Chapter 8: Deductions from Gross Total Income | CA Final DT

Statutory Framework

8.1 General Provisions Governing Deductions [Section 122]

Chapter VIII of Income-tax Act, 2025 • Sections 122 to 154 • Corresponding 1961 Act: Chapter VI-A (Sections 80A to 80U)

Under the Income-tax Act, 2025, taxable Total Income is computed by consolidating the net taxable income from all five heads into Gross Total Income (GTI), and then subtracting eligible deductions permissible under Chapter VIII (Sections 122 to 154).

Computation of Total Income

$$\text{Total Income} = \text{Gross Total Income (GTI)} - \sum \text{Deductions under Chapter VIII (Sections 122 to 154)}$$

Basic Statutory Rules Governing Chapter VIII Deductions [Section 122]

Rule 1 GTI as Maximum Ceiling [Section 122(2)]

The aggregate amount of deductions under Chapter VIII shall not, in any case, exceed the Gross Total Income of the assessee.

An assessee can never have a loss or negative income figure as a result of claiming Chapter VIII deductions! If GTI is ₹1,20,000 and eligible Section 123 investments are ₹1,50,000, the deduction is restricted strictly to ₹1,20,000, reducing Total Income to Nil.

Rule 2 No Deductions from Special Rate Incomes

Deductions under Chapter VIII are allowable only from normal incomes included in GTI. Deductions are strictly prohibited against:

Long-term capital gains taxable u/s 197 or u/s 198 [formerly 112 & 112A].
Short-term capital gains on STT-paid equity shares taxable u/s 196 [formerly 111A].
Winnings from lotteries, crossword puzzles, races, betting taxable u/s 94 [formerly 115BB].
Undisclosed income taxable u/s 199 [formerly 115BBE].

Rule 3 Double Deduction Bar [Section 122(3) & (4)]

Where a deduction of any profit or gain is allowed under any provision of Part C of Chapter VIII (Sections 138 to 152), deduction to that extent shall not be allowed again under any other provision of the Act!
The deduction shall not exceed the net profits and gains of the specific undertaking, unit, or enterprise.
If a member of an AOP/BOI is assessed, no double deduction is allowable in respect of his share of profit.

Rule 4 Inter-Unit Transactions at Market Value [Section 122(6) & (7)]

Where any goods or services held for an eligible business are transferred to any other business carried on by the assessee (or vice versa), and the transfer consideration does not correspond to the open market value, the profits of the eligible business shall be recomputed by the Assessing Officer taking the market value.

If it constitutes a Specified Domestic Transaction referred to in Section 164, market value means Arm's Length Price (ALP).

Mandatory Timely Return Filing for Profit-Linked Deductions [Section 122(5)]

Section 122(5) (formerly Section 80AC) mandates that no deduction under Part C of Chapter VIII (Sections 138 to 152) shall be allowed to an assessee unless he furnishes a return of income for that tax year on or before the due date specified under Section 263(1) [formerly 139(1)]!

If a return of income is filed belatedly under Section 263(4), the assessee completely forfeits the right to claim profit-linked tax holidays under Sections 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151 and 152!

ICAI Illustration 1

Mandatory Audit Report vs Timely Filing Deadline [Section 122(5)]

Problem Statement:

Examine the following statements with regard to the provisions of the Income-tax Act, 2025:

(a) For grant of deduction u/s 141, filing of audit report in prescribed form is a must for a corporate assessee, even if the return of income is filed after the due date specified under section 263(1).

(b) Filing of a belated return under section 263(4) of the Income-tax Act, 2025 will debar a company from claiming deduction with respect to its profits from housing projects under section 142.

Solution:

(a) The statement is NOT correct:

Section 122(5) of the Income-tax Act, 2025 explicitly stipulates compulsory filing of return of income on or before the due date specified under Section 263(1) as a mandatory pre-condition for claiming deduction under Section 141 (Part C of Chapter VIII). Therefore, if a corporate assessee fails to file its return within the Section 263(1) due date, mere filing of an audit report will NOT entitle the company to claim deduction u/s 141!

(b) The statement is CORRECT:

As per Section 122(5), an assessee has to furnish its return of income on or before the due date specified under Section 263(1) to be eligible for claiming deduction under Section 142 (profits from housing projects, falling under Part C of Chapter VIII). Consequently, filing a belated return under Section 263(4) will disentitle the company from claiming deduction under Section 142.

Section 123

8.2 Deduction in Respect of Investment in Specified Assets [Section 123]

Corresponding 1961 Act: Section 80C • Read with Schedule XV • Maximum Ceiling: ₹1,50,000

Section 123 read with Schedule XV (Para 2) provides a deduction from Gross Total Income to an Individual or a Hindu Undivided Family (HUF) in respect of amounts paid or deposited in specified financial assets, life insurance policies, provident funds, pension schemes, housing loans, and education fees during the tax year.

Eligible Assessees & Maximum Aggregate Ceiling [Section 123(1)]

Eligible Assessees: Available exclusively to Individuals and HUFs (Not available to Companies, Partnership Firms, LLPs, or AOPs/BOIs).
Regime Limitation: Deduction under Section 123 is available ONLY if the assessee exercises the option of shifting out of the default tax regime (Normal Regime). It is strictly disallowed under the default tax regime u/s 202(1)!
Maximum Monetary Limit: The total aggregate deduction under Section 123 shall not exceed ₹1,50,000 in any tax year.

1. Life Insurance Premium Limits [Schedule XV, Para 2]

Premiums paid on life insurance policies qualify for deduction. The policy must cover:

In case of an Individual: Self, spouse, and any child (child may be dependent or independent, minor or major, married or unmarried).
In case of a HUF: Any member of the family.

Date of Issue of Life Insurance Policy	Category of Insured Person	Maximum Permissible Premium (Cap on Deduction)
Issued on or before 31.03.2012	Any person (Self, Spouse, Child, Member)	Up to 20% of the actual capital sum assured
Issued on or after 01.04.2012 (General Rule)	Any person other than disabled	Up to 10% of the actual capital sum assured
Issued on or after 01.04.2013 (Special Disability Carve-Out)	Person with disability / severe disability u/s 154 or suffering from disease/ailment specified u/s 128	Up to 15% of the actual capital sum assured

Meaning of "Actual Capital Sum Assured": It means the minimum amount assured under the policy on the happening of the insured event at any time throughout the term of the policy, excluding: (i) the value of any premiums agreed to be returned; or (ii) any benefit by way of bonus or otherwise over and above the sum actually assured.

2. Comprehensive List of Other Eligible Specified Assets [Schedule XV]

Provident Funds & Social Schemes

Public Provident Fund (PPF): Subscribed in the name of self, spouse, or any child (Individual); or any member (HUF). Maximum deposit ₹1,50,000 per year.
Statutory Provident Fund (SPF) & Recognized Provident Fund (RPF): Employee's contribution.
Approved Superannuation Fund (ASF): Employee's contribution.
Sukanya Samriddhi Account Scheme: Deposits made in the name of any girl child (or child for whom individual is legal guardian). Interest and maturity amounts are 100% exempt under Schedule II.

Small Savings & Deposits

National Savings Certificates (NSC VIII Issue): Subscription amount and accrued interest deemed reinvested in years 1 to 4 (5th year interest is not reinvested).
Senior Citizens Savings Scheme (SCSS) Rules, 2004: 5-year lock-in deposit.
Post Office 5-Year Time Deposit: Deposit in an account under Post Office Time Deposit Rules, 1981.
Scheduled Bank 5-Year Term Deposit: Fixed deposit for ≥ 5 years under notified scheme.
NABARD Notified Bonds: Subscription to rural development bonds.

Housing Loan Principal & Transfer Costs

Repayment of Housing Loan Principal: Borrowed for purchase/construction of a residential house whose income is taxable under "Income from house property", from Govt, bank, LIC, NHB, or public housing finance company. Construction must be completed!
Stamp Duty & Registration Charges: Paid for transfer of the residential house property (eligible in the year of payment even if loan is not taken).
Inadmissible: Loans borrowed from relatives, friends, or non-approved entities; admission fees/shares; cost of alterations/repairs.

Education, Mutual Funds & Equities

Tuition Fees for Children: Paid at admission or thereafter for full-time education to any school, college, university in India for up to 2 children. (Development fees, transport, coaching, or foreign education fees are strictly ineligible).
Equity Linked Savings Scheme (ELSS): Units of notified mutual funds (3-year lock-in).
Unit Linked Insurance Plan (ULIP): ULIP of UTI or LIC (Self, spouse, child).
Eligible Issue of Capital: Shares/debentures of infrastructure public companies approved by CBDT.

Lock-in Periods & Recapture of Deduction upon Premature Transfer

Life Insurance: If policy is terminated or premium not paid for 2 years (single premium 2 years), deduction allowed earlier is deemed income of the year of termination.
Residential House Property: If house is transferred before the expiry of 5 years from the end of the financial year in which possession was obtained, all aggregate deductions claimed for principal repayment and stamp duty in earlier years are recaptured as taxable income of the year of sale!
Senior Citizens Savings Scheme / Post Office TD: Withdrawal before 5 years is taxable in year of receipt.
ELSS Mutual Funds / Shares: Minimum lock-in of 3 years.

