Documentos de Académico
Documentos de Profesional
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Legal Studies
Panjab University
TAXATION LAWS
Submitted to:
Submitted by:
Mrs. Shivani,
Riya Jain
(Taxation law)
160/12,
UILS, PU
9th semester,
Chandigarh.
B.com.llb.(Hons)
ACKNOWLEDGEMENT
have
taken
efforts
this
DR.
SABINA
SALIM
for
guidance
supervision
and
as
constant
necessary
information
regarding
also
for
her
the
project
in
&her
completing
the
project.
express
towards
my
my
gratitude
parents
and
kind
sibling
cofor
their
encouragement,
which
help
this
project.
me
in
completion
of
appreciations
go
to
my
colleague
the
project
in
and
developing
people
who
out
with
their
abilities.
project.
would
not
However,
have
been
itin
possible
without
the
kind
individuals.
extend
my
sincere
Isupport
would
thanks
like
to
to
all
of
them.
abilities
I have taken efforts in this project. However, it would not have been possible without the kind
support and help of many individuals. I would like to extend my sincere thanks to all of them.
I am highly indebted to MRS. SHIVANI for her guidance and constant supervision as well as for
providing necessary information regarding the project & also for her support in completing the
project.
I would like to express my gratitude towards my parents and sibling for their kind co-operation and
encouragement, which help me in completion of this project.
My thanks and appreciations go to my colleague in developing the project and people who have willingly
helped me out with their abilities.
THANK YOU!
RIYA JAIN
Page 2
TABLE OF CONTENTS
S.NO
TOPIC
Page No
1.
Introduction
4-6
2.
3.
4.
8-9
5.
6.
10-11
7.
12-13
8.
13-15
9.
16-21
10.
Section U
22-23
11.
Bibliography
24
Page 3
INTRODUCTION
Taxes are an integral component in our country, with them accounting for a major portion of the
income earned by the government, income which is utilized to provide certain basic provisions to
citizens. Individuals who earn more than a certain amount are expected to pay taxes, as per the
existing tax slabs.The existing tax slab for the year 2016-17 are as follows:
For Men Below 60 Years Of Age1
Income Tax Slab
Nil
Nil
For Senior Citizens (Age 60 years or more but less than 80 years)
Page 4
Nil
Nil
Indian tax laws contain certain provisions, which are intended to act as an incentive for achieving
certain desirable socio-economic objectives. These provisions are contained in Chapter VIA and
are in form of deductions from the gross income. By reducing the chargeable income, these
provisions reduce the tax liability, increase the post-tax income and thus induce the tax-payers to
act in the desired manner.2
While these taxes can be harsh on the bank balance of a taxpayer, the government also provides
certain provisions wherein one can save tax. Tax deductions can help one reduce the taxable
income, lowering their overall tax liability and thereby helping them save on taxes. The
deduction one is eligible for depends on a number of factors, with different limits set for different
purposes.
2 http://www.slideshare.net/SumitBedi57/tax-deductions-us-80c-to-80u, accessed on 16th October,2016 at
11.23pm.
Page 5
Page 6
Page 7
government. It ensures a regular source of revenue for the government by ensuring the tax is
collected as income is earned and not when a taxpayer files returns at the end of the year.
Any authorized person/institution on whom the responsibility of collecting tax is entrusted
collects tax and pays it to the government on behalf of an individual payer. In return, the
individual taxpayer gets a TDS certificate stating that the tax has been paid on his/her behalf.
Thus, tax is deducted at source and is forwarded to the government on behalf of the payer. This
provision of deduction of tax at source is applicable to several payments such as salary,
commission, interest on fixed deposits, brokerage, professional fees, contract payments, and
royalty etc.8
Tax deductions help you reduce an amount from your taxable income and save tax. When
you claim an income tax deduction, it reduces the amount of your income that is subject to tax.
Reduced taxable income helps you save and invest money in other areas.
Tax deduction first reduces the income subject to the highest tax brackets. So, you can
claim deduction for the amounts spent in tuition fees, medical expenses, and charitable
contributions.
Income tax return is mandatory and you cannot completely avoid paying tax. But with proper
planning, you can reduce your taxable income9.
