INSTRUCTIONS FOR FILING INVESTMENT DECLARATION

FORM
A. Permanent Account Number (PAN)
PAN no. is a ten digit alpha-numeric no. allotted by the Income Tax Department-
First five alphabets, next four numbers and one alphabet again.
a) Please mention Pan no. if you have already bin allotted one by the
department.
b) Please mention “Not Allotted” if you have applied for PAN but it has not
been allotted so far.
c) Please mention “Not applied” if you haven’t applied for PAN no. so far.

B. Section-I:- House Rent for HRA exemption u/s 10(13A) of Income Tax Act, 1961

a) This section is to be filled up only if you are living in a rented

accommodation during any part of the year.
b) In case any change is expected in payment of rent during the year, please
provide info. in the following format:
Example: Rent p.m.:- April to October : Rs.8,000p.m
November to March : Rs.10,000p.m
c) Please mention the complete address of property taken on lease at point no.2.
d) Please submit rent receipts of one month of each quarter which shall signify
that quarter. Also in case of change in rent at any particular time during the
year (as exemplified above) please submit rent receipt of the month in which
rent has changed & rent receipt of the month immediately preceding the
month in which rent has changed.

C. Section-II:- Deduction Under Chapter VI-A of Income Tax Act, 1961 (Under
Section 80 other than 80C)

a) Section 80D:-Premium paid for Medical Insurance (popularly known as

Mediclaim policy).
Following conditions must be satisfied to avail deduction:
¾ It is allowed on actual payment basis and not on due basis. Besides
payment should be made by cheque and not in cash.
¾ Premium should be paid for self, spouse, dependent parents and
dependent children.
¾ Deduction is allowed to an individual-Resident or Non resident, Indian
or foreign citizens.
Quantum of deduction:
¾ Actual premium paid or Rs.15,000/- whichever is lower.
¾ If premium is paid on policy for senior citizen, then additional deduction
allowed of Rs.5,000/- over & above Rs.15,000/- is allowed.
Responsibility of employee:
¾ Please mention the name of insured, relationship of insured with
employee and age of the insured.

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 ¾ Please submit medical premium receipt of current financial year .
b) Section 80DD:- Deduction in respect of medical treatment of Handicapped
Dependent.
Following conditions must be satisfied to avail deduction:
¾ Deduction is not allowed for disability of employee himself but for
disabled person dependent on employee. Dependent should be either
spouse, children, parents, brothers and sisters of employee.
¾ Disabled person must be wholly or mainly dependent on the employee
for his/her support and maintenance.
¾ Deduction is allowed to Resident individual whether he/she is Indian or
foreign citizen.
¾ Employee has incurred expenditure for medical treatment (including
nursing, training & rehabilitation) & maintenance of handicapped
dependent.
¾ Disabled person has not claimed any deduction under section 80U under
of Income Tax Act, 1961.
¾ Disability should not be less than 40%.
¾ Disability means person suffering from blindness, leprosy-cured, hearing
impairment, locomotor disability, mental retardation, mental illness.
¾ Employee has to furnish certificate of disability of government hospital
clearly stating the name of patient, nature of disability, percentage of
disability, temporary or permanent disability duly signed & stamped.
Quantum of deduction:
¾ Rs.50,000/- flat irrespective of expenditure incurred. (Though actual
expenditure is one of the conditions for claiming deduction but it has no
effect on quantum of deduction).
¾ If disability is severe i.e. 80% or more than deduction allowed is flat
Rs.75,000/-.
Responsibility of employee:
¾ Please mention the name of disabled dependent, relationship of
dependent with the employee.
c) Section 80E:- Deduction in respect of payment of interest on loan taken for
higher education
Following conditions must be satisfied to avail deduction:
¾ Loan must have been taken from any bank or financial institution (i.e. a
banking company or notified financial institution) or an approved
charitable institution approved for the purpose of providing educational
loans.
¾ Deduction is allowed to an individual-Resident or Non resident, Indian
or foreign citizens.
¾ Loan must have been taken & utilized for pursuing full time higher
education of self, spouse and children.
¾ Higher education means any graduate or post graduate course in
engineering including technology, architecture, medicine or management
or post graduate course in applied sciences or pure sciences including
mathematics and statistics.
Quantum of deduction:

