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Deduction Under Section 80C and 80U

What is Tax Deduction?

Eligible tax deductions reduce your tax liabilities, enabling you to save a considerable percentage of tax that is otherwise applicable on your income bracket. You have to file for tax deductions, with relevant proof to support your claims, to avail the provisions mentioned in the Income Tax Act, 1961. 

Deduction available under sections 80C to 80U are of special nature and are allowed to certain specified categories of taxpayers. Deductions under sections 80C to 80GGC are in relation to various investments and payments, whereas sections 80-IA to 80U cover deduction in respect of certain income. The purpose of these deductions is to encourage savings, industrialization, and to assist the taxpayers in meeting their essential expenditures. these deductions have to be made from the gross total income in order to arrive at net income. 

 

Income Tax Update: Budget 2021 date:-01 Feb, 2021   

– No changes in the Income Tax Slab Rate (old as well as new).
– No Income Tax Return filing requirement for Senior Citizens (Aged 75 years and more) having only pension and interest income.
– No change in Surcharge and HEC rates and standard deduction
– No changes in income tax deduction u/s 24(b), 80C and other sections under chapter VI-A. Only benefit u/s 80EEA extended to one more year i.e. up to 31 March 2022.
– Section 80EEA : Timeline for Sanction the loan is extended till 31st March, 2022.

– The government of India has launched a new initiative ”Honoring the Honest ”. The major attributes include Faceless assessment, Faceless Appeal, and Taxpayer’s Charter.
– None of the chapter VI-A deduction allowed except for 80CCD(2) and 80JJAA if you opt for new and reduced income tax rates.

Income Tax Deductions Section 80C to 80U for Tax Saving in India

The most comprehensive guide for all income tax deductions section 80C to section 80U covered in chapter VI A of Income tax for the FY 2020-21(AY 2021-22)


