What is section 80C?

What is section 80C?

Section 80C of the income tax act is an opportunity for Individuals and Hindu undivided families. They can have tax deductions up to the 1.5 lakhs under section 80C. However, other corporate firms, companies, and partnerships can not avail of the tax benefits under section 80C. Section 80C is divided into the following sections. An individual can avail of the tax benefits under section 80C for the investments and on gross earned income in a financial year. For instance- An individual needs to make investments and deductions between April 2019 to March-2020 to claim the tax deduction in the financial year 2019-20. All the subsections and applicable deductions are in detail mentioned below-

Subsections of section 80C

According to the regulations of the income tax act of India, deductions under section 80C is divided into different categories.

Deductions under section 80C

There are various deductions included in section 80C. If any individual wants to deposit his/her money in the following options then he/she is eligible to claim the deduction under section 80C of the income tax act of India. A list of investment options is given below to be eligible for the deduction, please go through it and know the eligible terms and conditions.

List of Tax saving

1. PPF(Public Provident Fund) - A contribution made towards the PPF account by an individual is eligible to tax exemption under section 80C. A public provident fund (PPF) is one of the saving schemes provided by the post office. National Savings Institute launched this scheme in 1968. The interest rate of the public-private fund is 7.1% for the current quarter and interest is calculated on the minimum balance of the public- private fund. 2. EPF (Employees’ Provident Fund) - EPF is applicable only to those employees who have been in the service at least for 5 years. The earned returns from an employee provident fund along with the interest rate rely on section 80C for deductions. . 3. NSC (National Saving Certificate) - Earned Interest on the national saving certificate or NSC is compounded twice a year. NSC comes under section 80C and its maturity period is ranged from 5 to 10 years. Like other investments, the national saving certificate allows deductions of up to Rs.1,50,000 lakh under section 80C. 4. ELSS (Equity Linked Saving Scheme) - Under this investment scheme is also known as a tax saving mutual fund, This tax-saving scheme has a lock period of 3 years. The returns from ELSS are tax- exempted up to a limit of ₹1 Lakh. For returns exceeding the limit, you will be subject to long-term capital gains tax at a 10% rate. 5. SSY(Sukanya Samriddhi Yojana) - The central government has announced a scheme for Sukanya Samridhi Yojana to develop the future of women. There are multiple schemes out there for girl children. This scheme is entirely aimed at strengthening the situation of women in society. Sukanya Samridhi yojana comes under the scheme of “Beti Bachao Beti Padhao” and can be opened by the parents or legal guardians of a girl child. Sukanya Samridhi yojana benefits to ensure a good financial future of the girl child and expenses of marriage. The interest earned in this scheme is eligible for tax exemption under section 80C. 6. SCSS (Senior Citizen Saving Scheme) - Senior Citizen Saving Scheme (SCSS) strives at furnishing a recurring income for senior residents aged beyond 60 years unrestricted at a certified bank and all the post offices across India. The lock-in period of SCSS is five years. Section 80C income tax deductions cover the prevalent amount, and the interest is tax exempted. 7. NPS (National Pension Scheme) - National Pension Scheme (NPS) is one of the finest investment programs that is governed by the Regulatory and Development Authority for the Pension Fund (PFRDA). Regulatory and Development Authority for the Pension Fund launched the National Pension System Trust (NPST) which is the registered owner of all assets under this investment plan. NPS full form is National Pension System. Only the Central Government employees were wrapped by the National Pension Scheme. Now NPS is open to all Indian citizens. NPS scheme maintains huge value for anyone working in the private sector and needs a regular post-retirement pension. 8. Stamp duty or registration charges - Registration charges or stamp duty can be taken as the widest expense made for having the ownership of property. The Indian Government permits deductions of tax liability until the charges are paid for stamp duty and registration towards the housing procurement. The exemption will only be claimed in the year of paid duties, otherwise, it will not be eligible for contemplation under section 80C. 9. SCSS (Senior Citizen Saving Scheme) - SCSS or senior citizen saving scheme encircles the senior citizen above 60 years to provide them a regular income at a certified bank and post offices. The SCSS has a lock-in period of five years. 10. NABARD Rular Bonds - NABARD means National Bank for Agriculture and Rural Development. The highest amount under section 80C is entitled up to 1.5 lakh. NABARD offers the rural bonds that are eligible for tax exemption as per the income tax act of India.

Section-80D

Section 80d of the income tax act 1961, provides tax deduction on health insurance. Any individual or HUF can avail of the tax deduction for premiums paid towards health insurance in a given year under section 80d. The benefits of deductions are not only unrestricted on health insurance for self but individual’s spouse, children, or family also. A taxpayer can be escaped from paying hefty bills on medical situations under section 80d.

Available deductions under section 80D

There are various deductions available under section 80d. Deduction of Rs.25,000 is allowed under section 80d in a fiscal year. Senior citizens above 60 years can avail of the deduction of up to Rs.50,000.

What is section 80DD?

There are several sections of the income tax act, of 1961. Section 80DD is one of them that allows deductions for the medical expenses of a dependent individual with disabilities or a differently abled person. Under Section 80DD any person can claim a deduction which is paying for the treatment of conditional suffering from a disability.

Deduction limit under Section 80DD

Important things about section 80D

As per section 80DD, Individuals and Hindu undivided Families are eligible to claim the deductions. NRI or non-residents can not claim deduction under section 80DD. If an individual is qualified for a refund for the disability or disease then he/ she must undergo a refund and get a new certificate. During the fiscal year, the disability must be applicable. You don't have to furnish any medical proof. Regardless, you must get the certificate in Form 10-IA from the mentioned medical authorities. If the dependent individual dies before the taxpayer then an amount equal to the amount paid or deposited will be taxable as income.

What is 80U?

As per section 80U, If an individual is certified by the medical authority to be a person with a disability or disease then he/she is eligible to claim the tax deduction during the financial year. As prescribed in the income tax act1961, An individual must obtain a certificate to avail of the tax deduction and benefits under section 80U. This article is focused on section 80U.

Who is eligible to claim the deduction under section 80U?

Under section 80U individual is certified by the medical authority to be a person with a disability or disease. He/she is eligible to claim the tax deduction during the financial year. The taxpayer should be going through at least 40% disabilities.

How to get a certificate under section 80U?

As per section 80U, It is mandatory to get a certified certificate of medical authority. A neurologist who is having a degree of Doctor of Medicine (MD) in Neurology (in the case of children, a Paediatric Neurologist has an equivalent degree) is A Civil Surgeon or Chief Medical Officer in a Government hospital.

Deduction limit under section 80U

If an individual has a disability or disease less than 80% but more than 40% then he/she is allowed to claim the deduction of 75,000. If an individual has a disability or disease of 80% or more than 80% then he/she is allowed to claim the deduction of 1,25,000.

Qualified interest for deduction under section-80TTA

Following interest is qualified for deduction under section-

1. Interest gained from the bank's savings account.
2. Interest is earned from the saving account of the Cooperative society.
3. Any interest gained from saving account of the post office.

1. Any interest earned from the FD (fixed deposit)
2. Interest earned from the RD (recurring deposits)
3. Any interest gained from any other deposit.

Deductions under Section 80E

An individual can avail of the deductions for taking any education loan for higher education. This loan can be availed for the spouse, children, or a student but the taxpayer should be a legal guardian. The deduction is available for a maximum of 8 years under section 80E, or till the entire interest is repaid. There is no limit on the claimable amount.