Income Tax Deductions on Section 80C, 80CCC, 80CCD & 80D

Deductions allowed under the income tax act help you reduce your taxable income. You can avail the deductions only if you have made tax-saving investments or incurred eligible expenses. There are a number of deductions available under various sections that will bring down your taxable income. The most popular one is section 80C of Chapter VIA. Other preferred deductions under chapter VIA are 80D, 80E, 80G, 80DDB and so on. In this article, let us discuss some of the important deductions under chapter VIA that a taxpayer can claim.

Section 80C

Tax Savings

Section 80CCC -

Insurance Premium

Section 80CCD

Pension Contribution

Section 80TTA

Interest on Savings Account

Section 80GG

House Rent Paid

Section 80E

Interest on Education Loan

Section 80EE

Interest on Home Loan

Section 80CCG

RGESS

Section 80D

Medical Insurance

Section 80DD

Disabled Dependent

Section 80DDB

Medical Expenses

Section 80U

Physical Disability

individual-Contribution-to-Political-Parties

Section 80G

Donations

Section 80GGB

Company Contribution

Companies-Contribution-tp-political-parties

Section 80GGC

Contribution to Political Parties

Section 80RRB

Royalty from Patent

Section 80TTB

Interest Income

Frequently Asked Questions

1. Section 80C - Deductions on Investments

You can claim a deduction of Rs 1.5 lakh your total income under section 80C. In simple terms, you can reduce up to Rs 1,50,000 from your total taxable income, and it is available for individuals and HUF's filing your Income Tax Return. The Income Tax Department will refund the excess money to your bank account.
Investments in Tax Saving FDs
Tax-saving FDs are like regular fixed deposits but come with a lock-in period of 5 years and tax break under Section 80C on investments of up to Rs 1.5 lakh.
Eligibility : Can be opened by Resident Indian individuals.
Liquidity: Fixed Deposits have lock-in period of 5 years.
Rate of Interest : FD interest rate across different banks ranges from 5.5% to 7.75%
Investment Limit: Minimum investment limit is Rs 1000.
Tax Treatment : Interest earned in taxable.

Investments in PPF (Public Provident Fund)

PPF are long term investments backed by government of India. Deposits made in a PPF account are eligible for tax deductions under Section 80C.
Eligibility : Can be opened by Resident Indian individuals, salaried and non-salaried individuals. A HUF cannot open a PPF account.
Liquidity: PPF account have lock-in period of 15 years, but can be further extended by 5 years. Partial withdrawals are allowed after 7 years.
Rate of Interest : Current interest rate is 8.0% p.a.
Investment Limit: Minimum and maximum investment limit is Rs 500 and Rs 1.5 lakh respectively.
Tax Treatment : Interest earned is tax-free.

Investments in EPF (Employee Provident Fund)

EPF is a retirement benefit scheme that is available to all salaried employees. This amounts to 12% of basic salary + DA, that is deducted by an employer and deposited in the EPF or other recognised provident funds.
Eligibility : Can be opened by employee with basic salary greater than 15,000 /month
Liquidity: Can withdraw PF balance after 2 months of leaving job and does not take up employment within two months with an employer covered by PF Act
Rate of Interest : Interest rate on the EPF is 8.55%.
Investment Limit: Both employer and employee have to contribute a minimum 12% of Basic Pay + D.A.
Tax Treatment :Entire PF balance (including interest) is tax-free, if withdrawn after continuous service of 5 years

Investments in NPS (National Pension System)

The NPS is a pension scheme that has been started by the Indian Government to allow the unorganised sector and working professionals to have a pension after retirement. Investments of up to Rs 1.5 lakh can be used to avail tax deductions under Section 80C
Eligibility : Can be opened by every Indian citizen between the age of 18 and 60
Liquidity: Partial withdrawals are allowed after 15 years but under special conditions
Rate of Returns : Returns rate on the NPS varies between 12% – 14%
Investment Limit: No limit on maximum contribution
Tax Treatment : Employer contributions are tax-free

Investments in ULIP (Unit linked Insurance Plans)

ULIPs are a mix of insurance and investment. A part of the invested amount in ULIPs is used to provide insurance and the rest of the amount is invested in the stock markets. Investments of up to Rs 1.5 lakh in ULIPs are eligible for tax breaks under Section 80C
Eligibility : An investor can buy ULIP for self or spouse or child
Liquidity: Interest rate varies as it is market linked
Rate of Returns : Return rate on the ULIP varies between 12% – 14%
Investment Limit: No limit on maximum contribution
Tax Treatment : Investment and withdrawals & maturity amount are tax-free

