Income Tax Deductions for Salaried & Employers – Deduction under Section 80C, 80CCC, 80CCD & 80D

Income Tax Deductions for Salaried & Employers - Deduction under Section 80C, 80CCC, 80CCD & 80D

What is section 80C?

Section 80C is from chapter VI A of Income Tax Act, 1961. Chapter mainly focuses on tax deduction for various personal expenses and also for section 80C.

Section 80C of Income Tax Act for Individuals & HUF’s in reducing their tax burden by investing in various schemes & personal expenditure. In order to promote savings, the government has provided a set of tax saving schemes.

Section 80C includes subsections, 80CCC, 80CCD (1), 80CCD (1b) and 80CCD (2).

The overall amount for claiming a deduction, including the subsections, is Rs. 1.5 lakh, with the exception of an additional deduction of Rs. 50,000 permitted under Section 80CCD (1b)

Deductions under Sections Eligible Investments for Tax Deductions
Deductions allowed under 80C investments made in EPF, PPF, LIC premium, Equity Linked Saving Schemes, payment made towards the principal sum of a home loan, SCSS, NSC, SSY, etc.
Deduction for life insurance annuity plan.
Payments made to annuity pension plans are tax deductible under section 80CCC. Taxes are due in the year that the annuity pension or amount paid upon surrender, including interest or bonus accrued on the annuity, is received.
80CCD (1)
Deduction for NPS
Employee’s benefaction under section 80CCD( 1) max reduction permitted is least of the following

10 of payment( in case taxpayer is hand)
20 & of gross total income( in case of tone employed)
Rs1.5 Lakh( cap permitted u/ s 80C)
80CCD (1b)
Deduction for NPS
Additional reduction of Rs 50,000 is perrmitted for amount deposited to NPS account, Contributions to Atal Pension Yojana is also eligible for deduction.
80CCD (2)
Deduction for NPS
Employers contribution is permitted for reduction upto 10% of basic salary plus dearness allowance under this section. Benefit in this section is allowed only to salaried individuals and not self employed.

What is section 80D?

Section 80D of Income Tax Act provides tax deduction to individual and Hindu Undivided Family (HUFs) related to medical insurance premium paid for Self & Family members. It provides deduction for Medical Related Expenditure as well. Such Personal Expenses are promoted through 80D and provides a positive benefit simultaneously.

Benefits of 80C & 80D deduction?

Deduction under 80C

Investment in 80C can provide benefits up to Rs. 1.5 Lakhs.

Various list of schemes for 80C such as:

  • Life/Term Insurance Premium
  • Equity Linked Saving Schemes (ELSS)
  • Public Provident Funds (PPF)
  • Sukanya Samriddhi Scheme
  • Senior Citizens Savings Scheme (SCSS)
  • National Savings Certificate (NSC)
  • Stamp Duty & Registration Charges on Property Purchased
  • Children’s Tuition Fees (Registered Educational Institues)
  • Principal Repayment of Housing Loan
  • Tax Saving Fixed Deposits

Deduction under 80D

Section 80D provides deduction for health insurance premium paid by Individuals & HUF’s only.

The benefit of 80D can be availed for self, spouse, dependent children’s & parents.

Rs 25,000 can be claimed as deduction from health insurance, including preliminary health care checkup & Other Medical Expenditure for the family. If your self or spouse or dependent childrens are above the age of 60 Years, then a maximum of Rs 50,000 can be availed as deduction.

Income Tax Deduction chart

Checklist provisions for filing 80C & 80D?

  • Under Section 80C, Maximum of Rs 1.5 Lakhs can be availed which is aggregate of all the investments specified in the list.
  • Taxpayers should be aware before investing in various mutual fund schemes, and make sure the scheme is Equity Linked Saving Scheme eligible under section 80C.
  • Generally, Under Section 80D, Maximum of Rs. 25,000 can be availed in case of individuals being below 60 years of age & Rs. 50,000 in case of individual being above 60 years of age.
  • Medical Insurance Premium paid through cash aren’t eligible for 80D deduction.
  • Only the taxpayer should pay the health insurance premium in order to claim the deduction. No other person can claim such benefits under 80D.

What are the list of documents required to file form 80C & 80D?

  • Contribution receipts of provident fund.
  • Deposit receipt of senior citizen saving schemes.
  • Stamp Duty & Registration Fees
  • Housing Loan Statement providing details about Principal Repayment of Loan.
  • Tuition Fees Receipts.
  • Other appropriate receipts.
  • Life insurance premium receipts.
  • Payment made for preventive health check up.
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