Page 8
______________
______________
______________
______________
______________
_________________
Page 10
______________________
The aggregate amount of deductions under section 80C to 80U in any case cannot exceed the
Gross Total Income of the assessee. Therefore, the total income after deductions will either be
positive or nil. It cannot be negative due to deductions. If the Gross Total Income is negative or
nil, no deduction can be permitted.
ii.
If a deduction is allowed under the above sections to the AOP or BOI then deductions for the
same payment/income will not be allowed to the members of the AOP/BOI.
iii.
Double deduction not allowed and deduction cannot exceed the profit of the
particular undertaking or unit or enterprise, etc.
Where any amount of profits and gains of an undertaking or unit or enterprise or eligible
business is claimed and allowed as a deduction under any of those provisions for any assessment
year, deduction in respect of, and to the extent of, such profits and gains shall not be allowed
under any other provisions of this Act for such assessment year and shall in no case exceed the
profits and gains of such undertaking or unit or enterprise or eligible business, as the case may
be.
iv.
Where the assessee fails to make a claim in his return of income for any deduction then no
deduction shall be allowed to him thereunder.
v.
vi.
Page 11
If an asssessee approaches a statutory authority for obtaining a concession under the taxing
statute, he should in fairness place all the material before the said authority and be also in a
position to satisfy the said authority that he was entitle to obtain such concession.10
vii.
Benefits of certain deductions not to be allowed in cases where return is not filled
within the specified time limit:
Where in computing total income of an assessee, no such deduction shall be allowed to him
unless he furnishes a return of his income for such assessment year on or before the due date
specified under section 139(1).11
80 C
80 CCC
80 CCD
80 CCF
Rs 20,000
Eligible Claimants
Individuals
Individuals
10 TAX LAW &PRACTICE, Girish Ahuja & Ravi Gupta, pg.426, Bharat Law House, New Delhi 2015.
Page 12
80 CCG
Rs 25,000
Resident individuals
80 D
RS 20,000
80 DD
80 DDB
80 E
No limit mentioned
Individuals
80 EE
Rs 3 lakh
Individuals
80 G
All assesses
80 GG
80 GGA
80 GGB
Indian companies
80 GGC
80 IA
All assesses
80 IAB
80 IB
All assesses
Page 13
80 IC
All assesses
80 ID
All assesses
80 IE
All assesses
80 JJA
All assesses
80 JJAA
80 LA
80 P
Cooperative societies
80 QQB
Rs 3 lakh
80 RRB
Rs 3 lakh
Resident individuals
80 TTA
80 U
Resident individuals
disabilities
NOTE: WE JUST HAVE 80C, 80CCC, 80CCD AND 80 U IN OUR SYLLABUS. DETAIL
DISCUSSION ON THESE SECTIONS
SECTION 80C
Saving plays a vital role in fast economic development of any country. To encourage savings, an
incentive in the form of a deduction out of ones taxable income has been allow. To chanelise
those savings, various schemes has been framed and if the assesse deposits those savings in these
approved scheme, a deduction shall be allowed.
Page 14
Section 80 C is the most popular provision and it aims to encourage savings in the economy by
extending several incentives under it. The section allows income tax deductions for certain types
of payments, subscriptions and investments/savings made by the tax payer.
ELIGIBLE ASSESSEES:
An Individual
As per budget 2016, a maximum of Rs 150000 can be deducted by a normal person under this
section. Following are the tax deduction items under the section.
Life insurance premiums: Deduction is available under Section 80C with respect to
premium paid towards life insurance policy for self, spouse and any child. The children
may be married/unmarried, dependent/not dependent, step and adopted on the individual.
It may be noted that no deduction is available for any late-fee charges paid. The amount
received on maturity of the policy is exempt from tax, subject to prescribed conditions. 13
In the case of Hindu Undivided Family the premium should be paid on the life of any
member of the family.
The Life Insurance Policy cannot be surrendered unless premium has been paid for
2years on such policy.
Public Provident Fund (PPF): Contribution to a PPF account in the name of self,
spouse and a child is eligible for deduction under Section 80C. Earlier the annual
investment in PPF was limited to Rs 70,000, thereby limiting the tax deduction also.
However, with effect from 1 December 2011, this limit has been raised to Rs 1 lakh per
year.
The
annual
accretion
on
the
account
is
also
not
taxable.
