Section 80 C of Income Tax Act allows deductions up to Rs1.5 Lakh per annum. Under the section, individuals can invest in multiple savings schemes and claim deductions on their taxable income.Saving + earning= Section 80C
Section 80C of the Income Tax Act is basically allows certain expenditures and investments to be exempt from tax. If you plan your investments well and divide them intelligently across different investments such as PPF, NSC, etc., you can claim deductions up to Rs.1.5 lakh, thereby lowering your tax liability.
The EMI paid as principal of home loan repayment is also tax deductible under Section 80C of Income Tax Act 1961. The home loan repayment has two components, while the interest part of the repayment cannot be claimed as deduction under Section 80C of the Income Tax Act. In case you purchase a home or a property and make payment for stamp duty and registration, these amounts can be claimed as tax deductions under Section 80C of the Income Tax Act.
NABR Rural Bonds : National Bank for agriculture and Rural Development offers two type of bonds, viz. Bhavishya Nirman Bonds and NABARD Rural Bonds.
Senior Citizen Savings Scheme : The Senior Citizen Savings Scheme is one of the best investments for senior citizens. The returns are relatively lucrative in comparison with other schemes. The interest is paid only on a quarterly basis. All individuals who are above 60 years can make investment in this scheme and claim tax benefit.
Post office deposit schemes are a lot similar of fixed deposits offered by banks. The duration of these schemes could range from 1-5 year, but only the interest earned on five-year post office time deposit schemes are eligible for tax deductions under Section 80C of the Income Tax Act.
|Section||Deduction on||Deduction Limit|
|Section 80CCC||Amount deposited in LIC or other insurer's annuity plan for a pension from a fund mentioned in Section 10 (23AAB)|
|Section 80CCD (1)||Employee's contribution to National Pension Scheme account (up to Rs.1. lakh)|
|Section 80CCD (2)||Employer's contribution to National Pension Scheme account.||Up to 10% of the salary|
|Section 80CCD (1B)||Additional contribution to National Pension Scheme account||Rs 50,000|
|Section 80TTA (1)||Interest income from savings account||Rs 10,000|
|Section 80TTB||Exemption of interest from post office, banks, etc. (only applicable to senior citizens)||Up to Rs 50,000|
|Section 80GG||Rent paid when House Rent Allowance has not been received from the employer||Least of either Rs.5,000 per month, rent paid less 10% of total income, or 25% of the total income.|
|Section 80E||Interest on Education Loan||Interest paid for 8 years|
|Section 80EE||Interest on home loan (applicable to first-time homeowners)||Rs 50,000|
|Section 80CCG||Rajiv Gandhi Equity Scheme||Rs.25,000 or 50% of the amount invested in equity shares, whichever is less.|
|Section 80D||Medical Insurance||Rs.25,000 for self, children and spouse, and Rs.50,000 for parents above 60 years of age|
|Section 80DD||Medical treatment for handicapped dependents||Rs.75,000 in case the disability is more than 40% but less than 80%, and Rs.1.25 lakh in case the disability is more than 80%|
|Section 80U||Self-suffering from disability||Rs.75,000 in case of mental retardation or physical disability (including blindness), and Rs.1.25 lakh for individuals suffering from severe disabilities|
|Section 80G||Contributions to organisations for social causes||Donation of up to Rs.2,000 made by any mode except cash|
|Section 80GGB||Any contribution made to political parties by companies.||The amount contributed|
|Section 80GGC||Any contribution made to political parties by individuals.||The amount contributed|
|Section RRB||Deductions on income by way of royalty of a patent||The income earned or Rs.3 lakh, whichever is less.|