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 | 50,000 | 5,000 | 50,000 |
Members of HUF: Above age of 60 | 50,000 | - | 50,000 |
5. Section 80DD: Deduction in respect of maintenance including medical treatment of a handicapped dependent who is a person with disability:
When taxpayer has incurred expenses for medical treatment of dependent or paid or deposited under any scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the administrator or specified company and approved by the Board in this behalf, for maintenance of dependent who is differently-abled and wholly dependent on the taxpayer (individual or HUF) for support and maintenance, the expenditure can be claimed as a deduction under section 80DD. Disability of the dependent should not be less than 40%.
| Deduction u/s 80DD |
Where disability is more than 40% and less than 80% | Rs. 75,000 |
Where disability is more than 80% | Rs. 1,25,000 |
6. Section 80DDB: Deduction in respect of medical treatment:
The taxpayer who is resident (individual or HUF) has actually paid any amount for the medical treatment of specified disease. The expenditure is actually incurred for medical treatment of the assessee himself or wholly dependent spouse, children, parents, brothers and sisters of the taxpayer. In case of taxpayer being HUF, the expenditure is incurred for medical treatment of family member who is wholly dependent on family.
List of specified diseases:
a. Neurological diseases where the disability level has been certified to be more than 40% and above
b. Malignant cancers
c. Full Blown Acquired Immuno-Deficiency Syndrome (AIDS)
d. Chronic Renal Failure
e. Hematological disorder
Actual expenditure or medical treatment is allowed as deduction. However, it should not exceed Rs. 40,000. In case of medical expenditure incurred on senior citizen, deduction is available upto Rs. 1,00,000.
7. Section 80E: Deduction in respect of interest on loan taken for higher education:
The taxpayer who is an individual has taken educational loan for the purpose higher education of his own, spouse, child or someone to whom taxpayer is legal guardian can claim deduction for interest paid on such educational loan taken. Entire payment of interest is deductible. However, it should be paid from income chargeable to tax. The deduction is available for a maximum of 8 years or till the interest is paid, whichever is earlier.
8. Section 80EEB: Deduction in respect of interest on loan taken for purchase of electric vehicle:
The taxpayer being an individual who has taken loan for purchase of electric vehicle can claim deduction for interest paid on such loan taken. Loan shall be sanctioned during April 1, 2019 and March 31, 2023. Deduction is available in respect of interest payable on loan taken or Rs. 1,50,000 whichever is less.
9. Section 80G: Deduction to donations to certain funds, charitable institutions, etc.:
Donation made to certain organization can be claimed as deduction under section 80G. However, not all donations made can be claimed as deduction. Amount of deduction is calculated as a percentage of net qualifying amount. Net qualifying amount is limited to per cent of gross total income of the assessee as reduced by the following:
a) amount deductible under section 80CCC to 80U (but not in section 80G);
b) such incomes on which income-tax is not payable;
c) log-term capital gains
d) short-term capital gains taxable @ 10 per cent under section 111A; and
e) incomes referred to in section 115A, 115AB, 115AC or 115AD.
Any donations made in cash exceeding Rs 2,000 will not be allowed as a deduction. The donations above Rs 2,000 should be made in any mode other than cash to qualify as a deduction under Section 80G. The various donations specified in Section 80G are eligible for a deduction of up to 100% or 50% with or without restriction, as provided in Section 80G.
10. Section 80GG: Deduction in respect of rent paid:
While computing total income, assessee can claim deduction for rent paid by him for the property occupied for the purpose of his own residence under this section.
To claim deduction the following conditions are need to be satisfied:
a) He should be a self-employed and/ or salaried person who is not in receipt of House rent allowance any time during the previous year.
b) He or his spouse or minor child (including step child and adopted child) or HUF, in which he is member, do not own any residential property in India or abroad.
To claim deduction under section 80GG, assessee should file Form 10BA regarding the expenditure incurred by him towards payment of rent.
11. Section 80TTA: Deduction in respect of interest on deposits in saving accounts:
Taxpayer can claim deduction for interest income earned on deposits in savings account with
a) a banking companies
b) a co-operative society engaged in carrying on banking business
c) a post office
Taxpayer can claim deduction for interest income earned or Rs. 10,000 whichever is lower. The above deduction is not available for senior citizens. Senior citizen can claim deduction under section 80TTB.
12. Section 80TTB: Deduction in respect of interest on deposits in case of senior citizen:
Assessee who is senior citizen aged 60 years or above can claim deduction under this section for interest income earned on deposits with a bank or co-operative bank or post office. Assessee can claim deduction for interest received on saving account, fixed deposit or any other interest. It is not necessary that interest should be received on saving account only as it is in section 80TTA. Amount of deduction can be actual interest received or Rs. 50,000 whichever is lower.
13. Section 80U: Deduction in case of person with disability:
An individual being resident who has been certified as a person with a disability by the medical authority can claim the tax benefit under section 80U. Disability should not be less than 40%.
| Deduction u/s 80U |
Where disability is more than 40% and less than 80% | Rs. 75,000 |
Where disability is more than 80% | Rs. 1,25,000 |
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- Compiled by - Aradhana Jaju