Deduction is the amount, which is reduced from the gross total income before computing tax.

There are other deductions such as for donations, for repayment of loans taken for educational purposes etc. Deductions on Interest ( U/s 80L) Up to Rs. 12,000/- : Additional deduction up to Rs. 3,000/If interest is earned on Govt. Securities, Bank deposits, Post Office deposits, debentures, National Savings Certificates etc., On interest from Govt. Securities, if not already covered in the Rs. 12,000/- limit mentioned earlier.

Deductions on premium for medical insurance (U/s 80cc) Up to Rs. 10,000/Up to Rs. 15,000/If premium for medical insurance is paid by cheque for a person, or his dependent family member or member of the HUF. For senior citizens Deductions on expenditure on handicapped dependent (U/s 80DD) Up to Rs. 40,000/If any expenditure has been incurred on the treatment, nursing, training of a handicapped dependent, or for creating an insurance benefit for such person subject to the condition that doctor working in a government hospital has issued the necessary certificate. Deductions on treatment of diseases ( u/s 80DDB) Up to Rs.40,000 /Rs.60,000 /If an individual or an HUF actually incurs expenditure for treatment of certain specified diseases for himself, dependents or a member of HUF. For treatment of senior citizens

(This deduction is available only for certain specified diseases.) Deductions on contribution to pension funds ( u/s 80CCC) Up to Rs.10,000 /If an individual contributes to specified pension funds The pension will however be taxable on receipt.

AGRICULTURAL INCOME :
Agricultural Income :Agriculture income is exempt under the Indian Income Tax Act. This means that income earned from agricultural operations is not taxed. The reason for exemption of agriculture income from Central Taxation is that the Constitution gives exclusive power to make laws with respect to taxes on agricultural income to the State Legislature. However while computing tax on nonagricultural income agricultural income is also taken into consideration.

As per Income Tax Act income earned from any of the under given three sources meant Agricultural Income; (i) Any rent received from land which is used for agricultural purpose.

(ii) Any income derived from such land by agricultural operations including processing of agricultural produce, raised or received as rent in kind so as to render it fit for the market, or sale of such produce. (iii) Income attributable to a farm house subject to the condition that building is situated on or in the immediate vicinity of the land and is used as a dwelling house, store house etc. Now income earned from carrying nursery operations is also considered as agricultural income and hence exempt from income tax. ASSESSE : Assessee means person by whom tax is payable - The word assessee means the person by whom income-tax is payable. It follows therefore that the cost which is to be considered for the purpose of depreciation must be the original cost to the person by whom income-tax is payable AVERAGE RATE : ?? BLOCK OF ASSET : Cocept "Block of Assests" is used in Income Tax Act 1961. It means a group of assets on which same rate of depriciation is allowed. As per act following definition of block of assets has been given. block of assets means a group of assets falling within a class of assets comprising (a) tangible assets, being buildings, machinery, plant or furniture; (b) intangible assets, being know-how, patents, copyrights, trade-marks, licences, franchises or any other business or commercial rights of similar nature, in respect of which the same percentage of depreciation is prescribed CHARITABLE PURPOSE :
Section 2(15) of the Income Tax Act, 1961 defines 'Charitable Purpose" to include the followings: (i) Relief of the Poor (ii)Education (iii)Medical Relief and (iv)the advancement of any other object of general public utilit An entity with a charitable object of the above nature was eligible for exemption from tax under section 11 or alternatively under section 10(23C) of the Act. However, it was seen that a number of entities who were engaged in commercial activities were also claiming exemption on the ground that such activities were for the advancement of objects of general public utility in terms of the fourth limb of the defenition of "Charitable Purpose'. Therefore, section 2(15) was amended vide Finance Act, 2008 by adding a proviso which states that the advancement of any other object of general public utility shall not be a charitable purpose if it involves the carrying onn of [a] any activity in the nature of trade, coomerece or business, [b] any activity of rendering any service in relation to any trade, commerce or business

FMV :
Fair market value (FMV) is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts. If you put a restriction on the use of property you donate, the FMV must reflect that restriction."