Financial year is approaching to its end and now tax payers have started planning to save there taxes. So here I have listed all the useful income tax deductions that an individual tax payer can claim under income tax act 1961 like section 80C, 80CCC, 80CCD, 80CCF, 80D, 80DD, 80E, 80G , 80GG, 80U, 80RRB and 80QQB. These are all relevant deductions for an Individuals that he can claim depending on the condition. Short description of each deduction available will help you understand the limit of deduction available, eligibility to avail tax deduction under each section etc. So lets get started and see how much tax you can save.
Section 80C of the income tax act 1961 allows income tax deductions upto Rs 100,000 to individuals & HUFs. Tax payers can invest in any of the investments mentioned under section 80C to claim tax deduction. Investments in which you can invest to claim tax deduction u/s 80C are Equity Linked savings scheme (ELSS), Fixed Deposits, National Saving Certificate (NSC), Public provident fund (PPF), life insurance policy, Home loan etc.
Section 80CCC of the income tax act 1961 allows tax deduction upto Rs 100,000. To claim tax deduction u/s 80CCC, an individual tax payer can invest in an annuity plan of the Life Insurance Corporation of India or any other insurer for receiving pension i.e under a recognized pension fund/ plan. But Section 80CCC deduction limit is clubbed with the limit of section 80C- which means the maximum tax deduction u/s 80C & 80CCC is Rs 1 lakh.
Section 80CCD of the income tax act 1961 allows tax deduction to the individuals who invest 10% of the basic monthly salary (including Dearness allowance) under the NPS scheme. Tax deduction u/s 80CCD is above Rs 1 lakh limit available u/s section 80C & section 80CCC.
An individual working under government sector or private sector can invest 10% of his basic monthly salary whereas a self employed person can invest 10% his gross total income under NPS to avail tax deduction u/s 80CCD.
But tax payers cant make investment under NPS on there own. In other words, it is the employer who needs to deposit the amount on his behalf with equal contribution like EPF.
No such deduction is available u/s 80CCF for the FY 2012-13.
Section 80D of the income tax act 1961 allows tax deduction upto Rs 15000 (Rs 20,000 for senior citizens). An individual or HUF can claim tax deduction u/s 80D for paying medical insurance premium for self, spouse, children or parents. Other insurance premiums for like premium for life insurance is not covered under this section only payment of health insurance premium or contribution made to Central Government Health Scheme offers income tax deduction u/s 80D.
Premium Paid For Self, Spouse & Dependent Children
Premium Paid For Parents
Total Deduction u/s 80D
|All members are below 60 years of age||Rs 15,000||Rs 15,000||Rs 30,000|
|Tax Payer & family is below 60 years & parents are above 60 years of age.||Rs 15,000||Rs 20,000||Rs 35,000|
|Tax payer & parents are above 60 years of age.||Rs 20,000||Rs 20,000||Rs 40,000|
Section 80DD of the income tax act allows tax deduction to individual & HUF for the maintenance of dependent handicapped relative. This deduction is given to the assesse if a person with permanent disability is dependent on him. A person with disability means disabilities like autism, cerebral palsy,
mental retardation, blindness etc. certified by a specified physician or psychiatrist. The amount of deduction allowed is upto Rs 50,000 for the maintenance of dependent handicapped relative and Rs 100,000 for dependent with severe disability i.e dependent is more than 80% disable.
Section 80DDB of the income tax act allows tax deduction to individuals & HUF’s against the medical expenditure incurred for specified disease like Neurological Diseases, Parkinson’s Disease, Malignant Cancers, Acquired Immune Deficiency Syndrome (AIDS), Chronic Renal failure, Hemophilia and Thalassaemia. The amount of deduction allowed is upto Rs 40,000 (Rs 60,000 for senior citizen) for the treatment of self, spouse, children, siblings, and parents, wholly dependent on you.
Section 80E of the income tax act allows tax deduction against interest paid on education loan in India without any upper limit. The tax deduction is allowed only for the interest paid in the previous year and not the principal amount. Tax benefits are allowed only if the loan is taken from a bank, non-banking institutions, Credila, charitable institutions and NGOs for higher studies. The tax benefits can be claimed upto eight years of loan repayment.
Section 80G of the income tax act allows tax deduction against donation to charitable institutions for social cause upto either 50% or 100% with or without restriction as provided in sec 80G.
Section 80GG of the income tax act allows tax deduction for rent paid to individuals or HUF’s who are either self employed or not getting HRA from there employer. The amount of deduction allowed is equal to or least of- actual rent paid less 10% of gross total income, 25% of his adjusted gross total income and Rs. 2,000 p.m. The assesse is eligible to take deduction only if he satisfies the following conditions:-
- Assessee or his spouse or minor child should not own residential accommodation at the place of employment.
- Assessee should not have a self occupied residential premises in any other place.
Section 80U of the income tax act 1961 allows tax deductions to a disable person to reduce his/ her tax burden. Section 80U offers a fixed amount i.e Rs.50,000/- to an individual who suffers from a physical disability (including blindness) or mental retardation and Rs 100,000 to a person with severe disability.
Section 80RRB of the income tax act 1961 allows tax deduction to an individual residents in respect of any income by way of royalty in respect of a patent registered. The amount of deduction allowed is Rs 3 lakhs or actual income received which ever is less.
Section 80QQB of the income tax act 1961 allows tax deduction to an individual residents in respect of royalty or copyright income received in for authoring any book other than text book. the amount of tax deduction allowed is Rs. 3 lakhs or the actual income received, whichever is less.