Filing ITR? These Expense-Based Deductions can save your Income Tax u/s 80C to 80U

Filing your income tax return can be a daunting task, but understanding the deductions available to you can significantly ease this process and reduce your taxable income. The Income Tax Act, 1961, provides various sections under Chapter VI-A that allow taxpayers to claim deductions on specific expenditures. This article will explore the expenditure-based deductions available under Sections 80C to 80U.

Section 80C: Deductions on Investments and Expenditures

Section 80C is one of the most popular sections for tax-saving purposes. The maximum deduction limit under this section is Rs 1.5 lakh per financial year. Here are some of the key expenditures that qualify for deduction under Section 80C:

1. Life Insurance Premiums:
   • Premiums paid for life insurance policies for self, spouse, and children.
2. Children’s Tuition Fees:
   • Tuition fees paid for up to two children studying in India.
3. Principal Repayment on Home Loan:
   • Repayment of the principal amount of a home loan.
4. Fixed Deposits:
   • Fixed deposits with a minimum tenure of 5 years with banks or post offices.
5. Unit-Linked Insurance Plans (ULIPs):
   • Investment in ULIPs for self, spouse, and children.
6. National Savings Certificate (NSC):
   • Investment in NSC.
7. Sukanya Samriddhi Yojana:
   • Investment in the Sukanya Samriddhi Account for a girl child.
8. Senior Citizen Savings Scheme (SCSS):
   • Investments made in SCSS.
9. Post Office Time Deposit:
   • 5-year post office time deposit account.

Section 80CCC: Contributions to Pension Funds

This section allows deductions for contributions to certain pension funds. The maximum limit is Rs 1.5 lakh, which is included in the overall limit of Section 80C.

Section 80CCD: Contributions to Pension Schemes

1. 80CCD(1):
   • Employee’s contribution to the National Pension System (NPS) and Atal Pension Yojana. The limit is 10% of salary for employees
2. 80CCD(1B):
   • An additional deduction of Rs 50,000 for contributions to NPS.
3. 80CCD(2):
   • Employer’s contribution to NPS, with a limit of 10% of salary (basic + DA).

Section 80D: Deductions on Medical Insurance

Section 80D provides deductions on premiums paid for medical insurance:

1. Self, Spouse, and Children:
   • Up to Rs 25,000 for insurance premiums.
2. Parents:
   • An additional deduction of Rs 25,000 if the parents are below 60 years and Rs 50,000 if they are above 60 years.
3. Preventive Health Check-Ups:
   • Up to Rs 5,000 (within the overall limit).

Section 80DD: Deduction for Maintenance and Medical Treatment of Disabled Dependents

1. Fixed Deduction:
   • Rs 75,000 for dependents with 40% to 80% disability.
   • Rs 1,25,000 for dependents with more than 80% disability.
   • Form 10IA to file and get certificate from medical practitioner

Section 80DDB: Deduction for Medical Treatment of Specified Diseases

1. Age Below 60:
   • Up to Rs 40,000 for specified diseases.
2. Age Above 60:
   • Up to Rs 1,00,000 for senior citizens.
3. Form 10IA to file and get certificate from medical practitioner

Section 80E: Deduction for Interest on Education Loan

1. Education Loan:
   • Deduction on the interest paid on education loans for higher studies. There is no limit on the amount, but it is available for a maximum of 8 years.

Section 80EE: Deduction on Home Loan Interest

1. Additional Deduction:
   • Up to Rs 50,000 for interest on home loans for first-time homeowners, over and above the limit under Section 24(b).
   • Taxpayers can claim 80EE only if they had serviced a home loan between 1 April 2016 to 31 March 2017. 

Section 80G: Donations to Specified Funds and Charitable Institutions

1. Percentage-Based Deduction:
   • 50% or 100% of the donation amount, depending on the institution and with or without qualifying limit.

Section 80GG: Deduction for House Rent Paid

1. For Non-Salaried Individuals:
   • Deduction for house rent paid if not receiving HRA. The limit is the least of:
     • Rs 5,000 per month.
     • 25% of total income.
     • Rent paid minus 10% of total income.

Section 80GGA: Deductions on Donations for Scientific Research or Rural Development

1. 100% Deduction:
   • On donations made to specified institutions for scientific research or rural development.

Section 80GGB: Donations to Political Parties

1. 100% Deduction:
   • On donations made to political parties.

Section 80GGC: Donations by Individuals to Political Parties

1. 100% Deduction:
   • For donations made by individuals to political parties.

Section 80RRB: Deduction on Income by Way of Royalty of a Patent

1. Maximum Deduction:
   • Up to Rs 3,00,000 for income received by way of royalty on a patent registered on or after April 1, 2003.

Section 80TTA: Deduction on Interest on Savings Accounts

1. Interest Income:
   • Up to Rs 10,000 for interest earned on savings accounts.

Section 80TTB: Deduction on Interest Income for Senior Citizens

1. Interest Income:
   • Up to Rs 50,000 for interest earned on deposits with banks, post office, or co-operative banks.

Section 80U: Deduction for Disabled Individuals

1. Fixed Deduction:
   • Rs 75,000 for individuals with 40% to 80% disability.
   • Rs 1,25,000 for individuals with more than 80% disability.
   • Form 10IA to file and get certificate from medical practitioner

Please note above deductions are allowed under Old Regime only

Visit www.cagurujiclasses.com for practical courses