Saturday, December 29, 2018

Section 80 deductions can save tax more than you think

Most of us think that deductions mean deduction under section 80C which further means just related to Fixed deposits, Insurance and now National pension scheme. But, there are lot more tools which allow deductions under section 80. Just read it thoroughly.

All deductions are  allowed from the gross total income in order to arrive at taxable income. For the purpose of deduction, all amounts are allowed only on paid basis during the previous year. If the investment is not made between the period of income liable for tax then deduction is not allowed. All deductions are subject to maximum limit i.e. Rs.1,50,000 subject to any specific limit on some contributions/investment limiting deduction to Rs.100,000 only.

Please note that some of the deductions may not be available if return of income is not filed on or before due dates u/s 139(1).

1.       Deduction for Home loan u/s 80C –

If you have taken a loan to finance your home then you will not only get deduction for interest and loss on property under the Head of income ‘House Property’ but also get deduction u/s 80C up to limit of Rs. 1,50,000.

All you need is to refer your repayment schedule and insert principal amount in the 80C section.
What’s more, you are eligible for deduction of Rs.50,000 more u/s 80EE basis following condition:

·         You are a first time home buyer in FY 2016-17 i.e. assessee did not own a house         
        property on the loan sanction date.
·         The loan was sanctioned in between 1 April 2016 and 31 March 2017.
·         The loan sanction amount doesn’t exceed ₹ 35,00,000.
·         The value of house property doesn’t exceed ₹ 50,00,000.

2.       Various contributions u/s 80C :

Ø  Tuition fee is allowed to all parents having up to 2 children. This deduction does not cover private tutor fee. One  more thing, this deduction is very specific to ‘Tuition fee’ only, so any amount mentioned on fee slip as Library fee, music fee, sports fee, transport fee etc is not deductible.
This deduction is neither available for distant learning nor studies in abroad.
Ø  Life insurance cover provides cushion for your family in case of death or permanent disability of the insurer. This also provides you deduction under section 80C. Conditions to deduction:
·   Investment in the name of Self / Spouse & Children allowed
Ø  Other items to invest are Deferred annuity, provident fund, public provident fund, National Savings Certificate, Unit linked Insurance plan, Notified Mutual fund or UTI, Fixed deposit for more than 5 years, Five year Deposit Scheme of Post office, Deposit under Senior Citizen Saving Scheme, pension fund (80CCC), National Pension Scheme (80 CCD) etc.
Some plans have minimum period of holding applicable:
ULIP – 5 years
Life Insurance – 2 years
Deposit under Senior Citizen Saving Scheme – 5 years
Fixed Deposits with bank or post office – 5 years

3.       Mediclaim policy u/s 80D: The deduction is available if the following conditions are satisfied-
S. No
Self, spouse, dependent children
Maximum Eligible in ₹
Maximum Eligible in ₹
Maximum Eligible Deduction (inclusive of preventive check-up)
Senior Citizen
Senior Citizen
Other than Senior citizen
Senior Citizen
Other than Senior citizen
Other than Senior citizen

4.       Disability deductions under section 80DD/80U - Conditions for claiming deduction:
Eligible Person
Resident Individual or HUF
Resident Individual
Allowable for
Spouse, children, parents, brothers/sisters of employee or any of them dependent on him
Rs, 75000
Rs. 75000
Severe disability
Rs. 125000
Rs. 125000
Incurred any expenditure or paid /deposited any amount as specified
Certificate from the medical authority
It may be noted that employer should ensure that employee has submitted Form No. 10-IA for claiming deduction u/s 80DD or 80U.

5.       Deduction for medical treatment u/s 80DDB :
Deduction is available if following conditions are satisfied :

1.       Claim is made by individual and HUF resident in India.
2.       Claim is made for self or first family member.
3.       Claim is made for specified illness below:
Neurological diseases, Malignant cancers, AIDS, Chronic Renal Failure and Hematological disorders.
Limit for deduction
Rs. 40000 for non senior citizen
Rs. 1,00,000 for senior citizen for Assessment year 2019-20.
6.       Deduction for Interest on loan u/s 80E:
All interest on loan for education for Self/Spouse/Children is allowed for deduction. The loan should be taken from Financial institution. The loan must be taken for pursuing higher education.

7.       Deduction u/s 80EE: If loan is taken by individual from financial institution and loan is sanction during 1 April 2016 and 31 March 2017 for amount Rs.35 lakhs and value of property does not exceeds Rs.50 lakhs then deduction of Rs. 50,000 is allowed given assesse does not own any other house property.
8.    Deduction u/s 80G : This deduction is available to any tax payer for making any contribution to charitable institutions etc.
Deduction is available upto 100% and minimum 50% as prescribed of the amount contributed.

There are many more deductions that are available under section 80 but all of those are generally not available to individuals or not normally famous method of investment for the individual.
Income tax site can be referred for complete list or you can get in touch with me for any help.


  1. Section 80 deductions can save tax more than you think

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