Income Tax Deductions Section 80C

Section 80C

You can claim ₹150,000.00 as deductions under section 80C of Income Tax Act 1961. That is, you can reduce up to ₹150,000.00 from your total taxable income through Section 80C. This deduction is allowed to an individual and an HUF.

Deductions Under Section 80C

Life Insurance Policy

Premium paid on insurance on the life of individual, spouse or child and in the case of HUF, any member thereof.

In respect of policies issued before 1.4.2012

However, where the annual premium on insurance policies, other than a contract for the deferred annuity, issued on or before 31.3.2012, exceeds 20% of the actual capital sum assured, only the amount of premium as does not exceed 20% will qualify for a rebate.

In respect of policies issued on or after 1.4.2012

However, the deduction under section 80C for premium or other payment made on the insurance policy, other than a contract for a deferred annuity, shall be restricted to the 10% of the actual sum assured, in case the insurance policy is issued on or after 1st April 2012.

In respect of policies issued on or after 1.4.2013

Premium paid in respect of a life insurance policy issued on or after 1st April 2013, where the insurance is in the life of any person, who is –

  1. a person with disability or person with a severe disability as referred to in section 80U; or
  2. suffering from disease or ailment as specified in the rules made under section 80DDB,

would qualify for deduction to the extent of 15% of minimum capital sum assured. In respect, other policies, the deduction of premium paid would continue to be restricted to 10% of minimum capital sum assured.

Provident Fund 

Contributions to any provident fund to which the Provident Funds Act, 1925 applies.

Contributions made to any Provident Funds set up by the Central Government and notified in his behalf.

Contribution by an employee to a recognised provident fund or to an approved superannuation fund.

The contribution made by a resident individual in PPF Account. The account can be in the name of self/spouse, any child and for HUF, it can be in the name of any member of the family.

Equity Linked Savings Scheme (ELSS)

ELSS – Equity Linked Savings Scheme is a diversified equity mutual fund which has the majority of the corpus invested in equities. This type of mutual fund has a lock-in period of 3 years. The investor can claim up to ₹1 lakh as a deduction from his gross taxable income under section 80C of the Income Tax Act. Read more: Equity Linked Savings Scheme

Home Loan Principal Repayment

The EMI that you pay every month to repay your home loan consists of two components – Principal and Interest. The principal amount of the EMI qualifies for deduction under section 80C. Interest amount qualifies for deduction under section 24 of the Income Tax Act.

National Savings Certificate (NSC) (VIII Issue)

Investments in NSC are eligible for a deduction of up to ₹150,000.00 p.a. under section 80C. Furthermore, the accrued interest which is deemed to be reinvested qualifies for deduction under Section 80C.

5 years Deposits

Term deposits for a fixed period of not less than 5 years with a scheduled bank, and which is in accordance with a scheme framed and notified.

5-year term deposit in an account under the Post Office Time Deposit Rules, 1981.

Senior Citizen Savings Scheme

The account may be opened by an individual,

  1. who has attained an age of 60 years or above on the date of opening of the account.
  2. who has attained the age 55 years or more but less than 60 years and has retired under a Voluntary Retirement Scheme or a Special Voluntary Retirement Scheme on the date of opening of the account within three months from the date of retirement.
  3. No age limit for the retired personnel of Defence Services provided they fulfil other specified conditions.

Sukanya Samriddhi Account

The account may be opened by the natural or legal guardian (depositor) in the name of a girl child from the birth of the girl child till she attains the age of ten years and any girl child, who had attained the age of ten years, one year prior to the date of commencement of the scheme i.e. 2nd December 2014.

Unit Linked Insurance Plan

ULIPs cover life insurance with benefits of equity investments. They have attracted the attention of investors and tax-savers not only because they help us save tax but they also perform well to give decent returns in the long term.

Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, college, school or other educational institution situated in India, for full-time education of any 2 of his/her children.

Others

In addition to the above mentioned, there are some other deductions under section 80C. They are:-

  • Stamp duty and registration charges for a home
  • Sum paid under contract for deferred annuity for individual, on life of self, spouse or any child
  • Subscription to notified schemes of (a) public sector companies engaged in providing long-term finance for purchase/construction of houses in India for residential purposes/(b) authority constituted under any law for satisfying a need for housing accommodation or for planning, development or improvement of cities, towns and villages, or for both.
  • Subscription to notified bonds issued by the NABARD.

One thought on “Income Tax Deductions Section 80C”

Leave a Reply

Your email address will not be published. Required fields are marked *