A Guide to Section 80 of the Income Tax Act
Section 80 of the Income Tax Act provides for various savings and investment options to reduce taxable income. It covers sections 80C to 80U and includes a wide range of options including home loans, health insurance, investment plans and pension funds. In this way, individuals can protect their finances through long-term investments and insurance..
With this section, the Indian government wants to encourage more citizens to save money for the future and invest in insurance and retirement plans. Here is a detailed guide to sections 80C to 80U, including the maximum allowable limit for each section.
Section 80C:
It provides tax deductions of up to Rs. 1,50,000 through tax-saving investments, which can be claimed by individuals and HUF (Hindu Undivided Family) under Some of these investments and expenses include:
- Employee’s contribution to Provident Fund (PF)
- Equity Linked Savings Scheme (ELSS)
- Senior Citizen Savings Scheme (SCSS)
- Payment for life insurance policies
- Unit Linked Insurance Plan (ULIP)
- Tuition fees paid for up to two children
- Tax-saving fixed deposit accounts
- National Savings Certificate (NSC)
Section 80CCC:
This sub-section under of the Income Tax Act provides tax deductions on pension plans offered by various public and private insurers. Individual taxpayers can claim deductions up to Rs. 1.5 lakh of the premium deposited in any annuity pension scheme during the financial year..
Pension received from the annuity plan, including interest and bonus, is taxable in the year of receipt.
Section 80CCD:
Section 80CCD(1) allows employees to claim deductions for the amount they have contributed to any pension scheme under the Central Government. Individuals can claim deductions of 10% of their salary or 20% of their gross total income, whichever is lower, up to a limit of Rs. 1.5 lakh.
Employers can also avail tax benefits for contributions to pension schemes under section 80CCD(2). Additional deduction of Rs. 50,000, above Rs. 1.5 lakh limit is allowed under section 80CCD(1b). This provision allows a tax deduction for contributions towards NPS (National Pension Scheme) and APY (Atal Pension Yojana).
Section 80CCF:
Section 80CCF allows tax benefits of up to Rs. 20,000 for investments in long-term infrastructure bonds notified by the government. This deduction is available to individuals and HUFs under of the Income Tax Act.
Section 80CCG:
The maximum amount that an individual can claim is Rs. 25,000. These deductions are offered based on the employee’s investments in Equities under the Rajiv Gandhi Equity Scheme.
Section 80D:
This sub-section under of the Income Tax Act provides the opportunity to receive deductions from health insurance premiums. You can claim a maximum deduction of Rs. 25,000 on the premium paid for yourself and family members (spouse and children). Additionally, for insurance premiums paid for parents, you can claim an extra deduction of Rs. 25,000.
If your parents qualify as senior citizens, aged 60 years or older, you can claim a tax deduction of Rs. 50,000 for paying their health insurance premium. An extra deduction of Rs. 25,000 is available if you are also classified as a senior citizen. Consequently, the maximum deduction you can claim under this section is Rs. 1,00,000.
Additionally, it’s worth noting that permits tax deductions of up to Rs. 5,000 for preventive health check-ups.
Section 80DD:
If you provide financial support for a disabled dependent relative, you can claim tax deductions under Section 80DD. This provision enables individuals and HUFs to lower their tax liability by a fixed rate based on the severity of the disability.
You can claim a deduction of Rs. 75,000 if your relative has a disability ranging from over 40% to less than 80%. For individuals with 80% or more disability, the fixed deduction allowable is Rs. 1,25,000.
Section 80DDB:
Section 80DDB allows for the reduction of tax liability for expenses related to the treatment of specific diseases. Individuals and HUFs below 60 years old can claim a maximum deduction of Rs. 40,000 for medical expenses. For senior citizens and super senior citizens (80 years or above), this limit goes up to Rs. 1 lakh.
Section 80E:
You can claim tax deductions on the interest paid towards your education loan under this subsection of of the Income Tax Act. There is no maximum limit for claiming the deduction, but it can be claimed for a maximum of 8 years from the start of the interest repayment or until the interest is fully repaid (whichever is earlier)..
This education loan can be taken for yourself, your spouse, children, or if you are someone’s legal guardian.
Section 80EE:
Under Section 80EE, you can claim an additional deduction of Rs. 50,000 of your home loan interest payments above the section 24 limits. This feature is only available to first-time home buyers who have taken a home loan in FY 2016-17, FY 2014-15 or FY 2013-14. Their total home loan should not exceed Rs. 35 lakh and the property value should not exceed Rs. 50 lakh to get this deduction.
