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March 23, 2019
Tax Saving

Income Tax Act Sections Which will help you save Tax

Certain Tax deductions and exemptions are allowed, by Income Tax Department, to be claimed for the purpose of Tax savings.

Some of the important deductions can be claimed under Chapter VI-A of Income Tax Act . This article  will brief on some of the basic deductions available to save tax.

Section 80C

Maximum limit = 1.5 Lakh Only.

Various investment include :- PPF ( Public Provident Fund ), EPF ( Employee's Provident Fund ), NSC ( National Saving Certificates ),  Tuition Fees of children, Principal repayment of Home Loan, National Pension Scheme,  ELSS :- Equity Linked Saving Schemes, Post Office Senior Citizen saving Scheme, Life Insurance Premium,  Sukanya Samridhi Scheme.

Section 80CCC 

Contribution to annuity plan of LIC or any other Life Insurance  Company for receiving a pension from the fund is considered for tax benefits. Maximum Limit = 1.5 Lakh.

Section 80CCD

An person can invest in government notified pension scheme.

Contribution :- Max  10% of Salary (in case of salaried employee) or 10% of Gross income in other cases, and 50,000 additional tax benefits is allowed u/s 80CCD (1b) which will be over and above Rs 1,50,000 deduction.

Total Maximum Deduction u/s 80C, 80CCC, 80CCD (1) is Rs 1,50,000. Deduction u/s 80CCd(1b) is above this limit.

Section 80D

Premium paid  towards a health Insurance policy/ Central government Health Scheme for the assessee or his family ( spouse and dependent children) up-to Rs 25,000.

Rs 25,000 deduction is also allowed as health insurance premium paid in respect of parents.

Increased deduction of Rs 50,000 is allowed in case person mentioned above is a senior citizen.

Preventive Heath Check ups :- 

Expenses up-to Rs. 5000 allowed to be claimed as deductions.

Section 80DD

Deduction up-to Rs. 75,000 can be claimed for medical treatment of dependent who suffers from 40% disability, and up-to Rs. 1.25 Lakh in case of severe disability.

Section 80DDB

Deduction up-to Rs. 40,000 for treatment of specified critical disease on self or dependent. For Senior Citizen and Super Senior Citizen limit is of Rs. 1,00,000.

Section 80CCG

Although tax benefit have been withdrawn for Rajiv Gandhi Equity Savings Scheme, still if an investor has invested in FY 2016-17 in RGESS they can claim deduction under this scheme.

Section 80E

Tax deductions can be claimed for interest ( not principal) paid towards Education Loan for pursuing higher education. (for self, spouse, children). The deduction is available for 8 years or for the period of time interest is paid whichever is earlier.

Section 80EE

Under this section, first time home buyers can claim additional tax deduction of up-to Rs. 50,000 on home loan interest payment. Provided :- Value of house should be below Rs 50 Lakh, and value of Loan should be below Rs. 35 Lakh, Loan to be sanctioned during or after FY 2016-2017, lastly buyer should not have any other home in his name.

Section 80G

Contributions made to certain relief funds and charitable institutes by cheque or drafts or cash.

Section 80GG

Deduction available to those who are not owning a residential house and also do not receive House Rent Allowance.

it would be lower of :- 

1) Rent paid minus 10% of adjusted total income,
2) Rs. 5000.00 Per month,
3) 25% of total income.

Section 80TTA & 80TTB

Interest Income earned on Fixed Deposits & Recurring deposits will be exempt up-to Rs. 50,000 for senior citizens u/s 80TTB. But then no deduction u/s 80TTA can be claimed if deduction u/s 80TTB is claimed.

Interest income on Saving Bank account up-to Rs. 10,000 is exempt except in case of late filing of income Tax return.

Section 80U

Standard deduction of Rs. 40,000 in lieu of Medical Allowance to assessee who is physically or mentally challenged.

For article on Section 10 Exemptions :- Click Here

Ankit Kapoor

edubizsolutionz@gmail.com / info@ebsolutionz.com