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Deductions under Sections 80GGC and 80TTA

• Income Tax is a tax imposed by government on a person that is to be paid on the income earned by him or her in the previous year. Income Tax is a source of revenue for government. Income Tax return has to be filed annually by taxpayers to determine their tax obligations.
• Some relaxations are also available for the taxpayers in the form deductions. These deductions help to lower the amount of income that is taxable and hence reduce the tax liability. Two such types of deductions that are available to taxpayer are :-
• “Deduction under Section 80GGC”and
• “Deduction under Section 80TTA”

Deductions under Section 80GGC

• Who can claim this deduction?
• Only an individual taxpayer can claim this deduction.

• Exception
• Any local authority and artificial juridical person that is funded by government cannot claim this deduction.
• To whom donations/ contributions can be made?
• Any political party in India
• An electoral trust.

Amount Qualifying for deduction.

• The donations that are made under section 80GGC are 100% tax deductible as there is no such limit is mentioned under this section.
• That means, any amount an individual donates to a political party or an electoral trust can be claimed for deduction.

 

• Exception
• Any donation amount qualifies for deduction as long as it is paid through any mode of payment other than cash.
• The donation should not exceed the taxable income of the individual.

Deductions under Section 80TTA

• Who can claim this deduction?
• An Individual; or
• A Hindu Undivided Family (HUF).

 

• Amount Qualifying for deduction.
• As per assessment year 2020-21 the amount of deduction available under section 80TTA is upto Rs 10,000.

 

• Income that qualify for deduction.
• Any income that is earned as interest on deposits in a savings account with
• A banking company, or
• A cooperative society, or
• A post office.

 

• Exception
• If any interest income on deposits in a savings account is earned where the account is held by a firm/body of individuals, then no deduction will be given to it’s members.

Tax Avatar is a platform for all your tax related problems, queries and doubts. Income Tax is a complicated subject and usually confuses people but we are here to help you. We wish to simplify and ease your any issue related to Income Tax and deductions. We at Tax Avatar, will help you get a better and clear understanding of income tax and deductions related to it. We can help you reduce your tax liability by using these deductions under Section 80GGC and Section 80TTA and others that are available for you. We will use our expertise to benefit you by reducing your taxable income. We can help you file an Income Tax Return and save as much tax as possible in accordance to Income Tax Act, 1961. We will make sure that you become a well informed and aware taxpayer.