As we are into the month of December and last month for the calendar year, we might think of Christmas leaves or block leaves and new year events but for the salaried individuals it will be nightmare for them to submit tax proofs to their HRs/ Managers for tax planning and deduction. Yes, you are right, this article helps you to plan your tax effectively and reduce the heavy taxes deducted by employers. If you have not planned for the investments till now and you have 3 months to plan your investments till March 31, 2023. These investments which includes savings, retirement planning, children education and health benefits.
Now let us dive into the topic:
DEDUCTIONS AVAILABLE UNDER SEC 80 OF INCOME TAX ACT:
|
Section |
Investment | Deduction Amount |
| 80C | 1.Life Insurance Premium paid ( Premium should not exceed 10% of Sum assured). LIC Paid for Self, Spouse and Child will only be eligible for deduction. LIC paid on behalf of Parents is not eligible.
2.Investment in Public Provident Fund 3.Employees contribution to Statutory Provident Fund, Recognized Provident Fund, Approved Superannuation fund. 3.Investment in National Savings Certificates and Interest accrued. 4.Repayment of Housing Loan taken from bank of Financial Institution Principal portion of repayment is only eligible. 5.Fixed Deposit in schedule Bank or Post office for 5 years. 6. Tuition Fees paid for children education (maximum of 2 children for education in India) 7.Investment in notified bonds of NABARD 8.Investment in Notified Units of Mutual Funds 9.Contribution towards Unit Linked Insurance Plan (ULIPS) 10.Notified Pension Scheme of UTI or MF. 11.Deposit in Senior Citizen Savings Scheme. 12.Deposit in Sukanya Samridhi Scheme ( for girl child) 13.Stamp Duty and registration fees paid on purchase of house property. |
1,50,000 |
| 80CCC | Contribution to Pension fund of LIC or Other Insurance Company | |
| 80CCD(1) | Contribution to Pension Scheme of Central Govt/ New Pension Scheme/ Atal Pension Yojna.
For Salaried Individual: |
|
| Lower of Contribution made or 10 % of Basic Salary For Others:
Lower of contribution made or 20% of Gross Total Income. All the three sections 80C +80CCC+80CCD(1) is restricted to 1,50,000!- |
||
| 80CCD(1B) | Additional Deduction is provided to employee towards NPS in above to 80CCD(1) | 50,000 |
| 80D | Deduction available for Medial Insurance Premium! Preventive Health Checkup! CG Health Scheme & Medical Treatment.
Self, Spouse, Dependent Children. Extra 25,000 if any of the member is a senior citizen. For parents there is an additional deduction ( If any of them is senior citizen extra 25,000 is available) The maximum deduction available u!s 80D is 1,00,000( Provided parents are senior citizen and any of the family members are senior citizen) Medical checkup has an overall limit of Rs 5,000!- included in 25,000. |
25,000
25,000 |
| 80DD | Deduction for Medical treatment of Handicapped Dependent relative. Normal Disability
Sever Disability Assessee should incur expenses on medical treatment or deposit any amount for maintenance. |
75,000 1,25,000 |
| 80DDB | Deduction in respect of medical treatment of Specified Disease Amount of Deduction:
Lower of : (i) Actual Expenses on treatment (ii) Maximum of 40,000! 1,00,000 Normal Case -40,000 Senior Citizen-1,00,000 Less: Insurance claim will be the actual deduction. |
|
| 80U | Deduction for Handicapped assessee
Normal Disability – Severe Disability- |
75,000 1,25,000 |
| 80E | Deduction of Interest on loan taken for higher education in India or abroad for education of Self, Spouse, Children.
Interest for 8 consecutive years from which assessee starts paying interest. |
Interest paid amount |
| 80EE | Deduction in respect of Interest on Housing loan.
Conditions to be satisfied: 1) Loan to be taken from Bank of FI for purchase of residential 2) Purchase price of house should be up to 50 Lakhs 3) Loan to be taken between 01-04-2016 to 31-03-2017. 4) Loan amount should not exceed 35 Lakhs 5) Assessee should not own any residential house on loan sanction date. 6) First deduction to be claimed under sec 24(b) up to 2,00,000 and |
50,000 |
| 80EEA
|
Deduction in respect of Interest on Housing loan. Conditions to be satisfied:
1) Loan to be taken from Bank of FI for purchase of residential 2) Stamp Duty value of house property should be up to 45 Lakhs 3) Loan to be taken between 01-04-2019 to 31-03-2022. 4) Assessee should not own any residential house on loan sanction 5) First deduction to be claimed under sec 24(b) up to 2,00,000 and |
1,50,000 |
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| 80EEB
|
Deduction in respect of Electric Vehicle Loan
Conditions: 1) Loan to be taken from Bank of FI for purchase of Electric Vehicle 2) Loan should be sanctioned between 01-04-2019 to 31-03-2023. |
1,50,000 |
| 80GG
|
Rent paid on House property ( HRA Not Received)
Deduction amount: Lower of 1) 5000 per month 2) 25 % of Adjusted Total Income. 3) Rent paid – 10 % of Adjusted Total Income Adjusted Total Income means – Total Income without giving effect of this section. |
|
| 80GGA
|
Deduction in respect of Donation to scientific research or rural development
Donation should be in other than cash if it exceeds two thousand/- |
100 % of Donation |
| 80GGC
|
Donation to Political parties or electoral trust
No deduction if amount paid in cash |
100 % of Donation |
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Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the author whatsoever and the content is to be used strictly for informational and educational purposes. While due care has been taken in preparing this article, certain mistakes and omissions may creep in. the author does not accept any liability for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any actions taken in reliance thereon.
Author can be reached at mallavoluandassociates@gmail.com
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