250 Q&A on Deductions

 Here are 250 interview-style questions and answers based on the document DEDUCTIONS.pdf you provided, covering Chapter VI-A Deductions and Section 10AA of the Indian Income Tax Act:

✅ Section-Wise Interview Q&A on Deductions from Gross Total Income

GENERAL OVERVIEW

  1. Q: What is the key difference between exemption under section 10 and deduction under Chapter VI-A?
    A: Exemptions are not included in gross total income, whereas deductions are first included and then reduced from gross total income.
  2. Q: Can a deduction result in a negative total income?
    A: No, deductions cannot create a loss. Total income after deduction is either positive or nil.
  3. Q: Under which tax regime are most deductions under Chapter VI-A not allowed?
    A: Under the default tax regime as per Section 115BAC.
  4. Q: Which deductions are allowed under Section 115BAC default regime?
    A: Deductions under 80CCD(2), 80CCH(2), and 80JJAA.
  5. Q: What is the meaning of "gross total income" under Section 80B(5)?
    A: It is total income before making any deduction under Chapter VI-A.

SECTION 80C – Investment-Based Deductions

  1. Q: What is the maximum limit of deduction under Section 80C?
    A: ₹1,50,000.
  2. Q: Is 80C deduction available under default tax regime?
    A: No, only if taxpayer opts out of Section 115BAC.
  3. Q: What is the premium limit for life insurance policies issued after 1.4.2013 for handicapped persons?
    A: 15% of actual capital sum assured.
  4. Q: What is the limit for investment in PPF for 80C?
    A: ₹1,50,000 per annum.
  5. Q: Can tuition fee for education abroad be claimed under 80C?
    A: No, only for full-time education in India.
  6. Q: Can HUF claim 80C deduction?
    A: Yes, for investments in the name of its members.
  7. Q: Are stamp duty and registration fee eligible under 80C?
    A: Yes, for purchase/construction of house property.
  8. Q: What is the treatment if ULIP is terminated before 5 years?
    A: Earlier deductions are added back to income and taxed.
  9. Q: What is the lock-in period for 5-year bank FD under 80C?
    A: Minimum of 5 years.
  10. Q: Is Sukanya Samriddhi Yojana eligible for deduction?
    A: Yes, under 80C for girl child.

SECTION 80CCC – Pension Fund Deduction

  1. Q: Who can claim deduction under Section 80CCC?
    A: Individuals paying for an annuity plan of LIC or other insurer.
  2. Q: What is the maximum limit for 80CCC?
    A: ₹1,50,000 (combined with 80C and 80CCD(1)).
  3. Q: What is the taxability on surrender of annuity plan under 80CCC?
    A: Entire amount received is taxable in the year of receipt.

SECTION 80CCD – National Pension System (NPS)

  1. Q: What is the deduction limit under 80CCD(1)?
    A: 10% of salary (employee) or 20% of gross total income (self-employed).
  2. Q: What is 80CCD(1B)?
    A: Additional deduction of ₹50,000 beyond ₹1.5 lakh limit.
  3. Q: Is employer’s contribution to NPS taxable?
    A: Yes, but deductible under 80CCD(2) up to 10% (private) or 14% (govt.).
  4. Q: Does 80CCD(2) fall under 80CCE limit?
    A: No, it's over and above the ₹1.5 lakh limit.
  5. Q: Can a taxpayer claim both 80CCD(1) and 80CCD(1B)?
    A: Yes.
  6. Q: Are Tier II NPS contributions eligible for deduction?
    A: Only for Central Government employees under 80C.

SECTION 80CCH – Agnipath Scheme

  1. Q: Who can claim deduction under Section 80CCH?
    A: Individuals enrolled under Agnipath Scheme.
  2. Q: Is the government contribution to Agniveer Corpus Fund taxable?
    A: Yes, but fully deductible under 80CCH(2).
  3. Q: Are withdrawals from Agniveer Fund taxable?
    A: No, exempt under Section 10(12C).

SECTION 80D – Health Insurance Premium

  1. Q: What is the maximum deduction under 80D for individual + parents under 60?
    A: ₹25,000 + ₹25,000 = ₹50,000.
  2. Q: What if one or more of the insured persons are senior citizens?
    A: Deduction increases to ₹50,000 per senior citizen.
  3. Q: Is preventive health check-up covered?
    A: Yes, up to ₹5,000 within overall limits.
  4. Q: Can medical expenditure be claimed without insurance?
    A: Yes, for senior citizens, up to ₹50,000 if not covered under any insurance.
  5. Q: Is cash payment allowed for health insurance?
    A: No, except for preventive health check-ups.

