1. What is section 80C?
Section 80C of the income tax act is an opportunity for Individuals and Hindu undivided families. They can have tax deductions up to the 1.5 lakhs under section 80C. However, other corporate firms, companies, and partnerships can not avail of the tax benefits under section 80C. Section 80C is divided into the following sections. An individual can avail of the tax benefits under section 80C for the investments and on gross earned income in a financial year. For instance- An individual needs to make investments and deductions between April 2019 to March-2020 to claim the tax deduction in the financial year 2019-20. All the subsections and applicable deductions are in detail mentioned below-
2. Subsections of section 80C
According to the regulations of the income tax act of India, deductions under section 80C is divided into different categories.
|Tax-saving sections||Eligible investments for tax deductions|
|Section 80-C||80C permits a deduction for the investment made in PPF, EPF, LIC premium, Equity-linked saving scheme, principal amount towards the home loan, stamp duty, and registration charges for the purchase of property, Sukanya siddhi Yojana, National saving certificate, Senior citizen savings scheme, ULIP, etc.|
|Section 80- CCC||80CCC permits a deduction for payment towards annuity pension plans Pension received from the annuity or Payments made towards pension plans and mutual funds.|
|Section 80CCD (1)||Employee’s contribution towards the NPS (National Pension Yojana), Atal Pension Yojana (APY) under section 80CCD (1).|
|80CCD (1b)||Additional deduction of Rs 50,000 is qualified for the NPS account.|
|80CCD (2)||Employers' contribution is qualified towards the National Pension Yojana up to 10%.|
3. Deductions under section 80C
There are various deductions included in section 80C. If any individual wants to deposit his/her money in the following options then he/she is eligible to claim the deduction under section 80C of the income tax act of India. A list of investment options is given below to be eligible for the deduction, please go through it and know the eligible terms and conditions.
|Investment options||Interests||Minimum lock-in period||Assure d return||Associate d risk|
|ELSS||12% to 15% (relies on the fluctuation of the market)||3 years||No||High|
|NPS(National Pension Scheme)||9% to 11%||Until investor get of the 60 years of age (retirement)||No||High|
|ULIP||8% to 10% (relies on market fluctuation)||5 years||No||Moderate|
|Fixed deposit||Up to 8.40%||5 years||Yes||Low|
|Sukanya Samriddhi Yojana Scheme||7.50%||8 years||Yes||Low|
4. List of Tax saving
1. PPF(Public Provident Fund) - A contribution made towards the PPF account by an individual is eligible to tax exemption under section 80C. A public provident fund (PPF) is one of the saving schemes provided by the post office. National Savings Institute launched this scheme in 1968. The interest rate of the public-private fund is 7.1% for the current quarter and interest is calculated on the minimum balance of the public- private fund. 2. EPF (Employees’ Provident Fund) - EPF is applicable only to those employees who have been in the service at least for 5 years. The earned returns from an employee provident fund along with the interest rate rely on section 80C for deductions. . 3. NSC (National Saving Certificate) - Earned Interest on the national saving certificate or NSC is compounded twice a year. NSC comes under section 80C and its maturity period is ranged from 5 to 10 years. Like other investments, the national saving certificate allows deductions of up to Rs.1,50,000 lakh under section 80C. 4. ELSS (Equity Linked Saving Scheme) - Under this investment scheme is also known as a tax saving mutual fund, This tax-saving scheme has a lock period of 3 years. The returns from ELSS are tax- exempted up to a limit of ₹1 Lakh. For returns exceeding the limit, you will be subject to long-term capital gains tax at a 10% rate. 5. SSY(Sukanya Samriddhi Yojana) - The central government has announced a scheme for Sukanya Samridhi Yojana to develop the future of women. There are multiple schemes out there for girl children. This scheme is entirely aimed at strengthening the situation of women in society. Sukanya Samridhi yojana comes under the scheme of “Beti Bachao Beti Padhao” and can be opened by the parents or legal guardians of a girl child. Sukanya Samridhi yojana benefits to ensure a good financial future of the girl child and expenses of marriage. The interest earned in this scheme is eligible for tax exemption under section 80C. 6. SCSS (Senior Citizen Saving Scheme) - Senior Citizen Saving Scheme (SCSS) strives at furnishing a recurring income for senior residents aged beyond 60 years unrestricted at a certified bank and all the post offices across India. The lock-in period of SCSS is five years. Section 80C income tax deductions cover the prevalent amount, and the interest is tax exempted. 