ICAI Illustration 2

Life Insurance Premium Caps (20%, 10% & 15% Rules)

Problem Statement:

Compute the eligible deduction under section 123 for tax year 2026-27 in respect of life insurance premium paid by Mr. Hari:

Date of Issue of Policy	Person Insured	Actual Capital Sum Assured (₹)	Premium Paid in TY 2026-27 (₹)
30/03/2012	Self	9,00,000	48,000
01/05/2019	Spouse	1,50,000	20,000
01/06/2022	Handicapped son (Section 154 disability)	4,00,000	80,000

Solution:

Computation of Deduction u/s 123 for Tax Year 2026-27

Policy Issue Date	Person Insured	Sum Assured (₹)	Premium Paid (₹)	Statutory Limit %	Eligible Deduction (₹)
30/03/2012	Self	9,00,000	48,000	20% (Max ₹1,80,000)	48,000
01/05/2019	Spouse	1,50,000	20,000	10% (Max ₹15,000)	15,000
01/06/2022	Handicapped Son (Section 154 disability)	4,00,000	80,000	15% (Max ₹60,000)	60,000
Total Eligible Deduction under Section 123					₹ 1,23,000

ICAI Illustration 3

Default Tax Regime Bar on Section 123

Problem Statement:

What would be your answer to Illustration 2 if Mr. Hari pays tax under the default tax regime under section 202(1)?

Solution:

If Mr. Hari pays tax under the default tax regime under Section 202(1), he would NOT be entitled to any deduction under Section 123.

Deduction allowable under Section 123 = NIL.

ICAI Illustration 4

Section 123 Overall Ceiling Restriction (₹1,50,000)

Problem Statement:

An individual assessee, resident in India, has made the following payments during the tax year 2026-27:

Contribution to Public Provident Fund (PPF): ₹1,50,000
Insurance premium paid on life of spouse (policy taken 01.04.2019, Sum Assured ₹3,00,000): ₹40,000

What is the deduction allowable under section 123 for tax year 2026-27 if assessee shifts out of the default tax regime?

Solution:

Particulars	Amount (₹)
Deposit in Public Provident Fund (PPF)	1,50,000
Insurance premium on life of spouse (Restricted to 10% of sum assured ₹3,00,000)	30,000
Total Qualifying Investments	1,80,000
Deduction allowable under Section 123 (Restricted to maximum statutory ceiling)	₹ 1,50,000

ICAI Illustration 5

Chapter VIII Deduction vs Gross Total Income Cap (Lottery Exclusion)

Problem Statement:

Mr. Binu, aged about 40 years, has earned lottery income of ₹1,30,000 (gross) during the tax year 2026-27. He also has interest on fixed deposit of ₹35,000. He invested ₹20,000 in Public Provident Fund and ₹34,000 in a 5-year post office term deposit.

What is his total income for the tax year 2026-27 under the normal provisions of the Act?

Solution:

Computation of Total Income of Mr. Binu for Tax Year 2026-27

Particulars	Amount (₹)	Amount (₹)
Income from other sources:
Interest on Fixed Deposit	35,000
Lottery income (taxable @ flat rate u/s 94)	1,30,000	1,65,000
Gross Total Income		1,65,000
Less: Deductions under Chapter VIII: Deposit in PPF: ₹20,000 5-year Post Office Term Deposit: ₹34,000 Total eligible investments: ₹54,000		(-) 35,000
Total Income		₹ 1,30,000

Cardinal Statutory Principle:

Though the qualifying investments under Section 123 amount to ₹54,000, Section 94 prohibits any Chapter VIII deduction against casual income (lottery winnings). Therefore, deductions under Chapter VIII can only be set off against the remaining income of ₹35,000 (FD interest). The balance ₹19,000 of investment is unabsorbed and lapses.

Section 124

8.2B Contribution to National Pension System (NPS) [Section 124]

Corresponding 1961 Act: Section 80CCD • Subsections (1), (2), (3) & (4) [NPS Vatsalya & UPS] • Default Regime vs Normal Regime Impact

Section 124 governs deductions for contributions made to the National Pension System (NPS), Atal Pension Yojana (APY), Unified Pension Scheme (UPS), and the newly introduced NPS Vatsalya Scheme.

Sub-section	Nature of Contribution	Statutory Limit & Quantum of Deduction	Available Under Default Regime u/s 202?
Section 124(1) (Employee / Individual)	Contribution by Employee or Self-Employed Individual to NPS Account	Salaried Employee: Up to 10% of Salary (Basic + DA forming part). Self-Employed: Up to 20% of Gross Total Income. Note: Subject to the aggregate ceiling of ₹1,50,000 along with Section 123!	NO ✗ (Normal Regime Only)
Section 124(3) (Additional Self Contribution)	Additional Voluntary Contribution to NPS Tier-I Account	Up to ₹50,000. Exclusive Benefit: Over and above the ₹1,50,000 limit of Section 123!	NO ✗ (Normal Regime Only)
Section 124(4) (NPS Vatsalya Scheme)	Contribution made to account of minor child under NPS Vatsalya	Deduction for amount deposited to the minor's account up to ₹50,000.	NO ✗ (Normal Regime Only)
Section 124(1)/(2) (Employer's Contribution)	Contribution made by Employer to the Pension Scheme Account of Employee	Central / State Government: Up to 14% of Salary. Other Employers (Private Sector): Up to 14% of Salary under Section 202 default regime (10% under normal regime). Crucial: First added to gross salary under Section 16, then allowed as 100% deduction!	YES ✓ (Allowed in BOTH Regimes)

Salary Definition for Section 124

$$\text{Salary} = \text{Basic Salary} + \text{Dearness Allowance (if terms of employment so provide, i.e. forming part of retirement benefits)}$$

All other allowances, bonuses, commissions (even fixed turnover commission), and perquisites are strictly excluded.

Tax Treatment on NPS Withdrawals & Unified Pension Scheme (UPS)

Lump-Sum Payment on Closure [Schedule II, Table S. No. 6]: Up to 60% of the total accumulated corpus received on closure or opting out is 100% exempt from tax. The remaining 40% must be utilized to purchase an annuity (annuity pension received periodically is taxable).
Partial Withdrawal [Schedule III, Table S. No. 4]: Partial withdrawal from NPS up to 25% of the employee's own contribution is 100% exempt from tax.
Unified Pension Scheme (UPS) [Section 124(11)]: Amount standing to the credit of an assessee in UPS received on closure or opting out is deemed taxable income, unless rolled over into approved annuity plans.

ICAI Illustration 6

NPS Deduction Breakdown: Normal Regime vs Default Regime

Problem Statement:

The basic salary of Mr. Arjun is ₹1,00,000 p.m. He is entitled to Dearness Allowance, which is 40% of basic salary. 50% of Dearness Allowance forms part of retirement benefits.

Both Mr. Arjun and his employer contribute 15% of basic salary to the pension scheme referred to in Section 124.

Compute the deduction allowable under Section 123 and Section 124, assuming that:

(i) He has exercised the option of shifting out of the default tax regime (Normal Regime).

(ii) He pays tax under the default tax regime under Section 202(1).

Solution:

Computation of Relevant Salary for Section 124

$$\text{Basic Salary} = ₹1,00,000 \times 12 = ₹12,00,000$$ $$\text{DA forming part} = 50\% \text{ of } (40\% \text{ of } ₹12,00,000) = ₹2,40,000$$ $$\text{Salary for Section 124} = ₹12,00,000 + ₹2,40,000 = ₹14,40,000$$

(i) If Mr. Arjun Shifts Out of Default Tax Regime (Normal Provisions)

Particulars	Amount (₹)
Employee's Contribution (Actual: 15% of basic ₹12,00,000 = ₹1,80,000):
(a) Deduction u/s 123 read with Schedule XV [Restricted to 10% of salary ₹14,40,000]	1,44,000
(b) Additional deduction u/s 124(3) [Balance ₹1,80,000 − ₹1,44,000 = ₹36,000; allowable up to ₹50,000]	36,000
Total Deduction in Respect of Employee's Contribution	1,80,000
Employer's Contribution [Section 124(1)/(2)]: Actual contribution = ₹1,80,000. Restricted to 10% of salary (₹14,40,000 × 10%) under normal regime	1,44,000
Total Deduction Allowable under Chapter VIII	₹ 3,24,000

(ii) If Mr. Arjun Pays Tax Under Default Tax Regime [Section 202(1)]

Employee's contribution under Section 123 (₹1,44,000) and Section 124(3) (₹36,000) is STRICTLY DISALLOWED under the default tax regime.
Employer's contribution under Section 124(1)/(2) IS ALLOWED up to 14% of salary under Section 202(1) (i.e. ₹14,40,000 × 14% = ₹2,01,600, restricted to actual ₹1,80,000).

Total Deduction under Section 202 Default Regime = ₹ 1,80,000 (Employer's Contribution).

ICAI Illustration 7

Section 123 Inter-Play with Multi-Scheme Investments

Problem Statement:

Gross Total Income of Mr. Neeraj for tax year 2026-27 is ₹9,00,000. He made the following payments:

Contribution to PPF: ₹1,30,000
Payment of tuition fees for son studying in Class X in Mumbai: ₹45,000
Repayment of housing loan taken from Canara Bank: ₹30,000
Contribution to approved pension fund of LIC: ₹1,55,000

Compute the eligible deduction under Section 123 for the tax year 2026-27 under the normal provisions.

Solution:

Eligible Specified Investment / Payment	Amount (₹)
Contribution to PPF	1,30,000
Tuition fees paid for full-time education of son	45,000
Repayment of housing loan to Canara Bank	30,000
Contribution to approved pension fund of LIC	1,55,000
Total Qualifying Payments	3,60,000
Deduction Allowable under Section 123 (Statutory Max Ceiling)	₹ 1,50,000

Section 125

8.2C Contribution to Agnipath Scheme [Section 125]

Corresponding 1961 Act: Section 80CCH • Agniveer Corpus Fund Deductions

Section 125 provides deductions in respect of contributions made to the Agniveer Corpus Fund under the Agnipath Scheme launched by the Central Government for Indian Armed Forces recruitment:

Section 125(1) Agniveer's Own Contribution

Each Agniveer contributes 30% of his monthly customized package to the Agniveer Corpus Fund.
Deduction is allowed for the full amount so paid or deposited by the individual.
Regime Limitation: Available ONLY if the individual shifts out of the default tax regime (Normal Regime).