COMPLIANCE REQUIREMENTS

  1. Q: What is the requirement under Section 80AC for claiming deduction?
    A: Filing return on or before due date under Section 139(1).
  2. Q: Can a belated return claim deduction under 80QQB?
    A: No.
  3. Q: Is audit mandatory for claiming 80JJAA?
    A: Yes, along with timely return filing.

SECTION 80CCE – Combined Ceiling

  1. Q: What is the combined limit under 80C, 80CCC, and 80CCD(1)?
    A: ₹1,50,000.
  2. Q: Is 80CCD(1B) included in this limit?
    A: No, it is over and above the ₹1.5 lakh limit.

SECTION 10AA – Units in SEZ

  1. Q: Is deduction under Section 10AA available under 115BAC?
    A: No, only under optional tax regime.
  2. Q: Who is eligible for deduction under Section 10AA?
    A: Units established in SEZs meeting specified conditions.

MISCELLANEOUS DEDUCTIONS & LIMITATIONS

  1. Q: Can 80G donations be claimed by members of AOP if already claimed by AOP?
    A: No, double deduction not allowed.
  2. Q: What if 80C policy is surrendered within 2 years?
    A: Prior deductions become taxable.
  3. Q: What happens if NPS corpus is used for annuity purchase?
    A: It is not treated as received and not taxed.
  4. Q: Is employer’s contribution under 80CCD(2) allowed under default regime?
    A: Yes.
  5. Q: What is “market value” under Section 80A(6)?
    A: The open market price for goods/services on date of transfer.
  6. Q: Is deduction allowed if not claimed in return?
    A: No, as per Section 80A(5).
  7. Q: Can taxpayer claim both 35AD and 80-IA/IB/IE?
    A: No, one of them only.
  8. Q: Is income under Sukanya Samriddhi Account taxable?
    A: No, it is exempt under Section 10(11A).
  9. Q: What happens if post office deposit under 80C is withdrawn before 5 years?
    A: It becomes taxable in the year of withdrawal.
  10. Q: Can both husband and wife claim 80C for tuition fees?
    A: Yes, if they both pay for their two children.
  11. Q: What is the lock-in period for equity shares under 80C?
    A: Three years.

SECTION 80DD – Dependent with Disability

  1. Q: Who can claim deduction under Section 80DD?
    A: An individual or HUF incurring expenses for the medical treatment, training, and rehabilitation of a dependent with disability.
  2. Q: What is the deduction amount under Section 80DD?
    A: ₹75,000 for a dependent with disability, and ₹1,25,000 for a dependent with severe disability.
  3. Q: Is medical expenditure required to be incurred for claiming deduction under 80DD?
    A: Not necessarily; fixed deduction is allowed irrespective of actual expenditure if conditions are met.
  4. Q: Can an NRI claim deduction under 80DD?
    A: No, only resident individuals and HUFs can claim.

SECTION 80DDB – Specified Disease Treatment

  1. Q: What is Section 80DDB related to?
    A: Deduction for medical treatment of specified diseases or ailments.
  2. Q: Who is eligible to claim deduction under 80DDB?
    A: A resident individual or HUF.
  3. Q: What is the maximum deduction under 80DDB?
    A: ₹40,000 for normal patients, ₹1,00,000 for senior citizens.
  4. Q: Is a medical certificate required for claiming deduction under 80DDB?
    A: Yes, from a specialist doctor in government hospital.

SECTION 80E – Interest on Education Loan

  1. Q: What is the deduction allowed under Section 80E?
    A: 100% of interest on education loan for 8 consecutive years.
  2. Q: Is there any limit on the amount of deduction under 80E?
    A: No, the entire interest is deductible.
  3. Q: Can education loan be for spouse or children?
    A: Yes, the assessee can claim deduction for education of self, spouse, or children.
  4. Q: Is the principal repayment deductible under 80E?
    A: No, only interest is allowed as deduction.

SECTION 80EE & 80EEA – Home Loan Interest

  1. Q: What is the deduction under Section 80EE?
    A: Up to ₹50,000 on interest for first-time homebuyers on loans sanctioned between 01.04.2016–31.03.2017.
  2. Q: What is the additional benefit under Section 80EEA?
    A: Additional deduction of up to ₹1,50,000 for loans sanctioned from 01.04.2019 to 31.03.2022.
  3. Q: Can both 80EE and 80EEA be claimed together?
    A: No, if 80EEA is claimed, 80EE cannot be claimed.
  4. Q: Is deduction under 80EE/EEA available under default tax regime?
    A: No, only under the old regime (optional tax regime).

