Section 80C of the Income Tax Act

 Deduction in respect of life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc.

80C.  (1) 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, being the aggregate of the sums referred to in sub-section (2), as does not exceed  Rs 150000 w.e.f 01.4.2015 (Before this the limit was Rs 1,00,000)

Aslo Read  Section 80 C : Questions and Answers

Income Tax Return : Questions and Answers

Questions and Answers of Filing the Income Tax Return  

Q . What are the modes of filing return of income?

Return of income can be filed in paper mode or in e-filing mode. If return of income is filed through electronic mode, then the assessee has following two options:

(1)		E-filing using a Digital Signature
(2)		E-filing without a Digital Signature

Section 40A (3) : Dis allowance of Cash Payments

Sub Section 3 and 3A of Section 40 A are :-

(3) Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure.

(3A) Where an allowance has been made in the assessment for any year in respect of any liability incurred by the assessee for any expenditure and subsequently during any previous year (hereinafter referred to as subsequent year) the assessee makes payment in respect thereof, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, the payment so made shall be deemed to be the profits and gains of business or profession and accordingly chargeable to income-tax as income of the subsequent year if the payment or aggregate of payments made to a person in a day, exceeds twenty thousand rupees:

Section 40A (7): Disallowance of Gratuity

Section 40A (7): Disallowance of Gratuity :-

 (a) Subject to the provisions of clause (b), no deduction shall be allowed in respect of any provision whether called as such or by any other name) made by the assessee for the payment of gratuity to his employees on their retirement or on termination of their employment for any reason.

(b) Nothing in clause (a) shall apply in relation to any provision made by the assessee for the purpose of payment of a sum by way of any contribution towards an approved gratuity fund, or for the purpose of payment of any gratuity, that has become payable during the previous year.

Section 40A (9) of Income Tax Act 1961: Disallowance of Contribution

Section 40A(9)  of the Income Tax Act 1961:-

No deduction shall be allowed in respect of any sum paid by the assessee as an employer towards the setting up or formation of, or as contribution to, any fund, trust, company, association of persons, body of individuals, society registered under the Societies Registration Act, 1860 (21 of 1860), or other institution for any purpose, except where such sum is so paid, for the purposes and to the extent provided by or under clause (iv) [or clause (iva)] or clause (v) of sub-section (1) of section 36, or as required by or under any other law for the time being in force.

Section 40(a)(ia) of Income Tax Act 1961

Brief History of Section 40(a)(ia):-

The provision of section 40(a)(ia) of the IT Act, 1961 was brought on the Statute by the Finance Act, 2004, w.e.f. 1-4-2005.

- It provides for disallowance of any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted, or, after deduction, has not been paid during the P.Y., or in the subsequent year before the expiry of the time specified under section 200(1).

Disadvantages of filing a late return

Disadvantages of filing a late return

As per Income Tax Department of India : “A tax return may be furnished any time before the expiry of two years from the end of the financial year in which the income was earned’. This means that if you earned your income during FY 2013-14, you may file a belated return anytime before 31st March, 2016 ” . But there are some disadvantages if you don’t file your returns on time .   They are

• 1. You will not be able to carry forward your Business loss (Speculation or otherwise) , capital loss , loss due to 
•      owning and maintaining of race horses.
• 2.  Loss of Interest on refund : You may loose interest on refund u/s 244A specially in case if you are claiming a 3.  Major amount as refund.
• 4.  You cannot revise your return.
• 5.  late filing can delay processing for tax refunds.
• 6.  Incremental Interest U/s. 234A – If the tax has not been paid before the end of the tax year concerned and you file the return late, incremental interest at the rate of 1% per month will be payable on the unpaid amount after the due date. This is in addition to the 1% per month interest for non-payment of advance tax, that is, tax due after tax deduction at source exceeding Rs 10,000. Thus, late returns can result in an additional interest burden.

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