Investments in Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana/Scheme is one of the most popular schemes by the Government of India. The scheme is aimed at the betterment of girl child in the country
Eligibility : Parents/guardians can open an account in the name of a girl child till she attains the age of 10 years
Liquidity: Up to 50% of the deposit amount can be prematurely withdrawn once the girl reaches the age of 18 years
Rate of Interest : Interest rate on Sukanya Samriddhi Yojana is 8.5%
Investment Limit: Investment is limited to maximum Rs.1,50,000 in a financial year
Tax Treatment : Investment and withdrawals & maturity amount are tax-free

2. Section 80CCC – Insurance Premium

Deduction for Premium Paid for Annuity Plan of LIC or Other Insurer

Section 80CCC provides a deduction to an individual for any amount paid or deposited in any annuity plan of LIC or any other insurer. The plan must be for receiving a pension from a fund referred to in Section 10(23AAB). Pension received from the annuity or amount received upon surrender of the annuity, including interest or bonus accrued on the annuity, is taxable in the year of receipt.

A. What is Section 80CCC?

The Section 80CCC exemption limit includes the money spent on the purchase of a new policy or payments made towards renewal or continuation of an existing policy. The primary condition for availing this exemption is that the policy for which the money has been spent must be providing a pension or a periodical annuity.Section 80CCC is read along with Section 80C and Section 80CCD(1), thereby limiting the total exemption limit to Rs. 1,50,000/- per annum.

B. Terms and Conditions of Section 80CCC

Following are the terms and conditions applicable under the Act: –

(i) Available to those individuals who have paid the sum for renewal or purchase of a life insurance policy from their taxable income.

(ii) The payment of funds from the policy should be made as per the terms of Section 10 (23AAB) from the accumulated funds.

(iii) If any bonuses are received or interest is accrued, it is not eligible for deduction under Section 80CCC.

(iv) Any amount received from the policy as a monthly pension is liable for taxation as per the prevailing rates.

(v) If the policy is surrendered, the amount would also be subject to taxation.

(vi) Any rebates that were available on investment in annuity plans before April 2006 are not allowed under Section 88.

(vii) Any amount deposited before April 2006 is not eligible for deduction.

C. What is Section 10 (23AAB)?

The provisions of Section 10 (23AAB) are inherently linked with Section 80CCC. It relates to the income earned from a fund that has been set up by a recognized insurer, including the LIC. The fund must have been set up before August 1996 as a pension scheme. The contributions made by the taxpayer to the policy must have been with the intention of earning pension income in the future.

D. Eligibility for Deduction Under Section 80CCC?

The conditions regarding eligibility for deductions are: (i) An individual taxpayer who has subscribed to an annuity plan which has been offered by an approved insurance company.(ii) HUF or Hindu Undivided Family is not eligible for exemption under Section 80CCC.(iii) These provisions apply to both residents as well as non-residents.

E. Important Points Related to Section 80CCC

Here are some essential points that you must know regarding the applicability of 80CCC Section:
(i) The deduction limits available under Section 80CCC are clubbed together with Section 80C and Section 80CCD (1) to determine the total deduction limit available.
(ii) The provisions of Section 80CCC are specifically applicable to those insurance providers in India that offer annuity or pension plans. The insurer could be a public Sector entity or a private Sector entity as well.
(iii) The deductions are applicable for the premium/sum paid for the preceding Assessment Year only. For instance, if an individual pays the sum for 2-3 years together, then deduction can only be claimed for the amount that pertains to the preceding year only.
(iv)The maximum available deduction under this Section is Rs. 1,50,000/- per annum.
With the provisions of Section 80CCC, you can save a significant sum of money towards your taxation liability. To be eligible to avail this exemption, you must keep a record of the transaction for the payment of money towards the insurance policy. Under no circumstances can the exemption limit exceed the income of the individual. Along with Section 80CCC, there are several other provisions also under the Income Tax Act to help you save your taxation liability.

3. Section 80CCD – Pension Contribution

Deduction for Contribution to Pension Accounts.

Employee’s contribution under Section 80CCD

a. You can claim this if you deposit in your pension account. Maximum deduction you can avail is 10% of salary (in case the taxpayer is an employee) or 20% of gross total income (in case the taxpayer being self-employed) or Rs 1.5 lakh – whichever is less.

Until FY 2016-17, maximum deduction allowed was 10% of gross total income for self-employed individuals.

b. Deduction for self-contribution to NPS – section 80CCD (1B) A new section 80CCD (1B) has been introduced for an additional deduction of up to Rs 50,000 for the amount deposited by a taxpayer to their NPS account. Contributions to Atal Pension Yojana are also eligible.

c. Employer’s contribution to NPS – Section 80CCD (2) Claim additional deduction on your contribution to employee’s pension account for up to 10%

of your salary. There is no monetary ceiling on this deduction.

