Section 80 of the Income Tax Act offers a range of savings and investments that you can use to lower your taxable income. Section 80C to 80U covers everything from home loans and health insurance policies to investment plans and retirement funds. It offers Indians the option to safeguard their finances with long-term investments and insurance policies.
With this section, the Indian government aims to encourage more citizens to save money for their future and invest in insurance and retirement plans. Here’s a detailed guide to Section 80C-80U and the maximum allowed limit of each section. Read on!
It provides tax deductions of up to Rs. 1,50,000 through tax-saving investments. Only individuals and HUF (Hindu Undivided Family) can claim deductions under Section 80C. The following are some of these investments and expenses:
Also Read: How To File Income Tax Return Online
This sub-section under Section 80 of the Income Tax Act offers tax deductions on pension plans offered by various public and private insurers. Individual taxpayers can claim deductions of up to Rs. 1.5 lakh in a financial year for the premium amount they deposit for any annuity pension plan.
Pension from the annuity plan, including interest and bonus, is taxable in the year of receipt.
Section 80CCD(1) allows employees to claim deductions for the amount they have paid for any pension scheme under the Central Government. Individuals can claim deductions of 10% of their salary or 20% of gross total income, whichever is lower up to a limit of Rs. 1.5 lakh.
Employers can also avail of tax benefits for contribution to pension scheme u/s 80CCD(2). An additional deduction of Rs. 50,000 over the Rs. 1.5 lakh limit is allowed u/s 80CCD (1b). It allows a tax deduction for contributions towards NPS (National Pension Scheme) and APY (Atal Pension Yojana).
Section 80CCF allows tax deductions of up to Rs. 20,000 for long-term infrastructure bonds, which are notified by the government. Only individuals and HUFs can claim this deduction under Section 80 of the Income Tax Act.
You can also claim tax deductions for investments in government-notified equity savings schemes. It allows specific individual residents to get deductions amounting to 50% of the investment, to an upper limit of Rs. 25,000.
This sub-section under Section 80 of the Income Tax Act allows individuals to claim deductions on premiums paid for health insurance policies. You can claim a maximum deduction of Rs. 25,000 on the premium paid for self and family members (spouse and children). In the case of insurance premiums for parents, you can claim an additional deduction of Rs. 25,000.
If your parents are senior citizens, i.e., 60 years or older, you can claim a tax deduction of Rs. 50,000 for paying their health insurance premium. You can get an additional deduction of Rs. 25,000 if you are also a senior citizen. Thus, you can claim a maximum deduction of Rs. 1,00,000 under this section.
Note that Section 80D also allows tax deductions up to Rs. 5000 for preventive health check-ups.
If you spend money to take care of a disabled dependent relative, you can claim tax deductions u/s 80DD. It allows individuals and HUFs to reduce their tax liability at a fixed rate depending on the nature of their disabilities.
You can claim a fixed deduction of Rs. 75,000 in case your relative has a disability over 40% but less than 80%. For those with 80% or more disability, you can claim a fixed deduction of Rs. 1,25,000.
Section 80DDB allows the reduction of tax liability for expenses related to the treatment of specific diseases. For individuals and HUFs below 60 years old, you can claim a maximum deduction of Rs. 40,000 for medical expenses. For senior citizens and super senior citizens (80 years or older), this limit increases to Rs. 1 lakh.
You can claim tax deductions on interest paid towards your education loan under this subsection of Section 80 of the Income Tax Act. There is no maximum limit for claiming deductions, but you can claim it for up to 8 years from the beginning of interest repayment or till full repayment of interest (whichever comes first).
This education loan can be taken for self, spouse, children or if you are someone’s legal guardian.
As per Section 80EE, you can claim an additional deduction of Rs. 50,000 over the limits of Section 24 on interest payments of your home loan. This facility is available only for first-time homebuyers who took a home loan in FY2016-17, FY2014-15, or FY2013-14. Their total home loan amount needs to be up to Rs. 35 lakh and property worth not more than Rs. 50 lakh to claim this.
