Deductions on Section 80C, 80CCC, 80CCD & 80D

Here are various deductions available to the taxpayer for FY 2018-19.

What is covered here

1. Section 80C

Deductions on Investments

Section 80C provides deduction up to ₹ 1,50,000 from your total income. One can reduce up to ₹ 1,50,000 from your total taxable income via section 80C. Deductions are allowed to an Individual or a HUF.

If you have paid excess taxes, but have invested in LIC, PPF, Mediclaim, incurred towards tuition fees etc. and have missed claiming a deduction of the same under 80C, you can file your Income Tax Return, claim these deductions and get a refund of excess taxes paid

2. Section 80CCC – Insurance Premium

Payment for Annuity Plans:

Any amount paid or deposited by an individual in any annuity plan of LIC or any other insurer is eligible for section 80CCC. The plan must be for receiving a pension from a fund referred to in Section 10(23AAB). Pension received from the annuity or amount received upon surrender of the annuity, including interest or bonus accrued on the annuity, is taxable in the year of receipt.

3. Section 80CCD – Pension Contribution

Contribution to Pension Account

1. Employee’s contribution – Section 80CCD (1) is allowed to an individual who makes deposits to his/her pension account. Maximum deduction allowed is

10% of salary (if the taxpayer is an employee) or
20% of gross total income (if taxpayer being self-employed) or
Rs 1, 50,000,

Whichever is less.

FY 2016-17 and earlier years – In the case of a self-employed individual, maximum deduction allowed is 10% of gross total income.

2. Deduction for self-contribution to NPS – section 80CCD (1B)A new section 80CCD (1B) has been introduced for an additional deduction of up to Rs 50,000 for the amount deposited by a taxpayer to their NPS account. Contributions to Atal Pension Yojana are also eligible.

3. Employer’s contribution to NPS – Section 80CCD (2) Additional deduction of up to 10% of the salary of the employee is allowed for an employer’s contribution to employee’s pension account. There is no monetary ceiling on this deduction.

4. Section 80 TTA – Interest on Savings Account

Deduction for Interest received on Savings Bank Account

An individual or a HUF can claim maximum ₹ 10,000 against interest income received from a savings bank account. Interest from savings bank account first should be added in other income to claim deduction u/s 80TTA on interest earned or ₹ 10,000,

Whichever is less.

Section 80TTA only applicable on interest received from savings account with a bank, co-operative society, or post office.

Section 80TTA deduction is not available on interest income from fixed deposits, recurring deposits, or interest income from corporate bonds.

5. Section 80 TTB – Interest Income

Deduction of Interest on Deposits for Senior Citizens

A new section 80TTB has been inserted vide Budget 2018 wherein, a deduction in respect of interest income from deposits held by senior citizens will be allowed as a deduction from the total income The limit for this deduction is Rs. 50,000. Further, no deduction under section 80TTA shall be allowed. In addition to section 80 TTB, section 194A of the Act will also be amended so as to increase the threshold limit for deduction of tax at source on interest income payable to senior citizens from the existing limit Rs 10,000 to Rs. 50,000.

6. Section 80GG – House Rent Paid

Deduction for House Rent Paid when HRA is not Received

Section 80GG deduction is available for rent paid when HRA is not received.
The deduction is available to all individuals only
The taxpayer, spouse or minor child should not own any residential house at the place of employment
The taxpayer should not have self-occupied residential property in any other place
The taxpayer must be living on rent and paying rent

Deduction available is the least of the following:

Total Rent paid minus 10% of adjusted total income
Rs 5,000/- per month
25% of adjusted total income*

*Adjusted Gross Total Income is arrived at after adjusting the Gross Total Income for certain deductions, exempt incomes, long-term capital gains and income relating to non-residents and foreign companies.

KNA experts will take care of these complex calculations.