Detailed Analysis of the Section

1. What is Section 80CCD?

Section 80CCD relates to the deductions available to individuals against contributions made to the National Pension Scheme (NPS) or the Atal Pension Yojana (APY). Contributions made by the employers towards the NPS, also come under this section. NPS is a notified pension scheme from the Central Government.

2. National Pension Scheme under 80CCD

The Central Government introduced NPS to provide the benefit of an organized pension scheme toIndian citizens. Initially, NPS was meant for government employees only but was later opened for the private sector as well as for the self-employed individuals. The basic motive behind NPS is to help individuals create a retirement corpus and receive a fixed monthly payout to help them lead a comfortable life post-retirement.

Here are some of the major highlights of the NPS:

(i) One must contribute to NPS until the age of 60 years. While it is mandatory for employees of Central Government, for other individuals it is voluntary.

(ii) To be eligible for Income Tax deduction under the NPS Tier 1 Account, one must contribute a minimum of Rs. 6,000 per annum or Rs. 500 per month.

(iii) To be eligible for Income Tax deduction under the NPS Tier 2 Account, one must contribute a minimum of Rs. 2,000 per annum or Rs. 250 per month.

(iv)There is an option to choose from various investment options like Equity funds, Government bonds, Government securities, etc.

(v) Partial withdrawals up to 25% of the contribution made by an individual, subject to certain conditions, is allowed.

(vi) Individuals can withdraw up to 60% of the corpus as a lump-sum payout and have to invest the remaining 40% in an annuity plan.

(vii) It is one of the cheapest equity-linked investment options in the market.

3. Categorising 80CCD

Section 80CCD has been further divided into two subsections to provide clarity regarding the available deductions for income tax assesses. While one subsection deals with the rules about tax deductions available to salaried and self-employed professionals, the other pertains to contributions made by the employer towards NPS.

Following is detailed information regarding the two sections for Section 80 CCD.

(i) Section 80CCD (1)

This subsection defines the rules related to income tax deduction available to individuals for contributions made to the NPS. It is irrespective of the fact whether the contribution has been made by a government employee, private employee or a self-employed individual. The provisions of this section apply to all Indian citizens who are contributing to the NPS and are between the age of 18 to 60 years. This also applies to NRIs.

Following are the key provisions of Section 80 CCD (1):

The maximum deduction permissible under this section is 10% of the salary (basic + DA) or 10% of the gross income of the individual.
From FY 2017-18, this limit has been increased for the self-employed individuals to 20% of the Gross total income with the maximum limit being capped at Rs. 1,50,000/- for a given financial year.

A new amendment to the Section 80 CCD has been introduced in the Union budget of the year 2015 as sub-section 1B. Under these new provisions, individuals can claim an additional deduction of Rs. 50,000/-. This is available to both salaried as well as self-employed individuals. This has thereby raised the maximum deduction available under Section 80CCD to Rs. 2,00,000/-. Tax benefits under Section 80CCD (1B) can be claimed over and above the deductions available under Section 80CCD (1).

(ii) Section 80CCD (2)

The provisions under Section 80 CCD (2) come into effect when an employer is contributing to the NPS of an employee. The contributions towards NPS can be made by an employer in addition to those made towards PPF and EPF. The contribution made by the employer can be equal to or higher than the contribution of the employee. This section applies to only salaried individuals and not to self-employed individuals. The deductions under this Section can be availed over and above those of Section 80 CCD (1).

Section 80CCD (2) allows salaried individuals to claim deductions up to 10% of their salary which includes the basic pay and dearness allowance or is equal to the contributions made by the employer towards the NPS.

4. Terms and conditions for deductions under Section 80CCD
Following are the various terms and conditions governing the deductions under Section 80CCD.
(i) Deductions under Section 80CCD are available to salary as well as self-employed individuals. While it is mandatory for government employees, for other individuals, it is voluntary.
(ii) The maximum limit of deduction available under Section 80 CCD is Rs. 2 Lakhs; this includes the additional deduction of Rs. 50,000/- available under sub-section 1B.
(iii) Tax benefits availed under Section 80CCD cannot be claimed again under Section 80C, i.e. the combined deduction under Section 80C and 80 CCD cannot exceed Rs. 2 Lakhs.
(iv) The money received from NPS as monthly payments or as surrendered accounts will be liable for taxation as per the applicable provisions.
(v) Any amount received from NPS, which is reinvested in the annuity plan is entirely exempt from taxation.
The deductions available under Section 80CCD can be claimed at the end of the financial year when you are filing your income tax returns. You will be required to produce a proof of payment to be eligible for this deduction.

