What are the rules for claiming deductions on investments and expenses?
The Income Tax Act allows several deductions from total income for investments and expenses under Chapter VI-A (Sections 80C to 80U). Major deductions include 80C for investments up to Rs. 1.5 lakh (PPF, LIC, principal repayment etc.), 80D for health insurance premiums, 80E for education loan interest, and 80G for eligible donations. Section 80GG provides deduction for rent paid. Note: Finance Act 2025 has restricted deduction under 80EEB for interest on electric vehicle loans to Rs. 1 lakh from FY 2025-26. Supporting Case Law: Director of Income Tax vs Sushil Kumar & Co. (2022 – Supreme Court) – Disallowed deduction under Section 80G as donation was made with profit motive. Current Status: The eligibility conditions and caps for different deductions are frequently litigated, especially regarding evidence requirements, investments qualifying under Section 80C, and disallowances.
