A Guide To Section 80 Deductions

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Does saving on income tax feature on your to-do list? Section 80 of the Income Tax Act provides a wide range of tax-saving avenues. Here is an overview of what it offers.

Section 80 deductions

  • Section 80C

You can claim a tax deduction of up to Rs 1.5 lakh under this section through multiple tax-saving options. These include:

  • Public Provident Fund (PPF),
  • National Pension Scheme (NPS),
  • Life insurance premium,
  • Children’s tuition fees paid,
  • Home loan principal repayment,

…and many others.

  • Section 80D

Your medical insurance premiums are tax-deductible. Here’s how much you could claim: 

  • Deduction of Rs 25,000 on premium paid for self, spouse, and dependent children. Limit increases to Rs 30,000 in case of senior citizen family members.
  • Additional Rs 25,000 deduction on premium paid for parents under 60 years of age. Limit increases to Rs 30,000 for senior citizen parents. 

Uninsured senior citizens can claim up to Rs 50,000 on medical expenditure. There is an extra deduction of Rs 50,000 on medical expenses incurred for your uninsured senior citizen parents.

  • Section 80DD

Expenses incurred while taking care of a disabled dependent are tax-deductible. Claim up to Rs 75,000 in case of 40{4c4eada76ecf1be575223a4ba5c40f01738ab49b07447a5a057265ba4edb475a} disability and Rs 1.25 lakh for 80{4c4eada76ecf1be575223a4ba5c40f01738ab49b07447a5a057265ba4edb475a} disability.

  • Section 80DDB

Expenditure incurred on specified diseases for yourself or a dependent fetches a Rs 40,000 deduction for those under 60 years and up to Rs 1 lakh for senior citizens. However, you must provide a detailed prescription from a specialist doctor to make this claim. Any insurance reimbursement received is subtracted from the deduction.

  • Section 80E

Claim tax deductions on interest payments on education loans for up to eight years or until the interest is paid off (whichever is earlier). The loan could be taken for yourself, a spouse, a child, or any individual for whom you are a legal guardian. 

  • Section 80EE

Exhausted the Rs 2 lakh deduction on home loan interest payments available under Section 24? You can claim an additional Rs 50,000 deduction under certain conditions:

  • Your home loan, taken in FY2016–17, does not exceed Rs 35 lakh.
  • This is your first home purchase. 
  • The home value does not exceed Rs 50 lakh.

  • Section 80GG

If you do not get house rent allowance (HRA), claim a Rs 60,000 deduction on house rent paid in a year. But to get this benefit, you should not own residential property in your place of employment nor a self-occupied property elsewhere. 

  • Section 80U

This applies to disabled individuals who have not claimed under Section 80DDB. Those with 40{4c4eada76ecf1be575223a4ba5c40f01738ab49b07447a5a057265ba4edb475a} disability can get deductions of up to Rs 75,000; those with 80{4c4eada76ecf1be575223a4ba5c40f01738ab49b07447a5a057265ba4edb475a} disability can claim up to Rs 1.25 lakh.

  • Section 80G

Donations to specified funds or institutions will fetch you 50{4c4eada76ecf1be575223a4ba5c40f01738ab49b07447a5a057265ba4edb475a} or 100{4c4eada76ecf1be575223a4ba5c40f01738ab49b07447a5a057265ba4edb475a} of the contribution as a deduction. However, in some cases, the deduction may be limited to 10{4c4eada76ecf1be575223a4ba5c40f01738ab49b07447a5a057265ba4edb475a} of your gross adjusted income.

  • Section 80GGC

There is no maximum deduction limit on donations made to political parties. But you can make a claim only if you have not paid in cash.

  • Section QQB

Written a book? Royalty earnings are tax-deductible up to Rs 3 lakh. Authors who do not receive a lump sum payment can claim a deduction on up to 15{4c4eada76ecf1be575223a4ba5c40f01738ab49b07447a5a057265ba4edb475a} revenues received that year.

  • Section 80RRB

Royalties on patents registered from 1 April 2003 onwards are eligible for deductions of up to Rs 3 lakh.

  • Section 80TTA

Your bank deposits earn interest. If your annual interest earnings are Rs 10,000 or lower, you can claim the amount as a deduction.

  • Section 80TTB

Senior citizens can claim deductions of up to Rs 50,000 on interest earnings on deposits.

Summing up

Choose among these tax-saving avenues when preparing your financial plans for the year. With the right strategy in place, you could save a nifty sum each year.

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