to a research association which has as its object the undertaking of research in social science or statistical research or to a University, college or other institution to be used for research in social science or statistical research:

    Provided that such association, University, college or institution is for the time being approved for the purposes of clause (iii) of sub-section (1) of section 35.

    Explanation

    The deduction, to which the assesse is entitled in respect of any sum paid to a research association, University, college or other institution to which clause (a) or clause (aa) applies, shall not be denied merely on the ground that, subsequent to the payment of such sum by the assesse, the approval to such association, University, college or other institution referred to in clause (a) or clause (aa), as the case may be, has been withdrawn;

  • (b) any sum paid by the assesse in the previous year

    • to an association or institution, which has as its object the undertaking of any programme of rural development, to be used for carrying out any programme of rural development approved for the purposes of section 35CCA; or

    • to an association or institution which has as its object the training of persons for implementing programmes of rural development

      Provided  that the assesse furnishes the certificate referred to in sub-section (2) or, as the case may be, sub-section (2A) of section 35CCA from such association or institution.

      Explanation

      The deduction, to which the assesse is entitled in respect of any sum paid to an association or institution for carrying out the programme of rural development to which this clause applies, shall not be denied merely on the ground that subsequent to the payment of such sum by the assesse, the approval granted to such programme, or as the case may be, to the association or institution has been withdrawn;

    • (bb) any sum paid by the assesse in the previous year to a public sector company or a local authority or to an association or institution approved by the National Committee, for carrying out any eligible project or scheme :

      Provided that the assesse furnishes the certificate referred to in clause (a) of sub-section (2) of section 35AC from such public sector company or local authority or, as the case may be, association or institution.

      Explanation 1

      The deduction, to which the assesse is entitled in respect of any sum paid to a public sector company, or to a local authority or to an association or institution for carrying out the eligible project or scheme referred to in section 35AC, shall not be denied merely on the ground that subsequent to the payment of such sum by the assesse,

      • the approval granted to such association or institution has been withdrawn; or

      • the notification notifying the eligible project or scheme referred to in section 35AC carried out by the public sector company, or local authority or association or institution has been withdrawn.

      Explanation 2

      For the purposes of this clause, the expressions "National Committee" and "eligible project or scheme" shall have the meanings respectively assigned to them in the Explanation to section 35AC;

    • (c) any sum paid by the assesse in any previous year ending on or before the 31st day of March, 2002 to an association or institution, which has as its object the undertaking of any programme of conservation of natural resources or of afforestation, to be used for carrying out any programme of conservation of natural resources or of afforestation approved for the purposes of section 35CCB :

      Provided that the association or institution is for the time being approved for the purposes of sub-section (2) of section 35CCB;

    • (cc) any sum paid by the assesse in any previous year ending on or before the 31st day of March, 2002 to such fund for afforestation as is notified by the Central Government under clause (b) of sub-section (1) of section 35CCB;

    • (d) any sum paid by the assesse in the previous year to a rural development fund set up and notified by the Central Government for the purposes of clause (c) of sub-section (1) of section 35CCA;

    • (e) any sum paid by the assesse in the previous year to the National Urban Poverty Eradication Fund set up and notified by the Central Government for the purposes of clause (d) of sub-section (1) of section 35CCA.

    • No deduction shall be allowed under this section in respect of any sum exceeding ten thousand rupees unless such sum is paid by any mode other than cash.

  • Notwithstanding anything contained in sub-section (1), no deduction under this section shall be allowed in the case of an assesse whose gross total income includes income which is chargeable under the head "Profits and gains of business or profession".

  • Where a deduction under this section is claimed and allowed for any assessment year in respect of any payments of the nature specified in sub-section (2), deduction shall not be allowed in respect of such payments under any other provision of this Act for the same or any other assessment year.

Deduction in Respect of Contribution Given by any Person to Political Parties

In computing the total income of an assesse, being any person, except local authority and every artificial juridical person wholly or partly funded by the Government, there shall be deducted any amount of contribution made by him, in the previous year, to a political party or an electoral trust :

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

Explanation

For the purposes of sections 80GGB and 80GGC, "political party" means a political party registered under section 29A of the Representation of the People Act, 1951 (43 of 1951).

Deduction in Respect of Leave Travel Allowance (LTA)

assesse who incurs expenditure for

• travel for assesse and his family (up to 2 children)

• on leave to any destination in India

is eligible for exemption in respect of LTA to the extent of expenses actually incurred for the purpose of such travel subject to the following limits:

Exemption only in 2 out of a block of 4 years (current block: 1st January 2018 to 31st December 2021) with option to claim exemption for 1 journey (out of the 2) in the calendar year immediately following the end of the block.

Deduction in Respect of House Rent Alloance (HRA)

The least of the following is exempt:

• 40% of salary [50% if house situated at Mumbai, Kolkata, Delhi or Chennai]

• HRA actually received in respect of the period during which the accommodation is occupied on rent.

• Rent Paid - (Salary x 10%)

[Salary = Basic + Dearness Allowance (if provided by the terms of employment) + commission based on fixed % of turnover]

Exemption shall not be allowed, if the employee resides in a house that is owned by him or if no actual expenditure is incurred by the employee on rent