Deduction In Income Tax

Deduction in Respect of Certain Payments

Deduction in Income Tax in respect of certain payments made are allowed from 80C to 80GGC.Here we will discuss about 80C deduction. Sectors in which you can invest and get Tax benefit.

  • First of all we will see that which assessee can get deduction 
  • Maximum amount of deduction allowed?
    • Assessees shall be allowed to a deduction of whole of the amount paid/deposited during the FY provided that the aggregate of sum deposited doesn’t exceed Rs 1,50,000/-
  • Sectors of Investment
    • LIC– Amount paid by an individual to keep in force an insurance on the life of himself, his/her spouse, child of the individual. In case of HUF premium paid on the life of member of the HUF. (Point to note – The children may be married/unmarried, dependent/not dependent on the individual)
    • Contribution made by the employee towards a statutory provident fund or recognized provident fund. The deduction in respect of this payment is allowed only to individual only.
    • Contribution towards PPF by an individual/HUF. The contribution can be made in the name of individual/spouse/children/member of HUF.
    • Contribution by an employee towards Approved Superannuation fund.
    • Any contribution made to any such security of the Central government or any such deposit scheme as that Government may by notification specify in this behalf
      • Following schemes have been notified:
        • Subscription by Individual or HUF to National Saving Scheme,1992
        • Sum deposited in the name of a girl child of the individual, or any girl child for whom such person is the legal guardian under Sukanya Samriddhi Account
    • Subscription by individual or HUF to National Saving Certificate (VIII or IX Issue).Any interest accrued on these certificates also qualifies for deduction except for the last year interest as they are not deemed to be reinvested
    • Contribution by Individual or HUF in the Unit Linked Insurance Plan (ULIP) of the Unit Trust of India or Unit Linked Insurance Plan of LIC Mutual Fund referred in 10(23D)
    • Contribution by Individual or HUF to Equity Linked Saving Scheme (ELSS),2005
    • Contribution by Individual or HUF to UTI-Retirement Benefit Pension Fund
    • Subscription by Individual or HUF to pension fund Specified by National Housing Bank i.e. the Home Loan Account Scheme of the National Housing Bank
    • Subscription by Individual or HUF to any notified deposit scheme of:
      • A public sector co engaged in providing long term finance for construction or purchase of residential houses in India
    • Sum paid by individual as tuition fees which is paid at the time of admission or thereafter and is paid to any school, college, university or other educational institution subject to maximum for two children
    • Any payment by individual or HUF for purchase or construction of a residential house property
    • Any sum deposited in a term deposit for a fixed period of not less than 5 years with a scheduled bank
    • Any sum deposited as a five year time deposit in an account under Post Office Time Deposit Rules,1981
    • Subscription to bonds issued by the NABARD
    • Sum deposited in an account under Senior Citizen Saving Scheme Rules,2004

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