Section 80C Deduction, 80CCC and 80CCD(1)

Section 80C Deduction, 80CCC and 80CCD(1)

Section 80C Deduction comes under the income tax act which helps you in reducing your taxable income. You can avail of the deductions as long as you’ve got made tax-saving investments or incurred eligible expenses.

There are a variety of deductions available under various sections which will bring down your taxable income. The most famous one is Section 80C Deduction of Chapter VIA Income Tax Act. Other preferred deductions under chapter VIA are 80D, 80E, 80G, 80DDB, and so on.

Section 80 C – Deductions On Investments

  • You can claim a deduction of Rs 1.5 lakh in your total income under Section 80C of income tax act Deduction
  • In simple words, you can deduct up to Rs 1,50,000 from your total taxable income, and it is available to individuals and HUFs.
  • If you have paid additional taxes but have invested in LIC, PPF, Mediclaim, paid tuition fees for your children, and have missed claiming a deduction for the same, while filing your income tax return can do so.
  • Income Tax Department will surely return the excess money to your bank accounts under Section 80C of income tax act Deduction

Section 80 CCC – Insurance Premium

  • Section 80 CCC helps in the deduction to an individual for the premium payment that you have paid for the Annuity Plan for LIC or other Insurer.
  • However, the scheme should be for obtaining a pension from the fund referred to in Section 10 (23 AAB).
  • The amount received on annuity or surrender, including interest or bonus received from an annuity, is taxable in the year of receipt of a pension on surrender of the annuity.

Also, read | Income From Gratuity

Section 80 CCD – Pension Contribution

  1. Section 80 CCD (1) – Employees contribution under 

  • You can claim this if have deposited this in your pension account.
  • The maximum deduction you can get is 10% salary (if the taxpayer is an employee) or 20% of the gross total income (if the taxpayer is becoming self-employed) or Rs 1.5 lakh – whichever is lower.
  • As of FY 2016-17, the maximum deduction allowed for self-employed individuals was 10% of total income.
  1. Section 80CCD (1B) – Deduction for self-contribution to NPS 

  • A new section 80CCD (1B) has been brought in for an additional deduction of up to Rs 50,000 for the amount deposited by the taxpayer in his NPS account.
  • Benefaction (contributions) to the Atal Pension Yojana are also eligible.
  1. Section 80CCD (2) – Employer’s contribution to NPS

  • Claim extra deductions on your contribution to an employee’s pension account up to 10% of your salary.
  • There is no monetary ceiling (the maximum permitted level in a financial transaction) on this deduction.

Section 80D – Medical Insurance

  • Section 80 D is the deduction on which premium is paid for Medical Insurance.
  • You (as a single or HUF) can claim a deduction of Rs 25,000 under section 80D on insurance for self, better half, and dependent children.
  • The additional deduction is available for parents’ insurance up to Rs 25,000 if they are under 60 years of age under Section 80D.
  • If the parents are more than 60 years of age, then the Medical Insurance deduction amount is Rs 50,000, which has been increased from Rs 30,000 in the budget 2018.
  • Suppose, both the taxpayer and the parents are 60 years old or more, then the maximum deduction available under Section 80D – Medical Insurance ​is up to Rs 1 lakh.
  • Rohan is 65 years old and his father is 90 years old. In this case, Rohan can claim a maximum of 80% i.e. Rs. 100,000.
  • From FY 2015-16 cumulative excess deduction of Rs. 5,000 is allowed for preventive health screening.

Section 24 – Interest On Home Loan

  • Section 24 of the Indian Income Tax Act, 1961 considers the amount of interest paid by a person for a home loan.
  • Section 24 of Income Tax is also known as “Deductions from income from house property.
  • Fundamentally, it allows you to claim tax exemption on the interest amount of your home loan.
  • The greatest tax deduction limit under section 24 is Rs. 1, 50,000.
  • One doesn’t need to live in that particular home to claim tax deductions under Section 24.

