Click on the following links to read the amendments provided in the previous posts
4. Know everything about section 32AD
5. Amendment in section 36 of P/G/B/P
6. Amendment in scientific research
7. Amendment in section 80C, 80CCC and 80CCD
Today, we are posting the amendment related to section 80D to 80U
Amendment to section
80D
The table given below highlights provisions of section 80D
applicable from the assessment year 2016-17 onwards –
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Deduction in the case of
individual
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Deduction in the case of HUF
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For whose benefit payment can be made
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Family
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Parents
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Any member of HUF
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A.
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a. Medi-claim insurance premium
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Eligible
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Eligible
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Eligible
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b. Contribution to CGHS/notified scheme
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Eligible
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-
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-
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c. Preventive health check-up payment
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Eligible
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Eligible
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-
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Maximum deduction -
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General deduction [applicable in respect of (a), (b) and ( c)]
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Rs. 25,000
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Rs. 25,000
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Rs. 25,000
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Additional deduction [applicable only in case of (a) when
medi-claim policy is taken on the life of a senior citizen
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Rs. 5,000
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Rs. 5,000
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Rs. 5,000
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B.
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Medical expenditure on the health of a person who is a super
senior citizen if medi-claim insurance is not paid on the health of such
person
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Eligible
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Eligible
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Eligible
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Maximum deduction in respect of (B)
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Rs. 30,000
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Rs. 30,000
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Rs. 30,000
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C.
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Maximum deduction in respect of (A) and (B)
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Rs. 30,000
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Rs. 30,000
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Rs. 30,000
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Notes –
1.
Family includes individual, spouse of the
individual and dependent children of the individual.
2.
Parents include father and mother.
3.
The aggregate payment on account of preventive health
check-up of self, spouse, dependent children, father and mother cannot exceed
Rs. 5,000.
4.
The above payments [given under (A) and (B)]
should be made by any mode other than cash. However, payment on account of
preventive health check-up can be made by any mode (including cash).
5.
“Senior citizen” is a resident individual who is
at least 60 years of age at any time during the previous year.
6.
“ Super senior citizen” is a resident individual
who is at least 80 years of age at any time during the previous year.
Amendment
to section 80DD and 80U
The limit
of Rs. 50,000 has been increased to Rs. 75,000. Similarly, the monetary limit of Rs. 1,00,000 (applicable in the
case of severe disability) has been increased to Rs. 1,25,000.
Section
80DDB
Under the existing provisions of section
80DDB, a resident individual/HUF is allowed a deduction of sum not exceeding
Rs. 40,000, being the amount actually paid, for the medical treatment of
certain chronic and protracted diseases (such as cancer, full blown AIDS, etc.).
Amount of deduction is Rs. 40,000 (Rs. 60,000 in the case of senior citizen) or
the expenditure incurred, whichever is lower. A certificate in the prescribed
form from a neurologist, an oncologist, a urologist or such other specialist
working in a government hospital is required.
Amendments
to section 80DDB
A certificate from a doctor working in a
government hospital causes undue hardship to the persons intending to claim the
aforesaid deduction. Government hospitals at many places do not have doctors
specialized in the above branches of medicine. For this and other reasons, it
may be difficult for the taxpayer to obtain a certificate from a government
hospital. To avoid hardship, section 80DDB has been amended to provide that the
assessee will be required to obtain a prescription from a specialist doctor for
availing this deduction.
Section 80DDB has been further amended to
provide for a higher limit of deduction
of up to Rs. 80,000, for the expenditure incurred in respect of the medical
treatment of a super senior citizen (i.e. a resident individual who is at
least 80 years of age at any time during the previous year).
Amendment
to section 80G
List of institutions/funds under section
80G(2) has been modified. After the amendment, donation to the following
institutions will also be eligible for deduction –
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Donee institute
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Status of donor
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Amount of deduction
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Assessment year
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Swachh Bharat Kosh*
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Resident or non-resident
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100% of donation
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From AY 2015-16 onwards
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Clean Ganga Fund*
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Resident
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100% of donation
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From AY 2015-16 onwards
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National Fund for Control of Drug Abuse
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Resident or non-resident
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100% of donation
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From AY 2016-17 onwards
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*Donations to Swachh Bharat Kosh and Clean Ganga Fund will be eligible
for deduction under section 80G only if the amount is not spent by the assessee
in pursuance of CSR under section 135 of the Companies Act, 2013.
Section
80JJAA
The existing provisions contained in
section 80JJAA provide for deduction to an Indian company, deriving profits
from manufacture of goods in a factory. The quantum of deduction allowed is
equal to 30 per cent of “additional wages” paid to the new regular workmen
employed by the assessee in such factory in the previous year. This deduction
is available for 3 assessment years.
“Additional wages” for this purpose means
the wages paid to the “new regular workmen” in excess of 100 “workmen” employed
in the factory during the previous year. In the case of an existing factory,
deduction under section 80JJAA is not available if the increase in number of
“regular workmen” employed during the current year is less than 10 per cent of
the existing number of “workmen” employed during the current year is less than
10 per cent of the existing number of “workmen” employed in the undertaking as
on the last day of the preceding year.
A person employed in a supervisory capacity
(drawing wages exceeding Rs. 10,000 per month) or a person employed in
managerial/administrative capacity, is not included in “workmen” or “regular
workmen”. Casual workers, workers employed for contract labour or workers
employed for less than 300 days during the year, are “workmen” but not “regular
workmen” for this purpose.
Amendments
to section 80JJAA
The following amendments have been made to
the scheme of section 80JJAA from the assessment year 2016-17 –
1.
The benefit
under section 80JJAA has been extended to all assesses having manufacturing
units rather than restricting it to corporate assesses only.
2. Further,
the benefit has been extended to units
employing even 50 (instead of 100) regular workmen.
3.
Deduction under section 80JJAA will not be
available if the factory is acquired by the assessee by way of transfer from
any other person or as a result of any business re-organisation.
Example: ABC Ltd. is a
manufacturing company. It owns a factory in Andhra Pradesh since 2008. ABC Ltd.
is not eligible for any deduction under section 80JJAA up to the assessment
year 2015-16, as it employees less than 100 workmen in the factory. On March
31, 2015, it has 49 workmen out of which 3 are casual workmen. On May 1, 2015,
the company engages 8 “regular workmen” (wages being Rs. 6,000 per month). Can
ABC Ltd. avail deduction under section 80JJAA?
Deduction under section 80JJAA is not available in the case of an
existing assessee if number of newly appointed “regular workmen” is lower than
10% of the strength of “workmen” as on the last day of the preceding year. In
this case, ABC Ltd. has 49 workmen on March 31, 2015. 10% of it comes to 4.9.
Deduction under section 80JJAA is not available if number of newly appointed
regular workmen is 4 or less than 4 (such number should be 5 or more than 5).
In this case, the company has appointed 8 regular workmen during the previous
year 2015-16. Therefore, ABC Ltd. is
eligible for deduction under section 80JJAA. However, assessee cannot avail
the deduction in respect of wages payable to initial 50 workmen.
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49 workmen as on April 1, 2015
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No deduction under section 80JJAA
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1 regular workman appointed on May 1, 2015
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No deduction under section 80JJAA
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7 regular workmen appointed on May 1, 2015
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Deduction available u/s 80JJAA
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Therefore, the amount of deduction under
section 80JJAA is Rs. 1,38,600 (30% of Rs. 6,000 x 11 months x 7 regular
workmen). Besides, wages payable to all 57 workmen would be deductible under
section 37(1).
