80C deduction can be divided in to two parts ,
- Investment part and other is
- expenditure part.
- Under investment Part govt has declared /Notified few scheme under which person can invest amount and can claim deduction like investment in PPF/NSC ,Life insurance etc.Further there are specified time limit for which you have to hold the investment otherwise benefit availed u/s 80C have to be revered.
- Under Expense part ,few type of expenses are eligible for deduction.Like payment of tuition fees
- A. As per section 80C, an employee will be entitled to deductions for the whole of amounts paid or deposited in the current financial year in the following schemes, subject to a limit of Rs.1,00,000/-
- Payment of Insurance Premium :Payment of insurance premium to effect or to keep in force an insurance on the life of the individual, the spouse or any child of the individual.
- It may be clarified that the amount of premium or other payment made on an insurance policy [other than a contract for deferred annuity mentioned in sub-para (2)] shall be eligible for deduction only to the extent of 10 (
20upto 01.04.2012)percent of the actual capital sum assured.
- In calculating any such actual capital sum, the following shall not be taken into account: the value of any premiums agreed to be returned, or
- any benefit by way of bonus or otherwise over and above the sum actually assured which may be received under the policy.
- (a) Public Provident Fund :by an individual to any Provident Fund to which the Provident Fund Act, 1925 applies;
- (b) Provident Fund :to any provident fund set up by the Central Government, and notified by it in this behalf in the Official Gazette, where such contribution is to an account standing in the name of an individual, or spouse or children ;[The Central Government has since notified Public Provident Fund vide Notification S.O. No. 1559(E) dated 3.11.05.
- (c) by an employee to a Recognized Provident Fund;
- (d) by an employee to an approved superannuation fund;It may be noted that "contribution" to any Fund shall not include any sums in repayment of loan;
- (a) public sector companies engaged in providing long-term finance for construction or purchase of houses in India for residential purposes, or,
- (b) any authority constituted in India by, or, under any law, enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both.[The Central Government has since notified the Public Deposit Scheme of HUDCO vide Notification S.O. No.37(E), dated 11.01.2007, for the purposes of Section 80C(2)(xvi)(a)].
- where such payments are made towards or by way of any instalment or part payment of the amount due under any self-financing or other scheme of any Development Authority, Housing Board etc.The deduction will also be allowable in respect of re-payment of loans borrowed by an assessee from the Government, or any bank or Life Insurance Corporation, or National Housing Bank, or certain other categories of institutions engaged in the business of providing long term finance for construction or purchase of houses in India. Any repayment of loan borrowed from the employer will also be covered, if the employer happens to be a public company, or a public sector company, or a university established by law, or a college affiliated to such university, or a local authority, or a cooperative society, or an authority, or a board, or a corporation, or any other body established under a Central or State Act.
- The stamp duty, registration fee and other expenses incurred for the purpose of transfer shall also be covered.
- Payment towards the cost of house property, however, will not include, admission fee or cost of share or initial deposit or the cost of any addition or alteration to, or, renovation or repair of the house property which is carried out after the issue of the completion certificate by competent authority, or after the occupation of the house by the assessee or after it has been let out.
- Payments towards any expenditure in respect of which the deduction is allowable under the provisions of section 24 of the Income-tax Act will also not be included in payments towards the cost of purchase or construction of a house property.
- Where the house property in respect of which deduction has been allowed under these provisions is transferred by the tax-payer at any time before the expiry of five years from the end of the financial year in which possession of such property is obtained by him or he receives back, by way of refund or otherwise, any sum specified in section 80C(2)(xviii), no deduction under these provisions shall be allowed in respect of such sums paid in such previous year in which the transfer is made and the aggregate amount of deductions of income so allowed in the earlier years shall be added to the total income of the assessee of such previous year and shall be liable to tax accordingly.
- Full-time education includes any educational course offered by any university, college, school or other educational institution to a student who is enrolled full-time for the said course.
- It is also clarified that full-time education includes play-school activities, pre-nursery and nursery classes.
- It is clarified that the amount allowable as tuition fees shall include any payment of fee to any university, college, school or other educational institution in India except the amount representing payment in the nature of development fees or donation or capitation fees or payment of similar nature.
