top of page

Deductions eligible for Tax Saving

An assessee can claim deduction specified in section 80C to 80U from gross total income in order to arrive at the net income. The aggregate amount of deduction shall not be more than gross total income. Deductions specified in section 80C to 80U are not allowed from short term capital gain taxable under section 111A, any long-term capital gain and income referred to in sections 115A, 115AB, 115AC, 115AD and 115D. List such deductions is as follows:


1. Section 80C: deduction in respect of life insurance premia, deferred annuity, contribution to provident fund, etc.:

Assessee being individual or HUF can claim deduction under section 80C from gross total income. Section 80C provides deduction in respect of specified qualifying amounts paid or deposited by the assessee in the previous year. The gross qualifying amount would be allowed as deduction irrespective of the fact whether (or not) such amount is paid or deposited by the taxpayer out of his income chargeable to tax.

The maximum amount deductible under section 80C is Rs. 1,50,000. Moreover, the aggregate amount of deduction under sections 80C, 80CCC, 80CCD(1) cannot exceed Rs. 1,50,000.

2. Section 80CCC: Deduction in respect of contribution to pension fund:

This section provides a deduction to an individual for any amount paid or deposited by him in any annuity plan of the Life Insurance Corporation of India or any other insurer for receiving pension from fund referred to in section 10(23AAB). The deduction shall be restricted to Rs. 1,50,000. Moreover, the aggregate amount of deduction under sections 80C, 80CCC, 80CCD(1) cannot exceed Rs. 1,50,000.


3. Section 80CCD: Deduction in respect of contribution to National Pension Scheme:

Assessee being individual who has in the previous year paid or deposited any amount in his account under NPS (NPS covers New Pension Scheme and Atal Pension Yojana) can claim deduction under section 80CCD. Assessee may be employed by Central Government, employed by any other person or he may be even a self-employed person.


A. Contribution towards NPS by employee (or any other individual assessee) [Sec. 80CCD(1)]

Assessee’s contribution to NPS is deductible under section 80CCD(1) in the year in which contribution is made. No deduction is available in respect of employee’s contribution which is in excess of 10 per cent of the salary of the employee and 20 per cent of gross total income in case of self-employed.


B. Contribution towards NPS by employer [Sec. 80CCD(2)]

Contribution by employer to NPS is deductible under section 80CCD(2) in the hands of concerned employee. However, no deduction is available if contribution towards NPS is in excess of 10 per cent of salary (or 14 per cent of salary in case of Central Government employee).


The aggregate amount of deduction under sections 80C, 80CCC, 80CCD(1) cannot exceed Rs. 1,50,000. The ceiling is not applicable in respect of employer’s contribution towards NPS.


C. Additional contribution upto Rs. 50,000 towards NPS under section 80CCD

An additional deduction is available in respect of any amount paid (upto Rs. 50,000) towards NPS by any individual assessee. On this contribution, the ceiling of Rs. 1,50,000 under section 80CCE will not be available. The additional deduction is available whether or not any claim under section 80CCD(1).


4. Section 80D: Deduction in respect of medical insurance premia:

Deduction under section 80D is available to an individual (maybe resident/ non-resident or Indian citizen/ foreign citizen) or a Hindu Undivided Family (maybe resident or non-resident) if payment is made out of income chargeable to tax. Payment should be made by any mode other than cash. However, payment on account of preventive health check-up can be made by any mode (including cash).

Premium Paid - Self, Family, Children

Premium Paid- Parents

Preventive Health Check-up

Deduction under 80D

​​​Individual and parents below 60

25,000

25,000

5,000

50,000

Individual and family below 60 but parents above 60 years

25,000

50,000

5,000

75,000

Both individual, family and parents above 60 years

50,000

50,000

5,000

1,00,000

Members of HUF: below age of 60

25,000

25,000

-

25,000

Members of HUF: above age of 60

50,000

50,000

-

50,000

If assessee incurs any medical expenditure for self or family who are senior citizen and no payment is made to keep medical insurance in force can claim deduction for such payment made. An additional deduction for parents who are senior citizen is also available.

Medical Expenditure

Preventive Health Check-up

Deduction under 80D

Senior citizen: Self, family

50,000

5,000

50,000

Senior Citizen: Parents