SECTION 80EEB – Electric Vehicle Loan Interest

  1. Q: What is Section 80EEB about?
    A: Deduction of up to ₹1,50,000 for interest on loan taken for purchase of electric vehicle.
  2. Q: Is this deduction available to companies or firms?
    A: No, only individual assessees.
  3. Q: Is the deduction available under both tax regimes?
    A: No, only if the taxpayer opts out of Section 115BAC.

SECTION 80G – Donations

  1. Q: What kind of donations qualify under Section 80G?
    A: Donations to notified funds, charitable institutions, and relief funds.
  2. Q: What is the maximum deduction under Section 80G?
    A: Either 50% or 100%, with or without restriction, depending on the recipient fund.
  3. Q: Is donation in cash allowable?
    A: Yes, up to ₹2,000. Beyond that, payment must be in non-cash mode.
  4. Q: Can 80G deduction be claimed for political party donations?
    A: No, that’s covered under 80GGC/80GGB.

SECTION 80GGA – Scientific Research and Rural Development

  1. Q: Who can claim deduction under 80GGA?
    A: Assessees not having income from business or profession.
  2. Q: What type of contribution is allowed under 80GGA?
    A: Donations for scientific research and rural development.
  3. Q: Are cash donations allowed under 80GGA?
    A: No, only non-cash payments are eligible.

SECTION 80GGB & 80GGC – Donations to Political Parties

  1. Q: Who can claim deduction under Section 80GGB?
    A: Indian companies donating to political parties or electoral trusts.
  2. Q: Who can claim deduction under Section 80GGC?
    A: Any individual (other than company or firm) donating to political parties.
  3. Q: Is donation in cash allowed for 80GGB/GGC?
    A: No, must be by non-cash modes only.

SECTION 80GG – Rent Paid

  1. Q: Who is eligible to claim 80GG deduction?
    A: Individuals not receiving HRA and living in rented accommodation.
  2. Q: What is the maximum deduction under 80GG?
    A: Least of:
  • ₹5,000 per month
  • 25% of total income
  • Rent paid minus 10% of total income
  1. Q: Is declaration required for 80GG?
    A: Yes, Form 10BA must be filed.

SECTION 80TTA & 80TTB – Interest on Deposits

  1. Q: What is the limit under Section 80TTA?
    A: Up to ₹10,000 for interest on savings bank account for non-senior citizens.
  2. Q: Who is eligible for 80TTB?
    A: Senior citizens (60 years or more).
  3. Q: What is the deduction limit under 80TTB?
    A: ₹50,000 on interest from all deposits including FDs and RDs.
  4. Q: Can senior citizens claim 80TTA?
    A: No, they claim 80TTB instead.

SECTION 80U – Persons with Disability

  1. Q: Who can claim deduction under Section 80U?
    A: Resident individuals with a certified disability.
  2. Q: What is the deduction limit under Section 80U?
    A: ₹75,000 (disability), ₹1,25,000 (severe disability).
  3. Q: Can deduction under 80DD and 80U be claimed together?
    A: Yes, if for different individuals (one as dependent and another as self).

OTHER KEY POINTS

  1. Q: What is the condition under 80AC for availing deductions under “certain incomes”?
    A: Return must be filed within due date under Section 139(1).
  2. Q: Can HUF claim deduction under Section 80D?
    A: Yes, for members' medical insurance.
  3. Q: Is Section 80LA deduction available to IFSC units?
    A: Yes, on specified incomes of offshore banking units and IFSC.
  4. Q: Is deduction under 80JJAA available for firms?
    A: Yes, if they employ new regular employees and satisfy audit and filing conditions.
  5. Q: What is the deduction under 80P?
    A: Deduction for income of co-operative societies.
  6. Q: Is deduction under 80PA applicable to farmer producer companies?
    A: Yes, subject to certain turnover limits and conditions.
  7. Q: Can more than one deduction be claimed for the same expense?
    A: No, double deduction is not allowed.
  8. Q: If salary is not taxable, can deductions under Chapter VI-A be claimed?
    A: No, deductions are allowed only against taxable income.
  9. Q: Are contributions to Tier II NPS eligible under 80CCD(1B)?
    A: No, only Tier I is covered under 80CCD(1) & (1B).
  10. Q: What happens if house is sold before 5 years for 80C benefit?
    A: Entire prior deduction becomes taxable in the year of sale.
  11. Q: What is the treatment of interest on withdrawn 5-year deposits?
    A: It becomes taxable in the year of withdrawal.