Income Tax Deductions in India 

SectionsIncome Tax Deduction for FY 2020-21 (AY 2021-22)Who Can ClaimLimit for FY 2020-21 (AY 2021-22)
*Section 80C Investing into very common and popular investment options like LIC, Employee’s share of PF contribution, NSCs , Children’s Tuition fee, Principal Repayment of home loan, Investment in Sukanya Samridhi Account, ULIPS, ELSS, Sum paid to purchase deferred annuity, Contribution to notified Pension Fund set up by Mutual Fund or UTI, Subscription to Home Loan Account scheme of the National Housing Bank, Subscription to deposit scheme of a public sector or company engaged in providing housing finance, Subscription to equity shares/ debentures of an approved eligible issue, Senior Citizens savings scheme etc.Individuals or HUFsUpto Rs.1,50,000
*Section 80CCCContribution to certain pension fund Individuals Upto Rs.1,50,000
*Section 80CCD(1)Atal Pension Yojana and National Pension Scheme ContributionIndividualsUpto Rs.1,50,000
Section 80CCD(1B)Atal Pension Yojana and National Pension Scheme ContributionIndividualsUpto Rs.50,000
Section 80CCGInvestment made under any equity saving scheme as specified by the government Resident Individuals
Upto Rs.25,000
Section 80D-Medical Insurance – Self, spouse, children
-Medical Insurance – Parents more than 60 years old or (from FY 2015-16) uninsured parents more than 80 years old
Individuals or HUFs-Upto Rs.25,000
-Upto Rs.50,000
Section 80DDMedical treatment for handicapped dependent or payment to specified scheme for maintenance of handicapped dependent
– Disability is 40% or more but less than 80%
– Disability is 80% or more
Resident Individuals
or HUFs
Normal Disability: Rs 75000/-
Severe Disability: Rs 125000/-
Section 80DDBMedical Expenditure on Self or Dependent Relative for diseases specified in Rule 11DD
– For less than 60 years old
– For more than 60 years old
Resident Individuals
or Resident HUFs
Senior Citizens: Upto Rs 1,00,000
Others: Upto Rs 40,000
Section 80EInterest paid on Loan taken for Higher EducationIndividuals100% of the interest paid upto 8 assessment years
Section 80EEInterest on loan taken for acquisition of residential house property IndividualsUpto Rs.50,000 subject to some conditions
Section 80EEBInterest paid on Electric Vehicle LoanIndividualsUpto Rs.1,50,000 subject to some conditions
Section 80GDonation to Charitable Institutions
All Assessee (Individual, HUF, Company etc)100% or 50% of the Donated amount or Qualifying limit,
Allowed donation in cash upto Rs.2000
Section 80GGRent Paid for furnished / unfurnished residential house IndividualRs.60,000/-
25% of Total Income
Rent paid – 10% of Total Income
whichever is lower
Section 80GGACertain donations for scientific research or rural developmentAll assessees except those who have an income (or loss) from a business and/or a profession100% of the amount donated.
Allowed donation in cash upto Rs.10,000
Section 80GGBContribution to Political PartiesIndian Companies100% of the amount contributed
No deduction available for contribution made in cash
Section 80GGCIndividuals on contribution to Political PartiesIndividual, HUF, AOP, BOI, Firm100% of the amount contributed.
No deduction available for contribution made in cash
Section 80IAProfits and Gains from Industrial Undertakings engaged in infrastructure development, etc.Industrial Undertakings engaged in specified businesses100% of the profit for 10 consecutive years out of 15 years beginning from year of commencement
Section 80IABProfits and Gains to SEZ (Special Economic Zone) DevelopersSEZ Developers100% of the profit for 10 consecutive years out of 15 years beginning from year in which SEZ has been notified by Central Govt.
Section 80IACEligible startupsCompany or LLP engaged in eligible business subject to some conditions100% of the profit for 3 consecutive years out of 7 years beginning from the year of commencement
Section 80IBProfits and Gains from certain Industrial Undertakings other than infrastructure development undertakingsSpecified Industrial Undertakings25%, 30% or 100% of the profit for such periods as may be specified subject to certain conditions
Section 80IBAProfits and Gains from Housing ProjectsAll Assessees100% of the profit
Section 80JJAProfits and Gains of Specified BusinessSpecified Business100% of the profit for 5 consecutive years beginning from the year of commencement
Section 80JJAAEmployment of New EmployeesEmployer who was subject to tax audit u/s 44AB30% of additional employee cost for 3 years including the year in which employment is provided
Section 80PACertain income of Producer CompaniesProducer Companies engaged in eligible business100% of the profit
Section 80RRBRoyalty on PatentsIndividuals (Indian citizen or foreign citizen being resident in India)Rs.3,00,000/-
Or
Specified Income
whichever is lower
Section 80QQBRoyalty Income of AuthorsIndividuals (Indian citizen or foreign citizen being resident in India)Rs.3,00,000/-
Or
Specified Income
whichever is lower
Section 80TTAInterest earned on Savings AccountsIndividual
Or
HUF (except senior citizen)
Upto Rs.10,000
Section 80TTBInterest Income earned on deposits(Savings/ FDs)Individual (60 yrs or above)Upto Rs.50,000
Section 80UIncome of a person with disability IndividualsNormal Disability: Rs.75,000
Severe Disability: Rs.1,25,000

*The aggregate deduction under section 80C, 8CCC and 80CCD cannot exceed Rs.1,50,000. However, employer’s contribution towards NPS (up to 10% of salary of an employee) is outside the monetary ceiling of Rs.1,50,000.

Rebate u/s 87A increased: 

The amount of rebate u/s 87A has been increased from Rs.2,500 to Rs.12,500. Rebate is available to the individuals whose taxable income for financial year Financial year 2019-20 dose not exceed Rs.5,00,000. 

Disclaimer:- “All the information given is from credible and authentic resources and has been published after moderation. Any change in detail or information other than fact must be considered a human error.”

Dheeraj Kumar Singh

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