4. Section 80TTA – Interest on Savings Account

Deduction from Gross Total Income for Interest on Savings Bank Account

If you are an individual or an HUF, you may claim a deduction of maximum Rs 10,000 against interest income from your savings account with a bank, co-operative society, or post office. Do include the interest from savings bank account in other income. Section 80TTA deduction is not available on interest income from fixed deposits, recurring deposits, or interest income from corporate bonds. Section 80TTA deduction is not available on interest income from fixed deposits, recurring deposits, or interest income from corporate bonds.

Section 80TTA provides a deduction of Rs 10,000 on interest income. This deduction is available to an Individual and HUF.

This deduction is allowed on interest earned –

From a savings account with a bank
From a savings account with a co-operative society carrying on the business of banking
From a savings account with a post office

This deduction is NOT allowed on interest earned on time deposits. Time deposits mean deposits repayable on expiry of fixed periods.

It shall not be allowed for –

Interest from fixed deposits
Interest from recurring deposits
Any other time deposits

Maximum Deduction – The maximum deduction is limited to Rs 10,000. If your interest income is less than Rs 10,000, the entire interest income will be your deduction. If your interest income is more than Rs 10,000, your deduction shall be limited to Rs 10,000. (You have to consider your total interest income from all banks where you have accounts).

How to claim the deduction – First add your total interest income under the head ‘Income from Other Sources’ in your Return. The deduction is shown under section 80 Deductions under section 80TTA.

5. Section 80GG – House Rent Paid

Deduction for House Rent Paid Where HRA is not Received

a. Section 80GG deduction is available for rent paid when HRA is not received. The taxpayer, spouse or minor child should not own residential accommodation at the place of employment

b. The taxpayer should not have self-occupied residential property in any other place

c. The taxpayer must be living on rent and paying rent

d. The deduction is available to all individuals

Deduction available is the least of the following:
a. Rent paid minus 10% of adjusted total income
b. Rs 5,000/- per month
c. 25% of adjusted total income*
*Adjusted Gross Total Income is arrived at after adjusting the Gross Total Income for certain deductions, exempt income, long-term capital gains and income related to non-residents and foreign companies.An online e-filing software like that of TAXAJ can be extremely easy as the limits are auto-calculated. So, you do not have to worry about making complex calculations.From FY 2016-17 available deduction has been raised to Rs 5,000 a month from Rs 2,000 per month.

Usually HRA forms part of your salary and you can claim deduction for HRA. If you do not receive HRA from your employer and make payments towards rent for any furnished or unfurnished accommodation occupied by you for your own residence, you can claim deduction under section 80GG towards rent that you pay. Here are a few conditions that must be fulfilled –
You are self-employed or salaried
You have not received HRA at any time during the year for which you are claiming 80GG HRA component should not form part of your salary to claim 80GG.
You or your spouse or your minor child or HUF of which you are a member – do not own any residential accommodation at the place where you currently reside, perform duties of the office, or employment or carry on business or profession.
In case you own any residential property at any place, for which your Income from house property is calculated under applicable sections (as a self-occupied property), no deduction under section 80GG is allowed.

You will be required to file Form 10BA with details of payment of rent.
Deduction –the lowest of these will be considered as the deduction under this section-
(a) Rs 5,000 per month
(b) 25% of the total Income (excluding long-term capital gains, short-term capital gains under section 111A and Income under Section 115A or 115D and deductions under 80C to 80U. Also, income is before making a deduction under section 80GG).
(c) Actual rent less 10% of Income
Do take benefit of this section – provided all conditions have been fulfilled by you.

6. Section 80E – Interest on Education Loan

Deduction for Interest on Education Loan for Higher Studies

A deduction is allowed to an individual for interest on loans taken for pursuing higher education. This loan may have been taken for the taxpayer, spouse or children or for a student for whom the taxpayer is a legal guardian.80E deduction is available for a maximum of 8 years (beginning the year in which the interest starts getting repaid) or till the entire interest is repaid, whichever is earlier. There is no restriction on the amount that can be claimed.

Essential Conditions for Claiming This Deduction Are

1. Who can claim this deduction?

Only an individual can claim this deduction. It is not available to HUF or any other kind of taxpayer. The loan should be taken for the higher education of self, spouse or children or for a student for whom the individual is a legal guardian. Parents can easily claim this deduction for the loan taken for the higher studies of their children.

2. Where can this loan be taken?

The loan should be taken from any bank / financial institution or any approved charitable institutions. Loans taken from friends or relatives don’t qualify for this deduction.

