Income Tax Rates / Slabs for Assessment Year 2010-11 (F Y 2009-10)

• Individuals & HUFs
• AOPs & BOIs
• Co-operative Society
• Firm
• Local Authority
• Domestic Company
• Other Company

II. In case of individual being a woman resident in India and below the age of 65 years at any time during the previous year:-

III. In case of an individual resident who is of the age of 65 years or more at any time during the previous year:-

Surcharge: The surcharge on Income Tax for Individuals for total income exceeding Rs.10 lacs stands removed.

Education Cess: 3% of the Income-tax.

B. Association of Persons (AOP) and Body of Individuals (BOI)

i. Income-tax:

ii. Education Cess: 3% of the Income-tax.

C. Co-operative Society

i. Income-tax:

ii. Surcharge: Nil

iii. Education Cess: 3% of the Income-tax.

D. Firm

i. Income-tax: 30% of total income.

ii. Surcharge: The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge at the rate of 10% of such income tax, provided that the total income exceeds Rs. 1 crore.

iii. Education Cess: 3% of the total of Income-tax and Surcharge.

E. Local Authority

i. Income-tax: 30% of total income.

ii. Surcharge: Nil

iii. Education Cess: 3% of Income-tax.

F. Domestic Company

i. Income-tax: 30% of total income.

ii. Surcharge: The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge at the rate of 10% of such income tax, provided that the total income exceeds Rs. 1 crore.

G. Company other than a Domestic Company

i. Income-tax:

• @ 50% of on so much of the total income as consist of (a) royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1961 but before the 1st day of April, 1976; or (b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February, 1964 but before the 1st day of April, 1976, and where such agreement has, in either case, been approved by the Central Government;
• @ 40% of the balance

ii. Surcharge: The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge at the rate of 2.5% of such income tax, provided that the total income exceeds Rs. 1 crore.

iii. Education Cess: 3% of the total of Income-tax and Surcharge.

Source : http://multiutils.com/itax/rates10_11.htm

Direct Taxes :

Rates of Tax :

• Rates of corporate tax remain unchanged for both domestic and foreign companies.
• Nil surcharges for firms and companies with taxable income of not more than Rs.10 million continues.
• Education of 3% (includes 1% “secondary & higher education) across the board (including on income tax and service tax) continues.
• Effective fiscal 2009-2010, the Bill eliminates the controversial fringe benefit tax (FBT), introduced in Finance Act 2005, that is levied on a portion of an employer's expenses.

Advance Tax :

• Presently, a tax payer is liable to pay advance tax if the tax payable during a financial year is Rs.5, 000 or more. It is now proposed to raise the threshold limit for payment of advance tax from the present Rs.5, 000 to Rs.10, 000. Accordingly, advance tax for the financial year 2009-2010 and onwards would be payable only if the advance tax liability is Rs.10, 000 or more.

Fringe Benefit Tax ("FBT") :

FBT is not applicable on or after 01 April 2009.

• Any allotment or transfer (directly or indirectly) of any specified securities or sweat equity shares to employees (including former employees), will now be subject to tax as a perquisite only in the hands of the employee as under:
• The perquisite value taxable in the hands of the employee will be the difference between the FMV of the specified security or sweat equity shares on the date on which the option is exercised and the amount actually paid by / recovered from the employee.
• FMV will be computed in accordance with the method to be prescribed.
• Presently, in case of shares / debentures / warrants acquired under an ESOP prior to enactment of FBT, the value considered for computing perquisite in the hands of the employee is considered as cost of acquisition on sale. Now, FMV considered for computing the perquisite value will be considered as cost of acquisition on sale of such specified security or sweat equity shares.
• Presently, contribution by the employer to an approved superannuation fund for employees in excess of Rs.1, 00,000 for each employee is subject to FBT in the hands of the employer. Now, such excess will be a taxable perquisite in the hands of the Employee.
• Prescribed fringe benefits would now be subject to tax in the hands of the employee based on valuation rules, methodology to be prescribed.
• Thus, there would now be a withholding tax obligation on the employer.

Wealth Tax :

• The basic exemption limit for wealth tax has been enhanced from Rs.1,500,000 to Rs.3,000,000. Thus, wealth tax will be imposed @ 1% on the value of specified assets held by the taxpayer on the valuation date (31 March) in excess of the basic exemption of Rs.3,000,000.

