Section 80C- Deductions
on Investments
Section 80C is one of the most popular and favorite
sections amongst taxpayers as it allows them to
reduce taxable income by making tax-saving
investments or incurring eligible expenses.
Who can claim Section 80C deduction?: Section
80C deduction can be claimed by Individuals
and HUFs
" Maximum deduction allowed under section
80C?: Up to Rs.150,000 can be claimed as
deduction every year from the Gross total
income. Companies, partnership firms, and LLPs
cannot avail the benefit of this deduction.
Deduction Limits Under
Section 80C, 80CCC,
80CCD(1), 80CCE,
80CCD(1B)
Sec 80CCC and Sec 80CCD provide deductions for
the investments in the pension scheme either by
yourself or by way of the employer's contribution.
The maximum deduction under Section 80C, 80CCC
and 80CCD(1) put together is Rs 1.5 lakhs. However,
you may claim an additionaldeduction of Rs 50,000
allowedu/s 80CCD(1B) for contributions made to
NPS(National Pension Scheme). Thus, the maximum
deduction limit is Rs 2 lakhs under Section
80C+80CCC+800CD() + Section 80CCD(1B).
Eligible investments Maximum
Sections
for tax deductions Deduction
Investment made in
Equity Linked Saving
Schemes,
PPF/SPF/RPF,
payments made
80C Rs 1,50,O00
towards Life
Insurance Premiums,
principal sum of a
home loan, SSY, NSC,
SCSS, etc.
Payment made
80CCC towards pension Rs 1,50,000
funds
Employed:
Payments made
10% of basic
towards Atal Pension
salary + DA
Yojana or other
80CCD() Self
pension schemes
employed:
notified by
20% of gross
government
total income
Total deduction
80CCE under Section 80C, Rs 1,50,000
80CCC, 80CCD(1)
Investments in NPS
(outside Rs 1,50,000
80CCD(1B) Rs 50,000
limit under Section
80CCE)
Central
government
Employer's
employer: 14%
contribution towards
of basic
80CCD(2) NPS (outside Rs
salary +DA
1,50,000 limit under
Others: 10% of
Section 80CCE)
basic salary
+DA
Section 80C Deductions
List
Investment Average Lock-in Risk
options Interest period for factor
ELSS funds 12% - 15% 3 years High
Till 60 years
NPS Scheme 8%- 10% High
of age
ULIP 8% - 10% 5 years Medium
Tax saving Up to
5 years Low
FD 8.40%
PPF 790% 15 years Low
Senior citizen 5 years (can
Savings 8.60% be extended for Low
scheme other 3 years)
National
Savings 79% 5 years Low
Certificoate
Till girl child
reaches 21
years of
Sukanya age
Samriddhi 8.50% (partial Low
Yojana withdrawal
allowed when
she reached 18
years)
Section 80TTA - Interest
onSavings Accounts
" Who can claim Section 80TTAdeduction?:
Section 80TTAdeduction can be claimed by an
individual or HUF.
" Maximum deduction allowed under section
80TTA?: Rs 10,000
Section 80TTB- Interest
From DepositsHeld by
Senior Citizens
" Who can claim Section 80TTB deduction?:
Section 80TTB deduction can be claimed by a
resident senior citizen aged 60 years and above
at any time during the financial year.
" Maximum deduction allowed under section
80TTB?: Rs 50,000
Section 80GG - Income
Tax Deduction on House
Rent Paid
"Who is eligible to claim deduction under Section
80GG?: Those who do not receive HRA in their
salary structure but live in rented
accommodations.
"Conditions for claiming Section 80GG:
" Taxpayer must be self-employed or salaried
individual who does not receive HRA
" Taxpayer must be paying rent for residential
purpose only
" The taxpayer should not have self-occupied
residential property in any other place. Also,
the taxpayer, their spouse or minor child or
their HUF should not own any residential
accommodation in the place where they
currently reside.
" File Form 10BA -
" How much deduction is available Under Section
80GG?
The least of the following is available as
deduction:
" Rent paid (-) 10% of adjusted total income*
" Rs 5,000/- per month
" 25% of adjusted total income"
"Adjusted Gross Total Income =
Gross Total Income
Less:
- LTCG, if any, included in total gross income
- STCG u/s 111A
- Deductions u/s 80C to 80U except
deduction under section 80GG
- Incomes of NRIs and foreign companies are
taxedat a special tax rate, such as incomes
u/s 115A, 115AB, 115AC, or T15AD.
