Section 80C of Income Tax Act and list of other deductions

Basics Of Health Insurance
Published on: 29-09-2023

Introduction:

Various deductions are given under section 80C of Income Tax Act to benefit the taxpayers. Section 80C and further sections such as 80CCC, 80CCD, 80CCE, 80D to 80U allow several deductions based on specific investments and expenses made by taxpayers.

The main objective behind these deductions is to encourage taxpayers to not only focus on earning money but also grow their money through investments and savings. If you are a taxpayer and have made eligible investments and expenses you can also reduce your tax burden by reducing the eligible amount from your total income.

Read on to know in detail about these deductions for maximum tax savings.

S. No.	Section	Applicability	Deductions	Limit
1.	80C	Only individuals and Hindu Undivided Families (HUFs) are eligible to claim deductions under section 80C of Income Tax Act.	Section 80C of Income Tax allows deductions for the following investments and expenses: A. Investments Amount invested in Public Provident Fund (PPF) Amount invested in Employee Provident Fund Equity Linked Savings Scheme (ELSS) Investment in Infrastructure bonds Sukanya Samriddhi Yojana National Savings Certificate Senior Citizens Savings Scheme Unit Linked Insurance Plan Tax saver fixed deposit (FD with 5 years of maturity) B. Expenses Repayment of housing loan principal amount Stamp duty and registration charges on house property Payment of tuition fees of maximum two children Payment of life insurance premium	The maximum deduction allowed under section 80C of Income Tax Act for all investments and expenditures is ₹1,50,000.
2.	Section 80CCC	Only individuals	As per this section, individual taxpayers can claim a deduction from the total income for the amount contributed towards life insurance annuity plans.	The cumulative deduction under sections 80C of Income Tax Act, 80CCC and 80CCD shall be subject to the limit of ₹1,50,000.
3.	Section 80CCD	Only individuals	This section covers deductions available to individuals/employees for contributions made towards National Pension Scheme (NPS) 80CCD(1): Amount deductible for contribution to NPS: a) 10% of salary (for salaried employees) b) 20% of gross total income (for self-employed individuals) 80CCD(1b): It allows additional deduction of ₹50,000 for contribution to NPS. 80CCD(2): Employer’s contribution to employee’s NPS up to 10% of the basic salary and dearness allowance.	The cumulative deduction under sections 80C of Income Tax, 80CCC and 80CCD shall be subject to the limit of ₹1,50,000.
4.	Section 80D	Individuals and HUFs	This section allows a deduction for premiums paid for health insurance plans.	1. Premium paid for health insurance taken for self, spouse and dependent children - ₹25,000 2. Additional deduction for health insurance premium paid for insurance plan taken for parents - ₹25000 (If parents age is 60 years or above, then ₹50,000) A deduction of up to ₹5,000 for preventive health check-ups is also included in the above.
5.	Section 80DD	Individual and HUF	It allows a deduction for expenditure incurred on treatment and rehabilitation of a dependent handicapped relative.	On submitting a certificate of disability from a prescribed authority, the taxpayer can claim a deduction for the following amount paid or deposited to a specified scheme for rehabilitation and care of the handicapped dependent: 1. Disability status is more than 40% but less than 80% - ₹75,000 2. Disability more than 80% - ₹1,25,00
6.	Section 80DDB	Individual and HUF	This section allows a deduction for medical expenditure incurred on treatment of a specified illness of a self or dependent relative. HUFs can claim this for any of the members on the treatment of the prescribed disease.	1. For individuals or HUFs below 60 years of age - ₹40,000 2.60 years or above - ₹1,00,000
7.	Section 80E	Only individuals	This deduction is allowed for payment of interest on education loans taken for higher studies of self, spouse or children.	No limitation on the amount of interest paid on an education loan. However, this deduction can be claimed for a maximum of 8 years beginning from the year in which the repayment starts.
8.	Section 80EE	Only individuals	This deduction is available for the home loan borrowed between 1st April 2016 and 31st March 2017 for individuals who do not own more than one house property on the date of sanction of the loan.	An additional deduction of ₹50,000 on payment of home loan interest (after exhausting the limit of ₹2,00,000 under section 24 of the Act)
9.	Section 80G	All taxpayers	This deduction is available to taxpayers if donations are made to specified trusts or institutions.	An amount up to 100% or 50% of the donation made towards specified institutions can be claimed as a deduction.
10.	Section 80GGB	Companies	This deduction is available to companies for contributions made towards a political party or electoral trust.	100% of the donation can be claimed as a deduction if it is made in any mode other than by cash.
11.	Section 80GGC	Individuals	A deduction is allowed for contributions made by individual taxpayers towards a political party or electoral trust.	100% of the donation can be claimed as a deduction if it is made in any mode other than by cash.
12.	Section 80RRB	Individual	Deduction from income received as royalty for a patent registered after 1st April 2003 under the Patents Act 1970.	An Indian resident can claim the following deduction: Royalty income upto ₹3,00,000
13.	Section 80TTA	Individual and HUF	Deduction for interest income earned on saving accounts with banks, post offices or co-operative societies.	Maximum ₹10,000 of interest income on the savings account.
14.	Section 80TTB	Individuals (Aged 60 years or above)	Senior citizens can claim the deduction of interest income earned on deposits held by them.	Maximum ₹50,000 of interest income on deposits. Individuals claiming this deduction cannot claim further deduction under section 80TTA.
15.	Section 80U	Individual	Individuals suffering from physical or mental disabilities	The limits of deduction specified under this section are as follows: Physical disability and mental retardation: ₹75,000 Severe disability: ₹1,25,000

Apart from the above deductions, the Income Tax Act has given other deductions for the benefit of taxpayers. One such deduction is the deduction for interest paid on housing loans given under section 24. This section allows individuals to claim a deduction for interest paid on self-occupied house property. The maximum amount that can be claimed under this section is ₹2,00,000 in a financial year.

These deductions can help you in effective tax planning. You can meet your financial goals and achieve the dual benefits of reduction of tax burden and beneficial investments with the help of section 80C-80 tax deductions.

Follow the ABHI website and learn more about income tax-related matters, health insurance plans and more. You can also explore the following health insurance plans: