Savings/Contributions & Tax Benefits (Part-II)

Having previously discussed about the Investment opportunities available under Section 80C,80CCC & 80CCD  in order to save taxes , we go ahead with the other areas where an assessee is eligible for Tax benefits in return for Contributions/Savings made are described hereunder:-

1. Section 80CCF:- Deductions in respect of Long Term Infrastructure Bonds (w.e.f. Assessment Year 2011-12)

As per the amendment made by the Finance Bill, 2010 and in tune with the policy thrust of promoting investment in the infrastructure sector, the Bill has inserted a new section 80CCF in the Income Tax Act to provide that subscription during the financial year 2010-11 made to long-term infrastructure bonds, as maybe notified by the Central Government, to the extent of Rs.20, 000 shall be allowed as deduction in computing the income of an individual or Hindu undivided family. This deduction will be over and above the existing overall limit of tax deduction on savings of upto Rs.1, 00,000/- under section 80C, 80CCC and 80CCD of the Act.

2. Section 80D:- Deduction in respect of Medical Insurance premium

This deduction is allowed to an individual or HUF in respect of any sum paid in the previous year towards medical insurance premium on the health of the following:-

• In case of an individual:- the assessee himself or his/her spouse/dependent children /parent or parents.

• In the case of an HUF:- any member of the family.

The payment should be made by him/her by any mode of payment other than cash. The amount is paid out of him income chargeable to tax.
Quantum of deduction

• Where the assessee is an individual:- The deduction allowed shall be the aggregate of the following, namely:-

         a. The whole of the amount paid to keep in force the health insurance of the assessee or his spouse and dependent children upto an aggregate of Rs.15,000/- , and
         b. The whole of the amount paid to keep in force the health insurance of the parent or parents (whether dependent or not ) upto an aggregate of Rs.15,000/-

• Where the assessee is an HUF:- The whole of the amount paid to keep in force the health insurance of any member of that Hindu Undivided Family upto an aggregate of Rs.15,000/-.

Additional deduction of Rs.5000 is available where the person mentioned above is a senior citizen. Senior citizen means an individual resident in India who is of the age of 65 years or more at any time during the relevant previous year.

- Rittique Phukan (CA)