7. Section 80E – Interest on Education Loan

Deduction for Interest on Education Loan for Higher Studies

An individual can claim a deduction for interest paid on the higher education loan. This loan may have been taken for

Self or
Spouse or
Children or
For a student for whom the person is a legal guardian.

Section 80E deduction is available for a maximum of 8 years (beginning from the year in which the interest repayment starts) or till the entire interest is repaid, whichever is earlier.

There is no restriction on the amount that can be claimed.

8. Section 80EE – Interest on Home Loan

Deductions on Home Loan Interest for First Time Home Owners

This is an additional deduction of ₹50,000 on home loan interest in addition to deduction of ₹2,00,000 allowed under section 24 of the Income Tax Act for a self-occupied house property. An Individual can claim deduction under this section if the loan has been taken in FY 2016-17. The deduction under this section 80EE is available only to an individual who is a first-time home-owner. The value of the property purchased must be less than Rs 50 lakh and the home loan must be less than Rs 35 lakh. The loan must be taken from a financial institution and must have been sanctioned between 01 April 2016 to 31 March 2017.

FY 2013-14 and FY 2014-15 This section provides a deduction on the home loan interest paid. The deduction under this section is available only to individuals for the first house purchased where the value of the house is Rs 40 lakh or less and the loan taken for the house is Rs 25 lakh or less. The loan must be sanctioned between 01 April 2013 to 31 March 2014. The aggregate deduction allowed under this section cannot exceed Rs 1,00,000 and is allowed for FY 2013-14 and FY 2014-15.

9. Section 80CCG – RGESS

Rajiv Gandhi Equity Saving Scheme (RGESS)

The deduction under this section 80CCG is available to a resident individual. Investors whose gross total income is less than Rs. 12 lakhs. To avail the benefits under this section the following conditions should be met:

The person should be a new retail investor as per the requirement specified under the notified scheme.
The investment should be made in such listed investor as per the requirement specified under the notified scheme.
The minimum lock-in period in respect of such investment is three years from the date of acquisition in accordance with the notified scheme.

Upon fulfillment of the above conditions, a deduction, which is lower of the following is allowed.

50% of the amount invested in equity shares; or
Rs 25,000 for three consecutive Assessment Years.

Rajiv Gandhi Equity Scheme has been discontinued starting from 1 April 2017. Therefore, no deduction under section 80CCG will be allowed from FY 2017-18. But, if you have invested in the RGESS scheme in FY 2016-17, then you can claim deduction under Section 80CCG until FY 2018-19.

10. Section 80D – Medical Insurance

Deduction for the premium paid for Medical Insurance

Deduction under this section 80D is available to an individual or a HUF. A deduction of Rs. 25,000 can be claimed for insurance of

Self,
Spouse and
Dependent children.

An additional deduction for insurance of parents is available to the extent of Rs 25,000 if they are less than 60 years of age or Rs 50,000 (has been increased in Budget 2018 from Rs 30,000) if parents are more than 60 years old.

In case, a taxpayers age and parents age is 60 years or above, the maximum deduction available under this section is up to ₹ 100,000.

From FY 2015-16 a cumulative additional deduction of Rs. 5,000 is allowed for preventive health check-up to individuals.

11. Section 80DD – Disabled Dependent

Deduction for Rehabilitation of Handicapped Dependent Relative

Section 80DD deduction is available to a resident individual or a HUF and is available on:

Expenditure incurred on medical treatment (including nursing), training and rehabilitation of handicapped dependent relative
Payment or deposit to specified scheme for maintenance of dependent handicapped relative.
Where disability is 40% or more but less than 80% – fixed deduction of Rs 75,000.
Where there is a severe disability (disability is 80% or more) – fixed deduction of Rs 1,25,000.

To claim this deduction a certificate of disability is required from a prescribed medical authority. From FY 2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs 1,25,000.

