Deductions on Section 80C, 80CCC, 80CCD & 80D

The Department of Taxation for the purpose of promoting savings and investment among taxpayers has provided various deductions from the amount payable under Chapter VI A withholding. 80C is very popular, there are other deductions that benefit taxpayers to reduce their tax debt. Let's understand in more detail this issue:

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1. Section 80C – Deductions on Investments

Section 80C is one of the most popular and popular categories for taxpayers as it allows for a reduction in taxable income by making tax savings or incurring reasonable costs. It allows for a maximum deduction of Rs 1.5 lakh annually from taxpayers the amount of revenue.

The benefits of this release can be obtained by individuals and HUFs. Companies, corporate firms, LLPs cannot reap the benefits of this reduction.

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

It is important to note that the total limit that includes the clauses for the reduction of Rs 1.5 lakh without the additional deduction of Rs 50,000 allowed / s 80CCD (1b)

2. Section 80CCC – Insurance Premium /Section 80CCD – Pension Contribution

Eligible investments for tax deductions
80 C80C allows for a reduction in investments made in PPF, EPF, LIC premium, Equity-linked storage system, the principal payment of the home loan, stamp duty and registration costs for the purchase of Property, Sukanya siddhi yojana (SSY), national savings certificate (NSC), savings senior citizens scheme (SCSS), ULIP, FD tax for 5 years, Infrastructure bond etc.
80CCCDeduction for life insurance annuity plan. 80CCC allows for deductions in respect of pension plans Pension received from the pension or the amount earned from the pension contribution, inclusive interest or pension received, is taxable in the year of acquisition.
80CCD (1)Deduction for NPS Employee contribution under section 80CCD (1)Top allowed for at least one of the following
  • 10% of salary (in case taxpayer is employee)
  • 20& of gross total income (in case of self employed)
  • Rs 1.5 Lakh ( limit allowed u/s 80C)
80CCD (1b)Deduction for NPS Additional deduction of Rs 50,000 is allowed for amount deposited to NPS account

Contributions to Atal Pension Yojana is also eligible for deduction.
80CCD (2)Deduction for NPSEmployer contribution is allowed to deduct up to 10% of basic salary once grant money under this section. Benefits in this category are only available to income earners and not self-employed people.
Here are some of the investment options that are allowed such as drawing 80 / s. They not only help you save money but also help you to increase your income. A quick comparison of the options is listed below:
Investment options Average InterestLock in period for Risk factor
ELSS funds12% – 15%3 yearsHigh
NPS Scheme8% – 10%Till 60 years of ageHigh
ULIP 8% – 10% 5 years Medium
Tax saving FD 7% – 8%5 yearsLow
PPF7.10%5 yearsLow
Senior citizen savings scheme7.4%5years (can be extended for another 3 years)Low
National6.8%5 yearsLow
Sukanya Sam riddhi Yojana8.4%Until the girl child reaches the age of 21 years
(partial withdrawal allowed when he or she reaches the age of 18 years)
Low

3. Section 80 TTA – Interest on Savings Account

Deduction from Gross Total Income for Interest on Savings Bank Account

If you are an individual or HUF, you can apply for a reduction of a maximum of Rs 10,000 in interest income from your savings account with a bank, co-operative community, or post office. Add interest from savings bank account to other income.

Section 80TTA are not deducted from interest income from random deposits, recurring deposits, or interest income from corporate bonds.

4. Section 80GG – House Rent Paid

Deduction for House Rent Paid Where HRA is not Received

  • Section 80GG deduction is available for paid rent when the HRA is not available. A taxpayer, spouse or minor child should not have a place of employment
  • The taxpayer should not have his or her residence property anywhere else
  • The taxpayer must live on rent and pay rent
  • Arrest is available to everyone

Deduction available is the least of the following:

  • Rent paid minus 10% of adjusted total income
  • Rs 5,000/- per month
  • 25% of adjusted total income*

*Adjusted Gross Total Income is arrived at after adjusting the Gross Total Income for certain deductions, exempt income, long-term capital gains and income related to non-residents and foreign companies.

An online e-filing software like that of Myitronline can be extremely easy as the limits are auto-calculated. So, you do not have to worry about making complex calculations.

From FY 2016-17 available deduction has been raised to Rs 5,000 a month from Rs 2,000 per month.