Individuals who bought a house with a home loan taken between April 1 2019, and March 31 2020, can claim an additional deduction under Section 80EEA. However, they should not own another residential property, and the stamp value of the home should not exceed Rs. 45 lakh.
Individuals who purchase electric vehicles between April 1 2019, and March 31 2032, with a loan, can get tax deductions. This deduction is available on the interest repaid for such a loan. Section 80EEB allows a maximum deduction of Rs. 1.5 lakh.
Donations to various charitable funds and institutions are eligible for deductions under this subsection of Section 80 of the Income Tax Act. Depending on the institution, you can get 50% or 100% of the amount donated deducted from gross total income.
From 2018, donations eligible for deductions u/s 80G have a limit of Rs. 2000 for cash transactions. When claiming this deduction, you should also provide the details of any institution to which you donated.
Section 80GG allows you to reduce your tax liability for paying house rent in case you do not get HRA (House Rent Allowance). To claim this, you must not own a house in the name of yourself, your spouse, children or a member of HUF in the place of employment. You must also live in rented accommodation and pay regular rent.
You can claim the least of the following amounts as a deduction:
As per Section 80GGB, any contribution or donation made towards a political party by an Indian company is eligible for a 100% tax deduction. The party receiving the donation must be registered under Section 29A under the Representation of People Act, 1951. Payments can only be made through cheque, demand draft and electronic transfer.
Under this subsection, an individual taxpayer can claim tax deduction benefits on any contribution or donation made to a political party or electoral trust. The contribution cannot be made in cash. Any local authority or judicial person is not eligible for a tax deduction.
Section 80IA of the Income Tax Act provides instructions regarding tax benefits available for certain enterprises. Such organisations engage in the development/maintenance of industrial parks and infrastructure facilities. Furthermore, they are involved in telecommunication services and the distribution of natural gas.
This subsection of the Income Tax Act provides tax deduction facilities for new industrial establishments, hotels and cruises in certain cases.
This section is further divided into two subdivisions – 80JJA and 80JJAA. Section 80JJA states prohibitions for profits generated by industrial establishments concerned with the collection and processing of biodegradable waste. Some businesses can claim tax deductions on wages paid to new workers under Section 80JJAA.
Section 80LA allows tax deduction benefits for certain transactions of an assessee made through offshore banking or International Financial Service Centers (IFSC). The following incomes are considered for deduction:
Under Section 80P, certain earnings involved in specific activities of a cooperative society are eligible for a tax deduction if mentioned in the gross income of that society. This benefit is available under certain terms and conditions which mandate the co-operative society to be registered under the Co-operative Societies Act, 1912.
This section of the Income Tax Act is introduced specifically for Indian authors. They can avail of tax deductions for the royalty earned from the sale of their books. However, only books under literary, scientific and artistic categories are eligible for tax benefit. The maximum tax deduction amount allowed is up to Rs. 3 lakh.
Under Section 80RRB one can claim a tax deduction on the income tax against royalty payments. A royalty payment is received by the original patent holder whenever someone utilises his/her products. For eligibility, the patent has to be registered under the Patent Act, 1970.
Section 80TTA allows individuals and HUF to claim tax deductions of up to Rs. 10,000 on interest earned from savings accounts. The accounts can be opened at a bank or a post office. Moreover, taxpayers need to be below 60 years of age to claim this.
Senior citizens can claim tax deductions of up to Rs. 50,000 on the interest income from deposits in bank or post office u/s 80TTB. It allows tax benefits for interest income from various accounts such as savings accounts, fixed deposits, etc.
This subsection under Section 80 of the Income Tax Act allows resident taxpayers with disabilities to claim tax deductions. To claim this, such individuals need a ‘Person with Disability’ certification from relevant medical authorities. Some of the conditions that qualify u/s 80U are autism and cerebral palsy.