3. The purpose of the loan

The loan should be taken to pursue higher studies. It does not matter whether such education loan is taken for higher studies in India or outside India. Higher studies include all the fields of study pursued after passing the senior secondary examination or its equivalent exam. It includes both vocational as well as regular courses.

4. Deduction amount

The deduction allowed is the total interest part of the EMI paid during the financial year. There is no limit on the maximum amount that is allowed as deduction. You, however, need to obtain a certificate from your Bank. Such certificate should segregate the principal and the interest portion of the education loan paid by you during the financial year. The total interest paid will be allowed as a deduction. No Tax benefit is allowed for the principal repayment.

5. Period of deduction
The deduction for the interest on loan starts from the year in which you start repaying the loan. It is available only for 8 years starting from the year in which you start repaying the loan or until the interest is fully repaid whichever is earlier. This means if the complete repayment of the loan is done in 5 years only, then tax deduction will be allowed for 5 years and not 8 years.
It should also be noted that if your loan tenure exceeds 8 years, then you cannot claim a deduction for the interest paid beyond 8 years. So it is always advisable that an education loan is paid within eight years.

7. Section 80EE – Interest on Home Loan

Deductions on Home Loan Interest for First Time Home Owners
FY 2017-18 and FY 2016-17 This deduction is available in FY 2017-18 if the loan has been taken in FY 2016-17. The deduction under section 80EE is available only to home-owners (individuals) having only one house property on the date of sanction of the loan. The value of the property must be less than Rs 50 lakh and the home loan must be less than Rs 35 lakh. The loan taken from a financial institution must have been sanctioned between 1 April 2016 and 31 March 2017. There is an additional deduction of Rs 50,000 available on your home loan interest on top of deduction of Rs 2 lakh (on interest component of home loan EMI) allowed under section 24.
FY 2013-14 and FY 2014-15 During these financial years, the deduction available under this section was first-time house worth Rs 40 lakh or less. You can avail this only when your loan amount during this period is Rs 25 lakh or less. The loan must be sanctioned between 1 April 2013 and 31 March 2014. The aggregate deduction allowed under this section cannot exceed Rs 1 lakh and is allowed for FY 2013-14 and FY 2014-15.

8. Section 80CCG – RGESS

Rajiv Gandhi Equity Saving Scheme (RGESS)

The deduction under this section 80CCG is available to a resident individual, whose gross total income is less than Rs.12 lakh.

To avail the benefits under this section the following conditions should be met:
a. The assessee should be a new retail investor as per the requirement specified under the notified scheme.
b. The investment should be made in such listed investor as per the requirement specified under the notified scheme.
c. The minimum lock in period in respect of such investment is three years from the date of acquisition in accordance with the notified scheme.
Upon fulfilment of the above conditions, a deduction, which is lower of the following is allowed.
50% of the amount invested in equity shares; or
Rs 25,000 for three consecutive Assessment Years.

Rajiv Gandhi Equity Scheme has been discontinued starting from 1 April 2017. Therefore, no deduction under section 80CCG will be allowed from FY 2017-18. However, if you have invested in the RGESS scheme in FY 2016-17, then you can claim deduction under Section 80CCG until FY 2018-19.

9. Section 80D – Medical Insurance

Deduction for the premium paid for Medical Insurance

You (as an individual or HUF) can claim a deduction of Rs.25,000 under section 80D on insurance for self, spouse and dependent children. An additional deduction for insurance of parents is available up to Rs 25,000, if they are less than 60 years of age. If the parents are aged above 60, the deduction amount is Rs 50,000, which has been increased in Budget 2018 from Rs 30,000. In case, both taxpayer and parent(s) are 60 years or above, the maximum deduction available under this section is up to Rs.1 lakh.

Example: Rohan’s age is 65 and his father’s age is 90. In this case, the maximum deduction Rohan can claim under section 80D is Rs. 100,000. From FY 2015-16 a cumulative additional deduction of Rs. 5,000 is allowed for preventive health check.

10. Section 80DD – Disabled Dependent

Deduction for Rehabilitation of Handicapped Dependent Relative
Section 80DD deduction is available to a resident individual or a HUF and is available on:

a. Expenditure incurred on medical treatment (including nursing), training and rehabilitation of handicapped dependent relative
b. Payment or deposit to specified scheme for maintenance of handicapped dependent relative.
i. Where disability is 40% or more but less than 80% – fixed deduction of Rs 75,000.
ii. Where there is severe disability (disability is 80% or more) – fixed deduction of Rs 1,25,000.
To claim this deduction a certificate of disability is required from prescribed medical authority. From FY 2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs 1,25,000.

