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    ManualsIncome Tax
    What is the minimum donation limit to get tax deduction u/s 80GGA?
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    ManualsIncome Tax
    What is the minimum donation limit to get tax deduction u/s 80GGA?
    Show AI Summary
    Tax deduction under 80GGA allows any donation amount for scientific research or rural development to be claimed.
    Section 80GGA provides a tax deduction for sums donated for specified purposes of scientific research or rural development; there is no prescribed minimum donation threshold and any amount paid for the specified purpose is eligible for deduction.
    ManualsIncome Tax
    What are the conditions to claim deduction u/s 80GG?
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    Deduction under 80GG: individuals paying rent must submit Form 12BA to claim a rent deduction.
    An individual who pays rent for residential accommodation may claim deduction in respect of rent paid provided the claimant submits a written declaration in Form 12BA to the assessing officer asserting entitlement; the deduction is contingent on both actual rent payment and timely submission of the prescribed declaration.
    ManualsIncome Tax
    Is loan taken in name of any family member is eligible for deduction u/s 80E?
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    Deduction under section 80E not available if education loan is taken in a family member's name.
    Deduction under section 80E for interest on higher education loans is available only where the assessee is the named borrower; loans taken in the name of a relative or other family member do not qualify for the deduction, because the borrower identity is the operative condition for entitlement.
    ManualsIncome Tax
    What is the main difference between deduction u/s 80U & u/s 80DD of the Act?
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    Disability deduction: dependent relief under one provision versus taxpayer's own deduction under the other provision.
    Section 80DD provides a deduction for maintenance, including medical treatment, of a handicapped dependent claimed by the taxpayer, whereas Section 80U provides a deduction available to the taxpayer who is himself or herself a person with disability; the key distinction is whether the deduction is for a dependent or for the disabled taxpayer.
    ManualsIncome Tax
    Can a taxpayer claim deduction u/s 80DD for himself?
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    Section 80DD deduction applies only for maintenance of a disabled dependent, not for the taxpayer's own disability.
    Deduction under 80DD permits an income tax deduction for maintenance, including medical treatment, of a handicapped dependent who is a person with disability; the deduction is available for expenditure in respect of such a dependent and is not available to a taxpayer for his or her own disability-related expenses.
    ManualsIncome Tax
    Whether deduction u/s 80D is allowed if expenditure is made in cash?
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    Deduction under section 80D denied for cash payments; only preventive health checkup expenses may be paid in cash.
    Deduction for medical insurance premia under deduction u/s 80D is not available where the expenditure is made in cash; payments must be by non-cash modes to qualify, except that expenditure on preventive health checkups may be incurred in cash and still qualify for the deduction.
    ManualsIncome Tax
    Can an individual pay medical insurance premium for spouse and claim deduction u/s 80D?
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    Medical insurance premium deduction allowed when an individual pays for spouse, self and dependents under section 80D.
    An individual is entitled to claim a deduction for premiums paid for medical insurance covering the individual, the spouse, dependent children and parents under the medical insurance premium deduction framework; premiums paid by an individual for insurance on the health of those family members qualify for deduction.
    ManualsIncome Tax
    Can a Guardian claim tax benefit u/s 80CCG if investment is done in the name of Minor?
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    Tax benefit under 80CCG: guardian may claim deduction for investments made in a minor's name, subject to individual limits.
    A guardian who makes investments in a minor's name may claim the deduction under 80CCG, subject to the overall deduction limit applicable to the guardian as an individual and compliance with the scheme's conditions.
    ManualsIncome Tax
    Can a non resident individual join NPS u/s 80CCD?
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    Non-resident individuals joining NPS: eligible to open accounts, but accounts close if citizenship changes under pension deduction rules.
    Non resident individuals may join the National Pension System and make contributions eligible for pension contribution deduction under income tax provisions; however, an NPS account will be closed if the member's citizenship status subsequently changes, affecting continued participation and account maintenance.
    ManualsIncome Tax
    Whether deduction u/s 80CCC is allowed only to the resident individuals?
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    Deduction under section 80CCC can be claimed by non-resident individuals contributing to pension funds under the statute.
    The provision permits a deduction for contributions to pension funds and does not impose a residency restriction, so non-resident individuals who make qualifying contributions to pension funds are eligible to claim the deduction under the section.
