We will cover here the complete detail about deduction under section 80C for A.Y.2022-23 & A.Y.2021-22. We know that you are very much interested to know the deduction from gross total income to calculate net income tax. As we will discuss only here deduction under section 80C in detail. There are lots of deductions comes under Chapter VI-A from section 80C to 80U like 80HH, 80RRB, 80U and more. But this article is exclusively for the deduction comes under section 80C.
Summary About Income Tax Deduction u/s 80C
|Amount Eligibile For Deduction||Rs.1.5 Lakh Per Year|
|Allowed To||Individual and HUF|
|Popular Payment Eligibile||LIC, LIP, PF, Tution Fee, FD 5 Years, Some Mutual Funds, Senior Citizens Schems, NABARD Bonds, 5 Years Post Office Time Deposit, Sukanya Samriddhi Scheme etc.|
You can claim the deduction under section 80C as per follows:
- A.Y.2023-23: Up to Rs. 1,50,000/-
- A.Y.2021-22: Up to Rs. 1,50,000/-
- A.Y.2020-21: Up to Rs. 1,50,000/-
- A.Y.2019-20: Up to Rs. 1,50,000/-
- A.Y. 2018-19: Up to Rs. 1,50,000/-
- A.Y. 2017-18: Up to Rs. 1,50,000/-
- A.Y. 2016-17: Up to Rs. 1,50,000/-
- A.Y. 2015-16: Up to Rs. 1,50,000/-
- A.Y. 2014-15: Up to Rs. 1,00,000/-
Aggregate amount of deduction u/s 80C, 80CCC, 80CCD and new section 80CCE is restricted to Rs.1,50,000.
Salient Features of Section 80c
1) The deduction u/s 80 C is available only to individual or a Hindu undivided family.
2) The deduction 80C is available on the basis of investments/contributions/deposits/payments made by taxpayers during the previous year.
3) The maximum amount of deduction u/s 80C is Rs.1,50,000. 1. Moreover, the aggregate amount of deduction –
(a) under sections 80C, 80CCC, 80CCD(1) [i.e., contribution by an employee (or any other individual) towards NPS] and 80CCD(2) [i.e., employer’s contribution towards NPS] cannot exceed Rs. 1,00,000 (applicable for the assessment years 2006-07 to 2011-12); and
(b) under sections 80C, 80CCC and 80CCD(1)2.[i.e., contribution by an employee (or any other individual) towards National Pension System (NPS)] cannot exceed Rs. 1,00,000 (for the assessment years 2012-13 to 2014-15) or Rs. 1,50,000 (from the assessment year 2015-16).
You can avail the benefit of deduction u/s 80C by investing in the following schemes.
- Payment for Life Insurance Premium.
- Payment for Deferred Annuity Plan.
- Deferred Annuity Payable by Government.
- Contribution to Public Provident Fund.
- Contribution to Provident Fund set up by Central Government.
- Contribution to Recognised Provident Fund.
- Contribution to recognized superannuation fund.
- Subscription to any security or deposit notified by Government.
- Subscription to Saving Certificates.
- Subscription for Unit Linked Insurance Plan 1971.
- Contribution for Unit Linked Insurance Plan of LIC Mutual Fund.
- Payment for annuity plan of LIC or any other insurer.
- Subscription to units of notified mutual fund.
- Contribution to notified pension fund of mutual fund.
- Pension fund set up National Housing Bank.
- Subscription to a deposit scheme of public sector company engaged in providing long term finance for housing.
- Tuition fees of two children in India.
- Payment of instalment for self-financing of a residential property for repayment of loan.
- Subscription to equity shares or debentures as approved for infrastructure.
- Subscription to any units of mutual fund as approved by the Central Board of Direct Taxes.
- Notified bonds of NABARD.
- Deposit in an account under the Senior Citizens Savings Scheme Rules, 2004.
- Five-years time deposit in an account under the Post Officer Time Deposit Rules, 1981.
Popular Tax Saving Schemes Under Section 80C
Life Insurance Premium: You can get deduction by depositing or paying life insurance premium in previous year. You must note here that premium paid on behalf of wife/husband/child or any member of the family where assesse in an HUF. Child includes adult children also, Thus, deduction is available in respect of premium paid on a policy on the life of a married daughter.
More about LIP
Provident Fund & Public Provident Fund: You can claim deduction under section 80C for the amount deposit in provident fund also. The amount deposit in the name of wife/husband/child or any member of the family where you are as an HUF is also eligible for deduction u/s 80C. The annual contribution is Rs.1,50,000.
You can deposit Rs. 1,50,000 in PPF A/c even if you have paid the amount in LIC, NSC, ULIP etc. However, the deduction u/s 80C is available on the total contribution of PPF, LIC, ULIP, etc. up to maximum of Rs.1,50,000.
Interest on PPF is not treated as reinvestment for purpose of section u/s 80C is available even if the contribution is made in the PPF account of minor/major children or spouse.
More Articles on PPF
- PPF – Public Provident Fund – Popular Tax Saving Scheme
- SBI PPF Interest Rate & Maturity Period
- 5 Benefit of Opening SBI PPF Account
- How to Open PPF Account in SBI?
National Saving Certificates (NSC): You can also get deduction under section 80C for the amount deposit in national saving certification along with PPF/LIC/ULIP up to maximum of Rs.1,50,000 accrued during the year. There is no TDS deduction for repayment of NSC. Interested accrued during the year (except for the last year) shall be deemed to be reinvested and shall also qualify for deduction u/s 80C.
More about NSC
Bank Term Deposit Schemes: Amount invested in bank term deposits along with PPF/LIC/NSC/ULIP etc. up to a maximum of Rs.1,50,000 is also eligible for deduction under section 80C. The maturity period for bank term deposit schemes is 5 years.
More about Bank Term Deposit Schemes
- A Simple Guide to Fixed Deposit (FD) Tax Saving Scheme
- Bank Term Deposit Scheme: Tax Benefits & Application Procedure
Post Office Time Deposit Schemes: You can also opt for post office time deposit to get deduction under section 80C up to Rs.1,50,000. You must note that the deduction is available only to the first holder.
More on Post Office Schemes
Mutual Fund Schemes: Some of the schemes of mutual funds are eligible for deduction u/s 80C along with other investments give above. The income from mutual funds is also fully exempted u/s 10 (35).
Senior Citizens Saving Scheme, 2004: You can also get benefit of Senior Citizens Saving Scheme to get deduction u/s 80C of Rs.1,50,000. No TDS deduction is required if you provide form 15H/15G (as the case may be).
- Tax Planning for Senior Citizens
- Check Tax Liability of Senior Citizens
- All About Senior Citizen Savings Scheme
NABARAD Rural Bonds: The deduction is also available under section 80C for subscription to notified bonds issued by National Bank for Agriculture and Rural Development.
ULIP: The deduction is also eligibile for the amount deposit in the name of himself, his/her wife/husband or his child, and an HUF in the name of its members to any Unit Linked Insurance Plan of UTI.
Tuition Fees: You can claim the deduction of paying the tuition fee of your two children. Here, you should note that tuition fees eligible paid to any university, college, school or other educational institution situated in India. However, any development fees or donation or payment of similar nature shall not be eligible for deduction.
- Rs.1,00,000 up to the assessment year 2014-15.
- From A.Y.2012-13, employer’s contribution towards NPS is outside the monetary ceiling of Rs.1,00,000 or Rs.1,50,000.