Minimum Alternate Tax ("MAT") :

• Currently, under MAT provisions, if a company's income tax liability computed under the normal provisions of the Income Tax Act, 1961 (ITA) is less than 10 percent of the defined book profits (threshold), the book profit is deemed to be subject to income tax at the base rate of 10 percent. MAT paid can be carried forward for seven years for set-off as specified.
• The Bill would increase the threshold as well as the base tax rate (from 10 percent to 15 percent resulting in an effective tax rate of 16.995% including surcharge and education and would also increase the carry forward period to 10 years immediately succeeding the year in which the tax credit becomes allowable. The extended period applies to credits arising pursuant to MAT paid for the tax year 2005-2006 and subsequent years.
• For the purpose of MAT computation, book profits shall be increased by provision for diminution in value of any asset. The said amendment is retrospectively applicable from 01 April 2001.
• Income from other sources – Taxation of transactions without consideration or for an inadequate consideration by individuals and Hindu Undivided Families :
• Where immovable property or any other property is received without any consideration and the stamp duty value (in case of immovable property) / fair market value (in case of any other property) of such property exceeds Rs.50,000, the entire stamp duty value or fair market value (as the case maybe) of such property would be taxable as income from other sources.
• Where immovable property or any other property is received for a consideration and such consideration is less than the stamp duty value (in case of immovable property) / fair market value (in case of any other property) of the property by an amount exceeding Rs.50,000, the stamp duty value / fair market value reduced by the consideration received, would be taxable as income from other sources.
• The above provisions will not be applicable where property is received from a relative or on occasion of marriage of the individual or under a will or inheritance or in contemplation of death of the donor or from local authority, approved fund or trust.
• The above amendment will take effect from 01 October 2009.

Tax Incentives for business :

• The eligibility for tax exemption to units in free trade zones, software technology parks, etc. under section 10A and to Export Oriented Units under section 10B is extended for one more year and accordingly, these provisions granting exemption will be operative upto the assessment year 2011-2012 (relevant to the financial year 2010-2011).
• The Bill would also extend the deduction currently available for profits arising from the generation and distribution of power; the laying of new power lines; or the substantial modernization of existing power lines, if the business activity commences within a specified period upto 31 March 2010. As proposed, the Bill would extend the commencement deadline to 31 March 2011.
• Under the existing rules, to be eligible for a seven-year tax holiday (deduction) for profits arising from the production or refining of mineral oil, the refining had to commence before 31 March 2009. Considering the recent bids and large capital investments made by private sector companies, the bill would extend the commencement date to March 31, 2012. It would provide a similar seven-year deduction for profits arising from the production of natural gas if commercial production begins on or after April 1, 2009.
• Further, under new rules proposed in the bill, the exempt profits of an undertaking set up in a special economic zone would be computed with reference to the total turnover of the undertaking rather than the total turnover of the business of the assessee that owns the undertaking.
• With a view to creating rural infrastructure and environment friendly alternate means of transportation for bulk goods, the Bill would provide investment-linked incentives, i.e. a 100% deduction for capital investment (except land, goodwill or financial products) in the following activities:
• Setting up and operating cold chain facilities for specified agricultural products on or after 01 April 2009.
• Setting up and operating warehousing facilities for agricultural products on or after 01 April 2009.
• Laying and operating cross-country oil and gas pipelines and storage facilities on or after 01 April 2007.
• Consequently, the profit-linked deduction currently available to cross-country gas distribution networks would be discontinued.

Tax Deduction for Contributions made by tax payers to an electoral trust :

• In an effort to reform the system of funding political parties, the Bill proposes a 100% tax deduction for contributions made by taxpayers to an electoral trust approved by the Central Board of Direct Taxes (CBDT).
• Weighted deduction for research and development in some specified sectors.
• The Bill would extend the current weighted deduction of 150% allowed for research and development in some specified sectors such as biotechnology, pharmaceuticals and
• Telecommunications to all manufacturing sectors except those excluded by the Income-tax Act.