12. Section 80DDB – Medical Expenditure

Deduction for Medical Expenditure on Self or Dependent Relative

This deduction is available to a resident individual or a HUF. The deduction that can be claimed is Rs 40,000. Such deduction, for an individual, is available in respect of any expenses incurred towards the treatment of certain specified medical diseases or ailments for himself or any of his dependents. For a HUF, such deduction is available in respect of medical expenses incurred towards these prescribed ailments, for any of the members of the HUF.
In case the individual on behalf of whom such expenses are incurred is a senior citizen, a deduction up to Rs 1 lakh can be claimed by the individual or HUF taxpayer.

Until FY 2017-18, the deduction that could be claimed for a senior citizen and a super senior citizen was Rs 60,000 and Rs 80,000 respectively. This otherwise means, now it is a common deduction available up to Rs 1 lakh for all senior citizens (including super senior citizens) unlike earlier.
Any reimbursement of medical expenses by an insurer or employer shall be reduced from the quantum of deduction the taxpayer can claim under this section.
Also, remember that you need to get a prescription for such medical treatment from the concerned specialist in order to be able to claim such a deduction.

13. Section 80U – Physical Disability

Deduction for Person suffering from Physical Disability

A deduction of Rs. 75,000 is available to a resident individual who suffers from a physical disability (including blindness) or mental retardation.

In case of severe disability, deduction of Rs. 1,25,000 can be claimed. From FY 2015-16 – Section 80U deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs 1,25,000.

14. Section 80G – Donations

Deduction for donations towards Social Causes

The various donations specified in u/s 80G are eligible for deduction up to either 100% or 50% with or without restriction as provided in section 80G. From FY 2017-18 any donations made in cash exceeding Rs 2,000 will not be allowed as deduction. The donations above Rs 2000 should be made in any mode other than cash to qualify as deduction u/s 80G.

Donations with 100% deduction without any qualifying limit

National Defence Fund set up by the Central Government
Prime Minister’s National Relief Fund
National Foundation for Communal Harmony
An approved university/educational institution of National eminence
Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
Fund set up by a State Government for the medical relief to the poor
National Illness Assistance Fund
National Blood Transfusion Council or to any State Blood Transfusion Council
National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
National Sports Fund
National Cultural Fund
Fund for Technology Development and Application
National Children’s Fund
Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
The Maharashtra Chief Minister’s Relief Fund during October 1, 1993 and October 6,1993
Chief Minister’s Earthquake Relief Fund, Maharashtra
Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat (contribution made during January 26, 2001 and September 30, 2001) or
Prime Minister’s Armenia Earthquake Relief Fund
Africa (Public Contributions — India) Fund
Swachh Bharat Kosh (applicable from financial year 2014-15)
Clean Ganga Fund (applicable from financial year 2014-15)
National Fund for Control of Drug Abuse (applicable from financial year 2015-16)

Donations with 50% deduction without any qualifying limit

Jawaharlal Nehru Memorial Fund
Prime Minister’s Drought Relief Fund
Indira Gandhi Memorial Trust
The Rajiv Gandhi Foundation

Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income

Government or any approved local authority, institution or association to be utilized for the purpose of promoting family planning
Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India

Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income

Any other fund or any institution which satisfies conditions mentioned in Section 80G(5)
Government or any local authority to be utilized for any charitable purpose other than the purpose of promoting family planning
Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both
Any corporation referred in Section 10(26BB) for promoting the interest of minority community
For repairs or renovation of any notified temple, mosque, gurudwara, church or other places.

15. Section 80GGB – Company Contribution

Deduction on contributions given by companies to Political Parties

Section 80GGB Deduction is allowed to an Indian company for the amount contributed by it to any political party or an electoral trust. A deduction is allowed for contribution done by any way other than cash.

16. Section 80GGC – Contribution to Political Parties

Deduction on contributions given by any person to Political Parties

Deduction under this section 80GGC is allowed to a taxpayer except for a company, local authority and an artificial juridical person wholly or partly funded by the government, for any amount contributed to any political party or an electoral trust. The deduction is allowed for contribution done by any way other than cash.

