Deductions Available under Chapter VIA
- Section 80C, 80CCC, 80CCD(1):
- Purpose: These sections cover various investments and expenditures aimed at savings and long-term financial security.
- Details:
- 80C: Includes payments towards life insurance premiums, contributions to PF, PPF, EPF, NSCs, tuition fees for children, repayment of principal on home loan, etc.
- 80CCC: Deduction for payments made towards pension plans of LIC or any other insurer.
- 80CCD(1): Deduction for contributions made to notified pension schemes like the National Pension System (NPS).
- Limit: The combined limit for deduction under 80C, 80CCC, and 80CCD(1) is up to Rs. 1,50,000 in a financial year.
- Section 80CCD(1B):
- Purpose: Additional deduction for contributions made to the National Pension System (NPS).
- Details: This is over and above the limit of Rs. 1,50,000 available under 80C, 80CCC, and 80CCD(1).
- Limit: Up to Rs. 50,000 can be claimed as an additional deduction.
- Section 80CCD(2):
- Purpose: Deduction for contributions made by the employer towards an employee’s pension account under NPS.
- Details: The deduction is allowed up to 10% of salary (basic salary + dearness allowance) of the employee.
- Section 80CCG:
- Purpose: Deduction for investments made under the Rajiv Gandhi Equity Savings Scheme (RGESS).
- Details: Available to new retail investors with gross total income not exceeding Rs. 12 lakhs. The deduction is 50% of the amount invested, limited to Rs. 25,000.
- Section 80D:
- Purpose: Deduction for medical insurance premiums paid.
- Details:
- For self, spouse, and dependent children: Up to Rs. 25,000 (Rs. 50,000 for senior citizens).
- For parents: Up to Rs. 25,000 (Rs. 50,000 if parents are senior citizens).
- Includes preventive health check-up expenses within the overall limit.
- Section 80DD:
- Purpose: Deduction for maintenance and medical treatment of a dependent with a disability.
- Details:
- For severe disability: Up to Rs. 1,00,000.
- For disability (not severe): Up to Rs. 50,000.
- The disability should be certified by a medical authority.
- Section 80DDB:
- Purpose: Deduction for medical treatment of specified diseases for self or dependent relatives.
- Details:
- Maximum deduction of Rs. 40,000 (Rs. 1,00,000 for senior citizens) for expenses incurred on specified diseases like cancer, neurological diseases, etc.
- Section 80E:
- Purpose: Deduction for interest paid on loan taken for higher education.
- Details: Deduction is available for a maximum of 8 years starting from the year in which interest payment begins or until the interest is fully repaid, whichever is earlier. There is no upper limit on the deduction amount.
- Section 80G:
- Purpose: Deduction for donations made to specified funds, charitable institutions, etc.
- Details:
- Deduction varies based on the type of donation:
- 100% deduction without qualifying limit.
- 50% deduction with qualifying limit (applicable to certain donations).
- Deduction varies based on the type of donation:
- Section 80GG:
- Purpose: Deduction for house rent paid by individuals who do not receive HRA (House Rent Allowance).
- Details:
- Deduction is available up to Rs. 60,000 annually if certain conditions are met regarding the non-availability of HRA.
- Section 80TTA:
- Purpose: Deduction for interest earned on savings accounts with banks, cooperative societies, or post offices.
- Details:
- Up to Rs. 10,000 can be claimed as a deduction on interest earned.
- Section 80U:
- Purpose: Deduction for a person with a disability.
- Details:
- For severe disability: Up to Rs. 1,00,000.
- For disability (not severe): Up to Rs. 50,000.
- Disability must be certified by a medical authority.
These deductions are designed to encourage savings, investments, and social contributions while reducing the taxable income of individuals and thereby lowering their overall tax liability. It’s important to comply with the specific rules and conditions laid out under each section to claim these deductions effectively.