Income Tax Exemptions, Deductions and Rebates for FY 2016-17 (AY 2017-18)
As per Budget 2016-17, the following exemptions, deductions, rebates and tax benefits were available to taxpayers for Financial Year 2016-17 and Assessment Year 2017-18.
Quick Reference
Deduction Under Section 80C of the Income Tax Act, 1961 - Investments
Maximum deduction under Section 80C was ₹1,50,000. The following investments and payments could qualify for deduction under Section 80C:
- Public Provident Fund (PPF)
- Employees' Provident Fund (EPF)
- Five-year tax-saving fixed deposit with a bank or post office
- National Savings Certificates (NSC)
- Equity Linked Saving Schemes (ELSS mutual funds)
- Tuition fees of children
- Post Office Senior Citizen Savings Scheme (SCSS)
- Principal repayment of home loan
- National Pension System (NPS)
- Life insurance premium
- Sukanya Samriddhi Account deposit scheme
Deduction Under Section 80CCC - Contribution to Annuity Plan
Maximum amount up to ₹1,50,000 for contribution to an annuity plan of LIC (Life Insurance Corporation of India) or any other life insurance company for receiving pension from the fund.
Deduction Under Section 80CCD - Contribution to Government-Notified Pension Schemes
Contribution made to Government-notified pension schemes such as the National Pension System (NPS). The contribution limit was up to 10% of salary or gross income, and an additional tax benefit of ₹50,000 under Section 80CCD(1B) was also available.
The 10% of salary limit applied to salaried individuals and gross income applied to non-salaried individuals. If the employer also contributed to the pension scheme, the contribution up to the applicable limit could be claimed as a tax deduction under Section 80CCD(2).
Combined limit: Total deduction under Sections 80C, 80CCC and 80CCD(1) together could not exceed ₹1,50,000 for FY 2016-17. The additional deduction of ₹50,000 under Section 80CCD(1B) was over and above this ₹1.50 lakh limit.
Deduction Under Section 80D - Health Insurance Premium
Health insurance premium paid up to ₹25,000 could be claimed as deduction under Section 80D. For senior citizens, the deduction limit was ₹30,000.
For a senior citizen above 80 years who was not eligible to take health insurance, deduction was allowed up to ₹30,000 towards medical expenditure.
Section 80D Deduction Eligibility
| Description | Self, spouse and dependent children | Parents | Total deduction |
|---|---|---|---|
| All family members are below 60 years | Up to ₹25,000 | Up to ₹25,000 | ₹50,000 |
| Self, spouse and children below 60 years; any one parent above 60 years | Up to ₹25,000 | Up to ₹30,000 | ₹55,000 |
| Self or spouse attained 60 years; any one parent above 60 years | Up to ₹30,000 | Up to ₹30,000 | ₹60,000 |
Medical check-up expenses up to ₹5,000 per family could be claimed within the above overall limits. Family included self, spouse, dependent children and parents.
Deduction Under Section 80DD - Expenditure for Dependants with Disability
Deduction allowed for expenditure on dependants such as spouse, parents, children or siblings having at least 40% disability was ₹75,000.
In case of severe disability, the deduction was up to ₹1,25,000.
Deduction Under Section 80DDB - Specified Diseases and Ailments
An individual below 60 years could claim up to ₹40,000 for expenditure on specified critical ailments. This deduction could also be claimed for eligible dependants.
The deduction limit was ₹60,000 for senior citizens and ₹80,000 for very senior citizens above 80 years.
For claiming deduction under Section 80DDB, a doctor certificate or prescription from a specialist working in a government or private hospital was required.
Eligible diseases or ailments listed on the page
- Neurological diseases where the disability level was certified at 40% or above, including dementia, dystonia musculorum deformans, motor neuron disease, ataxia, chorea, hemiballismus, aphasia and Parkinson's disease
- Malignant cancers
- Full blown Acquired Immuno-Deficiency Syndrome (AIDS)
- Chronic renal failure
- Hematological disorders
- Hemophilia
- Thalassaemia
The page stated that Form No. 10-IA was to be submitted for claiming the deduction.
Deduction Under Section 24(b) - Interest Paid on Housing Loan
- Self-occupied property: deduction of ₹2,00,000 was allowed.
- Let-out property: the page stated that the entire interest amount was deductible.
Deduction Under Section 80E - Interest Paid on Education Loan
Deduction under Section 80E was allowed for interest paid on a loan taken for higher studies after completing the Senior Secondary Examination. The loan could be for higher education of the assessee, spouse, children or a student for whom the assessee was a legal guardian. Principal repayment was not deductible under this section.
There was no monetary ceiling on the interest amount deductible under Section 80E. The deduction was available for a maximum of eight years or until the interest was fully paid, whichever was earlier.
Deduction Under Section 80EE - First-Time Home Purchase
For FY 2016-17, first-time home buyers could claim an additional deduction up to ₹50,000 on home-loan interest under Section 80EE, subject to the conditions stated below:
- The home loan should have been sanctioned in FY 2016-17.
- The loan amount should have been less than ₹35 lakh.
- The value of the house should not have exceeded ₹50 lakh.
- The home buyer should not have owned any other residential house.
Deduction Under Section 80G - Donations and Contributions
The page stated that contributions to certain relief funds and charitable institutions could be claimed as deduction under Section 80G, subject to the applicable qualifying limits. Donations could be made by cheque, draft or cash, but deduction was not allowed for cash donations exceeding ₹10,000 for the period covered by this page.
Deduction Under Section 80GG - House Rent Paid
Eligible taxpayers not receiving HRA could claim deduction for qualifying house-rent expenditure under Section 80GG. The deduction was the lowest of the following:
- Rent paid minus 10% of adjusted total income.
- ₹5,000 per month from FY 2016-17.
- 25% of adjusted total income.
Adjusted Total Income for Section 80GG
Adjusted total income was determined from gross total income after excluding the specified capital gains and deductions under Sections 80C to 80U other than Section 80GG, along with the other exclusions referred to in the source page.
Deduction Under Section 80TTA - Interest on Savings Account
An individual or HUF could claim deduction up to ₹10,000 from gross total income for interest on savings-account deposits with a bank, co-operative society or post office. Section 80TTA deduction was not available for interest on fixed deposits.
Deduction Under Section 80U - Disability
A resident individual who was certified by the prescribed medical authority as a person with disability or severe disability could claim deduction under Section 80U. A valid certificate from the medical authority was required.
Medical Authorities Referred to on the Page
- A neurologist with an MD in Neurology.
- For children, a paediatric neurologist having an equivalent degree.
- A civil surgeon or Chief Medical Officer (CMO) of a government hospital.
Meaning of Disability for This Historical Page
A person with disability meant a person suffering from not less than 40% of a specified disability as certified by a medical authority. The source page referred to the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995.
The disabilities listed were blindness, low vision, leprosy-cured status, hearing impairment, locomotor disability, mental retardation and mental illness. The benefit was also stated to extend to persons with autism, cerebral palsy and multiple disabilities.
Severe Disability
Severe disability was described as 80% or more of one or more of the specified disabilities.
Medical Authority
The page described a medical authority as a hospital or institution specified under the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 by notification of the appropriate Government.
Rebate Under Section 87A - Income Below ₹5 Lakh
For FY 2016-17 (AY 2017-18), the page stated that eligible assessees earning below ₹5 lakh could obtain a rebate up to ₹5,000 under Section 87A.
If the income-tax liability was less than ₹5,000, the rebate was restricted to the amount of the income-tax liability.