Section 125(2) Central Government's Matching Contribution

The Central Government makes an equal matching contribution of 30% to the Agniveer Corpus Fund account.
This matching contribution is first included in the gross salary of the individual under Section 16, and then a 100% deduction is allowed under Section 125(2)!
Crucial Rule: Deduction u/s 125(2) is available irrespective of whether the individual pays tax under normal regime or default regime u/s 202!

Exemption of Seva Nidhi Package on Exit [Schedule II, Table S. No. 17]

Any payment received from the Agniveer Corpus Fund (the final Seva Nidhi package along with accrued interest) by a person enrolled under the Agnipath Scheme or his nominee upon completion of service is 100% EXEMPT FROM TAX under Schedule II.

Section 126

8.2D Deduction for Health Insurance Premium [Section 126]

Corresponding 1961 Act: Section 80D • Self, Family & Senior Citizen Parents • Preventive Check-up & Medical Expenditure

Section 126 allows an Individual or HUF shifting out of the default tax regime a deduction for health insurance premiums, contributions to the Central Government Health Scheme (CGHS), preventive health check-up costs, and medical expenditure incurred on senior citizens.

Category of Persons Insured / Covered	Normal Assessee Limit	Resident Senior Citizen Limit (Age 60+)
Category 1: Self, Spouse & Dependant Children • Medical Insurance Premium (Non-Cash) • Contribution to CGHS / Notified Scheme • Preventive Health Check-up (Max ₹5,000, Cash allowed) • Medical expenditure if not covered by any health insurance	₹ 25,000	₹ 50,000 (If self or spouse is age 60+)
Category 2: Parents (Father / Mother) • Parents may be dependent or independent • Medical Insurance Premium (Non-Cash) • Preventive Health Check-up (within overall ₹5,000 limit) • Medical expenditure if parent is not covered by any health insurance	₹ 25,000	₹ 50,000 (If either father or mother is age 60+)
Maximum Aggregate Possible Deduction (Both Categories Senior Citizens)	₹ 1,00,000 (₹ 50,000 + ₹ 50,000)

Essential Conditions for Claiming Section 126

Mode of Payment: Premium must be paid by any mode other than cash (cheque, draft, net banking, UPI). Premium paid in cash is strictly disallowed!
Cash Exception: Payment on account of preventive health check-up CAN be made in cash. Aggregate preventive check-up deduction across both categories cannot exceed ₹5,000.
Medical Expenditure Rule: Deduction for medical expenditure up to ₹50,000 is allowed only in respect of resident senior citizens who are NOT covered under any health insurance policy.
Lump-Sum Multi-Year Premium [Section 126(8)(b)]: Where premium is paid in lump sum for more than 1 year, deduction allowed each relevant tax year equals: $$\text{Deduction per year} = \frac{\text{Lump-Sum Premium Paid}}{\text{Total Number of Relevant Tax Years}}$$
HUF Deduction: Allowed up to ₹25,000 (or ₹50,000 if any member is a senior citizen) for premium paid or medical expenditure on family members.

ICAI Illustration 8

Mediclaim, CGHS, Senior Parents & Preventive Health Check-Up

Problem Statement:

Mr. Ravi, aged 45 years, paid the following medical expenses during the tax year 2026-27:

Medical insurance premium for self and spouse (by cheque): ₹22,000
Contribution to CGHS (by cheque): ₹4,000
Preventive health check-up for self and spouse (in cash): ₹5,000
Medical insurance premium for father (aged 68 years) (by cheque): ₹32,000
Medical expenditure on father's health (no insurance cover) (by cheque): ₹15,000
Preventive health check-up for father (in cash): ₹4,000

Compute deduction allowable under Section 126 for tax year 2026-27 (Normal regime).

Solution:

Particulars	Actual Paid (₹)	Deduction Allowable (₹)
A. Self and Spouse (Non-Senior Citizen):
(i) Medical insurance premium for self & spouse	22,000	22,000
(ii) Contribution to CGHS [Restricted to ₹25,000 − ₹22,000]	4,000	3,000
(iii) Preventive health check-up [Limit exhausted by (i) & (ii)]	5,000	Nil
Sub-total A (Capped at statutory ceiling)	31,000	25,000
B. Father (Resident Senior Citizen, Aged 68):
(i) Medical insurance premium for father	32,000	32,000
(ii) Medical expenditure [Not allowable since father is already covered by insurance]	15,000	Nil
(iii) Preventive health check-up for father [Allowable in cash up to overall ₹5,000 cap]	4,000	4,000
Sub-total B (Within ₹50,000 limit)	51,000	36,000
Total Deduction Allowable under Section 126 (A + B)		₹ 61,000

ICAI Illustration 9

Uninsured Senior Parents: Medical Expenditure Claim

Problem Statement:

Mr. Yatin, aged 48 years, paid medical expenses during tax year 2026-27 (opted out of default regime):

Medical insurance premium for self, spouse & dependent children: ₹23,000 (by cheque)
Contribution to CGHS: ₹6,500 (by cheque)
Mediclaim premium paid for mother (over 60 years): ₹31,000 (by cheque)
Medical expenditure incurred for father (over 60 years, not covered by any insurance): ₹28,000 (by cheque)

Compute deduction allowable under Section 126.

Solution:

Particulars	Amount (₹)	Deduction Allowable (₹)
Medical insurance premium for self, spouse & children	23,000
Contribution to CGHS	6,500
Total (₹29,500 restricted to statutory ceiling)	29,500	25,000
Mediclaim premium for mother (senior citizen)	31,000
Medical expenditure for father (senior citizen, uninsured)	28,000
Total parents' claim (₹59,000 restricted to senior citizen ceiling)	59,000	50,000
Total Deduction Allowable under Section 126		₹ 75,000

Section 127

8.2E Maintenance & Medical Treatment of a Dependant Disabled [Section 127]

Corresponding 1961 Act: Section 80DD • Flat Deduction of ₹75,000 / ₹1,25,000

Section 127 grants a flat deduction to a resident Individual or HUF who has incurred expenditure on the medical treatment (including nursing), training, and rehabilitation of a dependant with disability, or deposited funds in an approved scheme (like LIC) for the maintenance of such dependant.

Normal Disability Disability ≥ 40% and < 80%

₹ 75,000

Flat statutory deduction irrespective of actual expenditure incurred! Even if actual expenses are ₹10,000, full ₹75,000 is allowed.

Severe Disability Disability ≥ 80%

₹ 1,25,000

Flat statutory deduction of ₹1,25,000 for a person with severe disability (80% or more disability or autism, cerebral palsy, multiple disabilities).

Meaning of "Dependant" [Section 127]

Individual: The spouse, children, parents, brothers, and sisters of the individual, who are wholly or mainly dependant on such individual for support and maintenance, and who have not claimed deduction u/s 154 (self-disability).
HUF: Any member of the HUF dependant wholly or mainly on the HUF for support.

Section 128

8.2F Deduction for Medical Treatment of Specified Diseases [Section 128]

Corresponding 1961 Act: Section 80DDB • Specified Diseases (Cancer, AIDS, Renal Failure, etc.) • ₹40,000 / ₹1,00,000 Cap

Section 128 allows a deduction to a resident Individual or HUF for sums actually paid during the tax year for the medical treatment of specified diseases or ailments (as prescribed in the Rules, e.g., Neurological diseases, Malignant Cancers, Full Blown AIDS, Chronic Renal Failure, Hemophilia, Thalassaemia) for self or dependant:

Category of Patient	Quantum of Deduction Allowable [Section 128]
Non-Senior Citizen Patient (Age < 60 years)	Amount actually paid OR ₹ 40,000, whichever is LESS.
Resident Senior Citizen Patient (Age 60 years or more)	Amount actually paid OR ₹ 1,00,000, whichever is LESS.

Reduction for Insurance / Employer Reimbursement

The deduction allowable under Section 128 shall be reduced by the amount received, if any, under an insurance from an insurer, or reimbursed by an employer, for the medical treatment of the person.

$$\text{Eligible Deduction} = \min(\text{Actual Expenditure}, \text{₹40,000 or ₹1,00,000}) - \text{Insurance / Employer Reimbursement}$$

Section 129

8.2G Interest on Loan Taken for Higher Education [Section 129]

Corresponding 1961 Act: Section 80E • 8 Consecutive Tax Years • No Monetary Ceiling

Section 129 allows an Individual assessee shifting out of the default tax regime a deduction for any amount paid by way of interest on loan taken for pursuing higher education.

Eligible Beneficiaries & Purpose

Eligible Persons: Higher education of the individual himself, his/her spouse, his/her children, or the student for whom the individual is the legal guardian.
Higher Education Defined: Any course of study pursued after passing the Senior Secondary Examination or its equivalent (includes graduation, post-graduation, professional degrees, vocational diplomas, whether in India or abroad).
Lending Entities: Loan must be borrowed from any financial institution (bank) or an approved charitable institution. (Loans from family/friends are not eligible).