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 ¾ Amount of interest paid during the previous year shall be allowed as
deduction. {Repayment of Principal amount does not qualify for
deduction).
¾ Deduction is allowed for continuously 8 years starting from the year in
which employee starts paying the interest or until the above interest is
paid in full, whichever is earlier.
Responsibility of Employee:
Please provide the following info:
1 Whether loan taken for full time or part time education
2 Date on which loan taken
3 Course for which loan taken
4 Name of institution from which loan taken
5 Interest paid for F.Y. 2007-2008
Please submit a copy of certificate issued of amount of loan repaid during the
F.Y.2007-2008 clearly stating the amount of principal & interest separately
since benefit of only interest is allowable.
e) Section 80G:-Donation to specified institutions.
Central Board of Direct Taxes has issued circular no.781 dated 05/11/1999
whereby employer can give benefit of donation made u/s 80G, for the
purpose of deduction of tax, only to funds/institutions specified in that
circular. The list of funds/institutions specified in aforesaid circular is as
follows:
i. Donations eligible for 50% benefit:
¾ Jawaharlal Nehru Memorial Fund.
¾ The Prime Minister's Drought Relief Fund
¾ The National Children's Fund
¾ The Indira Gandhi Memorial Trust
¾ The Rajiv Gandhi Foundation
ii. Donations eligible for 100% benefit:
¾ National Defense Fund or The Prime Minister's National Relief Fund
¾ The Prime Minister's Armenia Earthquake Relief Fund
¾ The Africa (Public Contributions -India) Fund
¾ The National Foundation for Communal Harmony
¾ Chief Minister's Earthquake Relief Fund –Maharashtra
¾ National Blood Transfusion Council
¾ State Blood Transfusion Council
¾ Army Central Welfare Fund
¾ Indian Naval Benevolent Fund
¾ Air Force Central Welfare Fund
¾ The Andhra Pradesh Chief Minister's Cyclone Relief Fund -1996
¾ The National Illness Assistance Fund
¾ The Chief Minister's Relief Fund or Lieutenant Governor's Relief Fund
in respect of any State or Union Territory as the case may be, subject to
certain conditions
¾ The University or Educational Institution of national eminence
approved by the Prescribed Authority
¾ The National Sports Fund to be set up by Central Government

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 ¾ The National Cultural Fund Set up by the Central Government
¾ The Fund for Technology Development and Application set by the
Central Government
¾ The National Trust for Welfare of persons with Autism, Cerebral Palsy,
Mental Retardation and Multiple disabilities
¾ Donation to Indian Olympic Association for development of
infrastructure of sports and games or for sponsorship of games

If donation is made to any fund or institution other than the ones mentioned
in aforesaid list, benefit of the same has to be claimed by the assessee in
his/her Income Tax return. Assessee has to attach proof of donation with the
return. Assessing officer after verifying the genuineness of the
fund/institution shall give benefit of the same at the time of assessment.
f) Section 80U:- Deduction in respect of disability of employee himself.
Following conditions must be satisfied to avail deduction:
Same as the ones prescribed under section 80DD except that deduction under
Section 80U is allowed for disability of employee himself and not of any
person dependent on employee.
Quantum of deduction:
Same as prescribed under section 80DD
Responsibility of employee:
¾ Please mention the name of disabled dependent, relationship of
dependent with the employee.

D. Section-III:-Deduction under chapter VI-A 80C of Income Tax Act, 1961

(Under Section 80C)
¾ Deduction under section 80C is eligible up to a maximum of Rs.100,000/-.
Remember there is no limit on the amount which an individual can invest i.e.
an employee can invest crores of rupees but the benefit he/she’ll get under
section 80C is maximum up to Rs.1,00,000/-.
¾ Deduction is allowed to non-resident also.
¾ Earlier when eligible investments were covered under section 88, there was
cap on exemption of certain investments for instance on tuition fees
Rs.12,000/- per child for a maximum of 2 children, principal on housing loan
Rs.20,000/-, Mutual funds covered u/s 10(23D) Rs.10,000/-, additional
benefit of Rs.30,000/- provided amount is invested in infra bonds etc. The
aforesaid sectoral cap has been removed once the eligible investments have
been shifted to 80C section. For instance, if an employee has paid tuition fees
of Rs.90,000/- of 1 child, employee shall get benefit of Rs.90,000/- u/s 80C,
employee can claim benefit of tuition fees paid for “n” number of children
etc.
¾ Though investment under pension plan is covered under separate section i.e.
80CCC but the eligibility of total of 80C & 80CCC cannot exceed Rs.1,00,000/-
. Earlier there was cap on exemption u/s 80CCC i.e. Rs.10,000/- or
Rs.15,000/- but this has also been removed. If employee has paid premium
under pension plan of Rs.1,00,000/-, he/she is eligible for benefit for
Rs.1,00,000/-.