11. Section 80DDB – Medical Expenditure

Deduction for Medical Expenditure on Self or Dependent Relatives. For individuals and HUFs below age 60
A deduction up to Rs.40,000 is available to a resident individual or a HUF. It is available with respect to any expense incurred towards treatment of specified medical diseases or ailments for himself or any of his dependents. For an HUF, such a deduction is available with respect to medical expenses incurred towards these prescribed ailments for any of the HUF members.
b. For senior citizens and super senior citizens
In case the individual on behalf of whom such expenses are incurred is a senior citizen, the individual or HUF taxpayer can claim a deduction up to Rs 1 lakh. Until FY 2017-18, the deduction that could be claimed for a senior citizen and a super senior citizen was Rs 60,000 and Rs 80,000 respectively. This has now become a common deduction available upto Rs 1 lakh for all senior citizens (including super senior citizens) unlike earlier.
c. For reimbursement claims
Any reimbursement of medical expenses by an insurer or employer shall be reduced from the quantum of deduction the taxpayer can claim under this section. Also remember that you need to get a prescription for such medical treatment from the concerned specialist in order to claim such deduction. Read our detailed article on Section 80DDB.

12. Section 80U – Physical Disability

Deduction for Person suffering from Physical Disability

A deduction of Rs.75,000 is available to a resident individual who suffers from a physical disability (including blindness) or mental retardation. In case of severe disability, one can claim a deduction of Rs 1,25,000. From FY 2015-16 – Section 80U deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs 1,25,000.

13. Section 80G – Donations

Deduction for donations towards Social Causes

The various donations specified in u/s 80G are eligible for deduction up to either 100% or 50% with or without restriction. From FY 2017-18 any donations made in cash exceeding Rs 2,000 will not be allowed as deduction. The donations above Rs 2000 should be made in any mode other than cash to qualify for 80G deduction.

a. Donations with 100% deduction without any qualifying limit

National Defence Fund set up by the Central Government
Prime Minister’s National Relief Fund
National Foundation for Communal Harmony
An approved university/educational institution of National eminence
Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
Fund set up by a State Government for the medical relief to the poor
National Illness Assistance Fund
National Blood Transfusion Council or to any State Blood Transfusion Council
National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
National Sports Fund
National Cultural Fund
Fund for Technology Development and Application
National Children’s Fund
Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
The Maharashtra Chief Minister’s Relief Fund during October 1, 1993 and October 6,1993
Chief Minister’s Earthquake Relief Fund, Maharashtra
Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat (contribution made during January 26, 2001 and September 30, 2001) or
Prime Minister’s Armenia Earthquake Relief Fund
Africa (Public Contributions — India) Fund
Swachh Bharat Kosh (applicable from financial year 2014-15)
Clean Ganga Fund (applicable from financial year 2014-15)
National Fund for Control of Drug Abuse (applicable from financial year 2015-16)

b. Donations with 50% deduction without any qualifying limit

Jawaharlal Nehru Memorial Fund
Prime Minister’s Drought Relief Fund
Indira Gandhi Memorial Trust
The Rajiv Gandhi Foundation

c. Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income

Government or any approved local authority, institution or association to be utilized for the purpose of promoting family planning
Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India

d. Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income
Any other fund or any institution which satisfies conditions mentioned in Section 80G(5)
Government or any local authority to be utilised for any charitable purpose other than the purpose of promoting family planning
Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both
Any corporation referred in Section 10(26BB) for promoting the interest of minority community
For repairs or renovation of any notified temple, mosque, gurudwara, church or other places.

14. Section 80GGB – Company Contribution

Deduction on contributions given by companies to Political Parties

Section 80GGB deduction is allowed to an Indian company for the amount contributed by it to any political party or an electoral trust. Deduction is allowed for contribution done by any way other than cash.

15. Section 80GGC – Contribution to Political Parties

Deduction on contributions given by any person to Political Parties

Deduction under section 80GGC is allowed to an individual taxpayer for any amount contributed to a political party or an electoral trust. It is not available for companies, local authorities and an artificial juridical person wholly or partly fun

16. Section 80RRB – Royalty of a Patent

Deduction with respect to any Income by way of Royalty of a Patent

80RRB Deduction for any income by way of royalty for a patent, registered on or after 1 April 2003 under the Patents Act 1970, shall be available for up to Rs.3 lakh or the income received, whichever is less. The taxpayer must be an individual patentee and an Indian resident. The taxpayer must furnish a certificate in the prescribed form duly signed by the prescribed authority.

