What kind of deductions falls under section 80 ?

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This section 80 deduction under chapter VI A are nothing but tax planning investments or expenditure made by taxpayers which are deducted from gross total income. In this article, you will get to know about section 80 deductions applicable to salaried persons.

80C, 80CCC, 80CCD = Maximum Rs. 1,50,000

The total deduction under this section (along with section 80CCC and 80CCD (1) is limited to Rs. 1.50 lakh only.

Section 80C:

  • Life Insurance Premium for individual, policy must be in self or spouse’s or any child’s name. For HUF, it may be on life of any member of HUF.
  • Sum paid under contract for deferred annuity for individual, on life of self, spouse or any child.
  • Sum deducted from salary payable to Govt. Servant for securing deferred annuity for self-spouse or child Payment limited to 20% of salary.
  • Investment in Senior Citizens Savings Scheme 2004 for 5 years by resident individuals.
  • Contribution made under Employee’s Provident Fund Scheme.
  • Contribution to PPF for resident individual, can be in the name of self/spouse, any child & for HUF, it can be in the name of any member of the family.
  • Deposit in Sukanya Samriddhi Account as natural / legal guardian of girl child.
  • Contribution by employee to a Recognized Provident Fund.
  • Sum deposited in 10 years/ 15 years account of Post Office Saving Bank
  • Subscription to any notified securities/notified deposits scheme. e.g. NSS
  • Subscription to any notified savings certificate, Unit Linked Savings certificates. e.g. NSC VIII issue.
  • Contribution to Unit Linked Insurance Plan of LIC Mutual Fund e.g. Dhanrakhsa 1989
  • Contribution to notified deposit scheme/Pension fund set up by the National Housing Scheme.
  • Principle loan installment payment made or part payment of loan taken for purchase/construction of residential house property. Stamp duty paid on purchase of house property.
  • Subscription to units of a Mutual Fund notified u/s 10(23D).
  • Subscription to deposit scheme of a public sector, company engaged in providing housing finance.
  • Subscription to equity shares/ debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions.
  • Tuition fees paid at the time of admission or otherwise to any school, college, university or other educational institution situated within India for the purpose of full time education of any two children. Available in respect of any two children.

Section 80CCC:

Deduction in respect payment of premium for annuity plan of LIC or any other insurer Deduction is available upto a maximum of Rs. 150,000/-. The premium must be deposited for receiving pension from the fund.

Section 80CCD (1):

Deduction in respect of Contribution to Pension Account (by an assessee). Deduction available for the amount paid or deposited in a pension scheme notified or as may be notified by the Central Government subject to a maximum of :
(a) 10% of salary in the previous year in the case of an employee
(b) 10% of gross total income in any other case.

Section 80CCD(1A):

The maximum deduction allowable under this section is Rs. 1.00 lakh. in case of contribution to New Pension Scheme (NPS), it is Rs. 1.50 lakh w.e.f. 01.04.2015.

80CCD (1B) Contribution to NPS = Maximum Rs. 50,000 (New Deduction)

Contribution to National Pension Scheme (NPS), an additional deduction of up to Rs. 50,000 over and above the Section 80C, 80CCC and 80CCD savings cap of Rs. 1.5 lakh, is allowed if such amount is contributed by the employee. So, overall tax savings of Rs. 2 lakh can be availed under Section 80C, 80CCC and 80CCD(1)

80CCD (2) Pension Scheme = Maximum 10% of salary

Deduction under Section 80CCD(2) is available for the amount paid or deposited by the employer of an assessee in a pension scheme notified or as may be notified by the Central Government subject to a maximum of 10% of salary in the financial year.

80CCG Equity Saving Scheme = Maximum Rs. 25,000

This section applicable to individual / HUF having income below 12 lakhs. New Retail Investor has to applied to acquired listed shares in accordance with a notified scheme for locked-in for a period of 3 years. Amount of deduction is 50% of amount invested subject to Rs. 25,000. 

80D Medical Insurance = Maximum Rs. 60,000

Deduction is available upto Rs. 30,000/- for parents who are senior citizens and upto Rs. 25,000/- in other cases for insurance of self, spouse and dependent children. Amount of up to Rs.5000/- spent on preventive health check-up. So a maximum of Rs. 60,000 can be deducted which is spent towards Health Insurance premium

80DD Medical Treatment of Physically challenged dependents = Maximum Rs. 1,25,000

In the case of salaried employee who is taking care of physically challenged Dependent Relative, an amount with the maximum limit of Rs.75000/- spent towards medical treatment or rehabilitation can be deducted from the income (In the case of severe disability maximum deduction would be Rs 1,25,000)

80DDB Specified Disease = Maximum Rs. 80,000

Deduction in respect of specified disease for self or dependent relatives is allowed lower of Rs. 40,000 or actual amount paid. This deduction amount increases to Rs. 60,000 in case of senior citizen and Rs. 80,000 in case of super senior citizen. To claim this benefits, it is required to furnish certificate in form 10-I  from specialist.

80E Interest on Loan for Higher Studies = Full Interest

Deduction in respect of interest on loan taken for pursuing higher education. The deduction is also available for higher education of a relative. This deduction available for 8 years or full interest paid, whichever is earlier.

80EE Interest on Home Loan on First Home buyer = Maximum Rs. 50,000 (New Deduction)

First home buyers availing home loans, an additional deduction of interest on loan from any financial institution up to Rs. 50,000/-. The house property should be of a value less than Rs.50 lacs and loan amount sanctioned during the period after April 1 2016 should not exceed Rs.35 lacs.
Benefit of deduction is extended till the repayment of loan continues. The deduction is over and above the limit of Rs. 2 lacs provided for a self-occupied property u/s 24 of the Act.

80G Deduction for Donation = 100% / 50% of Donation

Notified donations under Sec. 80G will be eligible for deduction (100% or 50% as per the notification condition)

80GG House Rent Paid = Maximum Rs. 60,000

Deduction available is the least of

  • Rent paid less 10% of adjusted total income
  • Rs. 5000/- per month i.e. Maximum Deduction available is 60,000/-
  • Subject to 25% of adjusted total income or Rs.2000 per month whichever is lower
  • Employee or his/her spouse or minor child should not own residential accommodation at the place of employment.
  • HRA is not received.
  • No self-occupied residential premises in any other place.

80GGA Donation to scientific research or rural development = Full Donation

Any donation paid towards notified Rural development fund, a research association or university or approved institution prescribed by authority which has object of scientific research, is fully deductible. 

80GGC Donation to political parties = Full Donation

Any sum contributed by an assesse to a political party or an electoral trust is fully deductible. 

80 TTA Interest on Savings account = Maximum Rs. 10,000

Maximum of Rs. 10,000/-, in respect of interest on deposits in savings account (not time deposits) with a bank, co-operative society or post office.

80U Person suffering from Physical Disability = Maximum Rs. 1,25,000

Deduction of Rs. 75,000/- in respect of tax payer suffering from a physical disability. In the case of severe disability, deduction of Rs. 125,000/- will be allowed. Certificate from the approved medical authorities regarding the extent of disability will have to be produced (Rule 11D)

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