Section 80E – Interest On Education Loan

  • Section 80E provides a deduction for interest on education loans for higher studies.
  • This loan can be availed for the taxpayer, the better half, or children, or for the student for whom the taxpayer is a legal guardian.
  • Under this deduction is available for a maximum of 8 years (beginning years the year in which interest begins to be paid) or until the entire interest is repaid, whichever is earlier.
  • There is no restriction on the amount that can be claimed under Section 80E for Higher Studies.

Section 80G – Deductions For Donations

  • Section 80G of Section 80C Deduction allows deductions for donations that are used for a social cause.
  • Various donations specified under section 80G are eligible for either 100% or 50% deduction without restriction.
  • No donation in cash as deduction made more than Rs 2,000 will be allowed from FY 2017-18. 
  • To qualify for the 80G deduction, donations over Rs 2000 must be made in any mode other than cash.

1. Donations with 100% deduction with no passing breaking point

  • National Defense Fund was set up by the Central Government.
  • Leader’s National Relief Fund.
  • National Foundation for Communal Harmony
  • An affirmed college/instructive establishment of National distinction 
  • Zila Saksharta Samiti comprised in any area under the chairmanship of the Collector of that locale 
  • Asset set up by a State Government for the medical alleviation to poor people 
  • National Illness Assistance Fund 
  • National Blood Transfusion Council or to any State Blood Transfusion Council 
  • National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation, and Multiple Disabilities 
  • Asset for Technology Development and Application 
  • Public Children’s Fund 
  • Boss Minister’s Relief Fund or Lieutenant Governor’s Relief Fund as for any State or Union Territory 
  • The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996 
  • The Maharashtra Chief Minister’s Relief Fund during October 1, 1993, and October 6, 1993 
  • Boss Minister’s Earthquake Relief Fund, Maharashtra 
  • Any asset set up by the State Government of Gujarat solely for giving alleviation to the survivors of seismic tremor in Gujarat 
  • Any trust, organization, or asset to what Section 80G(5C) applies for giving help to the casualties of the earthquake in Gujarat (commitment made during January 26, 2001, and September 30, 2001) or 
  • Executive’s Armenia Earthquake Relief Fund 
  • Africa (Public Contributions — India) Fund 
  • Swachh Bharat Kosh (relevant from the monetary year 2014-15) 
  • Clean Ganga Fund (relevant from the monetary year 2014-15) 
  • Public Fund for Control of Drug Abuse (relevant from the monetary year 2015-16)

2. Donations with half i.e 50% deduction without any qualifying limit

  • Jawaharlal Nehru Memorial Fund 
  • Leader’s Drought Relief Fund 
  • Indira Gandhi Memorial Trust 
  • The Rajiv Gandhi Foundation 

3. Donations to coming up next are qualified for 100% deduction subject to 10% of adjusted gross complete pay 

  • Government or any endorsed local authority, foundation, or relationship to be used to promote family planning. 
  • Donation by a Company to the Indian Olympic Association or some other advised association or foundation set up in India for the development of the framework for sports and games in India or the sponsorship of sports and games in India 

4. Donations to coming up next are qualified for half allowance subject to 10% of changed gross complete pay 

  • Some other asset or any foundation which fulfills conditions referenced in Section 80G(5) 
  • Government or any nearby power to be used for any altruistic reason other than the motivation behind advancing family arranging 
  • Any power established in India to manage and fulfilling the requirement for lodging convenience or to plan, advancement or improvement of urban areas, towns, towns or both 
  • However, any enterprise alluded in Section 10(26BB) for advancing the interest of minority local area 
  • For fixes or redesign of any informed sanctuary, mosque, gurudwara, church, or different spots.

Section 80 TTA – Interest On Savings Account

  • Allowance from Gross Total Income for Interest on Savings Bank Account.
  • On the off chance that you are an individual or a HUF, you may guarantee an allowance of the most extreme Rs 10,000 against premium payments from your investment account with a bank, co-usable society, or mailing station. 
  • Do incorporate the premium from the reserve funds ledger in other pay. 
  • Section 80TTA deduction isn’t accessible on premium payments from the Fixed deposits, Recurring Deposits, or premium pay from corporate securities.