5. Section 80E – Interest on Education Loan

Deduction for Interest on Education Loan for Higher Studies

Arrest is allowed for a person with interest on loans taken on higher education. This loan may have been taken from a taxpayer, spouse or children or for a student taxpayer who is his or her legal guardian.

80E deduction is available for a period of eight years (beginning the year in which interest is first paid) or until all interest is paid, whichever is earlier. There is no limit to the amount claimed.

6. Section 80EE – Interest on Home Loan

Deductions on Home Loan Interest for First Time Home Owners

FY 2013-14 and FY 2014-15 During these financial years, the seizures obtained under this category were the first house costing Rs 40 lakh or less. You can only get this if the amount of your loan at this time is Rs 25 lakh or less. Loans must be approved between 1 April 2013 and 31 March 2014. Combined debts allowed under this section may not exceed Rs 1 lakh and are approved for FY 2013-14 and FY 2014-15.

7. Section 80D – Medical Insurance

Deduction for the premium paid for Medical Insurance

You (as an individual or HUF) can apply for a reduction of Rs. 25,000 under section-80Din child, spouse and dependent child insurance. The additional deduction for parental insurance is up to Rs 25,000, if they are under 60 years of age. If the parents are over 60, the deduction is Rs 50,000, which has been increased in the Budget 2018 from Rs 30,000.

In the event, taxpayers and parents (parents) are 60 years of age or older, the maximum reduction available under this category may amount to Rs.1 lakh.

Example: Rohan is 65 and his father's father is 90. In this case, the maximum reduction Rohan would require under section 80D Rs. 100,000. From FY 2015-16 an additional combined reduction of Rs. 5 000 approved for preventive health testing.

8. Section 80DD – Disabled Dependent

Deduction for Rehabilitation of Handicapped Dependent Relative

Section 80DD deductions are available from the resident or HUF and are available at:

  • Expenses incurred in treatment (including nursing), training and rehabilitation of a disabled relative
  • Payment or inclusion in a prescribed disability care plan.
  • Where the disability is 40% or more but less than 80% - a fixed deduction of Rs 75,000.
  • Where there is a serious disability (80% or more disability) - a fixed deduction of Rs 1,25,000.
  • To claim this deduction a certificate of disability is required from designated medical authorities. From FY 2015-16 - The deduction limit of Rs 50,000 has been increased to Rs 75,000 and Rs 1,00,000 has been increased to Rs 1,25,000.

9. Section 80DDB – Medical Expenditure

Deduction for Medical Expenditure on Self or Dependent Relative

For individuals and HUFs below age 60

Deductions up to Rs.40,000 are available from a resident or HUF. It is available in respect of any expenses incurred in the treatment of certain medical conditions or illnesses or those of other dependents. In HUF, such reductions are available in respect of the medical costs incurred in these prescribed diseases of any HUF members.

For senior citizens and super senior citizens

In the event that the person is entitled to such expenses as an adult citizen, that person or HUF taxpayer may require a reduction of up to Rs 1 lakh. As of FY 2017-18, the unwanted reductions for the senior citizen and the highest citizen were Rs 60,000 and Rs 80,000 respectively. This is now a standard requirement of up to Rs 1 lakh for all older people (including very senior citizens) unlike before.

For reimbursement claims

Any reimbursement of medical expenses by an insurer or employer will be deducted from the amount deducted that the taxpayer may claim under this section.

Also keep in mind that you need to obtain a prescription for such treatment from the specialists concerned in order to seek such a deduction. Read our detailed article at Section 80DDB.

10. Section 80U – Physical Disability

Deduction for Person suffering from Physical Disability

A deduction of Rs.75,000 is available from a person living in a physically disabled area (including blindness) or a mental disability. In the event of a severe disability, a person may claim a reduction of Rs 1,25,000.

From FY 2015-16 – Section 80U the deduction limit of Rs 50,000 has been increased to Rs 75,000 and Rs 1,00,000 has been increased to Rs 1,25,000.

11. Section 80G – Donations

Deduction for donations towards Social Causes

Various contributions specified in u / s 80G should be deducted up to 100% or 50% with or without limit. From FY 2017-18 any donations made in excess of Rs 2,000 will not be allowed as a deduction. Donations in excess of Rs 2000 must be made in any form other than cash to be able to be deducted at 80G.

