Section 80C of the IT Act, 1961, specifies all the different income tax deduction. Let us have a look at three such popular tax deductions you can benefit from-
1. Section 80C- Investment DeductionsSection 80C is probably the most popular among taxpayers as it helps you save taxes by making investments. Individuals and HUF (Hindu Undivided Family) can claim a deduction of up to Rs. 1.5 lakh under this section.
Life insurance policy payments, provident fund payments, payment for buying or construction of a residential property, and investments like mutual funds, senior citizen schemes, NABARD bonds, etc. are eligible for tax deductions under this section.
2. Section 80CCC- Insurance PremiumYou can also claim tax deductions if you have invested in an annuity plan of a registered insurance provider. However, the plan should be a pension fund as described under Section 10(23AAB).
Also, the amount received after surrendering the policy or the annuity will be taxable in the year that you receive such payments. Section 80CCC shares the maximum deduction under income tax of up to Rs. 1.5 lakhs with Section 80C listed above. This means that the combined deductions under Section 80C and 80CCC are Rs. 1.5 lakhs.
3. Section 80CCD- Contribution to Pension AccountIf you contribute to any pension fund offered by the central government, like National Pension Scheme (NPS), you can claim a deduction of up to 10% of your salary if you are a salaried employee and up to 20% of your total income if you are self-employed.
If your employer also contributes to your pension account, an additional tax deduction of up to 10% of your salary is allowed. Section 80CCD (1B) was recently introduced to offer additional deductions of up to Rs. 50,000 on the amount you contribute to pension funds. However, the deductions under Section 80CCD share the maximum limit of Rs. 1.5 lakh with Section 80C and 80CCC.
While the IT sections discussed above are very popular among taxpayers, there are several other income tax deductions under Section 80 of the IT Act. Some other deductions you can make use of are Section 80TTA, 80CCF, 80CCG, 80E, 80G, 80GGA, 80GGB, and 80GG.
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The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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