7. NPS (National Pension Scheme) - National Pension Scheme (NPS) is one of the finest investment programs that is governed by the Regulatory and Development Authority for the Pension Fund (PFRDA). Regulatory and Development Authority for the Pension Fund launched the National Pension System Trust (NPST) which is the registered owner of all assets under this investment plan. NPS full form is National Pension System. Only the Central Government employees were wrapped by the National Pension Scheme. Now NPS is open to all Indian citizens. NPS scheme maintains huge value for anyone working in the private sector and needs a regular post-retirement pension. 8. Stamp duty or registration charges - Registration charges or stamp duty can be taken as the widest expense made for having the ownership of property. The Indian Government permits deductions of tax liability until the charges are paid for stamp duty and registration towards the housing procurement. The exemption will only be claimed in the year of paid duties, otherwise, it will not be eligible for contemplation under section 80C. 9. SCSS (Senior Citizen Saving Scheme) - SCSS or senior citizen saving scheme encircles the senior citizen above 60 years to provide them a regular income at a certified bank and post offices. The SCSS has a lock-in period of five years. 10. NABARD Rular Bonds - NABARD means National Bank for Agriculture and Rural Development. The highest amount under section 80C is entitled up to 1.5 lakh. NABARD offers the rural bonds that are eligible for tax exemption as per the income tax act of India.
Section 80d of the income tax act 1961, provides tax deduction on health insurance. Any individual or HUF can avail of the tax deduction for premiums paid towards health insurance in a given year under section 80d. The benefits of deductions are not only unrestricted on health insurance for self but individual’s spouse, children, or family also. A taxpayer can be escaped from paying hefty bills on medical situations under section 80d.
6. Available deductions under section 80D
There are various deductions available under section 80d. Deduction of Rs.25,000 is allowed under section 80d in a fiscal year. Senior citizens above 60 years can avail of the deduction of up to Rs.50,000.
|Eligible Individuals||Premium Paid (Rs)||Deduction under section 80d (Rs)|
|For Self, Family, spouse, and Children||For Parents|
|Those Individual and parents who are below 60 years||25,000||25,000||50,000|
|Those Individual and family who are below 60 years but parents are above 60 years||25,000||50,000||75,000|
|Those individuals, family, and parents are above 60 years||50,000||50,000||1,00,000|
|Members of HUF & Non-resident Individual||25,000||25,000||25,000|
7. What is section 80DD?
There are several sections of the income tax act, of 1961. Section 80DD is one of them that allows deductions for the medical expenses of a dependent individual with disabilities or a differently abled person. Under Section 80DD any person can claim a deduction which is paying for the treatment of conditional suffering from a disability.
8. Deduction limit under Section 80DD
9. Important things about section 80D
As per section 80DD, Individuals and Hindu undivided Families are eligible to claim the deductions. NRI or non-residents can not claim deduction under section 80DD. If an individual is qualified for a refund for the disability or disease then he/ she must undergo a refund and get a new certificate. During the fiscal year, the disability must be applicable. You don't have to furnish any medical proof. Regardless, you must get the certificate in Form 10-IA from the mentioned medical authorities. If the dependent individual dies before the taxpayer then an amount equal to the amount paid or deposited will be taxable as income.
10. What is 80U?
As per section 80U, If an individual is certified by the medical authority to be a person with a disability or disease then he/she is eligible to claim the tax deduction during the financial year. As prescribed in the income tax act1961, An individual must obtain a certificate to avail of the tax deduction and benefits under section 80U. This article is focused on section 80U.