Quantum & Period of Deduction

Quantum: 100% of interest paid during the tax year out of income chargeable to tax. There is NO upper monetary limit (whether interest is ₹50,000 or ₹10,00,000, entire amount is deductible!).
Maximum Time Limit: Deductible for a maximum of 8 consecutive tax years starting from the tax year in which the assessee starts paying interest on the loan, or until the interest is paid in full, whichever is earlier.
Principal Repayment: No deduction is available for repayment of the principal loan amount.

ICAI Illustration 10

Higher Education Loans for Multiple Family Members

Problem Statement:

Mr. Gopal has taken three education loans on April 1, 2026 from a scheduled bank:

Loan Particulars	Loan 1	Loan 2	Loan 3
For whose education:	Mr. Gopal (Self)	Son of Gopal	Daughter of Gopal
Course of study:	MBA	B.Tech.	B.Tech.
Amount of loan:	₹ 6,00,000	₹ 3,00,000	₹ 4,50,000
Annual interest paid in TY 2026-27:	₹ 20,000	₹ 40,000	₹ 18,000

Compute deduction allowable under Section 129 for tax year 2026-27 (opted out of default regime).

Solution:

Section 129 allows deduction for interest paid on loan taken from a financial institution for higher education of self, spouse, or children.

Interest on Loan 1 for self (MBA): ₹20,000 — Fully eligible.
Interest on Loan 2 for son (B.Tech): ₹40,000 — Fully eligible.
Interest on Loan 3 for daughter (B.Tech): ₹18,000 — Fully eligible.

Total Deduction Allowable u/s 129

$$\text{Total Deduction} = ₹20,000 + ₹40,000 + ₹18,000 = ₹78,000$$

Section 130 & 131

8.2H Interest on Loans for Acquisition of Residential Property [Sections 130 & 131]

Corresponding 1961 Act: Sections 80EE & 80EEA • Over & Above ₹2,00,000 House Property Interest u/s 22

The Act provides two specific legacy incentive windows for individual first-time home buyers to claim additional interest deductions over and above the ₹2,00,000 limit available under Section 22 / Section 24(b):

Section 130 Residential Property Loan [Legacy 80EE]

Sanction Window: Loan sanctioned by financial institution/HFC between 01.04.2016 and 31.03.2017.
Loan Cap: Loan amount ≤ ₹35 lakhs.
Property Cap: Value of house property ≤ ₹50 lakhs.
First-time Buyer: Does not own any residential house property on date of loan sanction.
Maximum Deduction: Up to ₹50,000 per tax year.

Section 131 Affordable Housing Loan [Legacy 80EEA]

Sanction Window: Loan sanctioned between 01.04.2019 and 31.03.2022.
Stamp Duty Cap: Stamp duty value of house ≤ ₹45 lakhs.
First-time Buyer: Does not own any residential house on date of loan sanction.
No Double Benefit: Assessee not eligible to claim deduction u/s 130.
Maximum Deduction: Up to ₹1,50,000 per tax year.

ICAI Illustration 11

Section 130 Housing Interest over Section 22 Limit

Problem Statement:

Mr. Ankur purchased a self-occupied residential house property at a cost of ₹48 lakhs on 01.04.2017, taking a housing loan of ₹35 lakhs from Bank of India @ 11% p.a. on the same date. The loan was sanctioned on 10.03.2017. Entire loan was outstanding on 31.03.2027. Compute deduction for tax year 2026-27 under the normal provisions.

Solution:

Particulars	Amount (₹)
Total annual interest payable (₹35,00,000 × 11%)	3,85,000
Less: Deduction under Section 22 / 24(b) (Capped for self-occupied property)	(-) 2,00,000
Balance unabsorbed interest	1,85,000
Deduction under Section 130 Loan sanctioned between 1.4.2016 and 31.3.2017; loan ≤ ₹35L; cost ≤ ₹50L. Restricted to statutory ceiling	₹ 50,000
Total Interest Deduction (Section 22 + Section 130)	₹ 2,50,000

Section 132

8.2I Interest on Loan for Purchase of Electric Vehicle (EV) [Section 132]

Corresponding 1961 Act: Section 80EEB • Maximum Ceiling: ₹1,50,000

Section 132 allows an Individual shifting out of the default regime a deduction for interest payable on loan taken from a financial institution (bank or deposit-taking NBFC) for the purchase of an electric vehicle.

Statutory Conditions

Sanction Period: Loan must be sanctioned between 01.04.2019 and 31.03.2023.
Eligible Lender: Bank or NBFC (deposit-taking or systemically important non-deposit taking).
Electric Vehicle Defined: Vehicle powered exclusively by electric motor whose traction energy is supplied by traction battery.

Quantum of Deduction

Up to ₹ 1,50,000

Deduction for interest payable up to a maximum of ₹1,50,000 per tax year. Where deduction is allowed under this section, no deduction for such interest can be claimed under any other provision.

ICAI Illustration 12

Cross-Assessee Eligibility for Section 131 vs Section 132

Problem Statement:

Particulars of salaried individuals Arun, Barun, Chetan, and Dinesh for TY 2026-27:

Particulars	Mr. Arun	Mr. Barun	Mr. Chetan	Mr. Dinesh
Loan taken for:	House property	House property	Electric Vehicle	Electric Vehicle
Amount of loan:	₹ 43 lakhs	₹ 45 lakhs	₹ 20 lakhs	₹ 12 lakhs
Lender:	Housing Finance Co	Deposit NBFC	Deposit NBFC	Public Sector Bank
Date of Sanction:	01.05.2020	01.04.2019	01.04.2020	15.03.2019
Stamp Duty / Cost:	₹ 45 lakhs	₹ 48 lakhs	₹ 22 lakhs	₹ 15 lakhs
Interest Paid:	₹ 3,45,000	₹ 3,90,000	₹ 1,80,000	₹ 1,10,000

Compute deduction under Chapter VIII for each individual (Normal regime).

Solution:

Assessee	Relevant Section	Eligibility Analysis	Deduction Allowable (₹)
Mr. Arun	Section 131	Stamp duty value ≤ ₹45L; loan sanctioned within window (01.05.2020). Total interest ₹3.45L: ₹2L allowed u/s 22; balance ₹1.45L allowed u/s 131.	1,45,000
Mr. Barun	Section 131	Stamp duty value is ₹48L (> statutory cap of ₹45 lakhs). Ineligible for Section 131! (Only ₹2L allowed u/s 22).	Nil
Mr. Chetan	Section 132	Loan sanctioned between 1.4.2019 and 31.3.2023 from deposit NBFC for EV. Interest ₹1,80,000 restricted to statutory ceiling.	1,50,000
Mr. Dinesh	Section 132	Loan was sanctioned on 15.03.2019 (BEFORE the statutory commencement date of 01.04.2019). Disentitled!	Nil

Section 133

8.2J Donations to Certain Funds & Charitable Institutions [Section 133]

Corresponding 1961 Act: Section 80G • Four Categories of Donations • 10% Adjusted GTI Qualifying Limit

Section 133 allows all assessees shifting out of the default regime a deduction for donations made to approved charitable institutions, relief funds, and temples/shrines:

Category	Qualifying Funds & Institutions	Deduction Percentage
Category I (No Limit, 100%)	National Defence Fund; Prime Minister's National Relief Fund; Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund); Clean Ganga Fund; National Children's Fund; Swachh Bharat Kosh; State Disaster Management Fund.	100% of Donation
Category II (No Limit, 50%)	Jawaharlal Nehru Memorial Fund; Prime Minister's Drought Relief Fund; Indira Gandhi Memorial Trust; Rajiv Gandhi Foundation.	50% of Donation
Category III (Subject to Qualifying Limit, 100%)	Donations to Government or approved local authority for promoting family planning; donations by a company to Indian Olympic Association.	100% of Qualifying Amount
Category IV (Subject to Qualifying Limit, 50%)	Approved Charitable Trusts / Institutions registered under the Act; Government/local authority for other charitable purposes; renovation or repair of notified temple, mosque, gurdwara, church, or other place of historic importance.	50% of Qualifying Amount

Computation of Qualifying Limit & Adjusted Gross Total Income

$$\text{Qualifying Limit} = 10\% \text{ of Adjusted Gross Total Income}$$ $$\text{Adjusted GTI} = \text{GTI} - \text{LTCG (u/s 197 & 198)} - \text{STCG on Equities (u/s 196)} - \sum \text{Other Ch VIII Deductions (except Sec 133)}$$

Mandatory Statutory Restrictions

Cash Donation Limit: No deduction shall be allowed under Section 133 in respect of any donation exceeding ₹2,00,000? NO — ₹2,000 if paid in cash! Donations above ₹2,000 must be made by banking channels.
In-Kind Donations: Donations made in kind (e.g. food, clothing, medicine, building materials) do NOT qualify for deduction.

ICAI Illustration 13

Comprehensive Donation Calculation with 10% Adjusted GTI Limit

Problem Statement:

Mr. Arjun, aged 45 years, has Gross Total Income of ₹8,85,000 comprising salary and house property income. Payments made:

Premium paid on life of major daughter (Assured value ₹1,80,000): ₹20,000
Medical insurance premium for self: ₹14,000; for spouse: ₹15,000 (by cheque)
Donation to public charitable trust: ₹50,000 (by cheque)

Compute total income of Mr. Arjun for tax year 2026-27 (Normal regime).