Section 80EEA:
Individuals who purchased a house with a home loan obtained between April 1, 2019, and March 31, 2020, are eligible to seek an additional deduction under. However, they must not possess any other residential property, and the stamp value of the home should not surpass Rs. 45 lakh.
Section 80EEB:
Individuals purchasing electric vehicles between April 1, 2019, and March 31, 2032, using a loan can benefit from tax deductions. This deduction applies to the interest repaid for such loans. Section 80EEB permits a maximum deduction of Rs. 1.5 lakh.
Section 80G
Contributions made to charitable funds and institutions are eligible for deductions under this subsection of the Income Tax Act. Depending on the institution, you may be eligible to deduct 50% or 100% of the donated amount from your gross total income.
From 2018, donations eligible for deductions under are limited to Rs. 2,000 for cash transactions. When claiming this deduction, you should also provide details of the institution to which you made the donation.
Section 80GG:
Section 80GG allows you to reduce your tax liability for paying house rent if you do not receive HRA (House Rent Allowance). To claim this deduction, you must not own a house in your name, your spouse’s name, your children’s names, or any member of the HUF (Hindu Undivided Family) at your place of employment. Additionally, you must reside in rented accommodation and pay regular rent.Subject to the highest deduction, which is equal to 25% of the total income incurred or Rs. 2,000 per month.
Section 80GGB:
As per, any contribution or donation made towards a political party by an Indian company is eligible for a 100% tax deduction. The party receiving the donation must be registered under Section 29A of the Representation of People Act, 1951. Payments can only be made through cheque, demand draft, or electronic transfer.
Section 80GGC:
Under this subsection, an individual taxpayer can claim tax deduction benefits for any contribution or donation made to a political party or electoral trust. The contribution cannot be made in cash. Additionally, any local authority or judicial person is not eligible for a tax deduction.
Section 80IA:
The Income Tax Act outlines the tax benefits available for specific enterprises engaged in activities such as the development or maintenance of industrial parks and infrastructure facilities, telecommunication services, and the distribution of natural gas.
Section 80J:
This subsection of the Income Tax Act offers tax deduction facilities for new industrial establishments, hotels, and cruises in specific cases.
This section is further divided into two subsections – 80JJA and 80JJAA. estricts profits generated by industrial establishments involved in the collection and processing of biodegradable waste. Under Section 80JJAA, certain businesses can claim tax deductions on wages paid to new workers.
Section 80P:
Specific earnings derived from certain activities of a cooperative society qualify for a tax deduction if they are included in the society’s gross income. This benefit is subject to specific terms and conditions, including the requirement for the cooperative society to be registered under the Co-operative Societies Act, 1912.
Section 80QQB:
This section of the Income Tax Act is specifically designed for Indian authors, allowing them to claim tax deductions for the royalties earned from the sale of their books. However, only books falling under literary, scientific, and artistic categories are eligible for this tax benefit. The maximum deduction allowed is up to Rs. 3 lakh.
Section 80RRB:
Under individuals can claim a tax deduction against royalty payments made as income tax. Royalty payments are received by the original patent holder whenever someone utilizes their patented products. To qualify for this deduction, the patent must be registered under the Patent Act, 1970.
Section 80TTA:
of TTA allows individuals and HUF to get tax benefits up to Rs. 10,000 interest from bank or post office savings accounts. This deduction applies to taxpayers under 60 years of age.
Section 80TTB:
Senior citizens are eligible to claim tax deductions of up to Rs. 50,000 on the interest income from bank or post office deposits under section 80TTB. This provision enables tax benefits for interest income derived from different accounts, including savings accounts and fixed deposits.
Section 80U:
This subsection under Section 80 of the Income Tax Act enables resident taxpayers with disabilities to claim tax deductions. To qualify, individuals must obtain a ‘Person with Disability’ certification from relevant medical authorities. Conditions such as autism and cerebral palsy are among those eligible under section 80U.
Individuals with disabilities can claim a maximum deduction of Rs. 75,000 for normal disabilities, while those with severe disabilities can receive deductions of up to Rs. 1,25,000.
Conclusion:
Section 80C to 80U of the Income Tax Act provides opportunities for taxpayers to claim deductions through a range of tax-saving expenses and investments. Individuals who have chosen the old (existing) tax regime can report these deductions in their ITR-1 form to lower their income tax liability
