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What is Section 80C?
Section 80C of the Income Tax Act allows individuals to claim deductions on specified investments and expenses, such as life insurance premiums, Employee Provident Fund (EPF), Public Provident Fund (PPF), and tax-saving fixed deposits. The maximum deduction limit under this section is Rs. 1.5 lakh per year.
Note: This Deduction can be claimed by the assessee only if he chooses to opt for the Old Tax Regime.
Who is Eligible to claim Deduction under Section 80C?
In order to claim a deduction under section 80C only Individuals and HUFs are eligible.
What is the Amount of Deduction available u/s 80C?
The Maximum amount of deduction available under section 80C is Rs. 1,50,000
An annual deduction of up to Rs. 150,000 can be claimed from the gross total income. However, this deduction is not available to companies, partnership firms, or LLPs.
What is the Deduction Limits for Sections 80C, 80CCC, 80CCD(1), 80CCE, and 80CCD(1B)?
Sections 80CCC and 80CCD offer deductions for investments made in pension schemes, either by you or through your employer's contribution.
The total maximum deduction under Sections 80C, 80CCC, and 80CCD(1) combined is Rs. 1.5 lakh. Additionally, you can claim an extra Rs. 50,000 under Section 80CCD(1B) for contributions to the National Pension Scheme (NPS).
Therefore, the overall deduction limit is Rs. 2 lakh under Sections 80C, 80CCC, 80CCD(1), and 80CCD(1B).
What are the eligible investments for 80C?
Following are the Eligiblity Investments under section 80C:
1. Life Insurance Premium (LIP)
a) For individual: Self, Spouse, Children
b) For HUF: Any member
2. Amount deposited in Public Provident Fund (PPF)
a) For Individual: Self, Spouse, Children
b) For HUF: Any Member
3. Employee's contribution to
a) Statutory provident fund
b). Recognised Provident fund, or
c). Approved Superannuation Fund
4. Amount invested in NSC as well as interest accrued on NSC.
5. Repayment of Loan taken from banks or financial institutions for purchase or construction of House.
6. Fixed Deposit in a scheduled Bank or Post office for 5 years or more.
7. Tuition fees paid for the education of children. [Max 2 children for full-time education in India].
8. Deposit in Notified bonds of NABARD
8. Deposit in Senior Citizen Saving Scheme.
9. Contribution towards Unit Linked Insurance Plan (ULIP).
10. Notified units of Mutual Funds or UTI.
11. Notified Pension scheme of UTI or MF.
12. Deposit in Sukanya Samridhi scheme A/c [For any girl child of an individual or girl child for whom such individual is a legal guardian].
13. Stamp duty, Registration fee for acquisition of house property.
14. By an employee of CG as a contribution to a specified account of the pension scheme referred to in Sec. 80CCD for a fix period of Three years or more (NPS Tier-II).
15. Contribution to National Housing Bank (Tax Saving) Term Deposit Scheme, 2008.
What are the Tax Deductions available for Stamp Duty and Registration Fees Under Section 80C?
Under Section 80C of the Income Tax Act, taxpayers can claim deductions for stamp duty and registration charges, provided they are included within the overall limit of Rs. 1.5 lakh. This deduction is available regardless of whether a home loan is taken. However, it can only be claimed in the year the expenses are incurred.
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