National Saving Certificate (NSC): The amount invested in NSC is eligible for
deduction under Section 80C. Further, the interest accrued annually on NSC, though
taxable, is deemed to be re-invested and qualifies for deduction (except in the year of
maturity).
13 http://finotax.com/income-tax/info/deductions#i1, accessed on 21 st October, 2016 at 10.25 pm.
Page 15
Five-year bank fixed deposits (FDs): FDs with a scheduled bank, under a notified
scheme, with a tenure of five years is eligible for deduction under the above section.
However, the interest accrued on the FDs is subject to tax laws.
Post office five-year time deposit (POTD) scheme:POTDs are similar to bank FDs. A
five-year POTD qualifies for deduction under Section 80C. However, interest accrued on
the same is entirely taxable.
Senior Citizen Savings Scheme (SCSS): SCSS is another scheme eligible for deduction
under Section 80C. However, it is intended only for senior citizens. The interest accrued
on the same is entirely taxable.
Unit-linked insurance plans (Ulip): Investments in Ulips in the name of self, spouse
and a child, which covers life with benefits of equity investments, is eligible for
deduction under Section 80C.
Mutual fund (MF) and Equity-linked savings scheme (ELSS): Subscription to MFs
and ELSSs qualifies for deduction under Section 80C. Currently, dividend and long-term
capital gains on equity-oriented funds where securities transaction tax is paid are exempt
from tax.
Home loan principal repayment: Equated monthly installments that are paid to repay
home loans consists of two components-principal and interest. The principal component
qualifies for deduction under Section 80C, provided the loan is taken from a prescribed
lender (banks, PSU, etc.). The interest component can save your income tax as a
deduction from rental income, subject to prescribed conditions.
Stamp duty and registration charges for a home: Stamp duty and registration charges
paid for transfer of property qualify for deduction under Section 80C.
Page 16
Tuition fees: Tuition fees paid for full-time education in an Indian university, college,
school, educational institution, for any two children are eligible for deduction under
Section 80C. It is pertinent to note that tuition fees do not include payment towards any
development fees or donation or payment of similar nature.
NABARD rural bonds: Investment in rural bonds issued by NABARD qualify for
deduction under section 80C.
Contribution to pension funds: Contributions to certain pension funds of LIC or any other
insurer are eligible for deduction. Contribution to the National Pension Scheme is also
eligible for deduction.14
Section 80CCC: Deduction for Premium Paid for Annuity Plan of LIC
or Other Insurer
This section provides deduction to an Individual for any amount paid or deposited in any annuity
plan of LIC or any other insurer. The plan must be for receiving pension from a fund referred to
in Section 10(23AAB).
If the annuity is surrendered before the date of its maturity, the surrender value is taxable in the
year of receipt.
Quantum of deduction: the whole of the amount paid or deposited or Rs. 1,00,000 whichever is
less.
Important points:
If the assessee or his nominee receives any amount, standing to the credit of the assessee
in respect of which deduction under section 80CCC has been allowed to him:
Page 17
Where deduction has been allowed u/s 80CCC, deduction u/s 80C will not be available in
Page 18
The Section 80CCD (2) is for employers contribution to a notified pension scheme. As per
Section 80CCD (2), where any contribution in the said pension scheme is made by the Central
Government or any other employer then the employee shall be allowed a deduction from his total
income of the whole amount contributed by the Central Government or any other employer
subject to limit of 10% of his salary of the previous year.
It is emphasized that aggregate amount of deduction under sections 80C, 80CCC and Section
80CCD (1) shall not exceed Rs.1,50,000/. However, the deduction under Section 80CCD (1)
shall not exceed Rs.1,00000. But contributions made by the employer under Section 80 CCD (2)
doesnt come under this limit as it is the contribution of the government.17
Important points:
ILLUSTRATION:
deposited Rs 1,20,000 in public provident fund and Rs.1,10,000 in pension scheme of the Central
Government. Compute his taxable income.
SOLUTION:
Gross total income
5,90,000
Less: Deduction
17 http://www.indianeconomy.net/splclassroom/244/what-is-the-significance-of-section-80c-of-theincome-tax-act/, accessed on 22nd October,2016 at 11.20pm.
18 http://www.gconnect.in/personal-income-tax/income-tax-2015-16-deductions-and-exemptions.html, accessed on
22nd October,2016 at 11.11pm.