17. Section 80RRB – Royalty of a Patent

Deduction with respect to any Income by way of Royalty of a Patent

80RRB Deduction for any income by way of royalty for a patent registered on or after 01.04.2003 under the Patents Act 1970 shall be available up to Rs. 3 lakhs or the income received, whichever is less. The taxpayer must be an individual resident of India who is a patentee. The taxpayer must furnish a certificate in the prescribed form duly signed by the prescribed authority.

18. Deductions-Summary

Section	Deduction on	Allowed Limit (maximum) FY 2018-19
80C	Investment in PPF – Employee’s share of PF contribution – NSCs – Life Insurance Premium payment – Children’s Tuition Fee – Principal Repayment of home loan – Investment in Sukanya Samridhi Account – ULIPS – ELSS – Sum paid to purchase deferred annuity – Five year deposit scheme – Senior Citizens savings scheme – Subscription to notified securities/notified deposits scheme – Contribution to notified Pension Fund set up by Mutual Fund or UTI. – Subscription to Home Loan Account scheme of the National Housing Bank – Subscription to deposit scheme of a public sector or company engaged in providing housing finance – Contribution to notified annuity Plan of LIC – Subscription to equity shares/ debentures of an approved eligible issue – Subscription to notified bonds of NABARD	Rs. 1,50,000
80CCC	For amount deposited in annuity plan of LIC or any other insurer for a pension from a fund referred to in Section 10(23AAB)	–
80CCD(1)	Employee’s contribution to NPS account (maximum up to Rs 1,50,000)	–
80CCD(2)	Employer’s contribution to NPS account	Maximum up to 10% of salary
80CCD(1B)	Additional contribution to NPS	Rs. 50,000
80TTA(1)	Interest Income from Savings account	Maximum up to 10,000
80TTB	Exemption of interest from banks, post office, etc. Applicable only to senior citizens	Maximum up to 50,000
80GG	For rent paid when HRA is not received from employer	Least of : – Rent paid minus 10% of total income – Rs. 5000/- per month – 25% of total income
80E	Interest on education loan	Interest paid for a period of 8 years
80EE	Interest on home loan for first time home owners	Rs 50,000
80CCG	Rajiv Gandhi Equity Scheme for investments in Equities	Lower of – 50% of amount invested in equity shares; or – Rs 25,000
80D	Medical Insurance – Self, spouse, children Medical Insurance – Parents more than 60 years old or (from FY 2015-16) uninsured parents more than 80 years old	– Rs. 25,000 – Rs. 50,000
80DD	Medical treatment for handicapped dependent or payment to specified scheme for maintenance of handicapped dependent – Disability is 40% or more but less than 80% – Disability is 80% or more	– Rs. 75,000 – Rs. 1,25,000
80DDB	Medical Expenditure on Self or Dependent Relative for diseases specified in Rule 11DD – For less than 60 years old – For more than 60 years old	– Lower of Rs 40,000 or the amount actually paid – Lower of Rs 1,00,000 or the amount actually paid
80U	Self-suffering from disability : – An individual suffering from a physical disability (including blindness) or mental retardation. – An individual suffering from severe disability	– Rs. 75,000 – Rs. 1,25,000
80GGB	Contribution by companies to political parties	Amount contributed (not allowed if paid in cash)
80GGC	Contribution by individuals to political parties	Amount contributed (not allowed if paid in cash)
80RRB	Deductions on Income by way of Royalty of a Patent	Lower of Rs 3,00,000 or income received

Disclaimer: Due care has been taken to draft this write-up and is intended to express the Authors understanding and to start an academic discussion on the subject discussed in above write-up. it should not be considered as professional advice. Readers are advised to refer to relevant provisions of law before applying any of the above-mentioned views. The author accepts no responsibility whatsoever and will not be liable for any losses, claims or damages which may arise because of the content of this write-up.