Individual taxpayers and businesses can lower their taxable income under the Indian Income Tax Act within Sections 80C to 80U. Knowledge of these tax deduction under section 80C to 80U can help taxpayers minimise their tax liability while making informed and strategic financial decisions. By leveraging these deductions, individuals and businesses can effectively manage their finances, invest in tax-saving instruments and maximise their overall savings.
Tax deductions under section 80C
Section 80C is one of the most widely used tax-saving provisions under the 80c to 80u deduction list, allowing a deduction of up to Rs. 1.5 lakh per financial year. One can get income tax deduction 80C to 80U on the following investments and expenditures:
- Employee Provident Fund (EPF)
- Public Provident Fund (PPF)
- National Savings Certificate (NSC)
- Life insurance premium
- Equity-linked savings scheme (ELSS)
- Tuition fees for children
- Principal repayment on home loan
- Sukanya samriddhi yojana (SSY)
Tax deductions under section 80D
Section 80D provides deductions for health insurance. The deduction limits are:
- 25,000 for self, spouse, and children
- 50,000 for senior citizen parents
- Additional deduction for preventive health check-ups up to Rs. 5,000
Tax deductions under section 80E
Section 80E allows a deduction on interest paid on education loans. The deduction has no upper limit and is available for eight years or until the loan is fully repaid.
Tax deductions under section 80G
Donations made to charitable institutions, scientific research organisations, NGOs, etc, qualify for deduction under section 80c to 80u. These deductions can be either 50% or 100% of the donated amount, based on conditions outlined in the Income Tax Act.
Tax deductions under section 80IA
Section 80IA provides tax deductions for profits from infrastructure development projects such as power generation, telecommunication services, and industrial parks. They can claim certain tax deductions on profits.
Deductions under section 80J
Section 80J offers tax deductions for businesses generating employment or involving biodegradable waste processing. Companies hiring new employees can claim deductions on additional wages paid, subject to specific conditions.
Tax deduction under section 80LA
This section provides deductions to offshore banking units and international financial services centres. Banks and financial institutions benefit from tax exemptions for a specified period.
Tax deduction under section 80P
Section 80P offers deductions to cooperative societies engaged in agricultural and rural development activities. The deduction amount varies based on the nature of business operations.
Tax deduction under section 80QQB
Authors earning royalty income from books (excluding textbooks) can claim deductions under Section 80QQB. The maximum deduction allowed is Rs. 3 lakh per financial year.
Tax deduction under section 80RRB
Section 80RRB allows tax deductions for royalty income from patents registered under the Patents Act 1970. The maximum deduction is Rs. 3 lakh per year.
Tax deduction under sections 80TTA & 80TTB
Under Section 80TTA, taxpayers can now claim a deduction of over Rs. 10,000 on interest earned from savings accounts. Section 80TTB provides senior citizens with a higher deduction of up to Rs. 50,000 on interest earned from savings accounts and fixed deposits.
Tax deduction under section 80U
Section 80U provides deductions for individuals with disabilities. The deduction amount for individuals with disabilities is Rs. 75,000. This amount can reach Rs. 1,25,000 for individuals with severe disabilities.
Tax deductions under section 80C to 80U: Summary
The Income Tax Act provides all deduction under section 80C to 80U to reduce the tax burden of individuals. Additionally, these deductions encourage them to invest money across various financial instruments and social welfare schemes. It will surely help one in planning his finances and maximising tax savings.
FAQs
- Can deductions be claimed under multiple sections at once?
Yes, taxpayers can claim deduction under 80C to 80U under different sections if they satisfy the conditions applicable for various sections.
- Is the benefit of tax deduction under section 80C and 80U available to individuals and HUF?
Yes, all deductions under section 80C and 80U can be availed by taxpayers and Hindu Undivided Families (HUFs).
Conclusion
Taxpayers are advised to take advantage of the tax deduction 80C to 80U for optimal savings. A well-researched approach can help individuals manage tax burdens and secure their financial future. To maximise their benefits, they can invest in health insurance for family under Section 80D or explore other eligible tax-saving options, such as retirement funds.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It is not intended as a substitute for professional advice, diagnosis or treatment. Please consult a certified medical and/or nutrition professional for any questions. Relying on any information provided in this blog is solely at your own risk, and ICICI Lombard is not responsible for any effects or consequences resulting from the use of the information shared.