Income Tax

Income Tax Saving Under Section 80C, 80CCC and 80CCD

Under Section 80c Individual and HUF can save upto 1,50,000/ (The limit for the financial year 2017-18 ) tax free amount. If you Invest your Rs. 1,50,000/- in the scheme which falls under 80C you can save upto 15,450/-,  if you are under 10 % tax Slab, Rs. 30,900/ if you are in 20 % tax slab and Rs. 46,350/  in the slab of 30 %

Under this section deduction of Rs 1,50,000 can be claimed from total income. Means, an Individual or an HUF can reduce up to Rs 1,50,000 from total taxable income through section 80C.

Investment and Expenses Covered under section 80C

  1. Provident Fund Contribution accumulated over the financial year, covered under the Rs.1,50,000 limit.
  2. Life Insurance Premium Premium must be less than 10% of the sum assured.
  3. Fee Receipts of school going child if any. (includes play school, preschool)
  4. Stamp Duty and Registration Charges of Purchased house.
  5. Principal Repayment of Home Loan taken for first time. Interest Paid on Home Loan is covered under another section 24.

Sum Up the above Expenses, savings, and repayment whichever applicable, Subtract the above sum from 150000/, the answer received will be amount remaining, which can be invested in section 80C.

Rs.1,50,000 – Sum of Above = Amount for investments under 80C

PPF, Tax saver FDs, ULIP, Post Office Term Deposit, Sukanya Samridhi, Senior Citizens Savings Scheme, NSC, NPS, ELSS, RGESS etc. falls under section 80C.

Section 80CCC:  Annuity Plan of LIC or Other Insurer

This section provides a deduction to an Individual for any amount paid or deposited in any annuity plan of LIC or any other insurer. The plan must be for receiving pension from a fund referred in Section 10(23AAB). If it surrendered before its maturity, the surrender value is taxable.

Section 80CCD:  Pension Account

Section 80CCD (1) Employee’s contribution Allowed to an individual who makes deposits to own pension account. Maximum deduction allowed is 10% of salary (Salaried Person) or 10% of gross total income (self-employed) or Rs 1, 50,000,whichever is less.

Section 80CCD (1B) self-contribution to NPS:  Secction 80CCD (1B) gives an additional deduction of up to Rs 50,000 for the amount deposited by a taxpayer to NPS account. Shavings in to Atal Pension Yojana is also eligible for deduction.

Section 80CCD (2) Employer’s contribution to NPS: Additional deduction is allowed for employer’s contribution to employee’s pension account up to 10% of the salary of the employee.

Section 80CCG: Rajiv Gandhi Equity Saving Scheme (RGESS)

It was continue till 31.03.2017 in which Person with gross total income is less than Rs. 12 lakhs can invest in this scheme.

50% of the amount invested in equity shares or Rs 25,000 for three consecutive Assessment Years whichever less is applicable for Deduction claim.

If invested in the RGESS scheme in FY 2016-17 (AY 2017-18), then it can be claim deduction under Section 80CCG until AY 2019-20.

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