A Brief summary of Section 80C, 80CCC and 80CCD of Income Tax Act, 1961 (Maximum deduction 1,50,000+50,000)

DEDUCTION U/S 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

  

2. Contribution by an individual to Public Provident Fund, Recognized Provident Fund.
3. Contribution by an employee to approved superannuation Fund.
4. Subscription to notified securities or notified deposit scheme.
5. Subscription to National savings certificate. (However, Interest earned on National saving certificate are taxable.)
6. Contribution to Unit Linked Insurance Plan.
7. Contribution to notified pension fund set up by Mutual Fund or Unit Trust of India.
8. Contribution to notified annuity plan of Life Insurance Corporation or other insurer.
9. 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).
10. Payment of Tution fees to any university, college, school or other educational institution for the purpose of Full Time.
11. Investment in Sukanya Samridhi account.
12. Investment in tax saving deposits for the period of at least 5 year. (Interest earned on the same will be taxable).
13. Investment in Senior Citizens Savings Scheme.
14. Subscription to notified bonds of NABARD.
15. Subscription to deposit scheme of public sector or company engaged in providing housing finance.
16. Subscription to equity shares or debentures of an approved eligible issue.

 

DEDUCTION U/S 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 U/S 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

1. 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.

2. 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/-
3. 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.