SECTION 10AA – SEZ Units

  1. Q: Who is eligible to claim deduction under Section 10AA?
    A: An assessee (company or individual) having a unit in Special Economic Zone (SEZ) and opting for the optional tax regime.
  2. Q: Is 10AA deduction available under Section 115BAC?
    A: No, it is not allowed under the default tax regime.
  3. Q: What is the period of deduction under Section 10AA?
    A: For the first 15 consecutive years — 100% for first 5 years, 50% for next 5 years, and 50% of ploughed-back profits for next 5 years.
  4. Q: Is export income eligible under Section 10AA?
    A: Yes, profits derived from export of articles/services from SEZ units.

AGGREGATE RULES & LIMITATIONS

  1. Q: What is Section 80A(2) about?
    A: Deduction amount cannot exceed gross total income.
  2. Q: Can unclaimed deduction be revised in belated return?
    A: No, deduction must be claimed in return filed within due date u/s 139(1) as per Section 80A(5).
  3. Q: Can deduction be carried forward if not claimed?
    A: No, deductions must be claimed in the same assessment year.
  4. Q: What happens if investment made for 80C is reversed later?
    A: Deduction is withdrawn and added back as income.
  5. Q: Can a person claim deduction under both 80GGA and 80G?
    A: No, same contribution cannot be claimed under both.
  6. Q: Can you claim 80C for premium on spouse's life policy?
    A: Yes, even if the spouse is not earning.

SECTION 80RRB – Royalty on Patents

  1. Q: Who can claim deduction under Section 80RRB?
    A: A resident individual who is a patentee receiving royalty income.
  2. Q: What is the maximum deduction under 80RRB?
    A: ₹3,00,000 or actual royalty received, whichever is lower.
  3. Q: What condition is required for claiming 80RRB?
    A: The patent must be registered under the Patents Act, 1970.

SECTION 80QQB – Royalty on Books (Authors)

  1. Q: Who is eligible for deduction under 80QQB?
    A: Resident individual authors of certain books (excluding textbooks).
  2. Q: What is the maximum deduction under 80QQB?
    A: ₹3,00,000 or actual royalty, whichever is lower.
  3. Q: Can foreign royalty be claimed under 80QQB?
    A: Yes, if it is brought to India within specified time.

SECTION 80LA – Offshore Banking/IFSC

  1. Q: What is Section 80LA about?
    A: Deduction for income of offshore banking units and International Financial Services Centres (IFSCs).
  2. Q: What is the deduction limit under Section 80LA?
    A: 100% of income for first 5 years, then 50% for next 5 years.

SECTION 80M – Inter-corporate Dividend

  1. Q: Who can claim 80M deduction?
    A: Domestic companies receiving dividends from other domestic companies.
  2. Q: What is the purpose of 80M?
    A: To avoid double taxation on inter-corporate dividends.

SECTION 80P – Co-operative Societies

  1. Q: What kind of income is exempt under Section 80P?
    A: Income of co-operative societies from banking, cottage industries, etc.
  2. Q: Can housing co-operative societies claim deduction under 80P?
    A: Yes, for interest income from members.

SECTION 80PA – Producer Companies

  1. Q: What is 80PA about?
    A: Deduction for farmer producer companies with turnover < ₹100 crores.
  2. Q: What is the deduction under 80PA?
    A: 100% of profits for 5 years from incorporation.

SECTION 80JJA – Bio-Degradable Waste

  1. Q: Who can claim deduction under Section 80JJA?
    A: Assessees engaged in collecting/processing bio-degradable waste.
  2. Q: What is the deduction amount under 80JJA?
    A: 100% of profits for 5 consecutive years.

SECTION 80JJAA – Employment of New Employees

  1. Q: Who can claim 80JJAA?
    A: Business assessees (not professionals) who increase employment.
  2. Q: What is the deduction under 80JJAA?
    A: 30% of additional employee cost for 3 assessment years.
  3. Q: What is the minimum employment period for new employees under 80JJAA?
    A: 240 days (150 days for apparel, leather, footwear industries).
  4. Q: Is audit report necessary for 80JJAA?
    A: Yes, in Form 10DA.

SECTION 80GGC – Individual Political Donations

  1. Q: Who can claim deduction under Section 80GGC?
    A: Individual taxpayers (not companies/firms).
  2. Q: What is the mode of payment allowed?
    A: Non-cash modes only.

SECTION 80GGB – Corporate Political Donations

  1. Q: Who is eligible under 80GGB?
    A: Indian companies donating to political parties.
  2. Q: Is donation by cash allowed?
    A: No.