Donations with 100% deduction without any qualifying limit

  • National Security Fund established by Central Government
  • Prime Minister's National Assistance Fund
  • National Framework for Social Cohesion
  • A university / educational institution approved by National Higher Education
  • Zola Nakshatra Samiti was present in any district under the chairmanship of the Collector of that district
  • A fund set up by the State Government to provide medical assistance to the poor
  • National Sickness Fund
  • National Blood Transfusion Council or any other State Transfusion Council
  • National Social Welfare Trust for People with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
  • National Sports Fund
  • National Cultural Fund
  • Technology Development and Utilization Fund
  • National Children's Fund
  • Army Central Welfare Fund or Indian Naval Benevolent Fund or Air Force Central Welfare Fund, Andhra Pradesh Chief Minister's Cyclone Relief Fund, 1996
  • Maharashtra Prime Minister's Aid Fund on October 1, 1993 and October 6,1993
  • The Prime Minister's Earthquake Relief Fund, Maharashtra
  • Any fund established by the Government of Gujarat specifically for providing assistance to those affected by the earthquake in Gujarat
  • Any trust, institution or fund where Section 80G (5C) operates to provide assistance to earthquake victims in Gujarat (donations made on January 26, 2001 and September 30, 2001) or
  • Armenian Relief Fund Prime Minister's Assistance Fund
  • Africa Fund (Public Contributions - India)
  • Swachh Bharat Kosh (effective from the 2014-15 financial year)
  • Clean Ganga Fund (effective from the 2014-15 financial year)
  • National Drug Abuse Fund (applicable from the 2015-16 financial year)

Donations with 50% deduction without any qualifying limit

  • Jawaharlal Nehru Memorial Fund
  • Prime Minister's Government Fund for Assistance
  • Indira Gandhi Memorial Trust
  • Foundation of Rajiv Gandhi

Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income

  • Government or any approved local council, institution or organization that should be used for the purpose of promoting family planning
  • Company Contribution to the Indian Olympic Association or any other recognized organization or institution in India for the development of sports and sports infrastructure in India or sponsorship of sports and games in India

Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income

  • Any other fund or institution that meets the criteria set out in Section 80G (5)
  • Government or any local council may be used for any purpose of assistance other than for the purpose of promoting family planning
  • Any authority created in India for the purpose of addressing the need for accommodation or for the purpose of planning, developing or improving cities, towns, villages or both
  • Any organization referred to in Section 10 (26BB) for informing the public interest of minorities
  • Renovation or renovation of any designated temple, mosque, gurudwara, church or other venue.

12. Section 80GGB – Company Contribution

Deduction on contributions given by companies to Political Parties

Deduction under section 80GGC you are entitled to each taxpayer for any amount donated to a political party or electoral trust. It is not available to companies, local authorities and anyone with a partial or state-sponsored draft law. You can only get this release if you pay in any other way without the money.

13. Section 80RRB – Royalty of a Patent

Deduction with respect to any Income by way of Royalty of a Patent

80RRB Deductions from any patent revenue, registered before or after 1 April 2003 under the Copyright Act, 1970, will be deducted up to Rs. 3 lakh or money earned, whichever is less. The taxpayer must own one right and be a citizen of India. The taxpayer must provide a certificate in the prescribed form duly signed by the designated official.

14. Section 80 TTB – Interest Income

Deduction of Interest on Deposits for Senior Citizens

A new section 80TTBincluded vide Budget 2018 where deductions in respect of interest income on deposits held by adults. The limit for this deduction is Rs.50,000.

No further deductions under section 80TTA will be allowed. In addition to section 80 TTB, section 194A of the Act will also be amended to increase the TDS limit on the income paid to older persons. The previous limit was Rs 10,000, which was increased to Rs 50,000 according to the latest budget.

