Deductions on Section 80C, 80CCC, 80CCD & 80D
Updated On Apr 27, 2021
As a tax-paying individual, are you aware of the tax relief you can claim under Section 80, 80 CCC, 80 CCD, and 80D? If not, you are at the right place! Note that these deductions are classified into different buckets on the basis of investment type. Also, that they fall under Chapter VI A of the Income Tax Act, 1956. Having detailed knowledge about claiming these deductions and reducing your tax liability can help you plan your taxes and finances in a much better way. So, give a quick look at the deductions mentioned below.
Deductions on Section 80C, 80CCC, 80CCD & 80D Explained
The deductions as per different sections are as follows:
Under Section 80C -
An individual can claim relief in the total tax liability by Rs. 1.5 Lakh by making certain investments under Section 80 C. However, note that only a person who is an eligible assessee, i.e., an individual or HUF can claim relief under the section. While the maximum deduction allowed is restricted to Rs. 1.5 Lakh, there is no minimum limit. Investments eligible for deduction under Section 80 C are Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), National Pension Scheme (NPS), National Savings Certificate (NSC), Fixed Deposit (FD), Unit Linked Insurance Plan (ULIP), Sukanya Samriddhi Yojana (SSY), and Senior Citizen Savings Scheme (SCSS). Other expenses or investments eligible under Section 80C include the principal amount for a home loan repayment, stamp duty or fee for house property transfer, and tuition fees for any approved school, college, university for a maximum of 2 children.
Under Section 80 CCC -
Under this section, one can avail of a deduction of up to Rs. 1.5 Lakh for the amount paid towards a LIC annuity plan or any other insurance company.
Please note that the amount received annuity surrender, including interest accrued is taxable in the year of receipt.
Under Section 80 CCD -
National Pension Scheme or NPS is one of the popular tax saving-investment tools that any citizen between the age of 18 up to 65 years can join to avail tax benefits. Please note that the only condition is that the individual must comply with KYC norms.
Here is the eligibility for availing tax benefits on NPS through 3 sections:
1. i) Section 80CCD (1) - Employee’s contribution of up to 10% of basic salary and dearness allowance (DA) up to ₹1.5 lakh is eligible.
2. ii) Section 80CCD (2) - Employer’s contribution up to 10% of basic + DA is eligible. Keep in mind that the employer’s contribution is an additional deduction.
3. iii) Section 80CCD (1B) - Only section in which an additional exemption up to Rs. 50,000 in NPS is eligible.
It must be noted that the additional tax benefit of Rs. 50,000 is over and above the benefit of Rs. 1.5 Lakh claimed under all other investments.
Under Section 80D -
Under Section 80D, the premium paid for a health insurance policy is eligible for a tax deduction. An assessee is eligible for a deduction of Rs. 25,000 under Section 80D on insurance for self, spouse, and dependent children. If the assessee is above 60 years of age, then this deduction is available up to a maximum of Rs. 50,000. Note that an additional deduction for insurance of parents up to Rs. 25,000 is also allowed. In case, the parents are aged above 60 years, the deduction available is ₹ 50,000. Also note that if both the assessee and parent(s) are 60 years or more, then the maximum deduction available is Rs. 1 Lakh.
Now that you are aware of all the tax-saving ideas, make sure you use your investment opportunities wisely, save tax, and earn returns as well.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.