Page 19
1,20,000
59,000
179,000
________
4,11,000
** The aggregate amount of deduction under section 80C, section 80CCC and section 80CCD
shall not exceed Rs.1,50,000.19
SECTION 80 U
In computing the total income of an individual being a person with disability, a deduction under
section 80U shall be allowed if certain conditions are satisfied.
Meaning of person with disability:
person with disability means a person suffering from not less than 40% of any disability as
certified by a medical authority. The medical authority for certifying Autism, Cerebral Palsy,
19 http://www.nitinbhatia.in/personal-finance/income-tax-important-points/, accessed on 22nd October, 2016 at
10.40pm.
Page 20
Multiple Disabilities and Severe Disability referred to in section 2(a), (c), (h), (j) and (o) of
the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental retardation and
Multiple Disabilities Act, 1999 shall consist of the following:
Disability meansi.
ii.
iii.
iv.
v.
vi.
vii.
Blindness
Low vision
Leprosy-cured
Hearing impairment
Locomotor disability
Mental retardation
Mental illness.
Meaning of person with severe disability: Person with severe disability means a person
with 80% or more of one or more disabilities.21
Essential conditions for claiming deduction under this section:
1) The assessee is an individual being a resident and is a person with disability.
2) He is certified by the medical authority to be a person with disability, at any time during
the previous year.
3) He furnishes a certificate issued by the medical authority in the form and manner, as may
be prescribed, along with the return of the income under section 139, in respect of the
assessment year for which the deduction is claimed.22
Quantum of deduction:
20 Income Tax Law and Practice, V.P. Gaur, D.B. Narang and others, pg 2/527, Kalyani Publishers,
42nd edition, 2014.
21 Supra 10, pg 375.
22 http://www.relakhs.com/income-tax-deductions-fy-2016-17-ay-2017-18-tax-exemptions-benefits-rebates/,
accessed on 21st October, 2016 at 10.10pm.
Page 21
Tax deductions are one of the few topics that generate some excitement. While nobody likes to pay taxes,
everybody use deduction to lower their taxes. To put it plainly, tax deduction lower your taxable income,
which therefore lowers your tax liability.
Page 22
BIBLIOGRAPHY
BOOK SOURCES:
Dr.Jyoti Rattan, Taxation Laws, Bharat Publisher, 6th Edition (2015-16).
V.P. Gaur, D.B. Narang and others, Income Tax Law and Practice, Kalyani Publishers,
42nd Edition, 2014.
KailashRai, Taxation Laws, Allahabad Law Agency, 9th Edition ,2007
Kanga and Palkhiwals, The Law and Practice of Income Tax, The Law and
Practice of Income Tax- 7th Edition,
N.M.Tripathi, 1976 GrishAhuja, Direct taxes law and practice,
Bharat Publisher,18thEdition, (2008-09).
Vinod K. Singhania, Direct Taxation: Law and Practice of Income Tax, Taxman,
36thEdition, (2007).
Income Tax Act, 1961: Bare Act Income Tax Rules 1962 : Bare Act
WEB SOURCES:
http://www.universityofcalicut.info/SDE/VI_sem_BCom_income_tax_law_and_pra
ctise.pdf
http://www.icsi.in/Study%20Material%20Executive/Executive%20Programme2013/TAX%20LAWS%20AND%20PRACTICE%20(MODULE%20I%20PAPER
%204).pdf
http://manupatra.com/roundup/367/Articles/Concept%20of%20Residence.pdf
http://www.lexsite.com/services/network/caa/ar23-e.shtml
http://www.icaiknowledgegateway.org/littledms/folder1/residential-status.pdf
http://www.indianeconomy.net/splclassroom/244/what-is-the-significance-ofsection-80c-of-the-income-tax-act/
http://www.charteredclub.com/income-tax-deductions/
http://www.taxexemption.in/deduction.html
http://www.planmoneytax.com/income-tax-slab-rate-2016-2017/
http://business.mapsofindia.com/india-tax/deduction.html
http://www.slideshare.net/SumitBedi57/tax-deductions-us-80c-to-80u
http://finotax.com/income-tax/info/deductions
https://www.bankbazaar.com/tax/income-tax-deductions-under-section80c-to-80u.html
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