Income Tax Deductions under section 80 to save more tax

Updated on 24 Jan 2020.

If you are aware of various tax dedcutions provided by the government, you can save more money on taxes. Let’s go through all the tax deductions available under section 80 of the Income Tax Act, 1961.

Read: All about Online Filing of Income Tax Return

#1. Section 80C (Deductions on Investments)

You can claim a deduction of up to Rs. 1.50 lakh on your total income under section 80C. This means you can reduce 1.50 lakhs from your total taxable income if you have savings that come under section 80C like Public Provident Fund (PPF) or life insurance premiums.  This deduction is allowed to individual and HUFs.

Read: Best tax saving investments. Section 80C investment list Read: Stamp duty and registration charges deduction u/s 80C

#2. Section 80CCC (Deductions on Insurance Premium)

This section provides tax deductions under any investments made in an annuity plan of any insurance company or pension received under funds mentioned in Section 10(23AAB).

An annuity plan is a plan in which policyholders pay lumpsum money to receive regular money in installments after a certain period of time. Pension plans come under annuity plans.

#3. Section 80CCD (Pension Contribution)

Deductions under this section are for those people who contribute to the National Pensions Savings Scheme (NPS). It has 3 subsections –

Section 80CCD (1) (Employee’s contribution)

You can avail tax deduction under this section up to 10% of your salary (if you are an employee) or 20% of gross total income (if self-employed) or Rs 1.50 lakh whichever is less.

Section 80CCD (1B) (Additional Contribution to NPS)

Additional tax deduction of up to Rs. 50,000 for the amount deposited to NPS by the taxpayer. This means you can add additional Rs. 50,000 to NPS account in one year and get a tax rebate on the contributed amount.

Section 80CCD (2) (Employer’s Contribution)

This is applicable in case of an employer’s contribution to employee’s pension account. Maximum deduction of 10% of salary. There’s no monetary cap on this deduction.

#4. Section 80CCG (RGESS)

Rajiv Gandhi Equity Saving Scheme (RGESS)

You can avail deduction under this section if your annual income is less than Rs. 12 lakh and like to invest in equity shares.

  • You must be a new retail investor in equity investment.
  • You have to invest in specified equity shares under the notified scheme
  • Your investment should have a lock-in period of min. 3 years.

If you fulfill above conditions, you can get a deduction as below.

50% of the amount invested in the equity shares or Rs. 25,000 for 3 consecutive years, whichever is lower.

Note: RGESS has been discontinued from 1 April, 2017.

#5. Section 80D (Medical Insurance Premiums)

You (individual or HUF) can claim a deduction up to Rs.25,000 on the premium paid towards medical insurance for self, spouse and dependent children. An additional deduction of Rs.25,000 for parents is allowed for paying the premium of parent’s medical insurance if their age is less than 60 years.

If parents are above age 60 years, deduction amount is Rs. 50,000 (earlier it was Rs. 30,000).

In case, both the taxpayer and parents are above 60 years, maximum deduction is up to Rs. 1 lakh.

#6. Section 80DD (Disabled Dependent)

The deduction is available to individual or HUF for –

  • Expenses incurred on medical treatment, training, and rehabilitation of handicapped dependent relative.
  • Payment to specified scheme for the maintenance of handicapped dependent relative.
  • Fixed deduction of Rs.75,000 for 40% disability
  • Fixed deduction of Rs.1,25,000 for severe i.e. 80% disability.
  • The claimant is required to furnish the certificate of disability from a prescribed medical authority.

#7. Section 80DDB (Medical Expenditure)

i) For individuals or HUFs below age 60

A deduction up to Rs. 40,000 against any expense incurred towards the treatment of specified medical diseases for himself or any dependents. Similar in the case of HUFs, the same deduction on medical expenses for the treatment fo any HUF member.

ii) For Senior Citizens

A deduction up to Rs. 1 lakh can be claimed in case of any expense incurred towards the treatment of specified medical diseases for a senior or a super senior citizen.

iii) Reimbursement claims

You have to reduce reimbursement of medical expenses by insurer or employer from the deduction claim amount. You also need medical prescriptions and other proofs in order to claim such a deduction.

#8. Section 80E (Interest on Education Loan)

A deduction is also available on interest on education loans for higher studies. This loan could be taken by the assessee, spouse or children or a student for whom the assessee is a legal guardian.

The deduction is available for a maximum of 8 years. No restriction on the claim amount.

#9. Section 80G (Donations)

You can claim deduction either 100% or 50% (with or without restrictions) but you can’t claim cash donations exceeding Rs. 2,000. To get a claim on the amount more than Rs. 2,000 the payment mode should be other than cash.

#10. Section 80GG (House Rent Paid)

You can claim deduction on house rent paid u/s 80GG if HRA is not received. Taxpayer, spouse or minor child should not have residential accommodation at the place of employment.

You can get deduction on the conditions (whichever is lower ) below.

  • Rent paid minus 10% of the total income
  • Rs. 5,000 per month
  • 25% of  total income

#11. Section 80GGB (Company Contribution to Political Parties)

Donations given to political parties by any indian company are allowed for deduction without any restriction, but the deduction is allowed for payment mode other than cash.

#12. Section 80GGC (Contribution to Political Parties)

Donations given to political parties by any individual taxpayer are allowed for deduction without any restriction, but the deduction is allowed for payment mode other than cash.

#13. Section 80RRB (Royalty of a Patent)

Any Individual assessee who is patentee can claim deduction up to Rs.3 lac. The assessee has to furnish a patent certificate duly signed by the competent authority.

#14. Section 80TTA (Interest on Savings Account)

You can claim a tax deduction of up to Rs 10,000 on the interest earned on your deposits in a savings bank account, co-operative society or post office. It doesn’t include interest earned on Fixed deposits, recurring deposits or interest earned on corporate bonds.

#15. Section 80TTB (Interest Income)

A senior citizen can claim a tax deduction of up to Rs 50,000 on the interest earned on the deposits by him. But if you are getting benefit under section 80TTB, then you can’t further claim deduction under section 80TTA.

#16. Section 80U (Physical Disablitiy)

Physically Disabled persons can claim deductions under 80U in two categories –

  • A deduction of Rs. 75,000 if an individual suffers from physical disability (including blindness and mental retardation).
  • A deduction of Rs.1,00,000 if an individual suffers from svere disability.

Assessee is required to obtain a certificate from the prescribed medical authority.

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