Scheduled Banks can now issue zero coupon bonds ("ZCB’s") :

• Currently, only approved infrastructure capital companies or public sector companies are allowed to issue ZCB's that are eligible for preferential tax treatment. The Bill would extend the right to issue such bonds to all (Reserve Bank of India) scheduled banks, including most foreign banks. Further, the income paid in relation to such ZCB's is not subject to withholding tax under section 194A of the Act. The pro-rata discount on ZCB's is allowed as a deduction to the tax issuer, over the life of the ZCB’s. All this has been proposed with a view to empower scheduled banks to source their long-term funds by issuance of ZCB's.

Taxable profits of non-life insurance companies to be adjusted for increase / decrease in value of investments :

• The Insurance Act, 1938 was amended in 1999 and the Insurance Regulatory Development Authority (IRDA) was created. In the financial year 2001-02, IRDA introduced “IRDA (Preparation of Financial Statements and Auditor’s Report of Insurance Companies) Regulations, 2002”. The regulations mandated new guidelines and formats for preparation of accounts by General Insurers. According to these changed norms, a non-life insurance company has to include profit or loss on realization / sale of investment in the profit and loss account or revenue account. This is also consistent with international best practice on taxation of investment income of non-life insurance companies.
• In view of the above, it is proposed to amend the provisions of the Income-tax Act to provide that any increase in respect of any amount taken credit for in the accounts on account of appreciation of or gains on realization of investments in accordance with the regulations prescribed by IRDA shall be treated as income and included in the computation of the total income. Similarly, deduction shall be allowed in respect of any amount either written off or provided in the accounts to meet diminution in or loss on realization of investments in accordance with the regulations prescribed by IRDA.
• The proposed amendment takes effect from the tax year 2010-2011, i.e. it proposes to cover profits / losses after 01 April 2010.

Income of a mutual fund :

• Presently an exemption is available under section 10(23D) of the Income-tax Act in respect of
• Income of a mutual fund registered under SEBI and such other Mutual Funds set up by a public sector bank or a public financial institution or authorized by RBI and subject to such conditions as the Central Government may notify. The exemption is now proposed to be extended to include mutual funds set up by banks categorized as "other public sector banks".

Recognition of Provident Funds :

• The time window for in-house provident funds, which are covered by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, to obtain exemption under that law from the Regional Provident Fund Commissioner was earlier extended from 31 March 2008 to31 March 2009. Now, an exemption will be granted to provident funds till 31 December 2010 to satisfy the conditions.

Exemption for compensation on voluntary retirement :

• Currently, the provisions of section 89 of the Income-tax Act provide for backward spread of the arrears and forward spread of the advance in order to mitigate the excess burden of a higher tax rate in the year of receipt of arrears and/ or advance of salary.
• Under the Voluntary Retirement Scheme, the lump-sum received by the retiree employee is in the nature of advance salary. Section 10(10C) provides for an exemption of Rs.5 lakhs in respect of such amount. However, some tax payers have claimed both the benefit under section 10(10C) and section 89. With a view to prevent the claims of double benefit, it is proposed to insert a proviso to section 89 to provide that no relief shall be granted in respect of any amount received or receivable by an assessee on his voluntary retirement or termination of his service, if exemption is claimed under section 10(10C). Correspondingly, the said exemption under section 10(10C) would not be available if the employee has already claimed relief under section 89 from tax on compensation received at the time of voluntary retirement or termination of service and vice-versa.

Capital Gains :

• Presently, under section 50C of the Income-tax Act, the value adopted or assessed under stamp duty legislation could be considered as full value of consideration for computing capital gains on transfer of land or building or both. The said provision is now extended to transfers who may not require to be registered. With effect from 01 October 2009, the value which stamp duty valuation authority would have adopted or assessed if referred to, would be considered as full value of consideration, if the same is higher than the actual consideration.

Tax Deduction at source :

