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Section 80C

Section 80C is one of the most commonly known sections of the Income Tax Act. It is used to file income tax exemptions on life insurance, health insurance, investments in pension schemes, education fees, home loans and fixed deposits etc. The maximum deduction under section 80C is 1.5 lacs. The deductions that are eligible for exemption under section 80C are:

  1. Home loan payments
  2. Stamp duty and registration charges for house
  3. Health insurance
  4. Life insurance
  5. Fixed deposits
  6. Mutual Funds investments(ELSS)
  7. Provident Funds
  8. National Savings Certificate
  9. Infrastructure bonds
  10. Post office deposits
  11. Education expenses
  12. Pension Funds
  13. Senior citizens’ savings scheme

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Section 80C for NRIs

If an individual’s source of income is india, then they have to file their income tax on the due date irrespective of the residential address of the person. An individual is liable to file for IT returns if the business that he/she owns or his/her bank account is audited in India. An NRI is eligible for an equal amount of tax deductions under section 80C.

Section 80DD

It is difficult for an average salaried differently abled individual to bear their entire medical expenses. The Government of India has framed section 80DD under the Income Tax Act, to provide relief to people who are dependent-with-disabilities and people with severe disabilities. The only eligibility criteria for claiming income tax exemption under section 80 DD is that the individual must be a resident of India, i.e, no NRI can claim tax exemptions under section 80 DD.

The disabilities which are listed under Section (i) Clause 2 of Persons with Disabilities Act, 1995.

Eligibility criteria to claim tax deductions

  1. Medical certificate generated from any government hospital with the details of the individual’s disabilities.
  2. Individuals suffering from multiple disabilities require to submit the form 10-IA as well.
  3. A self-declaration claiming the medical expenses accrued by them during the financial year
  4. Original certificates need to be submitted with respect to payments made to an insurer such as LIC or UTI for enrolling in any plans/schemes to take care of the differently abled person

Tax deductions under Section 80DD

Individuals with disabilities are subject to tax exemptions under Section 80 DD of Income Tax Act. A person who is dependent-with-disabilities (individual experiencing 40% and above level of disability), can claim tax exemptions upto ₹50,000 and  a person with severe disabilities can claim tax exemptions upto ₹1,25,000.

Section 80 D

Section 80 D allows the taxpayer to benefit from tax exemptions on the premiums made on medical insurance. Section 80 D deductions apply to an individual over and above Section 80 C tax deductions.

The deductions allowed under Section 80D are:

  1. For Self and family: A maximum deduction of 25000 is allowed for health insurance premiums for self and family under section 80 D but if you’re senior citizen then your tax exemption could e upto 50000
  2. Additional deductions- An additional deduction of 5000 can be claimed by the taxpayer on the expenses related to health checkups. Such tax deduction prescribed by the government extends to a person’s kids, parents and spouse.

Overall tax deduction limits

Persons Covered

Exemption Limit

Health Check-Up Exemption

Total

Self and family

Rs.25,000

Rs.5,000

Rs.25,000

Self and family + parents

Rs.(25,000 + 25,000) = Rs.50,000

Rs.5,000

Rs.55,000

Self and family + senior citizen parents

Rs.(25,000 + 50,000) = Rs.75,000

Rs.5,000

Rs.80,000

Self (senior citizen) and family + senior citizen parents

Rs.(50,000 + 50,000) = Rs.1,00,000

Rs.5,000

Rs.1.05 lakh

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Deduction of MediClaim

MediClaim policy is a type of health insurance policy which is meant for taking care of the medical expenses of a person. Deduction of MediClaim makes sure that a person’s health insurance policy stays active. The policy is applicable for the policyholder and his/her spouse.

Summary of various tax deductions

Section

Deduction on

Allowed Limit (maximum) FY 2018-19

Section 80C

– Investment in PPF

– Employee’s share of PF contribution

– NSCs

– Life Insurance Premium payment

– Children’s Tuition Fee

– Principal Repayment of home loan

– Investment in Sukanya Samridhi Account

– ULIPS

– ELSS

– Sum paid to purchase deferred annuity

– Five year deposit scheme

– Senior Citizens savings scheme

– Subscription to notified     securities/notified deposits scheme

– 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

– Contribution to notified annuity Plan of   LIC

– Subscription to equity shares/   debentures of an approved eligible issue

– Subscription to notified bonds of   NABARD

Rs. 1,50,000

80CCC

For amount deposited in annuity plan of LIC or any other insurer for pension from a fund referred to in Section 10(23AAB).

80CCD(1)

Employee’s contribution to NPS account (maximum up to Rs 1,50,000)

80CCD(2)

Employer’s contribution to NPS account

Maximum up to 10% of salary

80CCD(1B)

Additional contribution to NPS

Rs. 50,000

80TTA(1)

Interest Income from Savings account

Maximum up to 10,000

80TTB

Exemption of interest from banks, post office, etc. Applicable only to senior citizens

Maximum up to 50,000

80GG

For rent paid when HRA is not received from employer

Least of :


– Rent paid minus 10% of total income

– Rs. 5000/- per month

– 25% of total income

80E

Interest on education loan

Interest paid for a period of 8 years

80EE

Interest on home loan for first time home owners

Rs 50,000

80CCG

Rajiv Gandhi Equity Scheme for investments in Equities

Lower of


– 50% of amount invested in equity shares; or

– Rs 25,000

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

– Rs. 25,000

– Rs. 50,000

80DD

Medical 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

– Rs. 75,000

– Rs. 1,25,000

80DDB

Medical Expenditure on Self or Dependent Relative for diseases specified in Rule 11DD


– For less than 60 years old

– For more than 60 years old

– Lower of Rs 40,000 or the amount actually paid

– Lower of Rs 1,00,000 or the amount actually paid

80U

Self suffering from disability:


– Individual suffering from a physical disability (including blindness) or mental retardation.

– Individual suffering from severe disability

– Rs. 75,000

– Rs. 1,25,000

80GGB

Contribution by companies to political parties

Amount contributed (not allowed if paid in cash)

80GGC

Contribution by individuals to political parties

Amount contributed (not allowed if paid in cash)

80RRB

Deductions on Income by way of Royalty of a Patent

Lower of Rs 3,00,000 or income received

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