    ManualsIncome Tax
    Whether education fees can be claimed as deduction u/s 80E and 80C both?
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    Education loan interest deductible for borrower; tuition fee relief limited to two children under a separate deduction.
    Only interest paid on an education loan for the taxpayer or a dependent qualifies under the education-loan interest deduction head, while tuition fees qualify under a separate tuition-fee deduction head and are restricted to tuition paid for a limited number of children; the two deductions are distinct and non-overlapping.
    ManualsIncome Tax
    Whether the post office savings scheme is eligible for deduction u/s 80C?
    Show AI Summary
    Deduction under section 80C: Post Office five year time deposit qualifies as an eligible investment for deduction.
    Contributions to the Post Office five year time deposit scheme are eligible to be claimed as a deduction under section 80C, and may be included among other specified investments such as life insurance premiums, deferred annuities and provident fund contributions, subject to the overall limits and conditions applicable to 80C deductions.
    ManualsIncome Tax
    Whether the repayment of loan taken for renovation/repair of house property is eligible for deductio...
    Show AI Summary
    Section 80C deduction excludes loan repayments for renovation or repair of residential property under income tax law.
    Repayments of loans taken for renovation or repair of residential property are not eligible for deduction under deduction under section 80C, which is confined to specified savings and investment outlays such as life insurance premiums, deferred annuities and provident fund contributions and does not include repair or renovation costs of a dwelling.
    ManualsIncome Tax
    Whether section 80C allows deduction on re payment of housing loan?
    Show AI Summary
    Deduction under section 80C: repayment of principal on housing loan qualifies, interest payments do not.
    Payments toward the cost of purchase or construction of a new residential property qualify for deduction under the provision and expressly include repayment of the principal amount of a housing loan; interest paid on such a housing loan is not eligible for deduction under the same provision.
    ManualsIncome Tax
    What kind of deduction is available for deduction u/s 80C?
    Show AI Summary
    Deduction under section 80C covers life insurance, provident fund and deferred annuity contributions and limited tuition fees.
    Deduction under section 80C permits tax deductions for specified savings and insurance instruments such as life insurance premia, provident fund contributions and deferred annuities, subject to statutory limits and qualifying conditions. Only tuition fees paid in India for full time education of up to two children qualify as deductible educational expenses; other charges like development fees or donations are not eligible.
    ManualsIncome Tax
    Who can take the benefit u/s 80C?
    Show AI Summary
    Deduction under section 80C available only to individuals and HUFs for life insurance and provident fund contributions.
    The provision permits deduction for life insurance premia, deferred annuity premiums and contributions to provident funds, available exclusively to Individual and HUF taxpayers as the classes eligible to claim the tax benefit.
    ManualsIncome Tax
    While clubbing income of minor with the parent's income, the investment made by the minor u/s 80C al...
    Show AI Summary
    Clubbing of minor income: investments made by the minor qualifying for investment-based deductions may be claimed when income is clubbed.
    When a minor's income is clubbed with a parent's income, investments made by the minor that qualify under the investment-based deduction framework-including life insurance premiums, provident fund contributions, and deferred annuity payments-may be considered as deductible in computing the parent's taxable income.
    ManualsIncome Tax
    Can a self employed individual claim the benefit of HRA u/s 10(13A)?
    Show AI Summary
    HRA exclusion for self-employed; rent deduction available under section 80GG if statutory eligibility conditions are met.
    HRA under section 10(13A) is a salary-linked exemption not available to self-employed individuals; self-employed taxpayers may claim a deduction for rent paid under section 80GG, subject to the statutory eligibility conditions and limits governing that deduction.
    ManualsIncome Tax
    Does actual payment of rent is required to claim HRA deduction u/s 10(13A)?
    Show AI Summary
    Actual rent payment required for HRA deduction - absence of rent payment for any period disqualifies entitlement to deduction.
    The House Rent Allowance deduction under section 10(13A) is conditional on actual rent payment for residential accommodation; if no rent is paid for any period, no deduction is allowable for that period, and entitlement to HRA or notional occupancy does not replace the need for real rent outgo.
    ManualsIncome Tax
    Whether an employee is allowed deduction u/s 10(13A) even if he owns a house property?
    Show AI Summary
    Deduction under section 10(13A) available despite house ownership when employee resides in rented accommodation.
    An employee who actually resides in rented accommodation may claim the salary-specific exemption for rent allowance under section 10(13A) even if he owns a house property in the same or a different city; entitlement depends on factual occupancy of rented premises rather than mere ownership of residential property.

