Tuesday, 1 October 2019

Income Tax Deductions & Exemptions FY 2019-20
The Income Tax Slab Rates remain unchanged for the Financial Year 2019-2020. However, Individuals with Taxable Income up to Rs 5,00,000/- per annum may avail Tax Credit up to Rs 12,500/- under Section 87A on the Income Tax payable. Thereby, implying that Individuals with Income up to Rs 5,00,000/- will not have any Tax Liability for the Financial Year 2019-20 and Assessment Year 2020-2021. Standard Deduction benefit has been increased to Rs 50,000/- for the Financial Year 2019-20. For FY 2019-20, Income Tax Deductions and Exemption is available to reduce the Taxable Income, allowing Individuals to minimize the Tax Implications.

Income Tax Calculation for Various Income Slabs 

Income Tax Slabs and Rates For Financial Year 2019-20

Income Tax Deductions and Exemption available under various Sections and the investment options available to the Individuals.

Income Tax Deductions U/S 80C

Income Tax Deduction and Exemption is available to the Individuals under Section 80C, 80CCD, 80CCC up to the extent of Rs 1,50,000/-. These sections are now effectively clubbed under Section 80C with the aggregate deduction ceiling of Rs 1,50,000/-. Investment options for Income Tax Deduction and Exemption under Section 80C has been shared in form of image (pic above). Please refer to the link shared below to know in detail about the Investment plans.

Public Provident Fund

ELSS Funds

National Savings Certificate (NSC)

Life Insurance Plans

Senior Citizens Savings Scheme (SCSS)

Repayment of Principal of House Loan taken is also eligible for Deduction along with Registration Fee and Stamp Duty paid towards the same. However, the benefit is restricted to the maximum deduction limit of Rs 1,50,000/-. Provided the Individual does not transfer the property before expiry 5 years from the Financial Year in which it was obtained.
The deduction on Registration Fee and Stamp Duty is also available to Individuals who have not availed Home Loan.

Income Tax Deductions U/S 80 CCD (1b)

Investment up to Rs 50,000/- is eligible for deduction up and over the deduction available U/S Section 80C on Contribution made to National Pension Scheme (NPS) and Atal Pension Yojana (APY).
Individuals may invest in both the schemes and avail cumulative deduction upto Rs 50,000/- on the investment.

Income Tax Deductions U/S 80D

Further deductions up and above the Deductions availed U/S 80C & 80CCD (1b) is available U/S 80D on payment made towards Health Insurance Premium. It covers the premium paid on the Health Insurance cover for self and family. Deduction of Rs 25,000/- can be availed for the premium paid for Self, Spouse and dependent children. Deduction goes up to Rs 50,000/- on premium paid towards the Mediclaim Insurance for Senior Citizen parents.

Income Tax Deductions U/S 80DDB

Tax Deduction to the extent of Rs 40,000/- incurred as treatment cost for specified medical disease for Self or dependent relative is also available. In case of Senior Citizens the limit goes up to Rs 1,00,000/-.
This deduction is available only in cases of specified diseases such as Cancer, Kidney Failure, AIDS, Haemophilia, AIDS, Dementia, Neurological Disorder, etc.

Tax Deduction U/S 80E

Deduction is also available on the education loan for higher studies (Graduation or Post Graduation) in the fields of Medicine, Engineering, Management, or Science. The deduction is available from the 1st year and subsequently for next 7 years. Deduction is available on the EMI paid as interest on the loan.

Tax Deduction U/S 80G

Deductions are also available for the donations made to notified NGO’s, Charitable Institutions are eligible for 50% or 100% deduction as provided under the act. However the maximum limit to the deduction claimed is 10% of the Adjusted Gross Total Income after claiming other deductions.
Some of the Prescribed Notable Institutions where 100% Deduction is available without qualifying limit:
National Defense Fund
Prime Minister Relief Fund
Swacch Bharat Kosh
National Sports Fund
National Children’s Fund
Clean Ganga Fund and many more….!!!

Tax Deduction U/S 80GG

Deduction available in respect of House Rent Paid, the least of the following:
Rent paid less 10% of the total income. Rs. 5000/- per month. (Maximum Deduction available is 60,000/-) 25% of total income, provided that Assesse or the spouse or minor child should not own residential accommodation at the place of employment, or anywhere else and is not receipt of House Rent Allowance. The deduction is available provided the Individual, does not receive any benefit of deduction U/S 10 (13A) for House Rent Allowance.

Tax Deduction U/S 24(b)

Deductions up to Rs 2,00,000/- is available on the interest paid on the Loan availed for purchase/construction of self occupied House Property. However the acquisition and construction of such house property should be completed within 5 years from the end of Financial year in which Home Loan was taken. The sum should be borrowed on or after 01/04/1999 to be eligible for deduction.
Note: As announced in the Budget 2019 for FY 2019-20, Additional Deduction of Rs 1,50,000/- is available on affordable housings up to the value of Rs 45 lakhs. The deduction is applicable on loans taken up to 31st March 2020.

Tax Deduction U/S 80DD & U

Deduction of Rs 75,000 U/S 80DD is available to meet the expenses and medical treatment of disabled dependent person. In case of severe disability (more than 80%) the Deduction limit is raised to Rs 1,25,000/-.
Deduction of Rs 75,000 U/S 80U is available to meet the expenses and medical treatment of Resident Individual (Self). In case of severe disability (more than 80%) the Deduction limit is Rs 1,25,000/-.

Tax Deduction U/S 80TTA/B

Deduction from Gross Total Income up to a maximum of Rs. 10,000/-, in respect of interest on deposits in savings account (not time deposits) with a bank, co-operative society or post office.
The interest free income has been extended up to Rs 50,000/- in case of Senior Citizens under Section 80TTB.

Tax Deduction U/S 80EE

Additional Deduction of Rs 50,000/- on interest paid on home loan is available for 1st time home buyers on loans up to 35 lacs, provided the value of house does not exceed 50 lacs. This deduction is up and above the Rs 2,00,000/- available on account of interest paid on loan. Deduction is available per Financial Year till the period the loan has been fully repaid.
Loan should be sanctioned by a Financial Institution or Housing Finance Company, provided Loan must be sanctioned between 01/04/2016 to 31/03/2017.
Income Tax Deductions and Exemptions under Section 80C to 80U discussed taken in to consideration.

Income tax Slabs & Rates FY 2019- 20, AY 2020-21
Income tax Slabs
General Category
Very Sr. Citizen
Upto Rs. 2. 5Lakh
Rs.2.5 Lakh to 3.0 Lakh
Rs.3.0 Lakh to Rs.5.0 lakh
Rs.5.0 Lakh to Rs.10.0 Lakh
Above 10.0 Lakh

  1. If the total income between Rs 50 Lakhs and Rs 1 crore, a surcharge of 10% will be levied.
  2. 15% surcharge on income tax if the total income is over and above Rs 1 cr.

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