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CS Executive Tax Laws study materials
CS Executive Tax Laws study resources

CS Executive Tax Laws: Deductions from Gross Total Income

CS Executive Tax Laws · Work through your exam, one topic at a time.

All guide sections

Deductions from Gross Total Income

What the exam tests

This domain tests Chapter VI-A deductions, their eligibility conditions, monetary caps and the order in which they reduce gross total income. The exam frequently asks for the maximum eligible deduction and whether a deduction is available under the new regime.

Core rules

  • Section 80C: Up to ₹1,50,000 for specified investments and payments, including PPF, life insurance premium, principal repayment of housing loan and tuition fees. The overall cap applies across eligible items.
  • Section 80CCD: Employee or self-employed contribution to the National Pension System is allowed within 80C; an additional ₹50,000 is allowed under 80CCD(1B). Employer contribution is separately allowed under 80CCD(2) subject to limits.
  • Section 80D: Health insurance premium and preventive health check-up, with higher limits for senior citizens and an additional limit for parents.
  • Section 80E: Interest on an education loan is deductible without a monetary ceiling for the specified period.
  • Section 80G: Donations to specified funds and charitable institutions, subject to qualifying limits and cash payment restrictions.
  • Section 80TTA/80TTB: Interest deduction for individuals and senior citizens, subject to caps.

Deductions cannot exceed gross total income and cannot be claimed twice. Most Chapter VI-A deductions are not available under the default new regime, except specified items such as 80CCD(2) and 80JJAA.

Worked example

Ms A has gross total income of ₹12,00,000 under the old regime. She invests ₹1,20,000 in PPF, pays ₹25,000 for her health insurance and ₹20,000 for her parents' health insurance. Her 80C deduction is ₹1,20,000. Her 80D deduction is ₹25,000 plus ₹20,000, subject to the applicable caps. Deductions reduce gross total income before tax rates are applied.

Traps

80C is an overall cap, not a separate limit for each item. A deduction cannot create a loss. Donations in cash above the prescribed limit do not qualify under 80G. Do not claim Chapter VI-A deductions under the new regime unless specifically preserved.