Solution:

Particulars	Amount (₹)	Amount (₹)
Gross Total Income		8,85,000
Less: Deductions under Chapter VIII:
Under Section 123 (Life insurance restricted to 10% of ₹1.8L)	18,000
Under Section 126 (Medical insurance ₹14k + ₹15k capped at ₹25k)	25,000
Under Section 133 (Donation to charitable trust — Category IV): Adjusted GTI = ₹8,85,000 − ₹18,000 − ₹25,000 = ₹8,42,000 Qualifying limit = 10% of ₹8,42,000 = ₹84,200 Qualifying donation = ₹50,000 (within ₹84,200) Deduction = 50% of ₹50,000 = ₹25,000	25,000	(-) 68,000
Total Income		₹ 8,17,000

Section 134

8.2K Deduction for House Rent Paid [Section 134]

Corresponding 1961 Act: Section 80GG • For Assessees Not Receiving House Rent Allowance (HRA)

Section 134 allows a deduction to an Individual (self-employed or salaried individual who does not receive HRA) for rent paid by him for furnished or unfurnished residential accommodation.

Pre-Conditions for Claim

Assessee must not be in receipt of any HRA from any employer.
The individual, spouse, minor child, or HUF of which he is a member must not own any residential accommodation at the place where he ordinarily resides or performs duties of office/employment.
If the individual owns a house at any other place, it must not be claimed as self-occupied under Section 21 / 23(2).

Statutory Least Rule

The deduction allowable is the LEAST of the following three limits:

₹ 5,000 per month (₹ 60,000 per annum);
25% of Total Income (before Section 134);
Actual Rent Paid − 10% of Total Income.

ICAI Illustration 14

Section 134 Three-Tier Limit Computation

Problem Statement:

Mr. Rakesh, a businessman, whose total income (before deduction u/s 134) for tax year 2026-27 is ₹4,60,000, paid house rent of ₹12,000 p.m. in Mumbai. Compute deduction allowable under Section 134 under normal provisions.

Solution:

The deduction under Section 134 is the least of:

(i) ₹5,000 p.m. × 12 = ₹60,000
(ii) 25% of Total Income (₹4,60,000 × 25%) = ₹1,15,000
(iii) Rent paid − 10% of Total Income = (₹12,000 × 12) − (10% of ₹4,60,000) = ₹1,44,000 − ₹46,000 = ₹98,000

Deduction Allowable u/s 134

$$\text{Least of (i), (ii), (iii)} = ₹60,000$$

Sections 135, 136 & 137

8.2L Scientific Research & Political Party Contributions [Sections 135 to 137]

Corresponding 1961 Act: Sections 80GGA, 80GGB & 80GGC • 100% Deductions • Absolute Cash Bar

Section	Eligible Assessee	Qualifying Donation / Contribution	Deduction & Mode Restrictions
Section 135 (Legacy 80GGA)	Any assessee having NO business/profession income	Donations to approved scientific research associations, universities, colleges, or National Urban Poverty Eradication Fund.	100% deduction. No deduction for cash donation exceeding ₹2,000.
Section 136 (Legacy 80GGB)	Indian Companies	Contributions to registered political parties or Electoral Trusts. (Includes advertisement expenditure in political souvenir/brochure).	100% deduction. Strictly NO CASH allowed (must be by cheque, draft, ECS, or electoral bond).
Section 137 (Legacy 80GGC)	Any Person (except local authority & Govt-funded AJP)	Contributions to registered political parties or Electoral Trusts.	100% deduction. Strictly NO CASH allowed! Contribution in cash is 100% disallowed.

ICAI Illustration 15

Company Political Contribution & Souvenir Advertisements

Problem Statement:

During the tax year 2026-27, Sky Ltd., an Indian company, contributed ₹3.5 lakhs to an electoral trust by cheque, and incurred ₹52,000 on advertisement in a brochure of a political party. Compute deduction under Section 136 assuming it does not opt for Section 200.

Solution:

Under Section 136, an Indian company is entitled to a deduction of 100% of any sum contributed by it to an electoral trust or registered political party, otherwise than by cash.

Contribution of ₹3.5 lakhs to electoral trust by cheque is 100% deductible.
Under Section 136 read with Section 32(2)(b) / 37(2B), expenditure incurred by a company on advertisement in any souvenir, brochure, or pamphlet published by a political party is deemed to be a contribution to such political party, and is fully deductible under Section 136!

Total Deduction Allowable to Sky Ltd. u/s 136

$$\text{Total Deduction} = ₹3,50,000 + ₹52,000 = ₹4,02,000$$

Part C • Section 138 to 152

8.3 Deductions in Respect of Certain Incomes (Profit-Linked Tax Holidays)

Chapter VIII, Part C • Corresponding 1961 Act: Sections 80-IA to 80RRB • Mandatory Return Filing by Due Date u/s 122(5)

Part C of Chapter VIII (Sections 138 to 152) provides profit-linked deductions to incentivize infrastructure development, startups, industrial manufacturing, affordable housing, green energy, employment generation, international financial services, and intellectual property development.

Section 138 Infrastructure Facility Profits [Legacy 80-IA(4)(i)]

Eligible Enterprise: Owned by an Indian company or consortium, entered into an agreement with Central/State Govt or local authority for developing, operating and maintaining an infrastructure facility.
Infrastructure Facility: Roads, bridges, toll roads, rail systems, highways, water supply projects, water treatment systems, irrigation, sanitation, sewage systems, ports, airports, inland waterways.
Quantum & Period: 100% of profits for 10 consecutive tax years out of 15 tax years (or out of 20 tax years in case of ports, airports, and inland waterways) beginning from the year in which the facility becomes operational.

Section 139 Telecommunication Services Undertakings [Legacy 80-IA(4)(ii)]

Provides deduction in respect of profits derived by an undertaking providing telecommunication services (basic or cellular, radio paging, domestic satellite service, network of trunking, broadband network, internet services).

Section 140 Tax Holiday for Eligible Start-ups [Legacy 80-IAC]

Eligible Start-up: A company or LLP incorporated between 01.04.2016 and 31.03.2025 / notified date, engaged in eligible business (innovation, development, or commercialization of new products, processes or services driven by technology or intellectual property).
Turnover Limit: Total turnover does not exceed ₹100 crores (or prescribed limit) in any of the relevant previous years.
Certification: Holds a certificate of eligible business from the Inter-Ministerial Board of Certification.
Quantum of Deduction: 100% of profits and gains derived from eligible business for 3 consecutive tax years out of 10 years beginning from the year of incorporation, at the option of the assessee!

Section 141 Certain Industrial Undertakings [Legacy 80-IB]

Undertakings engaged in the business of processing, preservation and packaging of fruits or vegetables, meat, poultry, marine, or dairy products; or integrated business of handling, storage, and transportation of foodgrains.
Deduction: 100% of profits for the first 5 tax years, and 25% (30% for companies) for the next 5 tax years.

Section 142 Housing & Rental Housing Projects [Legacy 80-IBA]

100% deduction of profits derived from developing affordable housing projects approved by competent authority.
Carpet area ≤ 60 sq.m. in metro cities (Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad); ≤ 90 sq.m. in non-metros.
Project must be completed within 5 years from approval date.

Section 143 North-Eastern States & Special Category [Legacy 80-IE]

100% deduction of profits for 10 consecutive tax years for eligible undertakings in North-Eastern States (Assam, Meghalaya, Manipur, Tripura, Mizoram, Nagaland, Arunachal Pradesh, Sikkim).

Section 144 Newly Established Units in SEZs [Legacy 80-IAB / 10AA]

Years 1 to 5: 100% of export profits.
Years 6 to 10: 50% of export profits.
Years 11 to 15: 50% of export profits (credited to SEZ Re-investment Reserve Account).

ICAI Illustration 16

Section 144 Export Profit Formula for SEZ Units

Problem Statement:

ABC Ltd. furnishes the following information for the year ended 31.03.2027 (3rd year of operation):

Particulars	Amount (₹ in lakhs)
Total turnover of Unit A located in SEZ	120.00
Profit of business of Unit A	45.00
Export turnover of Unit A realized in convertible foreign exchange within 6 months	60.00
Total turnover of Unit B located in Domestic Tariff Area (DTA)	150.00
Profit of business of Unit B	15.00

Compute deduction allowable under Section 144 to ABC Ltd. for tax year 2026-27.

Solution:

Section 144 Deduction Formula

$$\text{Eligible Export Profit} = \text{Profit of SEZ Unit} \times \frac{\text{Export Turnover of SEZ Unit}}{\text{Total Turnover of SEZ Unit}}$$ $$\text{Eligible Profit} = ₹45,00,000 \times \frac{₹60,00,000}{₹1,20,00,000} = ₹22,50,000$$

Since tax year 2026-27 is the 3rd year of operation (falling in the first 5-year block), deduction allowable under Section 144 is 100% of eligible export profits = ₹ 22.50 lakhs.

Section 145 Collecting & Processing of Bio-Degradable Waste [Legacy 80JJA]

Allows 100% deduction of profits derived from the business of collecting and processing or treating bio-degradable waste for generating power or producing bio-fertilizers, bio-pesticides, bio-gas, or making pellets/briquettes for fuel, for 5 consecutive tax years beginning from the year of commencement.

Section 146 Additional Employee Cost (New Employment Incentive) [Legacy 80JJAA]

Eligible Assessee: Assessee to whom tax audit u/s 208(1) [44AB] applies.
Quantum: 30% of Additional Employee Cost incurred in the course of business for 3 consecutive tax years!
Crucial: Available under BOTH normal regime and default tax regime under Section 202(1)!
"Additional Employee" Criteria:
1. Employed for a minimum period of 240 days in the previous year (or 150 days in the apparel, footwear, or leather products industry).
2. Total monthly emoluments do NOT exceed ₹25,000 per month.
3. Participates in a Recognized Provident Fund (RPF).
4. Emoluments paid through banking channels (account payee cheque/draft, ECS, or approved electronic mode). Cash payment disqualified.