ILLUSTRATION-BASED QUESTIONS

  1. Q: Can a person claim 80C for 3 children's tuition fees?
    A: No, only for 2 children.
  2. Q: What is the treatment for early withdrawal from Senior Citizen Saving Scheme?
    A: Interest and principal withdrawn before 5 years is taxable.
  3. Q: What is the effect if NPS withdrawal exceeds 60%?
    A: Amount above 60% becomes taxable unless used for annuity.
  4. Q: What if a life insurance policy’s premium exceeds the % cap?
    A: Deduction will be limited to the capped % of the capital sum assured.
  5. Q: Can 80D deduction be claimed if policy is paid in spouse’s name?
    A: Yes, if spouse is dependent and insured.

ADDITIONAL TECHNICAL SCENARIOS

  1. Q: Can you claim deduction under 80C and 80CCC for the same annuity plan?
    A: No, for same contribution only one can be claimed.
  2. Q: Can you claim 80TTA for interest from FDs?
    A: No, only savings account interest is eligible.
  3. Q: Are donations to foreign charities eligible for 80G?
    A: No, only approved Indian funds/institutions.
  4. Q: What is “additional employee” under Section 80JJAA?
    A: A new employee who increases total headcount and satisfies wage/duration conditions.
  5. Q: Can repayment of education loan be claimed under 80C?
    A: No, only under 80E, and only interest is allowed.
  6. Q: Can HUF claim deduction under 80U?
    A: No, only individuals can claim.
  7. Q: What happens to deductions if GTI is zero?
    A: No deductions are allowed, as deductions cannot exceed GTI.
  8. Q: What is the deduction under 80CCD(2) for Central Govt employees?
    A: Up to 14% of salary.
  9. Q: Can two people claim 80EEB on a jointly held EV loan?
    A: No, only one individual can claim.
  10. Q: What is the tax treatment of pension received from NPS annuity?
    A: It is taxable as income.
  11. Q: Is preventive health check-up payment in cash eligible?
    A: Yes, up to ₹5,000 as part of 80D limit.

REAL-LIFE CASE SCENARIOS & EDGE CONDITIONS

  1. Q: Can a deduction under 80C be claimed for insurance premium paid for in-laws?
    A: No, only self, spouse, and children.
  2. Q: Is interest earned on Sukanya Samriddhi Yojana taxable?
    A: No, it is exempt under Section 10(11A).
  3. Q: If a housing loan is taken jointly, can both claim 80C for repayment?
    A: Yes, proportionately, if both are co-owners and co-borrowers.
  4. Q: Can deduction under 80E continue if loan is paid off before 8 years?
    A: No, it ends with repayment or after 8 years, whichever is earlier.
  5. Q: Can deduction under 80U be claimed without a certificate?
    A: No, valid disability certificate is mandatory.
  6. Q: Can 80CCD(1B) be claimed even if 80CCD(1) is not claimed?
    A: Yes, 80CCD(1B) is independent and additional.
  7. Q: Is stamp duty allowed under 80C even if property is not yet occupied?
    A: Yes, if incurred for transfer of ownership.
  8. Q: Is deduction under 80D allowed for group medical insurance premium paid by employer?
    A: No, only if the assessee himself pays the premium.
  9. Q: Can tuition fees paid to coaching institutes be claimed under 80C?
    A: No, only for schools, colleges, or universities in India.
  10. Q: Is interest paid on delayed housing loan EMIs deductible under 80C?
    A: No, only principal repayment is considered.

MIXED INCOME AND DEDUCTIONS CASES

  1. Q: What if part of interest earned from NPS corpus is taxed earlier?
    A: It will not be taxed again on withdrawal.
  2. Q: Can interest from recurring deposits be claimed under 80TTA?
    A: No, only savings account interest qualifies.
  3. Q: Can a senior citizen claim both 80TTB and 80D?
    A: Yes, both are independent deductions.
  4. Q: Is premium paid for siblings eligible under 80D?
    A: No, only self, spouse, children, and parents.
  5. Q: Can deduction under 80C be claimed for house property outside India?
    A: No, must be situated in India.
  6. Q: Is 80G deduction allowed for donation in kind?
    A: No, only monetary donations qualify.
  7. Q: Can a retired person claim deduction under 80DDB?
    A: Yes, if resident and meeting conditions for specified disease.
  8. Q: Are preventive check-ups for parents covered under 80D?
    A: Yes, up to ₹5,000 within overall limits.
  9. Q: Can a person claim 80D for more than one medical policy?
    A: Yes, as long as total is within the limits.
  10. Q: Is employer’s contribution to NPS under 80CCD(2) exempt from ₹1.5 lakh cap?
    A: Yes, it is over and above the 80CCE limit.