Section 80EE – Additional Deduction For Interest On Home Loan

  • This deduction is accessible in FY 2017-18 if the loan has been taken in FY 2016-17.
  • Section 80EE deduction under area 80EE is accessible just to mortgage holders (people) having just one house property on the date of approval of the loan
  • The estimation of the property should be not as much as Rs 50 lakh and the home credit should be not as much as Rs 35 lakh. 
  • The credit is taken from a monetary foundation more likely than not to be endorsed between 1 April 2016 and 31 March 2017. 
  • There is an extra deduction of Rs 50,000 accessible on your home credit interest on top of a deduction of Rs 2 lakh (on the interesting part of home advance EMI) permitted under area 24.
  • FY 2013-14 and FY 2014-15 During these monetary years, the allowance accessible under this segment was a first-time house worth Rs 40 lakh or less. 
  • You can profit from this lone when your credit sum during this period is Rs 25 lakh or less.
  • The loan should be authorized between 1 April 2013 and 31 March 2014.
  • The total deduction permitted under this Section 80EE can’t surpass Rs 1 lakh and is considered FY 2013-14 and FY 2014-15.

Section 80DD – Disabled Dependent

Section 80DD Under Section 80C Deduction is accessible to an individual or a HUF and is accessible on: 

  1. Consumption caused on medical treatment (counting nursing), preparing and restoration of disabled ward relative 
  2. Hence, Payment or deposit to specified scheme for maintenance of handicapped ward relative. 
  3. Where inability is 40% or more however under 80% – fixed deduction of Rs 75,000. 
  4. Where there is a serious handicap (inability is 80% or more) – fixed deduction of Rs 1,25,000. 
  • To guarantee Section 80DD a certificate of disability is required from the prescribed medical authority.
  • From FY 2015-16 – The deduction furthest reaches of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs 1,25,000.

Section 80GGC – Contribution To Political Parties

  • Section 80GGC involves deduction giving by any person to a political party.
  • Deductions under Section 80GGC under Section 80C Deduction allow any individual taxpayer to contribute to a political party or electoral trust.
  • However, It is not wholly or partially government-funded for companies, local authorities, and an artificial judicial person.
  • You can only avail of 80GGC Deduction if you pay other than cash.

Section 80U- Physical Disability

  • Section 80U allows a deduction for a person suffering from a physical disability.
  • A deduction of Rs. 75,000 is available to a resident person suffering from a physical disability (including blindness) or mental disability.
  • If there should arise a severe disability, one can claim a deduction of Rs 1,25,000.
  • From the Fiscal Year, 2015-16 – Section 80U deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs 1,25,000.

Section 80GGB- Company Contribution

  • Section 80GGC involves deduction giving by companies to a political party.
  • The Indian company is allowed a Section 80GG deduction for the amount contributed by any political party or an electoral trust.
  • Deductions are allowed for contributions in any way other than cash.

Section 80RRB- Royalty Of A Patent

  • 80RRB of Section 80C Deduction is for any income by way of royalties for patents registered on or after 1 April 2003 under the Patents Act 1970, Rs. 3 lakhs or will be available to receive income, whichever is less.
  • The taxpayer must hold an individual patent and be an Indian resident.
  • The taxpayer has to produce a certificate in the prescribed form signed by the prescribed authority.

Section 80TTB- Interest Income

  • Section 80TTB has been inserted in Budget 2018 in which deduction will be allowed in respect of interest income from deposits held by senior citizens.
  • The limit of this deduction is Rs 50,000.
  • No further deduction will be allowed under Section 80TTA.
  • Apart from Section 80 TTB, section 194A of the Act will also be amended to increase the threshold limit for TDS on interest income payable to senior citizens.
  • The earlier limit of Section 80TTB was Rs 10,000, which was increased to Rs 50,000 as per the latest budget.

 

Nikita Dhyani

Nikita Dhyani is a Content Writer at Ionic Digitech. A passionate content writer and has been using her content writing skills to develop various content related to financial and business-related topics. She has done BAJMC (Bachelors in media and mass communication and journalism) from Graphic Era University. Her specialties include - Content creation, Content development, Media managing, Communications skills.

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