15. Deductions-Summary

Section 80 Deduction Table

SectionDeduction onAllowed Limit (maximum) FY 2018-19
80C Investment in PPF
–PF staff contribution contribution
– NSCs
– Life Insurance Premium Payment
– Children’s Tuition Fee
– Principal Repayment of home loan– ULIPS
– ELSS
– Sum paid to purchase deferred annuity
– Five year deposit scheme
– Senior Citizens savings scheme
– Notified stock scheme subscription
– Contribution to an informed pension fund established by the Mutual Fund or UTI.
– Registration for the National Housing Bank Debt Account
– The registration process for depositing a public sector or a company involved in providing housing finance
– Contribution to notified annuity Plan of LIC
– Subscription to equity shares/ debentures of an approved eligible issue
– Subscription to notified bonds of NABARD
Rs. 1,50,000
80CCCThe amount included in the LIC annuity plan or any other pension insurance from the fund referred to in section 10 (23AAB)
80CCD(1)Employee contribution to NPS account (up to Rs 1,50,000)
80CCD(2)Employer’s contribution to NPS accountMaximum up to 10% of salary
80CCD(1B)Additional contribution to NPSRs. 50,000
80TTA(1)Interest Income from Savings accountMaximum up to 10,000
80TTBExemption of interest from banks, post office, etc. Only used for adultsMaximum up to 50,000
80GGFor rent paid when HRA is not received from employerLeast of :
– Rent paid minus 10% of total income
– Rs. 5000/- per month
– 25% of total income
80EInterest on education loanInterest paid for a period of 8 years
80EEInterest on home loan for first time home ownersRs 50,000
80DMedical Insurance – Self, spouse, children
Medical Insurance – Parents more than 60 years old or (from FY 2015-16) uninsured parents more than 80 years old
– Rs. 25,000
– Rs. 50,000
80DDMedical treatment for handicapped dependent or payment to specified scheme for maintenance of handicapped dependent
– Disability is 40% or more but less than 80%
– Disability is 80% or more
– Rs. 75,000
– Rs. 1,25,000
80DDBMedical Expenditure on Self or Dependent Relative for diseases specified in Rule 11DD
– For less than 60 years old
– For more than 60 years old
– Lower of Rs 40,000 or the amount actually paid
– Lower of Rs 1,00,000 or the amount actually paid
80USelf-suffering from disability :
– An individual suffering from a physical disability (including blindness) or mental retardation.
– An individual suffering from severe disability
– Rs. 75,000
– Rs. 1,25,000
80GGBContribution by companies to political partiesAmount contributed (not allowed if paid in cash)
80GGCContribution by individuals to political partiesAmount contributed (not allowed if paid in cash)
80RRBDeductions on Income by way of Royalty of a PatentLower of Rs 3,00,000 or income received

Frequently Asked Questions

Q- Can I claim the 80C deductions at the time of filing return in case I have not submitted proof to my employer?

Proof of investment is submitted to the employer before the end of the financial year (FY) for the employer to consider this investment while determining your tax-free income and tax deductions that need to be made. However, even if you fail to provide this proof to your employer, a claim for this investment may be made at the time of filing your refund as long as these payments were made before the end of the relevant FY.


 

Q- I have made an 80C investment on 30 April 2018. For which year can I claim this investment as a deduction?

You can apply for a deduction on your investment in the return of your investment year. Therefore, if you make an investment on April 30, 2018, you will be able to apply for such an investment as a deduction during the FY 2018-19 year.


 

Q- I have availed a loan from my employer for pursuing higher education. Can I claim the interest paid on such loan as a deduction under Section 80E?

The deduction of interest paid on a student loan under Section 80E can only be made if the loan has been obtained from a financial institution through higher education. Therefore, obtaining a loan from your employer will not entitle you to claim interest under Section 80E.


 

Q- Is there any restriction or maximum limit up to which I can claim a deduction under Section 80E?

The Act did not set an additional limit on the claim for a deduction under Section 80E. Therefore, the actual interest paid during the year can be claimed as a deduction.


 

Q- Can a company or a firm take the benefit of Section 80C?

The provisions of Section 80C apply only to individuals or to the Hindu Undivided Family (HUF). Therefore, a company or firm cannot take advantage of Section 80C.


 

Q- I have been paying life insurance premium to a private insurance company. Can I claim 80C deduction for the premium paid?

Deductions under Section 80C are available in respect of the premium of life insurance paid for any insurance approved by the Insurance Regulatory and Development Authority of India, whether public or private. Therefore, the insurance premium will also help you to claim an 80C reduction.


 

Q- In which year can I claim deduction of the stamp duty paid for purchase of a house property

You may continue to apply for a home purchase stamp for the year in which the payment is made using the stamp operation under Section 80C.