• Withholding tax rates on various payments to residents would be rationalized and reduced. However, if the payee does not provide the payer with his PAN, the default withholding rate would be higher than normal.
• Processing of statements of taxes withheld to be done electronically to make the following adjustments :
• Arithmetical errors in the statement; or
• Incorrect claims apparent from information in the statement of taxes withheld
• Based on the above, intimation will be issued to the deductor, granting the deductor a refund or advising him on the amount of tax and interest payable.
• Time limit for issue of intimation will be one year from the end of the financial year in which the statement of taxes withheld is filed.
• Scheme for centralized processing of statements of taxes withheld may be introduced
• The following time limits have been prescribed for passing an order where the dedicatee is a resident taxpayer :
• Two years from the end of the financial year in which the statement of taxes withheld is filed by the deductor;
• Four years from the end of the financial year in which payment is made or credit is given, where no such statement is filed.
• Order for withholding tax proceedings for the financial year beginning 01 April 2007 and earlier years can be completed by 31 March 2011.
• Presently, statements of taxes withheld are required to be filed quarterly for each financial year. With effect from 01 October 2009, it is proposed to modify the existing provisions so as to allow the Government to prescribe periodicity of such TDS statements besides prescribing their form and manner. Corresponding amendments have been made in other relevant sections.
• Presently, statements are required to be filed quarterly in respect of interest payment made to residents, where taxes have not been withheld. With effect from 01 October 2009, such statements will be required to be filed within the time limit and in a form and manner as prescribed by the CBDT. Corresponding amendments have been made in other relevant sections.

New Pension Scheme ("NPS") :

• NPS Trust has been set up on 27 February 2008 to manage the assets and funds under the NPS for its beneficiaries. The savings under this Scheme will be taxed on EET basis (Exempt Exempt Taxed), i.e. deductible at the time of investment, no tax incidence during the income accumulation, and taxable at the time of withdrawal.
• Any income received by any person on behalf of the NPS Trust, shall be exempt from tax.
• With retrospective effect from 01 April 2009, any payment made to such specified trust is exempt from TDS.
• With retrospective effect from 01 April 2009, no DDT is payable on the amount of dividend distributed to NPS Trust. However, there is no provision for passing on such saving in DDT by the company to NPS Trust.
• Transactions of purchase and sale of equity and derivatives entered into by NPS are exempted from payment of STT.

Centralized Processing of Returns :

• The Income-tax department is in the process of setting up a Centralized Processing Centre (CPC) at Bengaluru for centralized processing of Income-tax returns.

Customs Duty :

• No change in the overall rate structure of customs duty.
• Peak rate of customs duty for industrial goods retained at 10% and major ad-valorem rates of 7.5% and 5% also retained.
• Authority of Advance Ruling constituted under the Income-tax Act to be notified as an authority eligible to adjudicate advance rulings for customs duty, excise duty and service tax.

Excise Duty :

• Duty rate on several items presently attracting 4% increased to 8%
• Manufacture of excisable and exempted goods granted option to pay 5% (reduced from 10%) on value of exempted goods and avail full CENVAT credit.
• Power granted to High Court to condone delay in filing of appeals / applications / memorandum of cross objections with retrospective effect.

Central Sales Tax (CST) :

• No change in CST rate.

Service Tax :

• The Bill would not change the 10.30% effective rate of the service tax.
• However, the Bill would expand the tax net to include as taxable supplies:
• The transportation of goods by rail;
• The transportation of goods through inland waters;
• legal consultancy services. Service provided by way of appearance before any court, tribunal or authority shall not amount to a taxable service. Services of individuals are excluded from the service tax net; and cosmetic and plastic surgery services.
• This change would take effect on a date to be specified by the central government after the enactment of the Bill.
• Some amendments to existing provisions have also been proposed. Notably, the supply of business auxiliary services would exclude activities that result in the "manufacture of excisable goods" (as defined by the central excise law), and the supply of sub-broking services would be excluded from the tax net. These changes would enter into force on a date to be specified by the central government after the enactment of the Bill.
• Finally, the Bill would revise a provision of Finance Act 2008 that classified any purchase or sale of foreign currency as a taxable supply. Effective 07 July 2009, the Bill exempts such inter-bank supplies between (RBI) scheduled banks exempt from service tax. Scheduled banks under the said notification means banks which are included in the Second Schedule of the Reserve Bank of India Act, 1934.
• A service provider performing taxable as well as exempted services and not maintaining separate books of accounts had an option of paying an amount of 8% on exempted services. While the service tax rate reduced from 12% to 10% from 24 February 2009, consequential relief was not granted on payment of service tax on exempted services. Accordingly, the reversal rate is reduced (with effect from 07 July 2009) from 8% to 6% on the value of exempted services.

Source : www.hsbc.co.in

A) Surcharge on Income-tax:

Surcharge on income tax on all firms and companies with a taxable income of Rs. one crore or less has been removed.

