Deduction under chapter VIA covers all the allowable deduction to be made while computing the total income. When we talk about the permissible deduction under chapter VIA, the first and the most popular section that comes to the mind is deduction under section 80C, which is taken up and explained thoroughly in the current article.
Categories of person to whom a deduction under section 80C is allowed –
Deduction under section 80C is permitted to the following categories of persons –
- An individual; or
- A Hindu Undivided Family (HUF).
List of allowable deduction –
| Allowable deduction | Important points to be noted |
| Life Insurance Premium | The deduction is allowed provided –
|
| Unit Linked Insurance Plan (ULIP) | The deduction is allowed provided –
|
| Investment in Equity Linked Saving Scheme (ELSS) | _ |
| National Savings Certificate (NSC) | _ |
| Public Provident Fund (PPF) | The deduction is allowed provided –
|
| Employees’ Provident Fund (EPF) | Contribution to recognized provident fund is allowed. |
| Fixed deposit with the bank | Conditions –
1. A term deposit is for a fixed period of 5 years or more. 2. A term deposit is with the scheduled bank. |
| Deposit with the post office | Allowable deduction – 5 year time deposit under the Post Office Time Deposit Rules. |
| Sukanya Samriddhi Yojna Scheme | _ |
| Tuition Fees | Any tuition fees paid to any university or college or school or other educational institution situated in India is allowed.
Such tuition fees don’t include any development fees or donation. In the case of an individual, tuition fees deduction is allowed for any two children. |
| Deferred Annuity Plan | The deduction is allowed provided –
The deduction is allowed only if the annuity plan doesn’t contain an option for the insurer to receive a cash payment in lieu of the payment of the annuity. The deduction is restricted to 1/5th of the salary, in case the sum is deducted from the salary of Government employee for securing the deferred annuity. |
| Principal repayment of Housing loan |
|
Miscellaneous –
|
|
Maximum allowable deduction –
The collective maximum allowable deduction under section 80C, section 80CCC and section 80CCD(1) cannot exceed INR 1.50 Lakhs.
Frequently Asked Questions (FAQ) –
1. What are the deductions under section 80c?
Deduction under section 80C is available to an individual and a HUF up to a maximum of INR 1.50 Lakhs. Various deductions like Life insurance premium, PF, fixed deposit, NSC etc. are deductions covered under section 80c.
2. Does PF deduction come under 80c?
Yes, PF deduction comes under section 80C.
3. Is HRA included of 80c?
No HRA is not included in deduction under section 80C. HRA is an exemption available as per provisions of section 10 (13A).
Can resident Indian and NRI both can claim deduction under section 80C?
Yes, both resident Indian as well as NRI is eligible to claim deduction under section 80C.
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Author Bio
Kindly advise the last date for making investment to get 80C deduction in AY 2020-21
The maximum limit of Rs.1.50 Lakh was fixed several years back. If it is increased the assessees will be much pleased. Here senior citizens may be given some more exemption u/s.80C.
Thanks madam for help us to know and makes simple to learn about income tax
Does ESI deduction come under 80c
Only principal amount is allowed to be deducted under 80C. Where is it given that Stamp duty, Registration fee is allowed for deduction?
Can i revise ITR for fy 2018-19 for 2nd time. Can i apply for sec 10E (arear allowance) in revise ITR.