Persons with normal disabilities can claim a maximum deduction of Rs. 75,000, while those with severe disabilities can get deductions of up to Rs. 1,25,000.
|Section||Deduction||Allowed Maximum Limit|
|80C||Against expenses like tuition fees of children, repayment of home loan principal, etc. and investments like ELSS, PPF, NSC, etc.||Rs. 1,50,000|
|80CCC||For payment made towards annuity pension plan||Rs. 1,00,000|
|80CCD||Against any amount paid towards a pension scheme under Central Government||Rs. 1,50,000|
|80CCF||For investments in Infrastructure bonds||Rs. 20,000|
|80D||On premiums paid for health insurance policies||Rs. 1,00,000|
|80DD||Against expenses incurred for taking care of disabled dependent relative||Rs. 1,25,000|
|80DDB||On expenses made for specific diseases||Rs. 1,00,000|
|80E||For payment towards education loan||No maximum limit|
|80EE||Against interest payments of home loan||Rs. 50,000|
|80EEA||Home loan taken between April 1 2019, and March 31 2020||Rs. 50,000|
|80EEB||For purchase of electric vehicles between April 1 2019, and March 31 2032, with a loan||Rs. 1,50,000|
|80G||On donations to various charitable funds and institutions||50-100% of the amount donated|
|80GG||Against house rent allowance||Rs. 5000 per month|
|80GGB||For contribution or donation made towards a political party by an Indian company||No maximum limit|
|80GGC||Against contribution or donation made towards a political party by an individual||10% of gross total income|
|80IA||Tax deductions are available for organisations that are engaged in the development /maintenance/operation of industrial parks, infrastructure facilities, power plant reconstruction, telecommunication services and distribution of natural gas.||The total profit generated for 10 consecutive years|
|80J||Tax deduction facilities for new industrial establishments, hotels and cruises in certain cases||Rs. 1,50,000|
|80LA||Against transactions of an assessee made through offshore banking or International Financial Service Centers (IFSC)||Rs. 1,50,000|
|80P||Tax deductions on certain income involved in specific activities of a co-operative society||Rs. 1,00,000|
|80QQB||Tax deduction benefits from the royalty earned from the sale of books||Rs.3,00,000|
|80RRB||Tax deduction on royalty payments||Rs.3,00,000|
|80TTA||Against Interest earned from savings accounts||Rs. 10,000|
|80TTB||On interest income from deposits for senior citizens||Rs.50,000|
|80U||Deductions available for taxpayers with disabilities||Rs. 1,25,000|
80C to 80U of Section 80 of the Income Tax Act allows taxpayers to claim various deductions through multiple tax-saving expenses and investments. Those who have opted for the old (existing) tax regime can fill in the details of these deductions in their ITR-1 form and reduce their income tax liability.
Ans: If you have mentioned these deductions to your employer, information on the same will be present in Form 16. Moreover, the IT department makes sure to have the details pre-filled in the tax return to make your income tax filing easier.
Ans: Under Section 80QQB, resident Indian authors can claim tax deductions of up to Rs. 3,00,000 from royalty earned from the sale of books. Only certain books, including scientific, artistic and literary works, are qualified for tax deductions.
Ans: Yes, Section 80RRB allows individual patentees who are resident Indians to claim tax deductions of up to Rs. 3,00,000 on royalty earned from patents. They must furnish documents signed by the prescribed authority to provide proof for their claims of patents.
Ans: Under Section 80P, cooperative societies can claim tax deductions on the income earned from renting warehouses. Furthermore, deductions are available on interest received from lending operations and securities. Depending on their work, they can get tax deductions from Rs. 50,000 to Rs. 1,00,000.
Ans: Indian companies involved in manufacturing goods can claim tax deductions under Section 80JJAA of the Income Tax Act. They can claim up to 30% of salaries paid to new full-time employees for three assessment years.
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This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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