ICAI Illustration 17

Additional Employee Cost: 240 Days, ₹25,000 Cap & 30% Deduction

Problem Statement:

Mr. Vikas commenced manufacture of computers on 01.04.2026. He employed 420 new employees during the tax year 2026-27:

Category	No. of Employees	Date Employed	Category	Monthly Emoluments
(i)	75	01.04.2026	Regular	₹ 24,000
(ii)	125	01.05.2026	Regular	₹ 26,000
(iii)	100	01.06.2026	Casual	₹ 24,500
(iv)	120	01.09.2026	Regular	₹ 24,000

All employees participate in RPF and salaries are paid by account payee cheque. Compute deduction u/s 146.

Solution:

Group	Employees	Eligibility Analysis	Qualifying Cost (₹)
Group (i)	75	Employed for 365 days (≥ 240 days); salary ₹24,000 (≤ ₹25,000); RPF member. Fully Eligible!	2,16,00,000 (75 × 24k × 12)
Group (ii)	125	Monthly emoluments ₹26,000 exceed statutory cap of ₹25,000. Ineligible!	Nil
Group (iii)	100	Casual employees do not participate in RPF. Ineligible!	Nil
Group (iv)	120	Employed from 01.09.2026 = 212 days (< 240 days). Ineligible for TY 2026-27 (will qualify in TY 2027-28 if continued).	Nil
Total Eligible Additional Employee Cost			₹ 2,16,00,000
Deduction under Section 146 (30% of ₹2,16,00,000)			₹ 64,80,000

Note: This deduction of ₹64,80,000 is allowable for 3 consecutive tax years: TY 2026-27, 2027-28, and 2028-29!

Section 147 Offshore Banking & IFSC Units [Legacy 80LA]

Available to scheduled banks with Offshore Banking Units in SEZ, and Units in International Financial Services Centres (IFSC).
100% deduction of income for 10 consecutive tax years out of 15 years.
Available under BOTH normal and default tax regime!

Section 148 Inter-Corporate Dividends [Legacy 80M]

Available to a Domestic Company receiving dividends from another domestic company, foreign company, or business trust.
Deduction equals dividends distributed by the recipient company on or before the due date (one month prior to Section 263(1) due date).
Available under BOTH normal and default tax regime!

Section 149 Income of Co-operative Societies [Legacy 80P]

100% deduction for profits from: banking/credit to members; cottage industry; marketing agricultural produce; fishing; godown letting rent.
Exclusion [Section 149(5)]: Does NOT apply to commercial co-operative banks (only primary credit societies and rural development banks eligible).

Section 150 Income of Federal Co-operatives [Legacy 80PA]

100% deduction of profits of Producer Companies / Federal Co-operatives engaged in marketing agricultural produce of members, having total turnover ≤ ₹100 crores.

Section 151 Royalty Income of Authors [Legacy 80QQB]

Books of literary, artistic, or scientific nature (excluding textbooks, guides, newspapers).
Royalty capped at 15% of book value (or lump sum).
Maximum deduction: ₹ 3,00,000. Foreign remittance within 6 months.

Section 152 Royalty on Patents [Legacy 80RRB]

Available to an Individual resident in India who is a patentee (true and first inventor) registered under Patents Act, 1970.
Maximum deduction: ₹ 3,00,000.

ICAI Illustration 18

Section 151 Foreign Book Royalty: 15% Cap & Foreign Remittance

Problem Statement:

Mr. Aakash earned foreign royalty of ₹2,88,000 for an authored literary book. Royalty rate is 18% of value of books. Expenditure incurred in earning royalty was ₹40,000. Amount remitted to India in convertible foreign exchange till 30.09.2027 is ₹2,30,000. Remaining amount was not remitted till 31.03.2028. Compute amount includible in GTI and deduction under Section 151 (Normal regime).

Solution:

Particulars	Amount (₹)
Gross royalty earned from foreign country	2,88,000
Less: Expenses incurred wholly and exclusively for earning royalty	(-) 40,000
Income includible in Gross Total Income (GTI)	₹ 2,48,000
Computation of Deduction under Section 151:
(i) Royalty restricted to 15% of book value [₹2,88,000 × (15 / 18)]	2,40,000
Less: Expenses relatable to qualifying royalty [₹40,000 × (15 / 18)]	(-) 33,333
Qualifying net royalty	2,06,667
(ii) Amount remitted to India within 6 months (Net of proportionate expenses): ₹2,30,000 − ₹40,000 =	1,90,000
(iii) Statutory maximum ceiling	3,00,000
Deduction Allowable under Section 151 [Least of (i), (ii), (iii)]	₹ 1,90,000

Section 153

8.4 Deduction for Interest on Deposits [Section 153]

Corresponding 1961 Act: Sections 80TTA & 80TTB • Savings Accounts (₹10,000) vs Senior Citizen Deposits (₹50,000)

Section 153 provides deductions from Gross Total Income in respect of interest earned on deposits with banking companies, co-operative banks, and post offices for assessees shifting out of the default tax regime:

Category of Assessee	Governing Sub-section	Qualifying Deposits	Maximum Permissible Deduction
Individual (Non-Senior Citizen) or HUF (Age < 60 years)	Section 153(1) (Legacy 80TTA)	Interest on Savings Bank Accounts ONLY (with banks, co-operative banks, post offices). Note: Time deposits (Fixed Deposits & Recurring Deposits) are strictly EXCLUDED!	Actual Interest OR ₹ 10,000, whichever is LESS.
Resident Senior Citizen Individual (Age 60 years or more at any time during previous year)	Section 153(2) (Legacy 80TTB)	Interest on ALL Deposits (Savings account interest, Fixed Deposits, Recurring Deposits, Time Deposits with banks, co-operatives, post offices).	Actual Interest OR ₹ 50,000, whichever is LESS.

Exclusion of Firm / AOP Bank Accounts

Where interest income is derived from any deposit held by, or on behalf of, a firm, an AOP, or a BOI, no partner or member is entitled to claim deduction under Section 153 in respect of such interest income!

ICAI Illustration 19

Senior Citizen: FD Interest Deduction vs Casual Lottery Income Ceiling

Problem Statement:

Mr. Shivpal, a resident individual aged about 64 years, earned business income of ₹1,40,000 and lottery income of ₹1,60,000 (gross) during tax year 2026-27. He also has interest on fixed deposits with banks of ₹51,000. He invested ₹1,50,000 in a Public Provident Fund account.

What is the total income of Mr. Shivpal for tax year 2026-27 assuming he has exercised the option of shifting out of the default tax regime?

Solution:

Computation of Total Income of Mr. Shivpal for Tax Year 2026-27

Particulars	Amount (₹)	Amount (₹)
Profits and gains of business or profession	1,40,000
Income from other sources:
Interest on Fixed Deposits with banks	51,000
Lottery income (taxable @ flat rate u/s 94)	1,60,000
Sub-total Other Sources	2,11,000
Gross Total Income		3,51,000
Less: Deductions under Chapter VIII:
Under Section 123 (Deposit in PPF)	1,50,000
Under Section 153(2) (FD interest for Senior Citizen — capped at ₹50,000)	50,000
Total qualifying deductions: ₹2,00,000
[Deductions cannot reduce lottery income of ₹1,60,000. Permissible deduction restricted to: ₹3,51,000 − ₹1,60,000 = ₹1,91,000]		(-) 1,91,000
Total Income		₹ 1,60,000

Section 154

8.5 Deduction in Case of a Person with Disability [Section 154]

Corresponding 1961 Act: Section 80U • Self-Disability • Flat Statutory Deduction

Section 154 provides a flat statutory deduction to a resident Individual who, at any time during the previous year, is certified by a medical authority to be a person with disability.

Normal Disability Disability ≥ 40% and < 80%

₹ 75,000

Flat statutory deduction. The assessee is NOT required to submit proof of actual medical expenditure!

Severe Disability Disability ≥ 80%

₹ 1,25,000

Flat statutory deduction of ₹1,25,000 for a person with severe disability (80% or more disability or suffering from autism, cerebral palsy, or multiple disabilities).

Key Distinction: Section 127 vs Section 154

Section 127 [80DD]: Claimed by an assessee for the maintenance/medical care of a dependant disabled relative.
Section 154 [80U]: Claimed directly by the disabled individual himself against his own total income!
Rule against double benefit: If an individual claims deduction for his own disability u/s 154, no other person can claim deduction u/s 127 in respect of that individual!

