Deduction under Section 80C, Section 80CCC, Section 80CCD (Maximum amount of Income Tax deduction Rs. 1,50,000+Rs. 50,000)

Deduction under Section 80C

In order to calculate total income of an Individual & HUF certain payments are very important to claim deduction u/s 80. Hence to know about which type of payment that are eligible to deduct from Gross Total Income so that assessee can pay least tax:

1. Payment of Life Insurance Premium by an assessee for the life of self, spouse, dependent children and any member of HUF.

Important thing is that if

Policies Issued

Amount Deductible

On or before 31st March, 2012

Max. 20% of Sum Assured

After 31st March, 2012

Max. 10% of Sum Assured

1. Contribution by an individual to Public Provident FundRecognized Provident Fund.

2. Contribution by an employee to approved superannuation Fund.

3. Subscription to notified securities or notified deposit scheme.

4. Subscription to National savings certificate. (However, Interest earned on National saving certificate are taxable.)

5. Contribution to Unit Linked Insurance Plan.

6. Contribution to notified pension fund set up by Mutual Fund or Unit Trust of India.

Tax Deduction

7. Contribution to notified annuity plan of Life Insurance Corporation or other insurer.

8. Repayment of principal amount of loan, taken for construction of house. (in case of transfer the house before the expiry of 5 year from the date of possession, the amount already deducted u/s 80c in respect of this loan, be taxable in the year of such transfer).

9. Payment of Tution fees to any university, college, school or other educational institution for the purpose of Full Time.

10. Investment in Sukanya Samridhi account.

11. Investment in tax saving deposits for the period of at least 5 year. (Interest earned on the same will be taxable).

12. Investment in Senior Citizens Savings Scheme.

13. Subscription to notified bonds of NABARD.

14. Subscription to deposit scheme of public sector or company engaged in providing housing finance.

15. Subscription to equity shares or debentures of an approved eligible issue.

Deduction under Section 80CCC

According to this section, deduction is allowable to only individual (whether resident or non-resident) for contributions made to certain pension funds. However, whenever the amount received from such pension funds along with interest then it will taxable in such period.

Deduction under Section 80CCD

According to this section, deduction is available to individuals for contributions made to the National Pension Scheme (NPS) or The Atal Pension Yojna (APY). (Mandatory to Central Government Employees).

Theses section has followings subsections

80CCD(1): This subsection is applicable to all employees whether employed by the Government employer or any other employer or are self employed and applies to all citizens of India (including NRIs).

The deduction is restricted to

Maximum of 10% of salary for – salaried employees and

Maximum of 10% of gross income for – self-employed taxpayers.

1. 80CCD(1B): It has been introduced through amendment made to the 2015 Union Budget. According to this assessee, whether salaried or self-employed, eligible to get additional deduction of Rs. 50,000/-

2. 80CCD(2): This subsection is applicable when an employer contributes towards NPS fund on behalf of employees. And deduction is available only to salaried employees and not self-employed.

The deduction is restricted to

Maximum of 10% of their salary for – salaried employees.

* For section 80CCD(1) & 80CCD(2) Salary means Basic Pay + Dearness Allowance.

Section

Maximum Deduction

80C+80CCD(1)+80CCD(2)

Upto 1,50,000

80CCD(1B)

Upto  50,000

Total Maximum deduction

Upto 2,00,000

Important Note: The date for making various investment/ payment for claiming deduction under Chapter-VIA-B of the IT Act which includes section 80C (LIC, PPF, NSC etc.), 80D (Mediclaim), 80G (Donations) etc. has also been further extended to 31st July, 2020. Hence the investment/ payment can be made upto 31st July, 2020 for claiming the deduction under these sections for FY 2019-20.

Author Bio

Qualification: CA in Practice
Company: Ankit Mahendra & Associates
Location: Lalitpur, Uttar Pradesh, IN
Member Since: 13 Jul 2020 | Total Posts: 13
I am qualified chartered accountant, engaged in practice and experience in Income Tax return filing, tax audit, Goods & Services Tax return filing, GST audit, various registration and incorporation etc. View Full Profile

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10 Comments

  1. sudev says:

    Sir,
    whether the investment made in NSC Rs.1,50,000/- can be claimed as deduction under 80-c every year ( all the five years) ?. If yes, provision and If NO rule under which same is not allowed

  2. Ravindra Srivastava says:

    I want to know rebate u/s 80CCD(2) for Deemed University employees. Is NIT’s is Central Government Institute or Deemed University. Kindly Answer me as soon as possible. Thank you

    1. charteredaccountantjhansi says:

      Deduction u/s 80CCD(2) is applicable for salaried employees and not for self employed irrespective of whether he is government employees or not.

    1. charteredaccountantjhansi says:

      The maximum amount of deduction u/s 80C is Rs. 150000 which include annuity plan.. for more query u can contact me on twitter @cabickey

  3. Rangarajan says:

    Whether 80ccd1(b)- contribution to NPS-50k allowed till 31st July
    Not mentioned in your report
    Only 80C/80 D/ 80 G mentioned
    Clarification requested for NPS

    1. charteredaccountantjhansi says:

      if you please read the important note then this mentioned that deduction u/s 80C, 80D, 80G etc. in this, etc. says that the section from 80C to 80GGC are covered in this. hence you can claim u/s 80CCD(1B) also. for more clarification you can ask me on twitter @cabickey

  4. Akansha says:

    As mentioned by you, the maximum deduction of Rs 1,50,000/- does not include the amount contributed by the employer under sec 80CCD(2).

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