Deductions from Gross Total Income
Structure of Chapter VI-A
Deductions reduce gross total income. The aggregate of 80C, 80CCC and 80CCD(1) cannot exceed Rs.1,50,000. 80CCD(1B) gives a further Rs.50,000 for the taxpayer's own NPS contribution. 80CCD(2) allows the employer's contribution, up to 14% of salary under the new regime (10% otherwise, 14% for government employees).
Commonly tested limits
- 80D: Rs.25,000 for self and family, Rs.50,000 where the insured is a senior citizen; parents are a separate limit; preventive health check-up is within the overall cap.
- 80G: 100% or 50% of the donation, with a qualifying limit of 10% of adjusted gross total income for donations covered by the limit.
- 80TTA: Rs.10,000 of interest on savings accounts for non-seniors; 80TTB: Rs.50,000 of interest for senior citizens.
- 80U: Rs.75,000 for disability, Rs.1,25,000 for severe disability.
- Under 115BAC, only 80CCD(2), 80CCH and 80JJAA survive.
Worked example
Gross total income Rs.12,00,000. The taxpayer invests Rs.1,60,000 in PPF, Rs.50,000 in NPS, pays Rs.28,000 for self medical insurance and Rs.55,000 for senior citizen parents. 80C is capped at Rs.1,50,000; 80CCD(1B) is Rs.50,000; 80D is Rs.25,000 plus Rs.50,000, that is Rs.75,000. Total deduction is Rs.2,75,000.
Traps
- Adding 80CCD(1B) inside the Rs.1,50,000 ceiling instead of over and above it.
- Ignoring the 10% adjusted gross total income ceiling under 80G.
- Claiming 80TTA and 80TTB together for the same person.
- Claiming any Chapter VI-A deduction other than the permitted few under the new regime.