Regime Matrix

8.6 Default Tax Regime [Section 202(1)]: Allowed vs Disallowed Deductions

Section 202 of Income-tax Act, 2025 • Critical Exam Filter for Chapter VIII

Under the default tax regime under Section 202(1) (concessional slab rates for individuals, HUFs, AOPs, BOIs), almost all Chapter VIII deductions are strictly barred, with only 5 very specific statutory exceptions:

Section (2025 Act)	Subject Matter	Legacy Section	Status Under Default Regime u/s 202(1)
Section 124(1)/(2)	Employer's Contribution to NPS Account (up to 14% of salary)	Section 80CCD(2)	ALLOWED ✓
Section 125(2)	Central Government's Matching Contribution to Agniveer Corpus Fund	Section 80CCH(2)	ALLOWED ✓
Section 146	Additional Employee Cost (New Employment Generation — 30% for 3 years)	Section 80JJAA	ALLOWED ✓
Section 147	Offshore Banking Units & Units in International Financial Services Centre (IFSC)	Section 80LA(1A)	ALLOWED ✓
Section 148	Inter-Corporate Dividends Received by Domestic Companies	Section 80M	ALLOWED ✓
Section 123	Specified Investments (PF, PPF, Life Insurance, Housing Loan, Tuition Fees)	Section 80C	DISALLOWED ✗
Section 124(1) & (3)	Employee's Own Contribution to NPS and Additional ₹50,000 Tier-I	Section 80CCD(1)/(1B)	DISALLOWED ✗
Section 125(1)	Agniveer's Own Contribution to Agniveer Corpus Fund	Section 80CCH(1)	DISALLOWED ✗
Section 126	Medical Insurance Premium (Self, Family & Senior Citizen Parents)	Section 80D	DISALLOWED ✗
Section 127 & 128	Maintenance of Dependant Disabled & Medical Treatment of Specified Diseases	Section 80DD & 80DDB	DISALLOWED ✗
Section 129	Interest on Loan Taken for Higher Education	Section 80E	DISALLOWED ✗
Sections 130 to 132	Housing Loan Interest (First Home & Affordable) & Electric Vehicle Loan Interest	Sections 80EE, 80EEA, 80EEB	DISALLOWED ✗
Section 133 & 134	Donations to Charitable Funds & House Rent Paid	Sections 80G & 80GG	DISALLOWED ✗
Sections 135 to 137	Scientific Research Donations & Political Party Contributions	Sections 80GGA, 80GGB, 80GGC	DISALLOWED ✗
Sections 138 to 145	Profit-Linked Deductions (Infrastructure, Start-ups, Housing, SEZ Units)	Sections 80-IA to 80JJA	DISALLOWED ✗
Sections 149 & 150	Co-operative Societies & Federal Co-operatives	Sections 80P & 80PA	DISALLOWED ✗
Sections 151 & 152	Royalty on Books of Authors & Patents	Sections 80QQB & 80RRB	DISALLOWED ✗
Sections 153 & 154	Interest on Deposits (Savings/FD) & Person with Disability	Sections 80TTA, 80TTB, 80U	DISALLOWED ✗

Practical Examination Focus

Test Your Knowledge: Practical Comprehensive Problems

ICAI CA Final Direct Tax Case Studies • Questions 1 to 5 with In-Depth Solutions

The following 5 comprehensive practical problems from the ICAI Study Material test advanced application of investment eligibility, standalone profit determination, inter-unit loss set-offs, cash mode prohibitions, and multi-assessee tax computations.

TYK Question 1

Mr. Srinivasan: Multi-Asset Investment Portfolio Eligibility [Section 123]

Problem Statement:

Mr. Srinivasan, aged 61 years, furnishes the following particulars for the year ending 31.03.2027:

Life Insurance Premium paid — ₹ 15,000, actual capital sum of the policy assured for ₹ 2,30,000 (issued before 01.04.2012).
Contribution to Public Provident Fund (PPF) — ₹ 40,000 in the name of his father.
Tuition fee payment — ₹ 8,000 each for 2 sons pursuing full time graduation course in a college in India.
Housing loan principal repayment — ₹ 32,000 to Axis Bank for property under construction.
Principal repayment of housing loan taken from a relative — ₹ 70,000 for constructed house property.
Deposited under Senior Citizens Savings Scheme Rules, 2004 — ₹ 15,000.
Five-year term deposits in an account under Post Office Time Deposit Rules, 1981 — ₹ 50,000.
Investment in National Savings Certificates (NSC VIII Issue) — ₹ 70,000.

Requirement: Compute the deduction eligible under Section 123 for the tax year 2026-27 (opted out of default regime).

Statutory Solution & Item-Wise Analysis:

Particulars of Investment / Payment	Statutory Eligibility Criteria & Analysis	Eligible Amount (₹)
1. Life Insurance Premium	Policy issued before 01.04.2012; premium eligible up to 20% of sum assured (20% of ₹2,30,000 = ₹46,000). Actual ₹15,000 is fully within limit.	15,000
2. Contribution to PPF in Father's Name	Under Schedule XV, an individual can contribute to PPF only in his own name, spouse's name, or children's name. Contribution in father's name is strictly INELIGIBLE!	Nil
3. Tuition Fees for 2 Sons	Paid for full-time education to a college in India for up to 2 children. Eligible (₹8,000 × 2 = ₹16,000).	16,000
4. Housing Loan to Axis Bank (Under Construction)	Principal repayment qualifies only where the house construction is completed and income is taxable under HP. Since under construction, NOT allowable.	Nil
5. Housing Loan Repayment to Relative	Loan borrowed from friends/relatives does not qualify. Loan must be from Govt, bank, LIC, NHB, or approved housing finance co. NOT allowable.	Nil
6. Senior Citizens Savings Scheme (SCSS)	Deposit in account under Senior Citizens Savings Scheme Rules, 2004 is an approved investment.	15,000
7. Post Office 5-Year Time Deposit	Term deposit for 5 years under Post Office Time Deposit Rules, 1981 qualifies.	50,000
8. National Savings Certificates (NSC)	Subscription to NSC VIII Issue qualifies for deduction.	70,000
Total Qualifying Amount under Schedule XV		₹ 1,66,000
Deduction Allowable under Section 123 (Restricted to Statutory Cap)		₹ 1,50,000

TYK Question 2

X Ltd. Windmill Power Unit: Loss Set-Off vs Section 138 Standalone Rule

Problem Statement:

X Ltd. has two units: Unit 'N' (engaged in power generation, eligible for deduction u/s 138) and Unit 'Y'. Unit 'Y' had a profit of ₹ 100 lakhs in Tax Year 2026-27.

X Ltd. claimed depreciation of ₹ 120 lakhs on windmills of Unit 'N' against the profit of Unit 'Y'. The Assessing Officer was of the view that depreciation relating to an eligible business under Section 138 cannot be set off against non-eligible business income.

Requirement: Examine the correctness of the action of the Assessing Officer.

Judicial Analysis & Decision:

Application of High Court Precedent: CIT v. Swarnagiri Wire Insulations Pvt. Ltd. (2012) 349 ITR 245 (Kar.)

In CIT v. Swarnagiri Wire Insulations Pvt. Ltd., the Karnataka High Court resolved the identical controversy regarding the interplay between inter-unit set-off and standalone deduction provisions:

Step 1: Normal PGBP Computation: The profits and losses of an assessee under the head "Profits and gains of business or profession" must first be computed by aggregating all units in accordance with the general provisions of the Act.
Step 2: Section 108(1) Inter-Source Set-Off: Under Section 108(1) [formerly 70(1)], an assessee is statutorily entitled to set off the loss (including depreciation loss) of one source against the profit of another source under the same head of income in the same tax year.
Step 3: Section 138 Standalone Fiction: The deeming fiction treating an eligible undertaking as a separate source for Section 138 operates only for determining the quantum of deduction available under Section 138. It does NOT debar or nullify the mandatory intra-head set-off under Section 108(1)!
Since Unit 'N' suffered a net loss after depreciation (profit was less than ₹120L), no deduction is claimed under Section 138. The unabsorbed depreciation of ₹120L is fully eligible to be set off against the business profits of Unit 'Y' under Section 108(1).

Conclusion

The action of the Assessing Officer in not permitting set-off of the loss/depreciation of the eligible business against the non-eligible business profit is NOT CORRECT in law.

TYK Question 3

Comprehensive Multi-Assessee Computation: Mr. A, Mr. B and Mr. C

Problem Statement:

Compute the total income of Mr. A, Mr. B, and Mr. C for tax year 2026-27 (opted out of default regime):

Particulars	Mr. A (₹)	Mr. B (₹)	Mr. C (₹)
(i) Salary (computed)	9,25,000	10,45,000	11,15,000
(ii) Interest on fixed deposits	75,000	85,000	95,000

Payments & Investments:

Mr. A: Deposit in PPF ₹1,50,000; Medical insurance premium for self (age 55) ₹30,000 by cheque; Contribution to National Children's Fund ₹30,000 by cheque.
Mr. B: Interest on bank loan for self-occupied house ₹2,35,000; Principal repayment of said housing loan to bank ₹1,70,000; Medical insurance premium ₹15,000 in CASH; Donation to BJP by crossed cheque ₹50,000; Donation to Electoral trust in CASH ₹50,000.
Mr. C: Medical insurance premium for self (age 48) ₹20,000 by crossed cheque; Life insurance premiums: Self (policy 31.03.2012, sum assured ₹2,48,000, premium ₹15,000); Spouse (policy 11.06.2020, sum assured ₹1,25,000, premium ₹15,000); Handicapped son u/s 154 (policy 31.07.2020, sum assured ₹2,00,000, premium ₹32,000).

Solution:

Computation of Total Income for Tax Year 2026-27

Particulars	Mr. A (₹)	Mr. B (₹)	Mr. C (₹)
Salaries	9,25,000	10,45,000	11,15,000
Income from House Property (Self-occupied interest restricted u/s 22)	-	(-) 2,00,000	-
Income from Other Sources (Interest on Fixed Deposits)	75,000	85,000	95,000
(A) Gross Total Income (GTI)	10,00,000	9,30,000	12,10,000
Less: Deductions under Chapter VIII:
Under Section 123: • Mr. A: PPF ₹1,50,000 • Mr. B: Housing loan principal restricted to ₹1,50,000 • Mr. C: LIC (Self ₹15k [20%], Spouse ₹12.5k [10%], Son ₹30k [15%] = ₹57,500)	1,50,000	1,50,000	57,500
Under Section 126 (Medical Insurance): • Mr. A: ₹30,000 by cheque restricted to ₹25,000 • Mr. B: ₹15,000 paid in CASH is DISALLOWED • Mr. C: ₹20,000 by cheque is fully allowed	25,000	Nil	20,000
Under Section 133: Mr. A: National Children's Fund (100% without limit)	30,000	-	-
Under Section 137 (Political Contributions): • Mr. B: Donation to BJP by crossed cheque (100% allowed) • Cash donation of ₹50,000 to Electoral Trust is DISALLOWED	-	50,000	-
(B) Total Deductions under Chapter VIII	2,05,000	2,00,000	77,500
Total Income (A) − (B)	₹ 7,95,000	₹ 7,30,000	₹ 11,32,500

TYK Question 4

Navi Limited: Standalone Basis & Trade Interest Eligibility

Problem Statement:

Following issues have been raised by Navi Limited regarding its deduction eligibility:

(i) It operates two separate undertakings. One undertaking is eligible for deduction u/s 141 and the other is not. How should profits be computed?