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      Bills

      Rationalisation of provisions related to Sovereign Wealth Fund (SWF) and Pension Fund (PF)

      1 February, 2021

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      Budget 2021-22 + FINANCE Bill, 2021

      Rationalisation of provisions related to Sovereign Wealth Fund (SWF) and Pension Fund (PF)

      Clause (23FE) of section 10 of the Act provides for the exemption to specified persons from the income in the nature of dividend, interest or long-term capital gains arising from an investment made by it in India. Specified persons are SWF or PF which fulfils conditions prescribed therein and are specified for this purpose by the Central Government through notification in the Official Gazette. This provision was introduced through the Finance Act, 2020 to encourage investments of SWF and PF into infrastructure sector of India. Subsequent to enactment, a notification was also issued to enlarge the scope of infrastructure activities eligible for investments. One SWF has already been notified under this provision. In order to rationalise the provision of this clause and to remove the difficulties in meeting some of the conditions, the followings amendments are proposed in the Bill:

      • Allowing Alternate Investment Fund (AIF) to invest up to 50% in non-eligible investments

      Presently SWF/PFs may invest in a Category-I or Category-II Alternative Investment Fund, having 100% investment in eligible infrastructure company. It is proposed to:

      (a) relax the condition of 100% to 50%.

      (b) allow the investment by Category-I or Category-II AIF in an Infrastructure Investment Trust (InvIT).

      (c) Exemption under this clause shall be calculated proportionately, in case if aggregate investment of AIF in infrastructure company or companies or in InvIT is less than 100%.

      • Investment through holding company

      Presently, SWF/PFs are not allowed to invest through holding company. It is proposed to allow the same subject to the following conditions:

      (a) Holding company should be a domestic company.

      (b) It should be set up and registered on or after 1st April, 2021.

      (c) It should have minimum 75% investments in one or more infrastructure companies.

      (d) Exemption under this clause shall be calculated proportionately, in case if aggregate investment of holding company in infrastructure company or companies is less than 100%

      • Investment in NBFC- IDF/IFC (non-banking finance company-infrastructure debt fund/Infrastructure finance company)

      Presently, SWF/PFs are not allowed to invest in NBFC-IFC/IDF. It is proposed to allow the same subject to the following conditions:

      (a) NBFC-IDF/IFC should have minimum 90% lending to one or more infrastructure entities.

      (b) Exemption under this clause shall be calculated proportionately, in case if aggregate lending of NBFC-IDF or NBFC-IFC in infrastructure company or companies is less than 100%.

      • Loan or borrowings by SWF/Pension Fund

      Presently, SWF/PFs are not allowed to have loans or borrowings or deposit or investments as there is a condition that no benefit should enure to private person. It is proposed to provide that there should not be any loan or borrowing for the purpose of making investment in India. It is also proposed to provide that the condition regarding no benefit to private person and assets going to government on dissolution would not apply to any payment made to creditor or depositor for loan taken or borrowing other than for the purpose of making investment in India.

      • Commercial activity

      Presently, SWF/PFs are not allowed to undertake any commercial activity. This condition is proposed to be removed and replaced with a condition that SWF/PFs shall not participate in day to day operation of investee. However, appointing director and executive director for monitoring the investment would not amount to participation in day to day operation.The term "investee" is propoed to define to mean a business trust or a company or an enterprise or an entity or a category I or II Alternative Investment Fund or an Infrastructure Investment Trust or a domestic company or an Infrastructure Finance Company or an Infrastrure Debt Fund, in which the SWF or PF, as the case may be, has made the investment, directly or indirectly, under the provisions of this clause.

      • Liable to Tax

      Presently, some PFs are liable to tax in their country though given exemption subsequently. It is proposed to amend this sub-clause to provide that if pension fund is liable to tax but exemption from taxation for all its income has been provided by the foreign country under whose laws it is created or established, then such pension fund shall also be eligible.

      • Rules to prescribe the method of calculation

      It is also proposed to provide that the Central Government may prescribe the method of calculation of 50% or 75% or 90%referred above.

      This amendment will take effect from 1st April, 2021 and will accordingly apply to the assessment year 2021-22 and subsequent assessment years.

      [Clause 5]

       

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      Budget 2021-22 + FINANCE Bill, 2021

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