Income Tax Deductions FY 2016-17- Important Income Tax Exemptions AY 2017-18

Income Tax Deductions FY 2016-17 :This article is relating to 80 C deductions for AY 2017-2018 ,deduction under section 80C to 80U for AY 2016-17 and Income deductions FY 2016-2017 Income tax deductions for salaried employees andTax Deductions for FY 2016-17, List of Important Tax Exemptions for AY 2017-18 and income tax calculator for AY2017-18 and deduction under chapter via for AY 2017-18 and also available below Income tax deductions FY 2016-2017.


The 2016-17 budget was presented to Parliament. The Minister of Finance has kept  income tax
 rates unchanged for fiscal year 2016-17 (evaluation year 2017-2018). He proposed to introduce or
extend Income tax deduction limits under some sections of the Income Tax Act.Understand all important sections and proposals for income tax deductions for FY 2016-17. This list can help you plan your taxes.

Income Tax Deductions FY 2016-17 and  important Income Tax Exemptions for AY 2017-18

Income tax deduction under Section 80c

The maximum exemption limit provided for in Article 80C was retained for Rs 1.5 Lakh only. The various avenues or capital expenditures that may be claimed as tax deductions under section 80c are as follows:

ETH , PPF (Public Provident Fund) , Principal repayment of mortgage ,Bank or five-year post office Tax savings Deposits, NSC (National Savings Certificates), Equity Linked Saving Schemes (ELSS) Tuition fees for children, SCSS (Swiss Post Savings Plan),Accounting System Section 80CCC, NPS (national pension system) Life insurance premium Samriddhi
The contribution to the LIC (Life Insurance Company of India) pension plan or any other life insurance company to receive a pension from the fund is considered a tax benefit.

  The maximum allowable tax deduction under this 80C is Rs 1.5 Lakh.

80 CCD deductions for AY 2017-2018

The employee can contribute to pension schemes notified by the government (such as the National Pension Plan - SNP). Contributions can be up to 10% of salary (or) of gross income and 50 000 additional rupees u / s 80CCD (1b) were proposed in the 2015 budget.
To claim this deduction, the employee must contribute to government-recognized pension plans such as NPS. The 10% of the wage limit is applicable for the employees and the gross income is applicable for the non-employees. If your employer also contributes to the Pension Plan, the entire contribution amount (10% of salary) can be claimed as a tax deduction under 80CCD (2).

Please note that the total deduction provided for in Articles 80C, 80CCC and 80CCD (1) can not together exceed Rs 1.50.000 for the financial year 2016-17. The additional tax deduction of Rs 50,000 u / s 80CCD (1b) is beyond this limit Rs 1.5 Lakh.

Also Read:
22 Income tax FAQ Questions|What are the due dates for filing income tax returns?
TDS Rate Chart for FY 2016-17 and AY 2017-18| TDS calculator for 2016-17   {Updated} Upload TDS returns and download statements on income tax website

80D Income tax deduction for AY 17-18

Deduction u / s 80D on the health insurance premium is Rs 25,000. For the elderly, it is Rs 30,000. For people over the age of 80 who are not eligible for health insurance, the deduction is allowed for Rs 30,000 towards medical expenses.
Preventive medical screening fees of 5,000 rupees / - per family may be claimed as tax deductions. Remember, this is not beyond the individual limits as explained above. (Family includes: Self, spouse, dependent children and parents).

Income tax deduction under Section 80DD

You can claim up to Rs 75,000 for expenses on medical treatment of your dependents (spouse, parents, children or siblings) who have 40% disability. The limit of the tax deduction of up to Rs 1.25 lakh in case of severe disability can be availed.
To claim this deduction, you must submit Form 10-IA.