Section 80E - Interest on
Education Loan
"Who is eligible to claim deduction under Section
80E? An individualcan claim a deduction of
interest paid on an education loan taken for
pursuing higher education.
" The education loan can be taken for the
taxpayer, their spouse or children or for a student
for whom the taxpayer is a legal guardian.
" 80E deduction is available for amaximum of 8
years (beginning the year in which the interest
starts getting paid) or till the entire interest is
paid, whichever is earlier. There is no ceiling limit
on the amount of interest that can be claimed.
8OEE- Interest on Home
Loan For First-Time Home
Owners
This deduction can be claimed from FY 2016-17 and
onwards only if the loan has been taken in FY 2016-17.
The deduction under section 80EE is available only to
home-owners (individuals) having only one house
property on the date of sanction of the loan. The
value of the property must be less than Rs 5O lakh and
the home loan must be less than Rs 35 [Link] loan
taken from afinancial institution must have been
sanctioned between 1 April 2016 and 31 March 2017.
There is an additional deduction of Rs 50,000
available on your home loan interest on top of the
deduction of Rs 2 lakh (on the interest component of
home loan EMI) allowed under section 24.
Section 80EEA - Interest
on Homne Loan For First
Time Home Owners
Section 80EEA, which provides taxpayers with an
extradeduction for paying interest on a house loan.
Whereas Section 24 exempted interest on home loans
up to Rs.2 lakhs, this section provides a tax exemption
of up to Rs1.5 lakhs per financial year to individuals on
the interest paicd on home loans for
purchasing/constructing an affordable house.
Deduction can be claimed for the housing loan taken
between 1st April 2019 to 31st March 2022. Read in
detailhere.
CONDITIONS FOR CLAIMING 8OEEA
01 The individual should not own any
residential house on the date of
sanction of loan
02
Stamp Duty Value
of house <Rs 45 lakhs
03
Not eligible to claim
deduction u/s 80EE
04
Loan should be sanctioned by a between
lst April 2019 and 31st March 2022
Section 80EEB-Interest
paid on Electric Vehicle
Loan
Toencourage the purchase and usage of electric
vehicles,deduction is allowed for interest paid on
vehicle loan availed to purchase the electric vehicles
up to Rs.150,000.
What is Section 80D?
Every individualor HUFcan claim a deduction for
medical insurance premiumspaid in the financialyear
under Section 8OD. This deduction is also available for
top-up health plans and critical illness plans.
The best part is that it is over and above the Rs 1.5
lakh limit deductions claimed under Section 80C.
Note: This deduction can be claimed if an individual or
HUF chooses to pay taxes under the old tax regime.
Who is Eligible for
Deduction Under Section
80D?
" Individuals
" Hindu Undivided Family (HUFs)
No other entity can claim this deduction. For example,
a company or a firm cannot claim a deduction under
this section.
What Deduction is
Allowed Under Section
80D?
The following expenses are allowed as deduction
under Section 8OD:
" Medical insurance premiums paid for self, family
and parents
" Medicalexpenses incurred for senior citizens
Individual or HUF taxpayers can claim deduction for
the insurance premium payments made for:
" Self
" Spouse
Dependent children
" Parents
Payments Eligible as
Deduction Under Section
80D
An individualor HUF can claim a deduction under
Section 80D for the payments mentioned below:
" Health insurance premiums paid in any mode
other than cash:
" Up to 25,000 paid for self, spouse,
dependent children or parents
" Up to 50,000 if family or your parents are
senior citizens (60 years and above)
Preventive health checkups (Cash payment
allowed):
" Up to 5,000 for self, spouse, dependent
children or parents
" Medical expenses
" Senior citizens (resident aged 60 years or
above) who do not have any health
insurance can claim a deduction up to Rs
50,000 on the medical expenses incurred.
Note: While the Income Tax Act doesn't
explicitly define "medical expenditure," it
typically means costs like medical
consultations, impairment aids, medicines,
etc.
" Contribution to CGHS/notified scheme
" Individuals can claim a tax deduction of up
to 725,000 for contributions made to the
Central Government Health Scheme (CGHS)
or any other notified scheme. However, any
contribution made on behalf of parents is
not eligible for this deduction.
Deduction Available Under
Section 80D
The deduction allowed under Section 80D is Rs
25,000 in afinancialyear. In the case of senior
citizens, the deduction limit allowed is Rs 50,000.
The table below captures the amount of deduction
available to an individual taxpayer under various
Scenarios: