CA Sandeep Kanoi

Raising the limit of deduction under section 80C

Under the existing provisions of section 80C of the Act, an individual or a Hindu undivided family, is allowed a deduction from income of an amount not exceeding one lakh rupees with respect to sums paid or deposited in the previous year, in certain specified instruments. The investments eligible for deduction, specified under sub-section (2) of section 80C, include life insurance premia, contributions to provident fund, schemes for deferred annuities etc. The assessee is free to invest in any one or more of the eligible instruments within the overall ceiling of Rs. 1 lakh.

The limit of above investments eligible for deduction under section 80C was fixed vide Finance Act, 2005. In order to encourage household savings, it is proposed to raise the limit of deduction allowed under section 80C from the existing Rs. 1 lakh to Rs.1 .5 lakh. In view of the same, consequential amendments are proposed in sections 80CCE and 80CCD of the Act.

These amendments will take effect from 1st April, 2015 and will, accordingly, apply in relation to the assessment year 2015-16 and subsequent assessment years in other words the same will apply in relation to Financial Year 2014-15 and subsequent Financial Years.

Related Provision in Finance Act,2014

Amendment of section 80C.

27. In section 80C of the Income-tax Act, in sub-section (1), for the words “one lakh rupees”, the Amendment of words “one hundred and fifty thousand rupees” shall be substituted with effect from the 1st day of section 80C. April, 2015.

Amendment of section 80CCD.

28. In section 80CCD of the Income-tax Act, in sub-section (1), with effect from the 1st day of  April, 2015,––

(i)for the words, figures and letters “Where an assessee, being an individual employed by the Central Government or any other employer on or after the 1st day of January, 2004”, the words, figures and letters “Where an assessee, being an individual employed by the Central Government on or after the 1st day of January, 2004 or, being an individual employed by any other employer”   shall be substituted;

(ii)  after sub-section (1), the following sub-section shall be inserted, namely:––

(1A) The amount of deduction under sub-section (1) shall not exceed one hundred thousand rupees.”.

Amendment of section 80CCE.

29. In section 80CCE of the Income-tax Act, for the words “one lakh rupees”, the words “one hundred  and fifty thousand rupees” shall be substituted with effect from the 1st day of April, 2015.

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Category : Income Tax (26735)
Type : Articles (16221) Featured (4128)
Tags : Budget (1950) Budget 2014 (172) Income Tax Deductions (428) Section 80C (145)

2 responses to “Section 80C deduction limit increased to Rs. 150000”

  1. amol says:

    last year salary difference received current year how to calculate tax??

  2. Gabani Kuldip says:

    is exemption available u/s.80C for exempt income(AGRICULTURE INCOME) invested u/s.80C(in eligible plans) ????

  3. Chandrashekher Tomar says:

    I & my wife have paid loan to my friend in 2011 of Rs5 + 4 lacks, which he refuse to repay and due to this I file a court case against him which I won and with interest he is liable to pay about 19 lacks so kindly tell me about the tax liability on this.Is there any provision under which the can be saved.

  4. Arun says:


    For 2014-2015 financial year while filling IT Returns i want to include my new flat stamp duty charges it is possible, if it is possible i should submit any relevant documents? need your assistance.

  5. Pranjal Dwivedi says:

    Is amount received under EPF and Gratuity, after leaving an organization, taxable ?? And how much tax is on RD ?

  6. latha says:

    december 2014 lic poilcy is tax exemption for this year ( financial year 2015-16)
    and A.Year 2016-17. please give information regarding this.

    Thanking u

  7. Suresh says:

    @ Renju – I guess you have selected Assessment year 2014-15 which is last years. You need to select Assessment year as 2015-16 for 2015 tax filing. As of now, this option is not available on e-filing site. When I contacted customer support, they said it will be available very soon. So wait for filing.

  8. Renju says:


    Did any one try filing the returns using the utility or site for FY 2014-2015? Are they still considering 1 Lac as 80C cap?

    Thank you!

  9. Ramesha M N says:

    I am central government employee, I’m filing my tax returns for the year 2014-15. My contribution to the NPS is 81331 and LIC + GSLIS premium is 38009. So when I started e-filing my return and filling details in the page it is restricting deduction under section 80c to 1 lakh only. As your article says that deduction will be 1.5 lakh for the FY 2014-15.

    Please help me to get clarification

  10. VANDANA says:


    While PREPARING 24Q FOR Q4 there is a T-FV-6039 error generated -that 80CCE Deduction limit cannot exceed rs 1 Lac , though actually the limit is rs 1.5 LACS, PLEASE GIVE SOLUTION FOR THIS

  11. s sudarshana says:

    With effect from FY 2014-15.

  12. SIVAPRAKASH K says:

    Dear Sir,
    Section 80C deduction limit increased to Rs. 150000/-

    I want to know date of effect from.

  13. s sudarshana says:

    Mr Shirmay: 45000 to make it nil tax liability.

  14. shrimay says:

    My wife annaul salary is 3 lakh 15 thousand for-2014-2015.
    Up to how much i can invest to save tax?

  15. s sudarshana says:

    Mr.Amer: Loan repayment will not qualify for rebate u/s 80-C.

  16. Amer says:

    Sir I want to know whether the Loan repayment amount on LIC Policy is allowed for exemption under section 80C along with premium or not.

  17. s sudarshana says:

    If you have taken two loans, ans is no. You can claim in respect of loan fof house provided other conditions are satisfied.

  18. nagaraj says:

    please advice me for calculation of income tax as i have availed site loan and construction loan for my self occupied property, can i claim deudction under section 24 of the income tax act for interest paid on both loans

  19. nagaraj says:

    i have availed site loan and housing loan for the same property and can i claim deduction under section 24 for the interest paid on both loans which is self occupied by me. please advice me for income tax calculation

  20. S Sudarshana says:

    Mr.Deepak: Your info is not adequate. There is a cap for 80-C investment of Rs.1,50,000. Pl calculate the tax by IT Calculator or send in the info on PF contribution, other savings etc

  21. S Sudarshana says:

    Mr Ashok P: You cannnot deposit more than Rs.1.5 lakh in PPF account of an individual.
    Mr.Kawshick: Amount received from the Provident Fund is not taxable. it is exempt u/s 10. You can show this amount under “income from other sources” and deduction u/s 10. Same amount.This deduction comes at the beginning itself and not after computing the tax.
    Mr.Deepak: The details given of your wife is not adequate th comment. You have to indicate the taxable income, how much you have contributed for deduction u/s 80-C exculing the NSC you have refered..

    • deepak says:

      Hi ,
      My wife’s salary is Rs 31,000 pm and her office’s accountant said him that approximate your tax will be Rs 10,000 , so we want to save this tax she is also paying every year Rs 20,000 for mediclaim it will sufficient for save tax (Rs10,000) or we have to take NSC for save the tax and how much amount should we invest in NSC ?

  22. deepak says:

    Hi ,
    My wife is working and his office’s accountant said that this year you have to pay Rs 8000 tax in march -2015 and we have Rs 30,000 NSC which we bought in Jan-2015 , so how much we get tax rebate in income tax ? (how much tax we have to pay now because earlier tax pay amount was Rs 8000)if any other option for save our tax (Rs 8000) so please tell us asap.
    Thank you.

  23. kowshick says:

    dear sir,
    Am kowshick. Am not well in english. but little bit know.
    one of the client pf amount received lumpsum of Rs.114122. This is taxable or not. it is add to income?
    he is already clim 80c benefit.

  24. ASHOK POKARNA says:

    I want to deposit Rs.200000/-in PPF for F.y.2014-15 is there any restriction on a deposit in PPF account?

  25. sudarshana says:

    Who said so? It is 1.5 lakhs now. You open 1 lakh one day and 50k next day. It is possible all banks/employees are not well informed. Secondly nobody puts all 1.50 lakh in tax saving FD. The limit is inclusive of other savings u/s 80-C.

  26. Ketan says:

    Tax saver FD limit is still 1 lakh and not 1.5 lakh

  27. s sudarshana says:

    ‘together’ and not ‘FT’.

  28. s sudarshana says:

    Mr Rohit, all investments including PPF qualifying for exemption u/s 80-C is put FT and limited to Rs.1,50,000.

  29. s sudarshana says:

    150000, for (from)Financial year 2014-15, which is also referred as Assessment Year 2015-16.

  30. Anand Ghutugde says:

    which 80c limit for the yaer 14-15 (1 lakh or 1.50 lakh)

    Thankig you,

  31. rohit says:

    Is limit of Rs. 150000 applicable only on investments in PPF or Any other????

  32. GAURAV says:

    from which date rs 1.5 lack ppf will apply .

  33. Venkatraman says:

    Unless PPF Act is amended without delay,banks will refuse to accept the contribution of 1.5 lakhs

  34. s sudarshana says:

    Finance Mininster may consider to improve it to 2 lkah during budget discussions.

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