C. As per the provisions of section 80CCD, where an assessee, being an individual employed by the Central Government on or after the 1st day of January, 2004, has in the previous year paid or deposited any amount in his account under a pension scheme as notified vide Notification No. F.N. 5/7/2003- ECB&PR dated 22.12.2003, he shall be allowed a deduction in the computation of his total income, of the whole of the amount so paid or deposited as does not exceed ten per cent of his salary in the previous year.
Nature of Deduction
Amount of deduction
Limit on Deduction u/s.80C, 80CCC & 80CCD
Life Insurance Premia, PF, PPF, NSC, ELSS, Units of Mutual Fund referred to u/s.10(23D), Tuition Fees(max. 2 Children), Repayment of Principal of Housing loan, Bank Fixed Deposit of 5 yrs period, notified Bonds of NABARD, Deposit in an account under Senior Citizens Savings Scheme rules, 5 year time deposit in an account under Post Office Time Deposit Rules, 1981 etc.
Premium paid towards approved Pension Fund (like LIC’s Jeevan Suraksha) max. 1 lakh.
Contribution to Central Government Pension Schemes. Upto 10% of salary with matching contribution from Government.
allowed u/s. 80C,
80CCC & sub-
section (1) of
is Rs. 1,00,000(READ who's name savings can be done u/s 80C)
Deduction in respect of investment made under an equity savings scheme(only for Resident Individual) (subject to conditions)
50% of the amount invested subject to a maximum of Rs.25,000
(a) Health Insurance Premium paid by an individual/HUF by any mode of payment other than cash to effect or keep in force an insurance on the health of the assessee(self) or his family(spouse & dependent children) for policies taken from General Insurance Corporation /other approved Insurance Regulatory and Development Authority or any contribution made to the Central Government Health Scheme or any payment made on account of preventive health check-up subject to a maximum of Rs.5,000.
(b) Medical Insurance Premium paid by an individual/HUF by any mode of payment other than cash to effect or keep in force an insurance on the health of his/her parent or parents for policies taken from General Insurance Corporation /other approved Insurance Regulatory and Development Authority or any contribution made to the Central Government Health Scheme or any payment made on account of preventive health check-up subject to a maximum of Rs.5,000.
(c) For Senior Citizens in respect of (a) & (b) above
(d) preventive health check up
5000/-(include in above limit)
(a) Any expenditure for Medical, Nursing & Rehabilitation incurred on dependant suffering from permanent disability including blindness, mental retardation, autism, cerebral palsy or multiple disabilities
(b) Deposits under LIC, UTI’s Scheme & other IRDA approved insurers for the benefit of physically handicapped dependent
Rs.50,000 (Rs.1,00,000 if the disability is severe exceeding 80%)
(a) Actual expenditure incurred on Medical treatment of Self or dependant or a member of HUF suffering from terminal diseases like Cancer, AIDS, Renal failure etc.
(b) For Senior Citizens(self or dependent on whom expenditure on medical treatment is taken)
Interest on loan taken from Financial/Charitable Institutions for Self/Spouse/Children for pursuing Higher Education (for a max. period of 8 yrs)
Actual Interest repaid
(a) Donations made to National Defence Fund, Prime Minister’s Relief Fund, approved Funds of reputed Educational Institutions, National Trust for Welfare of persons with Autism, Cerebral Palsy etc.
(b) Donations made to Jawaharlal Memorial Fund, PM’s Drought Relief fund, Any approved Charitable Institution/Trust, Religious Institutions, a corporation established by the Government for promoting interest of the members of a Minority Community
100% of Donation
50% of Donation restricted to 10% of Adjusted Gross Total Income
Deduction in respect of rents paid, provided the assessee is not in receipt of HRA and no house is owned by self, spouse, minor child or HUF in the place of work subject to filing of declaration in Form No.10BA
25% of income
or rent paid in excess of 10% of income
or ceiling of Rs.24,000 p.a whichever is less
Deduction in respect in interest on deposits(not being time deposits) in a savings account with a banking company, a co-operative society and a post office
Persons certified by the medical authority to be a person with disability
Rs.50,000 (Rs.1,00,000 in case of severe disability)