(ii) Its profit from an undertaking in North Eastern States eligible u/s 143 includes interest income derived on delayed collection of sale proceeds from customers. Is this interest eligible for deduction u/s 143?

Statutory Solution:

(i) Standalone Profit Computation [Section 141 read with Section 122]:

As per Section 141 read with the overriding statutory provisions, the profits and gains of an eligible industrial undertaking must be computed as if such eligible undertaking were the only source of income of the assessee during the previous year. Consequently, losses of the non-eligible undertaking cannot be set off against the standalone profits of the eligible undertaking for the purpose of computing deduction under Section 141!

(ii) Interest on Delayed Customer Receivables [Section 143]:

Under Section 143, 100% deduction is allowed on profits "derived from" eligible business. Interest income earned on delayed collection of sale proceeds from trade debtors has a direct first-degree nexus with the business of the industrial undertaking. It represents part of the sales realization and is directly derived from the eligible industrial activity.

Therefore, interest income on delayed sale proceeds IS ELIGIBLE for 100% deduction under Section 143!

TYK Question 5

PQR Co-operative Bank: Section 149 Eligibility for Loans, Deposits & Godown Rent

Problem Statement:

PQR Co-operative Bank, a primary agricultural credit and rural development bank, earned:

(i) Interest of ₹ 1,00,000 from its members on loans advanced to them.
(ii) Interest of ₹ 1,50,000 on deposits with other co-operative societies.
(iii) Rent of ₹ 2,00,000 from letting out its godowns for storage of commodities.

Examine the eligibility for deduction under Section 149.

Statutory Solution:

Section 149(5) Exemption for Primary Agricultural Credit Societies

Sub-section 149(5) provides that Section 149 shall not apply to any co-operative bank. However, Section 149(6) explicitly defines and exempts a primary co-operative agricultural and rural development bank from this exclusion! Since PQR Co-operative Bank is a primary rural development bank, it is entitled to Section 149 benefits.

Receipt Item	Relevant Section	Eligibility Analysis	Eligible Deduction (₹)
Member Loan Interest	Section 149(2)(a)(i)	Interest received on loans advanced to members for agricultural activities qualifies for 100% deduction.	1,00,000
Deposit Interest from other Co-operatives	Section 149(2)(d)	Interest derived from investments with any other co-operative society is 100% deductible.	1,50,000
Godown Letting Rent	Section 149(2)(e)	Income derived from letting of godowns/warehouses for storage, processing, or facilitating marketing of commodities is 100% deductible.	2,00,000
Total Deduction Allowable under Section 149			₹ 4,50,000

Comparative Matrix

8.8 Master Statutory Matrix: Chapter VIII (Income-tax Act, 2025 vs 1961 Act)

Direct Cross-Reference Table • Complete Chapter VIII Mapping (Sections 122 to 154)

The table below provides a comprehensive section-by-section comparison between Chapter VIII of the Income-tax Act, 2025 and Chapter VI-A of the Income-tax Act, 1961:

Section (2025 Act)	Section (1961 Act)	Subject Matter & Key Statutory Rules	Default Regime (Sec 202)
Section 122	Sections 80A, 80AB, 80AC	General rules: deductions cannot exceed GTI; no deduction against special rate incomes (LTCG, STCG 196, Lottery 94); return filing due date mandate u/s 263(1) for Part C.	Overriding Rule
Section 123	Section 80C	Deduction for investment in specified assets (Schedule XV): PF, PPF, LIC, tuition fees, housing loan principal, SCSS, NSC. Max ₹1,50,000.	Disallowed ✗
Section 124(1)/(2)	Section 80CCD(2)	Employer's contribution to NPS account (up to 14% of salary for Govt and private employers).	ALLOWED ✓
Section 124(1) & (3)	Section 80CCD(1)/(1B)	Employee's own NPS contribution (10% salary) and additional voluntary contribution up to ₹50,000.	Disallowed ✗
Section 124(4)	—	Contribution to minor's account under the newly introduced NPS Vatsalya Scheme (up to ₹50,000).	Disallowed ✗
Section 125(1)	Section 80CCH(1)	Agniveer's own contribution (30% of monthly package) to Agniveer Corpus Fund.	Disallowed ✗
Section 125(2)	Section 80CCH(2)	Central Government's matching contribution to Agniveer Corpus Fund.	ALLOWED ✓
Section 126	Section 80D	Health insurance premium (Mediclaim), CGHS, and preventive check-up (Self/family ₹25k/₹50k; Parents ₹25k/₹50k). Max ₹1,00,000.	Disallowed ✗
Section 127	Section 80DD	Maintenance and medical treatment of a dependant disabled person (Flat ₹75,000 / Severe ₹1,25,000).	Disallowed ✗
Section 128	Section 80DDB	Medical treatment of specified diseases/ailments (Actual or ₹40,000; Senior citizen ₹1,00,000).	Disallowed ✗
Section 129	Section 80E	Interest on loan taken for higher education of self, spouse, or children (No monetary limit; 8 consecutive years).	Disallowed ✗
Section 130	Section 80EE	Interest on loan borrowed for acquisition of residential house property (sanctioned in 2016-17, max ₹50,000).	Disallowed ✗
Section 131	Section 80EEA	Interest on loan for affordable residential house (sanctioned 2019-2022, value ≤ ₹45L, max ₹1,50,000).	Disallowed ✗
Section 132	Section 80EEB	Interest on loan taken for purchase of electric vehicle (sanctioned 2019-2023, max ₹1,50,000).	Disallowed ✗
Section 133	Section 80G	Donations to charitable funds/institutions (Categories I to IV; 10% Adjusted GTI qualifying cap; cash ≤ ₹2,000).	Disallowed ✗
Section 134	Section 80GG	Rent paid by non-salaried or non-HRA individuals (Least of ₹5,000/mo, 25% Total Income, Rent − 10% Total Income).	Disallowed ✗
Section 135	Section 80GGA	Donations for scientific research or rural development by assessees without business income (100% deduction).	Disallowed ✗
Section 136	Section 80GGB	Contributions given by Indian companies to political parties or electoral trusts (100% deduction, no cash).	Disallowed ✗
Section 137	Section 80GGC	Contributions given by any person to political parties or electoral trusts (100% deduction, no cash).	Disallowed ✗
Section 138	Section 80-IA(4)(i)	Profits and gains from infrastructure facility development/operation (100% for 10 out of 15/20 years).	Disallowed ✗
Section 139	Section 80-IA(4)(ii)	Telecommunication services undertakings.	Disallowed ✗
Section 140	Section 80-IAC	Tax holiday for eligible start-ups (100% profits for 3 consecutive years out of 10 years).	Disallowed ✗
Section 141	Section 80-IB	Certain industrial undertakings (food processing, preservation, packaging, grain storage).	Disallowed ✗
Section 142	Section 80-IBA	Profits from developing affordable housing projects and rental housing projects (100% deduction).	Disallowed ✗
Section 143	Section 80-IC / 80-IE	Undertakings in special category states / North-Eastern states (100% deduction for 10 years).	Disallowed ✗
Section 144	Section 80-IAB / 10AA	Newly established units in Special Economic Zones (SEZs) (100% for 5 yrs, 50% for 5 yrs, 50% reserve for 5 yrs).	Disallowed ✗
Section 145	Section 80JJA	Profits from business of collecting and processing bio-degradable waste (100% for 5 years).	Disallowed ✗
Section 146	Section 80JJAA	Additional employment cost (30% of employee cost for 3 consecutive tax years).	ALLOWED ✓
Section 147	Section 80LA	Offshore Banking Units and Units in International Financial Services Centre (IFSC) (100% for 10 years).	ALLOWED ✓
Section 148	Section 80M	Inter-corporate dividends received by domestic companies (deduction equal to dividend distributed).	ALLOWED ✓
Section 149	Section 80P	Income of primary co-operative societies (credit, cottage, agriculture, fishing, godowns).	Disallowed ✗
Section 150	Section 80PA	Income of federal co-operatives / producer companies (turnover ≤ ₹100 crores).	Disallowed ✗
Section 151	Section 80QQB	Royalty income of authors of certain books (literary/artistic/scientific — max ₹3,00,000).	Disallowed ✗
Section 152	Section 80RRB	Royalty on patents developed and registered in India (max ₹3,00,000).	Disallowed ✗
Section 153(1)	Section 80TTA	Interest on savings bank accounts for non-senior citizens (max ₹10,000).	Disallowed ✗
Section 153(2)	Section 80TTB	Interest on all deposits (savings + FD/RD) for resident senior citizens (max ₹50,000).	Disallowed ✗
Section 154	Section 80U	Deduction in case of a person with disability (Flat ₹75,000 / Severe ₹1,25,000).	Disallowed ✗