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 ¾ You are requested to ignore details regarding PF deductions made from your
salary, as the same will be picked up from the payroll data directly.
¾ LIC premium:-Please mention the name(s) of the assured along with
relationship with the employee. Also specify the sum assured against each
individual policy along with policy no., premium paid and date of payment
of premium.
Please submit copy of LIC receipts for premium paid during F.Y.2007-2008.
¾ PPF:-Please mention the name(s) of the person in respect of which deposit
has been made along with relationship with the employee. Investment must
be of current financial year.
Please submit either copy of PPF receipt of deposit made in F.Y.2007-2008
duly stamped or copy of PPF pass book along with front page of pass book
where personal details of account holder are mentioned.
¾ NSC:-Purchase of NSC in the name of any person other than employee
himself won’t qualify for benefit be it spouse or children or parents or brother
or sister etc. Investment must be of current financial year.
Please submit copy of NSCs certificate for amount invested in F.Y.2007-2008.
¾ ULIP:-Please mention the name(s) of the person in respect of which deposit
has been made along with relationship with the employee. Investment must
be of current financial year.
Please submit copy of receipts of premium paid in F.Y. 2007-2008
¾ Mutual funds notified u/s 10(23D) i.e. tax saving mutual funds:-Purchase of
mutual funds in the name of any person other than employee himself won’t
qualify for benefit be it spouse or children or parents or brother or sister etc.
Investment must be of current financial year.
¾ Principal paid on housing loan:-It includes expenses incurred for transfer of
title of house property such as registration charges, stamp duty, brokerage
etc provided the same are paid in the current financial year.
¾ Interest accrued on NSC:-Interest on NSCs which has been purchased in
earlier years and which is being re-invested qualifies for benefit. Please
submit copy of NSCs of earlier years not earlier than the year 2000. Interest
on NSC of employee himself qualifies for benefit.
¾ Term Deposit:-Please submit a copy of fixed deposit certificate which clearly
states the period of investment, amount invested, name of the person who
has taken fixed deposit. Amount should have been invested in the F.Y.2007-
2008 for a period of not less than 5 years. Amount invested in fixed deposit in
earlier years shall not qualify for benefit.

INCOME / LOSS FROM HOUSE PROPERTY

RULE 26B:- An employee may furnish income for the same financial year chargeable
under any head other than salary (not being a loss other than loss under the head
“Income from House Property”) to the employer i.e. Only loss from house property can
be adjusted against income from salary for TDS purpose as inserted by Finance Act,
1998.

LOSS FROM HOUSE PROPERTY

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 TWO CASES

Case-I :- In case of Self Occupied property, to the extent of Interest for the Financial Year
or Rs.1,50,000/- whichever is lower.
Case-II :- In case of let out property, where deduction u/s 24 & Municipal Tax deduction
is more than Annual Value of the property.

COMPUTATION OF INCOME / LOSS FROM HOUSE PROPERTY

GROSS ANNUAL VALUE

LESS: MUNICIPAL TAXES PAID
NET ANNUAL VALUE
LESS: DEDUCTION U/S 24
-30% FOR REPAIRS
-INTEREST ON H.L_________________
INCOME / LOSS FROM HOUSE PROPERTY

1. Municipal taxes are allowed on actual payment basis even if paid for earlier
years or future years & such should have been paid by the owner. For instance
:- if in the financial year 2006-2007, assessee pays municipal taxes for the years
2004-2005, 2005-2006, 2007-2008, 2008-2009 & 2009-2010, entire municipal tax
paid in the year 2006-2007 shall be allowable in that year itself.
2. Deduction for 30% for Repairs:- It is a flat deduction irrespective of actual
expenditure i.e. actual expenditure is not relevant.
30% is to be calculated of Net Annual Value (NAV). NAV is computed after
deducting municipal taxes paid from Gross Annual Value (GAV).
3. Interest on borrowed capital:- The following points must be kept in mind
before giving benefit u/s 24(b):
1. It is deductible on “ACCURAL” basis i.e. even if it has not been paid during
the year it shall be allowable.
2. Interest on unpaid interest i.e. penalty interest on late payment is not
allowable.
3. If interest has been paid on fresh loan taken for the purpose of repayment
of original loan which has been raised for the purpose construction,
purchase, renewal, repairs of house property, it is allowable.
4. If interest is payable outside India and tax has not been deducted at source,
such interest is not allowable u/s 24 of Income Tax Act, 1961.

There are two components of Interest on borrowed capital:-

1. Interest for current financial year
2. Interest for pre-construction period

There is a cap of Rs.1,50,000/- or Rs.30,000/- in the following two situations:

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 IN CASE OF SELF OCCUPIED PROPERTY

NAV is nil. Only one deduction is allowable i.e. interest on housing loan
maximum upto Rs.1,50,000/- & Rs.30,000/-.

Conditions for claiming deduction of Rs.1,50,000/-:-

1. Capital is borrowed on or after 01/04/1999 for purchase or construction of
house property.
2. Purchase or construction of property is completed within 3 years from the
end of financial year in which capital was borrowed.

Conditions upon fulfillment of which deduction of Rs.30,000/- is allowed instead

of Rs.1,50,000/-:-
1. If capital is borrowed on or after 1st April 1999 for reconstruction, repairs or
renewals of house property. That is loan is borrowed for carrying out
construction or repairs or renewals of already constructed house property.
2. If capital is borrowed on or after 1st April 1999 for construction of house
property but the construction is not completed within three years from the end
of financial year in which capital is borrowed, the condition which is required
for claiming deduction of Rs.1,50,000/-.

CASE COVERED U/S 23(2)(b)

Following conditions must be satisfied in order to avail deduction of Rs.1,50,000/-

or Rs.30,000/- as in case of self occupied property:
1. Assessee owns a house property which cannot actually be occupied by him by
the reason of employment, business or profession at any other place.
2. Assessee resides at that place i.e. the place of employment, profession or
business,which is not owned by him.
3. House property owned by the assessee is not let out during whole or part of
the year.

In this situation employee can avail exemption of HRA since he / she is staying in
rented premises because of the purpose of employment.

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