REGULATORY CONDITIONS & MISCONCEPTIONS

  1. Q: What if policy premium exceeds 10%/15% limit of sum assured?
    A: Deduction is restricted to that percentage only.
  2. Q: Can deductions reduce tax liability to negative?
    A: No, income after deductions can be zero but not negative.
  3. Q: Can 80C be claimed on down payment for a house?
    A: Yes, if it’s towards cost of purchase/construction.
  4. Q: Is LIC annuity plan contribution deductible under 80CCC?
    A: Yes, but subject to overall ₹1.5 lakh limit.
  5. Q: Can a person working in PSU claim deduction under 80CCD(1B)?
    A: Yes, if contributing to NPS.
  6. Q: What is the limit for employer’s contribution to Tier-I NPS?
    A: 10% of salary (14% for government employees).
  7. Q: Can donation to PM CARES Fund be claimed under 80G?
    A: Yes, eligible for 100% deduction without limit.
  8. Q: Is Form 10E required for claiming deduction under Chapter VI-A?
    A: No, Form 10E is for salary arrears relief, not deductions.
  9. Q: Can expenses for heart surgery be claimed under 80DDB?
    A: Only if it's among specified ailments.
  10. Q: Can a person with 60% disability claim 80U?
    A: Yes, ₹75,000 is allowed. ₹1,25,000 if disability is 80%+.

PRACTICAL LIMITATIONS & EXCLUSIONS

  1. Q: Is donation to a private trust eligible under 80G?
    A: Only if the trust is registered and approved.
  2. Q: Can capital gains be reduced by Chapter VI-A deductions?
    A: No, only from gross total income excluding capital gains u/s 111A, 112, 112A.
  3. Q: Can deduction under 80DDB be claimed for dependent parents?
    A: Yes, if they are wholly dependent.
  4. Q: Can interest on loan for EV be claimed under 80EEB for a second vehicle?
    A: No, only for first-time electric vehicle buyers.
  5. Q: Are fixed deposits in cooperative banks eligible under 80TTA?
    A: No, only savings account interest in banks/post office.
  6. Q: If spouse pays medical premium, can husband claim 80D?
    A: No, only the actual payer can claim.
  7. Q: Can both parents claim tuition fee deduction for the same child?
    A: Yes, proportionately if both paid.
  8. Q: Can 80G deduction be claimed by a firm?
    A: Yes, if donation is in the name of the firm.
  9. Q: Can business income be reduced by 80D deduction?
    A: Yes, since 80D applies to individual/HUF regardless of income head.
  10. Q: Are donations made in kind (food, books) eligible under 80G?
    A: No, only monetary donations.

ADVANCED UNDERSTANDING & EXCEPTIONS

  1. Q: Is Section 80CCE applicable to employer’s NPS contribution?
    A: No, 80CCD(2) is outside 80CCE limit.
  2. Q: Is reversal of deduction required on surrender of pension plan under 80CCC?
    A: Yes, amount received is taxable.
  3. Q: Is refund of PPF deposit subject to tax?
    A: No, both principal and interest are exempt.
  4. Q: What if donation under 80G is made after the end of the financial year?
    A: It is not allowed in the previous year; it will count in the next.
  5. Q: Can a salaried person claim 80EEA for under-construction house?
    A: Yes, subject to meeting loan and stamp duty limits.
  6. Q: Is maintenance of dependent mentally disabled person covered under 80DD?
    A: Yes, with higher deduction for severe disability.
  7. Q: Is donation to university for research allowed under 80GGA?
    A: Yes, if not carrying on business/profession.
  8. Q: Can 80CCD(2) deduction be claimed by self-employed individuals?
    A: No, only by salaried employees receiving employer’s contribution.
  9. Q: Can 80C deduction be claimed for home bought in joint names with parent?
    A: Yes, if the assessee is a co-owner and co-borrower and repaying the loan.
  10. Q: Can 80C and 80CCD(1B) be claimed together for NPS?
    A: Yes, within respective limits — ₹1.5 lakh (80C + 80CCD(1)) + ₹50,000 (80CCD(1B)).