• In the case of every individual, HUF, association of persons and body of individuals, whether incorporated or not, at the rate of ten per cent of such tax where the income or the aggregate of such income paid or likely to be paid and subject to the deduction, exceeds rupees ten lakh.
• In the case of every firm, artificial judicial person & domestic company, at the rate of ten percent of such tax.
• In the case of every company other than domestic company, at the rate of two and half per cent of such tax

C) Education Cess:

An additional surcharge called as ‘Education cess’ shall be levied at the rate of three percent on the amount of tax deducted inclusive of surcharge as stated in paras ‘A’ and ‘B’ above.

3. Section 192 of the income-tax Act, 1961: Broad scheme of tax.

Deduction at source from "salaries" etc.
3.1 Every person who is responsible for paying any income chargeable under the head "salaries" shall deduct income-tax on the estimated income of the assessee under the head "salaries" for the financial year 2007-2008. The income-tax is required to be calculated on the basis of the rates given above and SHALL BE DEDUCTED ON AVERAGE AT THE TIME OF EACH PAYMENTS e.g. FROM SALARY EVERY MONTH.

Any income falling within any of the following clauses shall not be included in computing the income from salaries for the purpose of section 192 of the Act:-

Any sum received under a life insurance policy, including the sum allotted by way of bonus on such policy other than,

• Any sum received under sub- section(3) of section 80DD.
• Any sum received under a Keyman insurance policy.
• · Any sum received under an insurance policy affected on or after 1-4-2003 in respect of which the premium paid in any of the years during the term of the policy exceeds twenty per cent of the actual capital sum assured.

In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, in accordance with and subject to the provisions of this section, the whole of the amount paid or deposited in the previous year out of his Income chargeable to tax being the aggregate of the sums given below not exceeding one lakh rupees. 

• Payment of insurance premium to effect or to keep in force insurance on the life of the individual, the wife or husband or any child of the individual; provided the premium paid is not in excess of twenty per cent of the actual capital sum assured.
  
• Any payment made to effect or to keep in force a contract for a deferred annuity, not being an annuity plan of the Life Insurance Corporation of India or any other insurer as the Central government may by notification in the official gazette specify on the life of the individual, the wife, the husband or any child of the individual provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity.
  
• i) for participation in the Unit-Linked Insurance Plan, 1971, of the Unit Trust of India; specified in Schedule II of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002.
  ii) for participation in any Unit-Linked Insurance Plan of the LIC Mutual Fund notified by the Central Government under clause (23D) of section 10, as the Central Government may, by notification in the Official Gazzette, specify in this behalf
  
• Any subscription made to effect or keep in force a contract for such annuity plan of the Life Insurance Corporation as the Central Government may by notification in the Official Gazette, specify.
  

NOTE: Section 80 CCE.
The aggregate amount of deduction under section 80C, section 80CCC, and shall not, in any case exceed one lakh rupees.

Under This section, a deduction up to Rs 10,000 (Rs 15,000 in case of senior citizens) is allowed in respect of premium paid by cheque towards health insurance policy, like "Mediclaim". Such premium can be paid towards health insurance of spouse, dependent parents as well as dependent children of the assessee provided that such insurance is in accordance with the scheme framed by,

• The General Insurance Corporation of India as approved by the Central Government in this behalf or
• any other insurer and approved by the Insurance Regulatory and Development Authority.

However, the deduction can be allowed for a sum not exceeding Rs.20,000 per annum where the assessee or his wife or husband, or dependent parents is a senior citizen which means an individual resident in India who is of the age of sixty-five years or more at any time during the relevant previous year.

4. under section 80DD an assessee, has during the previous year.

• a. Incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a handicapped dependant; or
• b. Paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or Unit Trust of India subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of handicapped dependant. The assessee shall in accordance with and subject to the provisions of this section, be allowed a deduction of a sum of forty thousand rupees in respect of the previous year.

Provided that where such dependent is a person with severe disability, the provisions of this section shall have effect as if for the words “fifty thousand rupees”, the words “seventy five thousand rupees” had been substituted.

The assessee claiming a deduction under this section shall furnish a copy of the certificate issued by the medical authority in the prescribed form and manner, along with the return of income under section 139 in respect of assessment year for which the deduction is claimed.

A) Surcharge on Income-tax:

Surcharge on income tax on all firms and companies with a taxable income of Rs.1 crore or less will get removed.

