You can save your Income Tax lawfully. There are various deductions available through which you can save your tax. Utilize the investment process properly for your tax planning.  Some of the Popular deductions are Deduction under Section 80C, Deduction under Section 80D, Deduction under Section 80E, deduction Under Section 80TTA and deduction Under Section 80TTB. In this article we will discuss about the same:-

Deduction under Section 80C

  • Under section 80C, a deduction of Rs 1,50,000 can be claimed from your total income. In simple terms, you can reduce up to Rs 1,50,000 from your total taxable income through section 80C.
  • This deduction is allowed to an Individual or an HUF.
  • A maximum of Rs 1, 50,000 can be claimed for the financial year 2019-20.

If you have paid excess taxes, but have invested in LIC, NSC,KVP, 5 yrs Fixed Deposit, Sukanya Samridhi Account, Principal repayment of housing loan,paid school fees of children or any other investments eligible for 80 C deduction then you can file your Income Tax Return and get a refund.

Tax Savings- Piggy bank and tax concept

Deduction under Section 80D

You can avail the tax deduction under section 80D if you have paid any premium on mediclaim policy under section 80D taken for:

  • Yourself
  • Your spouse
  • Dependent children
  • Your parents (parents need not be dependent on you)

Quantum of Deduction:

  • In case of the individual, Rs. 25,000 for himself and his family
  • If individual or spouse is 60 years old or more the deduction available is Rs 50,000
  • An additional deduction for insurance of parents (father or mother or both, whether dependent or not) is available to the extent of Rs. 25,000 if less than 60 years old and Rs 50,000 if parents are 60 years old or more.
  • For uninsured super senior citizens (80 years old or more) medical expenditure incurred up to Rs 50,000 shall be allowed
  • A deduction of Rs. 5000 will be allowed under this section for payment of preventive health check-up of either the individual himself or his family members which includes spouse, parents and dependent children.This deduction is NOT in addition to the deduction of Rs.25000/50000 stated above, but is included in the above deduction
  • In case of HUF, the maximum deduction is Rs. 25,000.

Deduction under Section 80E

The deduction under section 80E for Interest on educational loan is available to an individual if following conditions are satisfied:

1. Section 80E Deduction for educational loan available only to Individual not to HUF or other type of Assessee.

2. Deduction amount under Section 80E: – The amount of interest paid is eligible for deduction and moreover there is no cap on the amount to be deducted. You can deduct the entire interest amount from your taxable income. However there is no benefit available on the repayment of principal amount of the loan.

3. The deduction is available for a maximum of 8 years or till the interest is paid, whichever is earlier.

Deduction under Section 80TTA

Section 80TTA provides a deduction of Rs 10,000 on interest income. This deduction is available to Resident Individual or HUF (other than those assessee who has covered in Section 80TTB).

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

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 and then consider the deduction under section 80TTA.

Deduction under Section 80TTB

This section will provide deduction in respect of interest on deposits. This section is available to Resident individual who is of the age of sixty years or more at any time during the relevant previous year

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

Maximum Deduction – The maximum deduction is limited to Rs 50,000. If your interest income is less than Rs 50,000, the entire interest income will be your deduction. If your interest income is more than Rs 50,000, your deduction shall be limited to Rs 50,000. (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 and then consider the deduction under section 80TTB.

(Republished with Amendments)

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One Comment

  1. Alkesh T.Mehta says:

    Over & above Rs.150000/-U/S 80 C,you may save to the extent of Rs.50000/-U/S 80ccd.This will result in extra saving of income-tax to the tune of Rs.15450/-

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