24/02/2018
Section wise Income Tax Deductions for Assessment Year (AY) 2018-19 or Financial Year (FY) 2017-18
Section Nature of deduction Who can claim
(1) (2) (3)
Against ‘salaries’
16(ii) Entertainment allowance [actual or at the rate of 1/5th of salary, whichever is less] [limited to Rs. 5,000] Government employees
16(iii) Employment tax Salaried assessees
Against ‘income from house properties‘
23(1), first proviso Taxes levied by local authority and borne by owner if paid in relevant previous year All assessees
24(a) Standard deduction [30% of the annual value (gross annual value less municipal taxes)] All assessees
24(b) Interest on borrowed capital (Rs. 30,000/Rs. 2,00,000, subject to specified conditions) All assessees
25A(2) Standard deduction of 30 per cent of arrears of rent or unrealised rent received All assessees
Against ‘profits and gains of business or profession‘
A. Deductible items
30 Rent, rates, taxes, repairs (excluding capital expenditure) and insurance for premises All assessees
31 Repairs (excluding capital expenditure) and insurance of machinery, plant and furniture All assessees
32(1)(i) Depreciation1 in respect of following assets shall be allowed at prescribed percentage on actual cost of an asset (i.e., Straight Line Method):
i. Tangible Assets (buildings, machinery, plant or furniture);
ii. Intangible Assets (know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature).
However, if asset is acquired and put to use for less than 180 days during the previous year, the deduction shall be restricted to 50% of depreciation computed above.
Note:
Taxpayers engaged in business of generation or generation and distribution of power have the option to claim depreciation on written down value basis also
Taxpayer engaged in business of generation or generation and distribution of power.
32(1)(ii) Depreciation in respect of following assets shall be allowed at prescribed percentage on written down value of each block of asset (as per WDV method):
i. Tangible Assets (buildings, machinery, plant or furniture);
ii. Intangible Assets (know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature).
However, if asset is acquired and put to use for less than 180 days during the previous year, the deduction shall be restricted to 50% of depreciation computed above.
All assessees engaged in business or profession
32(1)(iia) Additional depreciation shall be allowed at 20% of actual cost of new plant and machinery [other than ships, aircraft, office appliances, second hand plant or machinery, etc.] (Subject to certain conditions).
However, if an asset is acquired and put to use for less than 180 days during the previous year, 50% of additional depreciation shall be allowed in year of acquisition and balance 50% would be allowed in the next year.
All taxpayers engaged in:
a) manufacture or production of any article or thing; or
b) generation, transmission or distribution of power (if taxpayer is not claiming depreciation on straight line basis ).
