Sec 80B of Income Tax Act, 1961: Definitions

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A deduction is an expense that can be subtracted from a taxpayer's gross income in order to reduce the amount of income that is subject to taxation. The aggregate of income computed under each head, after giving effect to the provisions for clubbing of income and set off of losses, is known as "Gross Total Income". In computing the total income of an assessee, certain deductions are permissible under sections 80C to 80U from Gross Total Income.

This complete list of Chapter VI-(Income Tax) Deductions for AY 2020-2021 and FY 2019-2020 are provided based on Union Budget 2019introduced by the Central Government. The aggregate amount of Deduction U/S 80C to 80U cannot exceed the Gross Total income. The deductions are available only to the assessees where the gross total income is positive. If however, the gross total income is nil or negative, the question of any deduction from the gross total income does not arise.

For this purpose, the expression 'Gross Total Income' means the total income of the assessee computed in accordance with the provisions of the Income-Tax Act, before making any deduction under Chapter VI-A (Income Tax), i.e., the aggregate income computed under each head, after giving effect to the provisions for clubbing of income and set off of losses, is known as "Gross Total Income".

Basic rules for deduction under section 80C to 80U:

1. Deductions not available from: Deductions under chapter VIA are not available from : • Long-term capital gain; • Short term capital gain covered u/s 111A (i.e., STCG on which STT is charged); and • Casual income like winning from lotteries, races, etc.

2. Limit of deduction: The aggregate amount of deduction under chapter VIA cannot exceed Gross Total Income of the assessee excluding - • Long term capital gain; • Short term capital gain covered u/s 111A; • Casual income like winning from lotteries, card-games, horse races, etc.; and • Income referred in Sec.115A, 115AB, 115AC, 115ACA, etc.

3. Deduction must be claimed: Deduction under chapter VIA shall be available only if the assessee claims for it. 4. Double deduction not permissible: Where deduction under any section of chapter VIA has been claimed then the same shall not qualify for deduction in any other section.