 

Q- Can a company claim a deduction for donations made under Section 80G

Any taxpayer who makes donations to certain institutions, funds etc.


 

Q- I am paying medical insurance premium for a medical policy taken in my name, my wife and children. I am also paying premium on a medical policy taken in the name of my parents who are above 60 years. Can I claim a deduction for both premiums paid?

The premium you pay for the policy you have taken for yourself, your spouse and children should be deducted under Section 80D up to Rs 25,000. In addition, you will be able to apply for a policy deduction for a policy deducted from your senior citizens up to Rs 50,000 (this limit was Rs 30,000 up to FY 2017-18. Therefore, you may require both premiums to be paid as a deduction under Section 80D .


 

Q- Is my FD interest exempt under Section 80TTB?

If you are a citizen over 60 years of age, then your interest from Fixed Deposit is not payable under Section 80TTB.


 

Q- What do you mean by 80C deduction under chapter VI A?

The Revenue Department allows for a reduction in the taxpayer's income in the event that the taxpayer makes certain investments or qualifying expenses allowed under Chapter VI A. 80C allows for deductions from investments made in PPF, EPF, LIC premium, linked affiliate savings scheme, premium payment in respect of home loan, stamp duty and purchase registration costs, Sukanya smriddhi yojana (SSY), national conservation certificate (NSC), senior resident protection scheme (SCSS), ULIP, FD tax for five years , infrastructure bonds etc.


 

Q- How to calculate deduction u/s 80c?

  • For section 80C- The amount of eligible investment or expenditure as specified is fully allowed for deduction subject to the limit of Rs 1.5 lakh.
  • The limit of Rs 1.5 lakh deduction of Section 80C includes 80CCC (contribution towards pension plan) and 80CCD (1), 80CCD (1b) and 80CCD (2).
  • Section 80CCCD (1) is a contribution towards the National pension scheme by the employee or self employed and is limited to 10% of salary (basisc + DA) or 20% of gross total income for self employed.
  • Section 80CCD (1b) provides additional deduction of Rs 50,000 for contributions towards NPS , Atal pension Yojana etc. This deduction is over and above Rs 1.5 lakh. Hence total of deduction including 80C and 80CCD (1b) can be maximum Rs 2 lakh for a single year.
  • Section 80CCD (2) is deduction allowed to salaried for contributions made by their employer for NPS , this is also allowed at 10 % of salary (basic +DA) . However it is important to note that there is no upper limit in 80CCD (2)
  • Hence for investment in 80C only , the limit is Rs 1.5 Lakh. For investment together in 80C, 80CCD (1) and 80CCD (1b), one may invest upto Rs 2 lakh in total. Whereas, a salaried employee can avail more deduction without restriction of limit of Rs 2 lakh under section 80CCD (2) if the employer contributes towards NPS account subject to 10% of salary.
  • Further please note that per Budget 2020, any contribution towards EPF, NPS and superannuation will be added to the salary as “perquisites” and taxable under salaries in the hands of employees

 

Q- Can you claim HRA under section 80?

Yes, if you do not receive the HRA as part of your salary, Paid rent may be claimed as a deduction under section 80GG. However the maximum arrest warrant is Rs 60,000 per year.


 

Q- What is 80GG in income tax? What is rent paid under 80GG ?

80GG allows you to claim a reduction in rent even if your salary does not include part of the HRA or self-employed people who have an income other than salary. The condition is that you must not have a residence where you want to be pulled under 80GG.


 

Q- Who can claim deduction in 80GG?

Withdrawals of less than 80GG are available to employees who do not receive the HRA as part of the salary due to jobs in the informal sector or to self-employed persons. A person who wants this deduction should not have a home where he or she lives.


 

Q- What is section 80CCD ?

80CCD is an 80C clause that allows for the deduction of contributions to national pension schemes as declared by central government. Withholding is allowed on donations made by an employee, employer or voluntary donation. The maximum reduction allowed in section 80C is Rs 1.5 lakh and an additional deduction of Rs 50,000 u / s 80CCD (1b) for personal donations to the NPS or Atal pension of the youth.


 

CEO Krishna Gopal

Krishna Gopal Varshney is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Myitronline.com. Myitronline is amongst the top emerging startups of Asia and authorized ERI by the Income Tax Department. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. ”

Krishna Gopal Varshney
Co-founder & CEO