• In the case of every individual, HUF, association of persons and body of individuals, whether incorporated or not, at the rate of ten per cent of such tax where the income or the aggregate of such income paid or likely to be paid and subject to the deduction, exceeds  rupees ten  lakh.
• In the case of every firm, artificial judicial person & domestic company, at the rate of ten  percent  of such tax.
  
• In the case of every company other than domestic company, at the rate of two and half per cent of such tax. 

C) Education Cess:

An additional surcharge called as ‘Education cess’ shall be levied at the rate of three percent on the amount of tax deducted inclusive of surcharge as stated in paras ‘A’ and ‘B’ above.

3. Section 192 of the income-tax Act, 1961:
Broad scheme of tax

Deduction at source from "salaries" etc.
3.1  Every person who is responsible for paying any income chargeable under the head "salaries" shall deduct income-tax on the estimated income of the assessee under the head "salaries" for the financial year 2007-2008. The income-tax is required to be calculated on the basis of the rates given above and SHALL BE DEDUCTED ON AVERAGE AT THE TIME OF EACH PAYMENTS e.g. FROM SALARY EVERY MONTH.

Any income falling within any of the following clauses shall not be included in computing the income from salaries for the purpose of section 192 of the Act:-

Any sum received under a life insurance policy, including the sum allotted by way of bonus on such policy other than,

• any sum received under  sub- section(3) of section 80DD
• Any sum received under a Keyman insurance policy
• Any sum received under  an insurance policy effected on or after  1-4-2003 in respect of which the premium paid in any of the years  during the term of the policy exceeds twenty per cent of the actual capital sum assured.

In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, in accordance with and subject to the provisions of this section, the whole of the amount paid or deposited in the previous year out of his Income chargeable to tax being the aggregate of the sums given below   not exceeding one lakh rupees. 

• Payment of insurance premium to effect or to keep in force an insurance on the life of the individual, the wife or husband or any child of the individual; provided the premium paid  is not in excess of twenty per cent of the actual capital sum assured.
  
• Any payment made to effect or to keep in force a contract for a deferred annuity, not being an annuity plan of the Life Insurance Corporation of India or any other insurer as the Central government may by notification in the official gazette specify on the life of the individual, the wife, the husband or any child of the individual provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity
  
• Any sum paid as contribution in the case of an individual, for himself, spouse or any child,
  i) for participation in the Unit-Linked Insurance Plan, 1971, of the Unit Trust of India; specified in Schedule II of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002.
  ii) for participation in any Unit-Linked Insurance Plan of the LIC Mutual Fund notified by the Central Government under clause (23D) of section 10, as the Central Government may, by notification in the Official Gazzette, specify in this behalf
  
• Any subscription made to effect or keep in force a contract for such annuity plan of the Life Insurance Corporation as the Central Government may by notification in the Official Gazette, specify.
  

NOTE: Section 80 CCE.
The aggregate amount of deduction under section 80C, section 80CCC, and shall    not, in any case exceed one lakh  rupees.

Under section 80D, a deduction can be allowed for a sum not exceeding Rs.15,000 per annum to the extent payment is made by cheque out of his income chargeable to tax to keep in force an insurance on the health of the assessee or on the health of the spouse, dependent parents or dependent children of the assessee provided that such insurance is in accordance with the scheme framed by

• the General Insurance Corporation of India as approved by the Central Government in this behalf or
• any other insurer and approved by the Insurance Regulatory and Development Authority.

However, the deduction can be allowed for a sum not exceeding Rs.20,000 per annum where the assessee or his wife or husband, or dependent parents is a senior citizen which means an individual resident in India who is of the age of sixty-five years or more at any time during the relevant previous year.

4. Under section 80DD an assessee, has during the previous year

• Incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a handicapped dependent; or
• Paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or the Unit Trust of India for the maintenance of handicapped dependent-shall in accordance with and subject to the provisions of this section be allowed a deduction of a sum of fifty thousand rupees in respect of  the previous year.

Provided that where such dependent is a person with severe disability, the provisions of this section shall have effect as if for the words “fifty thousand rupees”, the words “seventy five thousand rupees” had been substituted.

The assessee claiming a deduction under this section shall furnish a copy of the certificate issued by the medical authority in the prescribed form and manner, along with the return of income under section 139 in respect of assessment year for which the deduction is claimed.