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Deductions on Section 80C, 80CCC, 80CCD & 80D - FY 2022-23 (AY 2023-24)

Introduction :

Deduction from the gross income is a considerable part of the calculation of tax liability. The income tax liability is to be calculated on Net Total Income. The Income Tax Act provides that on determination of the gross total income of an assessee after considering income from all the heads, certain deductions therefrom may be allowed. These income tax deductions are provided in Chapter VI-A of the Income Tax Act. The income tax deductions are to be reduced from the gross total income of the assessee to arrive at Net Total Income.

Deduction Under Section 80C

This is the most common income tax deduction available for the individual regarding specified investments and expenditures. Assessee can claim these investments or expenditures as a deduction to reduce the tax liability for a particular year.

Amount paid by the assessee on account of common investments or expenditures for which the deduction under Income Tax Section 80C is allowed are as under:

  1. Payment for life insurance premium
  2. Tuition fees for the full-time education of any 2 children
  3. Contributions to the Employees’ or Recognised Provident Fund
  4. Contribution to notified unit-linked insurance plan (ULIP)
  5. Contribution to Public Provident Fund Account
  6. Notified annuity plan of Life Insurance Corporation or other insurers
  7. Investment in Equity Linked Saving Scheme(ELSS)
  8. Term deposits for a fixed period of not less than 5 years with a scheduled bank
  9. Contribution to an approved superannuation fund
  10. Subscription to any notified security or notified deposit scheme (Sukanya Samriddhi Account Scheme)
  11. Subscription to notified savings certificates like NSC, KVP
  12. Stamp duty and registration charges for the purchase of house property
  13. The principal amount paid towards a home loan
  14. Deposit in Senior Citizen Savings Scheme
  15. Contribution to Tier-II NPS account by central government’s employees.

Section 80CCC

Payment made to certain specified Pension Funds of LIC or other insurers (Subject to certain conditions). The premium must be deposited for a contract for an annuity plan of the LIC or any other insurer for receiving a pension from the fund.

Section 80CCD

Contribution or amount paid to the New Pension Scheme (NPS) notified by the Central Government (Subject to certain conditions) is allowable as a deduction from the gross total income of the individual.

The allowable deduction under this section should be calculated as follows :

  1. Amount contributed to a pension scheme
  2. 10% of salary(in case of employees)/ 20% of gross total income(in other case) whichever is less
  3. (subject to ceiling limit of ₹ 1,50,000 as provided under Section 80CCE) shall be allowed as a deduction under section 80CCD(1).
  • Additional deduction to the extent of ₹ 50,000 shall also be available to the assessee under section 80CCD(1B). The additional deduction is not subject to a ceiling limit of ₹ 1,50,000 as provided under Section 80CCE.
  • Amount paid by the employer shall also be allowed as a deduction under section 80CCD(2) while computing the total income of the employee. However, the amount of deduction could not exceed 14% of the salary in case of central/state Govt. employees and 10% in case of any other employees.

Section 80C, 80CCC and 80CCD Deduction limit :

Up to 1,50,000 (Subject to overall limit of ₹ 1,50,000 under Section 80C, 80CCC and 80CCD.

Eligible Assessee:

Individual assessee

Section 80D

This deduction is allowed when the amount is paid (in any mode other than cash) by an individual or HUF to LIC or other insurers to effect or keep in force any health insurance of a specified person (self, spouse, dependent children, or parents or member of HUF). An individual can also make payment to the Central Government health scheme on account of preventive health check-ups.

  • The aggregate Deduction for preventive health check-ups shall not exceed ₹ 5,000.
  • Payment for preventive health check-up may be made in cash.
  • A deduction shall also be allowed up to ₹ 50,000 towards medical expenditure incurred on the health of a specified person provided such person is a resident senior citizen and no amount has been paid for health insurance of such person. This means either deduction for medical expenditure can be claimed or for health insurance.

Deduction Limit :

  • For self, spouse, and dependent children: Up to ₹ 25,000 (₹ 50,000 if the specified person is a senior citizen)
  • For parents: An additional deduction of ₹ 25,000 shall be allowed (₹ 50,000 if the parent is a senior citizen)

Eligible Assessee: Individual & HUF

The above deductions can be summarised in the following table:

Deductions (U/s  80C, 80CCC, 80CCCD, & 80D) [Chapter VI-A]
Applicable Section Investments & Expenses Deduction Limit(₹)
80 C, 80CCC, 80CCD(1) An investment made in 1.5 Lakhs ( Max Under This Section )
The premium of a life insurance policy
PPF, EPF, and superannuation funds
Equity-linked saving scheme (ELSS)
Sukanya Samriddhi Yojana (SSY)
Unit Linked Insurance Plan (ULIP)
Tax saving Term Fixed Deposit for at least 5 years
Infrastructural bonds (e.g., NABARD bonds)
Post Office Deposits
Premiums paid for life insurance pension plans
contribution towards National Pension Scheme (NPS) NPS Contribution: - 20% of annual income (10% in case employer also contributes) - Rs. 1.5 lakhs
Expenses paid
The principal amount paid towards a home loan 1.5 Lakhs ( Max Under This Section )
Stamp duty and registration charges for the purchase of house property
Tuition fees
80CCD(1b) Additional deduction on ₹ 50,000   .
The contributions in NPS
Contributions towards Atal Pension Yojana
80D Payments made to Health Insurance Premiums and Preventive Health check-ups
For self / spouse or dependent children ₹ 25,000 (₹ 50,000 if any person is a Senior Citizen)
₹ 5,000 for Preventive Health check-ups, included in the above limit
For parents ₹ 25,000 (₹50,000 if any person is a Senior Citizen)
₹ 5,000 for Preventive Health check-ups, included in the above limit
Medical expenditure incurred on a Senior Citizen, if no premium is paid on Health Insurance coverage
For self / spouse or dependent children ₹ 50,000
For parents ₹ 50,000
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