17. Section 80 TTB – Interest Income

Deduction of Interest on Deposits for Senior Citizens

A new section 80TTB has been inserted vide Budget 2018 in which deductions with respect to interest income from deposits held by senior citizens will be allowed. The limit for this deduction is Rs.50,000.No further deduction under section 80TTA shall be allowed. In addition to section 80 TTB, section 194A of the Act will also be amended so as to increase the threshold limit for TDS on interest income payable to senior citizens. The earlier limit was Rs 10,000, which was increased to Rs 50,000 as per the latest Budget.

18. Deductions-Summary

Section 80 Deduction Table
Section Deduction on Allowed Limit (maximum)
FY 2018-19
80C Investment in PPF
– Employee’s share of PF contribution
– NSCs
– Life Insurance Premium payment
– Children’s Tuition Fee
– Principal Repayment of home loan
– Investment in Sukanya Samridhi Account
– ULIPS
– ELSS
– Sum paid to purchase deferred annuity
– Five year deposit scheme
– Senior Citizens savings scheme
– Subscription to notified securities/notified deposits scheme
– Contribution to notified Pension Fund set up by Mutual Fund or UTI.
– Subscription to Home Loan Account scheme of the National Housing Bank
– Subscription to deposit scheme of a public sector or company engaged in providing housing finance
– Contribution to notified annuity Plan of LIC
– Subscription to equity shares/ debentures of an approved eligible issue
– Subscription to notified bonds of NABARD Rs. 1,50,000
80CCC For amount deposited in annuity plan of LIC or any other insurer for a pension from a fund referred to in Section 10(23AAB) -
80CCD(1) Employee’s contribution to NPS account (maximum up to Rs 1,50,000) -
80CCD(2) Employer’s contribution to NPS account Maximum up to 10% of salary
80CCD(1B) Additional contribution to NPS Rs. 50,000
80TTA(1) Interest Income from Savings account Maximum up to 10,000
80TTB Exemption of interest from banks, post office, etc. Applicable only to senior citizens Maximum up to 50,000
80GG For rent paid when HRA is not received from employer Least of :
– Rent paid minus 10% of total income
– Rs. 5000/- per month
– 25% of total income
80E Interest on education loan Interest paid for a period of 8 years
80EE Interest on home loan for first time home owners Rs 50,000
80CCG Rajiv Gandhi Equity Scheme for investments in Equities Lower of
– 50% of amount invested in equity shares; or
– Rs 25,000
80D Medical Insurance – Self, spouse, children
Medical Insurance – Parents more than 60 years old or (from FY 2015-16) uninsured parents more than 80 years old – Rs. 25,000
– Rs. 50,000
80DD Medical treatment for handicapped dependent or payment to specified scheme for maintenance of handicapped dependent
– Disability is 40% or more but less than 80%
– Disability is 80% or more – Rs. 75,000
– Rs. 1,25,000
80DDB Medical Expenditure on Self or Dependent Relative for diseases specified in Rule 11DD
– For less than 60 years old
– For more than 60 years old – Lower of Rs 40,000 or the amount actually paid
– Lower of Rs 1,00,000 or the amount actually paid
80U Self-suffering from disability :
– An individual suffering from a physical disability (including blindness) or mental retardation.
– An individual suffering from severe disability – Rs. 75,000
– Rs. 1,25,000
80GGB Contribution by companies to political parties Amount contributed (not allowed if paid in cash)
80GGC Contribution by individuals to political parties Amount contributed (not allowed if paid in cash)
80RRB Deductions on Income by way of Royalty of a Patent Lower of Rs 3,00,000 or income received