APPLICATION-BASED AND EDGE CASES

  1. Q: Can an assessee claim deduction under 80C for LIC premium paid for brother?
    A: No, only self, spouse, and children.
  2. Q: Can a non-resident Indian (NRI) claim deduction under 80E for loan taken in India?
    A: Yes, if the loan is taken from a financial institution and used for eligible education.
  3. Q: Can a company claim deduction under 80CCD?
    A: No, only individuals can claim 80CCD deduction.
  4. Q: Can 80TTA and 80TTB be claimed together?
    A: No, if 80TTB is claimed by a senior citizen, 80TTA cannot be claimed.
  5. Q: Is deduction under 80G available for donation to a political candidate?
    A: No, only donations to registered political parties are allowed under 80GGB/80GGC.
  6. Q: If no return is filed, can a person claim 80G deduction?
    A: No, deduction under certain sections (like 80IA to 80RRB) requires return filing within due date (Section 80AC).
  7. Q: Can a person claim 80C deduction for a PPF account in the name of father?
    A: No, only self, spouse, and children qualify.
  8. Q: Can late payment charges on life insurance premium be included in 80C?
    A: No, only basic premium amount qualifies.
  9. Q: What happens if you miss the return filing deadline and want to claim 80QQB?
    A: Deduction is disallowed under Section 80AC.
  10. Q: Can a Hindu Undivided Family (HUF) claim deduction under 80D for a senior citizen member?
    A: Yes, HUF can claim up to ₹50,000 for senior citizen members.

NPS, PENSION & RETIREMENT-BASED DEDUCTIONS

  1. Q: Can 80CCD(1B) be claimed for Tier-II NPS contribution?
    A: No, only Tier-I contribution qualifies under 80CCD(1)/(1B).
  2. Q: Can a person opt for annuity on NPS maturity and avoid tax?
    A: Yes, annuity purchase is tax-deferred; only pension income is taxable.
  3. Q: What portion of NPS withdrawal is exempt under 10(12A)?
    A: 60% of the total corpus is exempt.
  4. Q: What is the tax treatment of partial NPS withdrawal?
    A: Exempt up to 25% of self-contribution under Section 10(12B).
  5. Q: What if employer contributes 18% to NPS?
    A: Only 14% (Govt.) or 10% (other employers) is deductible under 80CCD(2); excess is taxable.

MISCELLANEOUS CONDITIONS & RULES

  1. Q: Is Form 10BA mandatory for claiming 80GG deduction?
    A: Yes, declaration must be filed electronically.
  2. Q: Can 80C deduction be claimed on amount received from employer for LIC?
    A: No, only if premium is paid by the assessee.
  3. Q: Is tuition fee for nursery school eligible under 80C?
    A: Yes, for full-time education in a recognized school in India.
  4. Q: Is investment in ELSS mutual funds eligible under 80C?
    A: Yes, provided it is a notified Equity Linked Saving Scheme.
  5. Q: Can contributions to mutual fund pension plans be claimed under 80CCC?
    A: Yes, if the fund is set up by LIC or other approved insurer.

COMMON ERRORS IN DEDUCTION CLAIMS

  1. Q: What is a common mistake people make while claiming 80C?
    A: Including donations or coaching fees which are not eligible.
  2. Q: Can two policies be claimed under 80C even if total exceeds ₹1.5 lakh?
    A: Yes, but deduction is limited to ₹1.5 lakh in aggregate.
  3. Q: Can a person pay for a dependent parent's health insurance and claim 80D?
    A: Yes, if parent is financially dependent.
  4. Q: Is Form 10IA needed for 80U deduction?
    A: Yes, for certification of disability by authorized medical authority.
  5. Q: Can 80D deduction be claimed for policy paid in instalments?
    A: Yes, total amount paid in financial year is considered.

ADVANCED 80G DONATION CASES

  1. Q: What is the maximum cash donation allowed under 80G?
    A: ₹2,000.
  2. Q: Can anonymous donation be claimed under 80G?
    A: No, PAN and receipt are required for non-cash contributions.
  3. Q: Can NGO donations outside India be claimed?
    A: No, only Indian registered NGOs/funds are eligible.
  4. Q: What percentage deduction is available for Prime Minister's Relief Fund?
    A: 100% without qualifying limit.
  5. Q: Is 80G deduction allowed for donation to foreign disaster relief?
    A: Only if routed through Indian notified funds.

LONG-TERM DEDUCTION PLANNING

  1. Q: Can ELSS funds be withdrawn before 3 years and still retain deduction?
    A: No, withdrawal within lock-in results in capital gains and reversal of benefits.
  2. Q: What happens if NPS corpus is withdrawn before retirement?
    A: Taxable, unless used for annuity or within exempt limits.
  3. Q: Can 80C deduction be claimed for subsequent years of PPF deposit?
    A: Yes, every year up to the limit.
  4. Q: Can 80EEA deduction be claimed for house bought with spouse but loan in one name?
    A: No, only the person taking the loan can claim it.
  5. Q: Can self-employed person claim deduction under 80D for parents?
    A: Yes, up to the specified limit.

