Income Tax Deduction: Section 80C to 80U

Taxes are essential for our nation as most of the government income comes from taxes. People who have a certain salary pay scale are liable to pay taxes. Although this seems like a burden to the taxpayers, government offers some provisions to save some money from taxes. These provisions are tax deductions which can help you reduce your overall tax liability.

What is Tax Deduction?

Tax deductions help you save some money on income tax. However, depending upon the tax deduction you choose, the deduction amount varies. You can claim tax deductions in various ways such as in form of tuition fees, charitable funds, medical expenses, etc. Various schemes also offer tax deduction such as health insurance, national savings schemes, retirement plans, etc.

Income Tax Deduction from Section 80C to 80U

  1. Section 80C
  • You can avail maximum of INR 1.5 Lakhs under Section 80C and this amount is Section 80C, 80CCD, and 80CCC’s combined deduction.
  • You are applicable for this deduction when you invest in EPF, VPF, PPF, NSC, tax saving bank deposit, post office time deposit, ELSS, senior citizen schemes, etc.
  1. Section 80CCC
  • Only individuals, who invest in pension schemes, are eligible.
  • Maximum limit is INR 1.5 Lakhs as mentioned earlier.
  1. Section 80CCD
  • It is divided in 80CCD(1B), 80CCD(2), and 80CCD(1).
  • 80CCD(1) covers employees with voluntary NPS and the deduction can be maximum of 10% salary (DA + Basic).
  • 80CCD(1B) covers employees with voluntary NPS and the deduction can be maximum INR 50,000 or 10% salary (DA + Basic). But, deductions allowed in 80CCD(1) are not applicable here.
  • 80CCD(2) covers employees with voluntary NPS and the deduction can be maximum of 10% salary (DA + Basic). But, it is eligible for Atal Pension Yojna and National Pension Scheme.
  1. Section 80CCF
  • You can avail maximum deduction of INR 20,000 under Section 80CCF.
  • It is available for Hindu undivided family and individuals and provides deduction for long-term infrastructure government bonds.
  1. Section 80D
  • You can avail maximum deduction of INR 1,00,000 under Section 80D.
  • It is available for spouse, taxpayers, dependent children, and parent and provides deduction for medical expenses, medical insurance, and medical health check-ups.
  1. Section 80DD
  • You can avail maximum deduction of INR 75,000 for normal disability and INR 1,25,000 for severe disability.
  • It is available for differently abled dependent family members and provides deduction for disabilities such as blindness, leprosy cursed, low vision, etc.
  1. Section 80DDB
  • You can avail maximum deduction of INR 40,000 for people below 60 years and INR 1,00,000 for senior citizens.
  • It is available for certain specified diseases only.
  1. Section 80E
  • You can avail deductions for 8 years.
  • It is available when an individual takes education loan for children and deduction is provided on interest repayments.
  1. Section 80EE
  • You can avail maximum deduction of INR 50,000 under Section 80EE.
  • It is available when an individual takes residential loan and deduction is provided on interest repayments.
  1. Section 80G
  • You can avail deductions of 50% or 100% for without or with restrictions in Section 80G.
  • It is available when an individual makes a donation to a charitable trust and the deduction is calculated at 10% of gross total income.
  1. Section 80GG
  • You can avail maximum deduction of whichever is lower: rent paid is less than 10% of income, 25% total adjusted employee income, or INR 5,000 per month.
  • It is available for rent-paying non-HRA receiving or self-employed individual.
  1. Section 80GGA
  • You can avail maximum deduction of 100% if the contribution is made to rural development or scientific research but only if the person is an individual who doesn’t have any gains or profits from business.
  • Cash contributions amounting more than INR 10,000 are not applicable.
  1. Section 80GGB
  • Companies can avail benefits in case contribution is made in form of electoral trust or any other form to political parties.
  • But, cash contributions are not included.
  1. Section 80GGC
  • You can avail maximum deduction of 100% if the contribution is made in form of electoral trust or any other form to political parties.
  • The contributing individual should not be a local authority or artificial judicial person.
  1. Section 80IA
  • You can claim this deduction on profits via telecommunication, industrial park, power generation, SEZs, etc. industrial activities.
  1. Section 80IAB
  • You can claim this deduction on profits via SEZ development.
  1. Section 80IB
  • You can claim this deduction on profits via hotels, multiplex theatres, shops, scientific research and development, housing project, etc.
  1. Section 80IC
  • You can claim this deduction on profits or gains from special states such as Meghalaya, Assam, Manipur, Arunachal Pradesh, Mizoram, Uttaranchal, Himachal Pradesh, Tripura, and Nagaland.
  1. Section 80ID
  • You can claim this deduction on profits via convention centers and hotel but the establishment should be in certain specified areas.
  1. Section 80IE
  • You can claim this deduction if you have establishment in northeast area.
  1. Section 80J
  • Section 80JJA is available for businesses developing biological products such as bio-pesticides, bio-fertilizers, etc. from biodegradable waste collection. The deduction can be availed on profits for up to 100%.
  • Section 80JJA is available for businesses involved in goods manufactured in factories. The deduction of up to 30% salary of new employees can be availed.
  1. Section 80LA
  • The deduction can be availed by banks established outside India, banks in offshore SEZ, and International Financial Services Centres entities.
  • For first 5 years, the deduction can be acquired for 100% of income, and after that, for 5 years, 50% income which is produced with such transactions.
  1. Section 80P
  • Corporative societies from banking, fishing, cottage industry, agricultural harvest, and milk supply can avail 100% deduction on income.
  • Involvement in businesses other than above are eligible for INR 50,000 and INR 1,00,000.
  1. Section 80QQB
  • You can avail maximum of INR 3 Lakh under Section 80QQB.
  • The authors of Indian resident can avail this deduction for literary, scientific, and artistic books.
  1. Section 80RRB
  • You can claim this deduction on income by patent registered royalty, registered after or on 01.04.2003 for income received or up to INR 3 Lakhs, whichever is less.
  1. Section 80TTA
  • You can claim this deduction on income from savings deposits in financial institutions.
  • Hindu undivided family and individuals can avail deduction of INR 10,000.
  1. Section 80TTB
  • Senior citizens can avail this deduction of up to INR 50,000 for post office and bank deposits.
  1. Section 80U
  • An individual suffering from 40% disability can avail INR 75,000 deduction.
  • An individual suffering from 80% disability or above can avail INR 1,25,000.

Conclusion

If there is tax burden for taxpayer, there are also various tax deduction options to save yourself from tax liabilities. Hence, start planning your tax deduction and minimize the money spent on taxes every year.

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Rakesh Jain

Rakesh Jain

CEO at paysquare
Rakesh is a seasoned finance professional with 20 years of industry experience. He is the CEO and founder member of Paysquare. With his industry experience and vision, he has been a catalyst for developing Paysquare as one of the preferred destinations for payroll outsourcing.
A strategic and innovative thinker, Rakesh has successfully driven the growth of Paysquare and developed many new business opportunities. He has always believed to investing in cutting edge technology to stay ahead of the curve. His transparent approach and high level of integrity has earned him accolades from several clients.
Rakesh Jain

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