Section - 80G, 80GG, - Taxation | Income Tax for assessment (Inter Level) PDF Download

Section 80G. Donations

1. Who can claim deduction : The deduction u/s 80G is available to all assessee who make donation in ‘specified fund’. The fund is divided into two categories. Part A fund and Part B fund.

2. Part A fund: Any amount donated irrespective of the gross total income is eligible for deduction. The deduction allowed is either 100% of donation made or 50% of donation made.

3. Part B fund: Where maximum permissible limit is specified to the fund. Amount of donated cannot exceed the maximum permissible limit. Maximum permissible limit is 10% of Adjusted Gross Total Income (GTI).

Computation of Adjusted GTI : It includes all incomes except special incomes which are LTCG and STCG (STT paid), exempted incomes and after allowing all deductions u/s 80C to 80U except section 80G.

Note : Any donation paid by cash shall be allowed as deduction only if the sum does not exceed Rs. 10,000 per transaction. In order to avail deduction for donation in excess of Rs. 10,000 of each transaction, the mode of payment should be any mode other than cash i.e. by cheque.

Part A fund added by FA 2015

P1: Compute deduction allowed u/s 80G.

Ans: 7,000; 11,000; 11,750; 3,500.

Solution:

Computation of Total Income

Computation of adjusted GTI

Note 1: To get the maximum deduction apportion the amount first to family planning, then the balance amount to charity.
Note 2: Dividend from Indian Company is exempt u/s 10(34), therefore do not form part of taxable income.

P2: Compute total income from the following informations. 

Ans: 81,000; 7,65,700; 1,32,850; 1,48,000.

Section 80GG. Deduction in respect of rent paid
1. He lives in a rented accommodation provided by employer or otherwise.
2. He is not in receipt of HRA.
3. He, spouse, minor child or the HUF of which he is a member must not own any RHP at the place where he works or if he owns then he should not claim any concession in respect of SOP for residence u/s 23(2).
4. Amount of deduction

Adjusted GTI (for the purpose of 80GG) is GTI – special income – all deductions u/s 80C to 80U except 80GG.

P1 : Compute total income from the following information:
Basic Salary  -  5,00,000
He is provided with accommodation by employer in Delhi @  - Rs. 70,000
Other Income  - 70,000
PPF contribution  - 1,55,000
Donation to National Fund for Control of Drug Abuse  - 2,50,000

Ans: [5,00,000+5,000+70,000=5,75,000 – 1,50,000–2,50,000–43,750 = 1,31,250]

P2: Calculate the deduction allowed under section 80GG.
Business income  - 55,000
Interest from debentures - 5,000
PPF contribution - 2,000
Payment made for preventive health check up in cash to Fortis Hospital  -  3,000
Rent paid by him for a house occupied by him for the purpose of his residence  - Rs. 1,250 per month. [CA N96]

Ans: 9,500; 45,500.

P3 : Compute his total income from the following information:
Business Income - 5,00,000
Other Income  - 1,50,000
PPF contribution - 1,50,000
Contribution towards pension plan of LIC - 10,000
Donation made to approved charitable purpose in cash - 25,000
Rent paid - 80,000

Ans: [5,00,000 + 1,50,000 = 6,00,000 – 1,50,000 – 30,000 = 4,70,000]
 

P4 : Compute total income : Basic Salary of Mrs. X Rs. 6,00,000. Her employer has taken on rent her own house on a monthly rent of Rs. 15,000 and the same has been provided for residence to Mrs. X. Company is recovering Rs. 2,000 per month as rent of house. She is owning only one house and payment of interest of Rs. 2,25,000 and principal of Rs. 1,00,000 was made for housing loan taken for purchase of house. Loan was borrowed on 1- 4 -1998.

Ans : (Sal : 6,00,000 + 66,000 = 6,66,000) (HP : 1,80,000 – 54,000 – 2,25,000 = – 99,000)

(TI : 6,66,000 – 99,000 = 5,67,000 – 80C 1,00,000 – 80GG 0 = 4,67,000)