Section 80DDB-Income tax deductions FY 2016-2017

An individual (under the age of 60) may claim up to Rs 40,000 for the treatment of specified critical illnesses. This can also be claimed on behalf of dependents. The tax deduction limit in this section for the elderly is Rs 60,000 and for the elderly very old (over 80 years) the limit is Rs 80,000.
To claim tax deductions under 80DDB, it is mandatory for an individual to obtain a "doctor's certificate" or "prescription" from a specialist working in a government or private hospital.
For the purposes of section 80DDB, eligible diseases or conditions are:
Neurological diseases with a certified level of disability of 40% or more; (A) Dementia (B) Dystonia Musculorum Deformans (C) Motor Neuron Disease (D) Ataxia(E) Chorea (F) Hemiballism (G) Aphasia H) Parkinson's disease
Malignant Cancers Acquired Immunodeficiency Syndrome (AIDS);Chronic renal insufficiency Hematologic disorders HaemophiliaThalassemia

Section 24 (B)

The interest component of home loans is allowed as deduction under Section 24B for up to Rs 2 lakh in case of a self-occupied house. If your property is a let-out one then the entire interest amount can be claimed as tax deduction. (Read: Understanding Tax Implications of Income from house property)

Section 80EE- deductions under Income tax Act

This is a new proposal which has been made in Budget 2016-17. First time Home Buyers can claim an additional Tax deduction of up to Rs 50,000 on home loan interest payments u/s 80EE. The below criteria has to be met for claiming tax deduction under section 80EE.

The home loan should have been sanctioned in FY 2016-17.
Loan amount should be less than Rs 35 Lakh.
The value of the house should not be more than Rs 50 Lakh &
The home buyer should not have any other existing residential house in his name.
Section 80U

This is similar to Section 80DD. Tax deduction is allowed for the tax assessee who is physically and mentally challenged.

Section 80GG- Income tax deductions for 2017-2018

As per the budget 2016 proposal, the Tax Deduction amount under 80GG has been increased from Rs 24,000 per annum to Rs 60,000 per annum. Section 80GG is applicable for all those individuals who do not own a residential house & do not receive HRA (House Rent Allowance).

The extent of tax deduction will be limited to the least amount of the following;

Rent paid minus 10 percent the adjusted total income.
Rs 5,000 per month.
25 % of the total income.

Section 80G Under Income tax Act

Contributions made to certain relief funds and charitable institutions can be claimed as a deduction under Section 80G of the Income Tax Act. This deduction can only be claimed when the contribution has been made via cheque or draft or in cash. But deduction is not allowed for donations made in cash exceeding Rs 10,000. In-kind contributions such as food material, clothes, medicines etc do not qualify for deduction under section 80G.

 Section 80E deduction

If you take any loan for higher studies (after completing Senior Secondary Exam), tax deduction can be claimed under Section 80E for interest that you pay towards your Education Loan. This loan should have been taken for higher education for you, your spouse or your children or for a student for whom you are a legal guardian. Principal Repayment on educational loan cannot be claimed as tax deduction.

There is no limit on the amount of interest you can claim as deduction under section 80E. The deduction is available for a maximum of 8 years or till the interest is paid, whichever is earlier.
Section 87A- Rebate under Income tax Act

If you are earning below Rs 5 lakh, you can save an additional Rs 3,000 in taxes. Tax rebate under Section 87A has been raised from Rs 2,000 to Rs 5,000 for FY 2016-17 (AY 2017-18).

In case if your tax liability is less than Rs 5,000 for FY 2016-17, the rebate u/s 87A will be restricted up to income tax liability only.

Section 80 TTA -deductions under Income tax act

Deduction from gross total income of an individual or HUF, up to a maximum of Rs. 10,000/-, in respect of interest on deposits in savings account with a bank, co-operative society or post office can be claimed under this section. Section 80TTA deduction is not available on interest income from fixed deposits.

It is prudent to avoid last minute tax planning. Do not invest in unwanted life insurance polices or in any other financial products just to save taxes. It is better you plan your taxes based on your financial goals at the beginning of the Financial Year itself. Plan your taxes from April 2016 itself, instead of waiting until late December 2016 (or) January 2017.

It is OK to pay some taxes when you can not save or cannot invest in right financial products.  But, do not invest just to save TAXES. The cost of buying wrong financial products may outweigh the cost of taxes. Tax Planning is not a goal but a tool. Remember “Tax Planning alone is not Financial Planning.”

Also, kindly understand the tax treatment of the selected investment products across the different investment stages (i.e., investment, accrual & withdrawal) and then invest.

I believe that the above list is useful for your Tax Planning purposes. The above ‘Income Tax Deductions 2016-17’ are applicable for financial year 2016-2017 (Assessment Year 2017-2018).
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10 June 2017 at 02:37 ×

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