Section	Deduction on	Allowed Limit (maximum) FY 2018-19
80C	Investment in PPF – Employee’s share of PF contribution – NSCs – Life Insurance Premium payment – Children’s Tuition Fee – Principal Repayment of home loan – Investment in Sukanya Samridhi Account – ULIPS – ELSS – Sum paid to purchase deferred annuity – Five year deposit scheme – Senior Citizens savings scheme – Subscription to notified securities/notified deposits scheme – Contribution to notified Pension Fund set up by Mutual Fund or UTI. – Subscription to Home Loan Account scheme of the National Housing Bank – Subscription to deposit scheme of a public sector or company engaged in providing housing finance – Contribution to notified annuity Plan of LIC – Subscription to equity shares/ debentures of an approved eligible issue – Subscription to notified bonds of NABARD	Rs. 1,50,000
80CCC	For amount deposited in annuity plan of LIC or any other insurer for a pension from a fund referred to in Section 10(23AAB)	-
80CCD(1)	Employee’s contribution to NPS account (maximum up to Rs 1,50,000)	-
80CCD(2)	Employer’s contribution to NPS account	Maximum up to 10% of salary
80CCD(1B)	Additional contribution to NPS	Rs. 50,000
80TTA(1)	Interest Income from Savings account	Maximum up to 10,000
80TTB	Exemption of interest from banks, post office, etc. Applicable only to senior citizens	Maximum up to 50,000
80GG	For rent paid when HRA is not received from employer	Least of : – Rent paid minus 10% of total income – Rs. 5000/- per month – 25% of total income
80E	Interest on education loan	Interest paid for a period of 8 years
80EE	Interest on home loan for first time home owners	Rs 50,000
80CCG	Rajiv Gandhi Equity Scheme for investments in Equities	Lower of – 50% of amount invested in equity shares; or – Rs 25,000
80D	Medical Insurance – Self, spouse, children Medical Insurance – Parents more than 60 years old or (from FY 2015-16) uninsured parents more than 80 years old	– Rs. 25,000 – Rs. 50,000
80DD	Medical treatment for handicapped dependent or payment to specified scheme for maintenance of handicapped dependent – Disability is 40% or more but less than 80% – Disability is 80% or more	– Rs. 75,000 – Rs. 1,25,000
80DDB	Medical Expenditure on Self or Dependent Relative for diseases specified in Rule 11DD – For less than 60 years old – For more than 60 years old	– Lower of Rs 40,000 or the amount actually paid – Lower of Rs 1,00,000 or the amount actually paid
80U	Self-suffering from disability : – An individual suffering from a physical disability (including blindness) or mental retardation. – An individual suffering from severe disability	– Rs. 75,000 – Rs. 1,25,000
80GGB	Contribution by companies to political parties	Amount contributed (not allowed if paid in cash)
80GGC	Contribution by individuals to political parties	Amount contributed (not allowed if paid in cash)
80RRB	Deductions on Income by way of Royalty of a Patent	Lower of Rs 3,00,000 or income received

Frequently Asked Questions:

1. Can I claim the 80C deductions at the time of filing return in case I have not submitted proof to my employer?

Proofs for making investments are submitted to the employer before the end of a Financial Year (FY) so that the employer considers these investments while determining your taxable income and the tax deduction that needs to be made. However, even if you miss submitting these proofs to your employer, the claim for such investments made can be done at the time of filing your return of income as long as these investments have been made before the end of the relevant FY.

2. I have made an 80C investment on 30 April 2018. For which year can I claim this investment as a deduction?

You can claim deduction for investments made in the return of income for the year in which you have made the investment. Therefore, if you have made the investment on 30 April 2018, you will be eligible to claim such investment as a deduction during FY 2018-19.

3. I have availed a loan from my employer for pursuing higher education. Can I claim the interest paid on such loan as a deduction under Section 80E?

A deduction of interest paid on education loan under Section 80E can be made only if the loan has been availed from a financial institution for pursuing higher education. Therefore, availing a loan from your employer will not entitle you to claim the interest under Section 80E.

4. Is there any restriction or maximum limit upto which I can claim a deduction under Section 80E?

Law has not prescribed any upper limit for making a claim of deduction under Section 80E. Hence, the actual interest paid during a year can be claimed as a deduction.

5. Can a company or a firm take the benefit of Section 80C?

The provisions of Section 80C apply only to individuals or a Hindu Undivided Family (HUF). Hence, a company or a firm cannot take the benefit of Section 80C.

6. I have been paying life insurance premium to a private insurance company. Can I claim 80C deduction for the premium paid?

Deduction under Section 80C is available in respect of life insurance premium paid to any insurer approved by the Insurance Regulatory and Development Authority of India, whether public or private. Hence, the insurance premium you are paying will also help you claim an 80C deduction.

7. In which year can I claim deduction of the stamp duty paid for purchase of a house property

You can go ahead claiming the stamp duty for purchase of a house in the year in which the payment is made towards stamp duty under Section 80C.

8. Can a company claim a deduction for donations made under Section 80G

Any taxpayer making donations towards specified institutions, funds etc will be eligible to claim a deduction under Section 80G.

9. I am paying medical insurance premium for a medical policy taken in my name, my wife and children. I am also paying premium on a medical policy taken in the name of my parents who are above 60 years. Can I claim a deduction for both premiums paid?

The premium you have paid on the policy taken for yourself, spouse and children is eligible for a deduction under Section 80D upto a maximum of Rs 25,000. In addition to this, you will also be eligible to claim deduction of premium paid on the policy taken for your senior citizen parents upto a maximum of Rs 50,000 (this limit was Rs 30,000 until FY 2017-18. Hence, you can claim both premiums paid as a deduction under Section 80D.

10. Is my FD interest exempt under Section 80TTB?

If you are a senior citizen above 60 years of age, then your interest income from a Fixed Deposit is exempt under Section 80TTB.