CHAPTER VI-A & 10AA DEDUCTION COORDINATION

  1. Q: Can a unit in SEZ claim deduction under both 10AA and 80IA?
    A: No, not for same profits – 80A(4) prohibits double deduction.
  2. Q: Can 10AA be claimed if return is not filed on time?
    A: No, as per Section 80AC.
  3. Q: What is the treatment of inter-unit transactions for deduction?
    A: Must be at market value as per 80A(6).
  4. Q: Is profit from foreign branch eligible under 10AA?
    A: No, only SEZ units in India are covered.
  5. Q: Can loss be set off from SEZ unit claiming 10AA?
    A: Yes, but deduction is limited to profits, not losses.

FINAL WRAP-UP SCENARIOS

  1. Q: Is 80U available to non-residents?
    A: No, only to resident individuals.
  2. Q: Can 80D be claimed for premium paid for parent-in-law?
    A: No, only for parents, not in-laws.
  3. Q: Can tuition fee claimed under 80C include school bus or transport?
    A: No, only tuition fee is allowed.
  4. Q: Is 80D available for single premium health policies?
    A: Yes, on a proportionate basis over the policy term (max 5 years).
  5. Q: What if PAN of donee trust is not mentioned in receipt for 80G?
    A: Deduction may be denied; PAN is mandatory.
  6. Q: Can late filing fees under 234F affect deduction eligibility?
    A: Indirectly — late return may disqualify some deductions under 80AC.
  7. Q: Can deduction under 80E be claimed for part-time education?
    A: Yes, as long as it's from a recognized institution.
  8. Q: Can multiple life insurance premiums be claimed under 80C?
    A: Yes, but total deduction under 80C is capped at ₹1.5 lakh.
  9. Q: What is the mode of verification for 80G donations?
    A: Receipt, PAN of the donee, and mode of payment proof.
  10. Q: Are 80C investments allowed in the name of minor child?
    A: Yes, and deduction is available in the hands of the parent.

Comments

Post a Comment

Popular posts from this blog

Unified vs Dual GST Model

    Unified vs Dual GST Model Aspect Unified GST Model Dual GST Model Definition A single tax levied and collected by central authority Two-level tax : levied by both Centre and States Tax Authority Only central/federal government Both central and state/provincial governments Structure One law, one administration, one tax rate Separate levies: CGST + SGST (intra-state), IGST (inter-state) Compliance Easier, as businesses deal with only one authority More complex, requires dealing with both Centre and State authorities Input Tax Credit Seamless across the country ITC available separately under CGST & SGST; cross-utilization restricted Uniformity High – same rates across the country Rates can vary if states have flexibility (though GST Council striv...
Read more

A person includes an individual, Hindu Undivided Family (HUF), Association of Persons (AOP), Body of Individuals (BOI), a firm, a company etc. elaborate

 Under the Income Tax Act, 1961 of India, the term "person" is defined in a broad and inclusive manner to ensure that all entities and individuals earning income can be brought under the tax net. This definition is given in Section 2(31) of the Act. Definition of Person [Section 2(31) of the Income Tax Act, 1961] A "person" includes: An Individual A single human being who may be a resident or non-resident, male or female, minor or major. Example: Mr. Rajesh Sharma filing his personal income tax return. A Hindu Undivided Family (HUF) A family consisting of all persons lineally descended from a common ancestor, including their wives and unmarried daughters. It is treated as a separate tax entity. Example: The Mehra HUF earning rental and business income is taxed separately from its individual members. A Company Includes both Indian and foreign companies. A company is a separate legal entity under the Companies Act, and it is ta...
Read more

Exceptions to the General Rule: Previous year Assessment

  General Rule: Income of a previous year is assessed in the assessment year following the previous year. Previous Year (PY): The financial year in which the income is earned (e.g., 1st April 2024 to 31st March 2025). Assessment Year (AY): The year immediately following the previous year when income is assessed and taxed (e.g., AY 2025-26).   Example: Income earned during FY 2024-25 (PY) will be assessed in AY 2025-26. Exceptions to the General Rule: There are certain situations where the income of a previous year is assessed in the same previous year itself , and not deferred to the following assessment year . These exceptions are provided to protect revenue interests , especially when there's a risk of the income escaping assessment.  1. Shipping Business of Non-Resident [Section 172] Applies to non-resident owners/charterers operating ships in India. Since these individuals may not be traceable in the next year,...
Read more