11. Who is eligible to claim the deduction under section 80U?
Under section 80U individual is certified by the medical authority to be a person with a disability or disease. He/she is eligible to claim the tax deduction during the financial year. The taxpayer should be going through at least 40% disabilities.
12. How to get a certificate under section 80U?
As per section 80U, It is mandatory to get a certified certificate of medical authority. A neurologist who is having a degree of Doctor of Medicine (MD) in Neurology (in the case of children, a Paediatric Neurologist has an equivalent degree) is A Civil Surgeon or Chief Medical Officer in a Government hospital.
13. Deduction limit under section 80U
If an individual has a disability or disease less than 80% but more than 40% then he/she is allowed to claim the deduction of 75,000. If an individual has a disability or disease of 80% or more than 80% then he/she is allowed to claim the deduction of 1,25,000.
14. Qualified interest for deduction under section-80TTA
Following interest is qualified for deduction under section-
- Interest gained from the bank's savings account.
- Interest is earned from the saving account of the Cooperative society.
- Any interest gained from saving account of the post office.
- Any interest earned from the FD (fixed deposit)
- Interest earned from the RD (recurring deposits)
- Any interest gained from any other deposit.
15. Deductions under Section 80E
An individual can avail of the deductions for taking any education loan for higher education. This loan can be availed for the spouse, children, or a student but the taxpayer should be a legal guardian. The deduction is available for a maximum of 8 years under section 80E, or till the entire interest is repaid. There is no limit on the claimable amount.
Frequently Asked Questions
What is Covered under 80C?
80C covers deductions on investments made for the PPF, EPF, NSC, NPS, ELSS, Equity Linked Saving Scheme, SSY, life insurance premium and ULIP, etc.
What are 80C and 80D?
80C permits deductions for the investments made for NSC, NPS, ELSS, ULIP, PPF, SSY, equity-linked saving schemes, etc. But section 80D deduction is entitled to avail the tax benefits on the expenses occurred on health check- ups and health insurance premiums paid for self, parents, and family.
Who is eligible to claim the tax under section 80C?
Section 80C allows Hindu undivided families(HUF) and individuals to avail the tax exemption.
What is the limit for 80d in income tax?
A taxpayer can avail of the deduction of up to Rs.5,000 for a preventive check- up under section-80d. There are various types of deductions such as Rs.25,000, and Rs.30,000 to Rs.75,000 depending on the criteria and situations.
Who can claim 80d?
All individuals who fall in the category of Self, Dependent parents, Spouse, or Dependent children are eligible to claim the tax deduction under section 80d.
Can I claim 80d for parents?
Yes. You can claim a deduction under section 80d for a spouse, children, self, and dependent parents.
What is the limit for 80DD?
Section 80DD has a limit of Rs.75,000 for the medical expenditure, nursing, and treatment of a person who suffers from a disability. But if the person suffers from a severe disability or disease can claim a deduction of up to 1,25,000 in a fiscal year.
What is 80DD in income tax?
Section 80DD of the income tax act allows individuals to claim deductions for disabled persons of 40%.
Who is eligible for 80DD?
Residents individuals and Hindu Undivided Families can claim the deduction for disabled persons. But notably, non-residents are not eligible to avail of deductions under section 80DD.
Is 80TTA In addition to 80C?
The limit of tax deduction under section 80tta is above 1.5 lakhs. The same is deducted under section 80c.
Who can claim a deduction under 80tta?
1. 80tta can be claimed by the following- 2. Indian residents 3. Individual taxpayers and HUF (Hindu undivided family) 4. NRI with NRO savings accounts 5. An entity with savings account
What is section 80U?
Section 80U enables individuals to avail of the tax deduction who are suffering from disabilities or diseases as per the income tax act 1961.
Is 80U available in the new tax regime?
No. Section 80U is not available in the new tax regime. A taxpayer can not claim tax deductions under section 80U as per the income tax act.