DEDUCTIONS ON SECTION 80C, 80CCC, 80CCD & 80D
Dr. Ashima Saxena
Section 80 Deductions
Income tax department with a view to encourage savings and
investments amongst the taxpayers have provided various deductions
from the taxable income under chapter VI A deductions. 80C being the
most famous, there are other deductions which are beneficial for the
taxpayers to reduce their tax liability.
Section 80C – Deductions on Investments
Section 80C is one of the most popular and favourite sections amongst
the taxpayers as it allows to reduce taxable income by making tax saving
investments or incurring eligible expenses.
It allows a maximum deduction of Rs 1.5 lakh every year from the tax
payers total income. The benefit of this deduction can be availed by
Individuals and HUFs. Companies, partnership firms, LLPs cannot avail
the benefit of this deduction.
Section 80C includes sub sections, 80CCC, 80CCD (1), 80CCD (1b) and
80CCD(2).
It is important to note that overall limit including the subsections
for claiming deduction is Rs 1.5 lakh except an additional
deduction of Rs 50,000 allowed u/s 80CCD(1b).
Section 80CCC – Insurance Premium /Section 80CCD – Pension
Contribution
Eligible investments for tax deductions
80 C 80C allows deduction for investment made in PPF , EPF, LIC premium ,
Equity linked saving scheme, principal amount payment towards home
loan, stamp duty and registration charges for purchase of property,
Sukanya smriddhi yojana (SSY) , National saving certificate (NSC) , Senior
citizen savings scheme (SCSS), ULIP, tax saving FD for 5 years,
Infrastructure bonds etc
80CCC 80CCC allows deduction for payment towards annuity pension plans
, Deduction Pension received from the annuity or amount received upon surrender of
for life the annuity, including interest or bonus accrued on the annuity, is taxable
insurance in the year of receipt.
annuity
plan.
80CCD (1) Employee’s contribution under section 80CCD (1) Maximum deduction
Deduction allowed is least of the following
for NPS
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 Additional deduction of Rs 50,000 is allowed for amount deposited to NPS
(1b) account
Deduction Contributions to Atal Pension Yojana is also eligible for deduction.
for NPS
80CCD (2) Employers contribution is allowed for deduction upto 10% of basic salary
Deduction plus dearness allowance under this section. Benefit in this section is
for NPS allowed only to salaried individuals and not self-employed.
Here are some investment options that are allowed as deduction
u/s 80C:
Investment Average Lock in period for Risk factor
options Interest
ELSS funds 12% – 15% 3 years High
NPS Scheme 8% – 10% Till 60 years of age High
ULIP 8% – 10% 5 years Medium
Tax saving FD 7% – 8% 5 years Low
PPF 7.10% 5 years Low
Senior citizen 7.4% 5years (can be extended for Low
savings scheme other 3 years)
National 6.8% 5 years Low
Dr. Ashima Saxena
Section 80 Deductions
Income tax department with a view to encourage savings and
investments amongst the taxpayers have provided various deductions
from the taxable income under chapter VI A deductions. 80C being the
most famous, there are other deductions which are beneficial for the
taxpayers to reduce their tax liability.
Section 80C – Deductions on Investments
Section 80C is one of the most popular and favourite sections amongst
the taxpayers as it allows to reduce taxable income by making tax saving
investments or incurring eligible expenses.
It allows a maximum deduction of Rs 1.5 lakh every year from the tax
payers total income. The benefit of this deduction can be availed by
Individuals and HUFs. Companies, partnership firms, LLPs cannot avail
the benefit of this deduction.
Section 80C includes sub sections, 80CCC, 80CCD (1), 80CCD (1b) and
80CCD(2).
It is important to note that overall limit including the subsections
for claiming deduction is Rs 1.5 lakh except an additional
deduction of Rs 50,000 allowed u/s 80CCD(1b).
Section 80CCC – Insurance Premium /Section 80CCD – Pension
Contribution
Eligible investments for tax deductions
80 C 80C allows deduction for investment made in PPF , EPF, LIC premium ,
Equity linked saving scheme, principal amount payment towards home
loan, stamp duty and registration charges for purchase of property,
Sukanya smriddhi yojana (SSY) , National saving certificate (NSC) , Senior
citizen savings scheme (SCSS), ULIP, tax saving FD for 5 years,
Infrastructure bonds etc
80CCC 80CCC allows deduction for payment towards annuity pension plans
, Deduction Pension received from the annuity or amount received upon surrender of
for life the annuity, including interest or bonus accrued on the annuity, is taxable
insurance in the year of receipt.
annuity
plan.
80CCD (1) Employee’s contribution under section 80CCD (1) Maximum deduction
Deduction allowed is least of the following
for NPS
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 Additional deduction of Rs 50,000 is allowed for amount deposited to NPS
(1b) account
Deduction Contributions to Atal Pension Yojana is also eligible for deduction.
for NPS
80CCD (2) Employers contribution is allowed for deduction upto 10% of basic salary
Deduction plus dearness allowance under this section. Benefit in this section is
for NPS allowed only to salaried individuals and not self-employed.
Here are some investment options that are allowed as deduction
u/s 80C:
Investment Average Lock in period for Risk factor
options Interest
ELSS funds 12% – 15% 3 years High
NPS Scheme 8% – 10% Till 60 years of age High
ULIP 8% – 10% 5 years Medium
Tax saving FD 7% – 8% 5 years Low
PPF 7.10% 5 years Low
Senior citizen 7.4% 5years (can be extended for Low
savings scheme other 3 years)
National 6.8% 5 years Low
