Worried about paying huge taxes every year? Know about these deductions which could reduce your tax payable.

Section 80C - Deductions of investment from taxable income

Some of your investments give you more than just expected returns. You can also save on tax. Section 80C investments are an important examples of such investments. This deduction is eligible for an individual and a Hindu Undivided Family (HUF). The deductions are available in some of the major investments, such as:

  • Investment in Public Provident Fund (PPF)
  • Unit Linked Investment Plans (ULIPs)
  • Equity Linked Savings Schemes (ELSS)
  • Employee’s share of Provident Fund contribution
  • National Saving Certificates (NSC)
  • Life insurance premium payment
  • Children’s tuition fee
  • Principal repayment of home loan
  • Senior Citizens Savings Scheme(SCSS)

Maximum Deduction: `1,50,000*

*The maximum deduction provided here is for the particular section only. Please also note that, cumulatively, the maximum deduction that can be claimed under Section 80C, Section 80CC and 80CCD(1) is `1,50,000. Above this, an additional `50,000 can be claimed as a tax deduction for investment in National Pension Scheme (NPS) account under Section 80CCD(1B)

Section 80CCC - Deduction of contribution to pension fund

It is designed to reduce the income tax liability on the pension plans offered by various public and private sector insurers. It provides a deduction to an individual who has paid or deposited an amount in any annuity plan of an insurer for receiving a pension (income) from a fund set up by an insurer. Deduction of premium paid during the year can be claimed as deduction from taxable income.

Maximum Deduction: `1,50,000*

*The maximum deduction provided here is for the particular section only.Also, please note that, cumulatively, the maximum deduction that can be claimed under Section 80C, Section 80CC and 80CCD(1) is `1,50,000. Above this, an additional `50,000 can be claimed as a tax deduction for investment in NPS account under Section 80CCD(1B)

Section 80CCD - Deduction of contribution to pension scheme of central government

Deduction under Section 80CCD is allowed to an individual who makes deposits to his/her pension account.The maximum deduction is allowed to 10% of the salary (in the case of salaried individuals) and 20% of gross total income (in the case of self-employed individuals) or `1,50,000- whichever is less. Under Sub-section1B, an additional deduction of upto `50,0000 is available for contributions towards NPS by individuals.

Maximum Deduction: `2,00,000*

*The maximum deduction provided here is for the particular section only. Please also note that, cumulatively, the maximum deduction that can be claimed under Section 80C, Section 80CC and 80CCD(1) is `1,50,000. Above this, an additional `50,000 can be claimed as a tax deduction for investment in NPS account under Section 80CCD(1B)

Both the sections mentioned above are tied with pension plans and annuity plans. But there is a difference between the two. While Section 80CCC covers the deduction for the amount paid towards the annuity plan of any insurer, Section 80CCD provides a deduction for the amount contributed to pension schemes : NPS and Atal Pension Yojana.

Section 80D - Deduction of premium paid for medical insurance

Under section 80D, deduction of up to `25,000 is allowed to a tax-payer for insurance of self, spouse and dependent children. In case the age of the insured is 60 years or more, then the deduction is available up to `30,000. An additional deduction of insurance for parents (father or mother, or for both) is allowed to the extent of `25,000 (`30,000 if parents are of age 60 years or more). One can also avail a deduction for preventive health check-up of up to `5,000 under the prescribed limit as above.

Maximum Deduction: `60,000

Section 80E - Deduction of interest paid on education loan taken for higher studies

If you have taken an education loan for pursuing higher studies, then you can claim tax deduction under Section 80E. It is applicable even when the loan may have been taken for the spouse, children or for a student for whom the taxpayer is a legal guardian. The deduction is allowed on the interest amount of the loan and is available for a maximum of 8 years or till the interest is paid, whichever is earlier. You can even claim the deduction under this if the loan is taken for financing foreign studies.

Maximum Deduction: No restriction. The deduction allowed for 8 years.

Section 80GG - Tax deductions on house rent paid

Under Section 80GG, you can claim a deduction for the house rent paid when House Rent Allowance(HRA) is not received in salary. The taxpayer, spouse or the minor child mustn’t own residential accommodation at the place of the employment. The taxpayer should be living on rent and paying the rent. Also, the taxpayer should not have any self-occupied residential property in any other place.

The deduction under this section is available to the minimum of:

  • Rent paid minus 10% of the total income
  • `5,000 per month
  • 25% of total income

Maximum Deduction: `60,000

Deduction of interest on savings account - Section 80TTA

Under Section 80TTA,a deduction can be claimed against interest income gained from a savings bank account. Interest from a savings bank account should be first included under the head ‘other income’ while computing it and deduction can be availed of the total interest earned or `10,000- whichever is less. The interest income from fixed deposits, recurring deposits, or interest income from corporate bonds, cannot be claimed under this section.

Maximum Deduction: `10,000

 

End Note:

*The maximum deduction that can be claimed under section 80C, section 80CC and 80CCD(1) is `1,50,000. Above this, an additional `50,000 can be claimed as a tax deduction for investment in NPS account under section 80CCD(1B).

Tax benefits are subject to conditions of section 80C, 80CCC, 80CCD, 80CCE, 80D, 80E, 80GG, 80TTA and other provisions of Income Tax Act 1961. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.

Before getting into tax-saving investments, read and understand the long term benefits and align them with your own future goals.

Planning ahead for tax is always advisable, so as to avoid last-minute errors and be tension-free.

ICICI Pru iProtect Smart UIN:

ICICI Pru Heart/Cancer UIN: 105N154V03

ICICI Pru LifeTime Classic UIN: 105L155V08

ICICI Pru Smart Kid UIN: 105L145V08

Sources:

https://cleartax.in/s/80c-80-deductions

https://www.hrblock.in/guides/income-tax-deductions-80c.aspx

http://www.businesstoday.in/moneytoday/tax/income-tax-deductions/story/21137.html

 

Comp/doc/Oct/2017/0463

Our Tax Saving Plans
ICICI Pru iProtect Smart - Term Plan

Save tax up to `54,600 under Section 80C

ICICI Pru Heart/Cancer Protect – Health Plan

Save tax up to `7,800 under Section 80D

ICICI Pru LifeTime Classic - Wealth Plan

Save tax up to `46,800 under Section 80C

SmartKid with ICICI Pru Smart Life - Child Plan

Save tax up to `46,800 under Section 80C

 

term-life-insurance-banner

 

People like you also read ...

Back to Top