Income Tax exemptions for individuals are vital to manage their financial burdens and save on their tax liabilities. These exemptions, provided under various sections of the Income Tax Act, of 1961, encourage savings, investments, and certain expenditures. This blog will explore the tax exemptions available under Sections 80C, 80CCC, and 80CCD, providing detailed descriptions and a comprehensive tabular format.
Note: Data provided here is as of June 9th, 2024.
Introduction:
Tax exemptions for individuals in India cover various investments and expenses. Understanding these exemptions can help individuals optimize their tax savings and make more informed financial decisions.
Claims under Section 80C:
- Individuals and HUFs are both eligible for Section 80C deductions.
- This section also applies to both Indian residents and non-resident Indians.
- Companies, partnerships, and other corporate bodies are not eligible for the deduction.
| Section | Deduction Details | Maximum Limit (₹) |
|---|---|---|
| 80C | – PPF (Public Provident Fund: Lock-in period for 15 years) – LIC (Life Insurance Corporation Premium pay) – NSC (National Saving Certificate: Lock-in period for 5 years) – Home Loan: Principal Repayment. – Home Loan: stamp duty & registration charges. – SSY (Sukanya Samridhi Yojana: Lock-in period = Till girl child reaches 21 years of age. partial withdrawal allowed when she reached 18 years) – ULIP (Unit Linked Insurance Premium: Lock-in period for 5 years) – ELSS (Equity Linked Savings Scheme: Lock-in period for 3 years) – Tax saving FD (Lock-in period for 5 years) – Senior Citizens savings scheme (Lock-in period for 5 years, Can be extended to other 3 years) – Sum paid to purchase deferred annuity. – Children’s Tuition Fee. – Home Loan Account scheme of the National Housing Bank. – Deposit scheme of a public sector or company providing housing finance. – Notified annuity Plan of LIC. – Notified bonds of NABARD. – Notified securities/notified deposits scheme. – Notified Pension Fund set up by Mutual Fund or UTI. – Equity shares/ debentures of an approved eligible issue. | 1,50,000 |
| 80CCC | EPF (Employee’s Provident Fund) by Emloyee. | Included in 80C limit of 1,50,000 |
| 80CCD(1) | – NPS (National Pension Scheme) by Individual. – Atal Pension Yojana. – Other pension schemes notified by government Maximum deduction allowed: – Employed: 10% of salary (for employees) – Self-employed: 20% of gross total income. | Included in 80c limit of 1,50,000 |
| 80CCD(2) | NPS (National Pension Scheme) by Employer’s. Maximum deduction allowed: – Central government employer: 14% of basic salary + DA – Others: 10% of basic salary + DA | Outside Rs 1,50,000 limit. |
| 80CCD(1B) | – NPS (National Pension Scheme) by Individual. – Atal pension yojana. (Additional contribution apart from 80CCD(1)) | 50,000 Additional deduction of 50,000 after 1,50,000 |
Claims for Medical:
- Section 80D provides exemptions for premiums paid toward health insurance policies.
- Only individuals and HUFs can claim deductions under Section 80D.
- However, the higher limit of deduction is available to resident senior citizens and not available for non-resident senior citizens.
- Covered members: Self, spouse, dependent children, parents. Siblings are not eligible for deduction.
| Section | Deduction Details | Maximum Limit (₹) |
|---|---|---|
| 80D | Medical Insurance Premiums (Self, Family, Parents) | Self & Family (age < 60 years): 25,000 Self & Family (age > 60 years): 50,000 Parents (age < 60 years): 25,000 Parents (age > 60 years): 50,000 Preventive Health check-up: 5,000 (Included in above limit) |
| 80DD | Maintenance including medical treatment of a dependent disabled. | 40% to 80% disability: 75,000 more than 80% disability: 1,25,000 |
| 80DDB | Medical treatment for specified diseases. | < 60 years: Amount paid or 40,000, whichever is less. > 60 years: Amount paid or 1,00,000, whichever is less |
| 80U | Self disability | Up tp to 80% disability (Normal Disability): 75,000 More than 80% disability (Severe Disability): 1,25,000 |
Claims for Donations:
| Section | Deduction Details | Maximum Limit (₹) |
|---|---|---|
| 80G | Donations to certain funds, charitable institutions, etc. | Varies (50% or 100% of the amount donated, with/without qualifying limit) |
| 80GGA | Donations for scientific research or rural development | No limit |
| 80GGB | Company Donation to Political Parties. | No limit (other than cash contributions) |
| 80GGC | Individual Donation to Political Parties. | No limit (other than cash contributions) |
Other claims under Section 80:
| Section | Deduction Details | Maximum Limit (₹) |
|---|---|---|
| 80E | Interest on Education Loan Interest paid for a period of 8 years (beginning the year in which the interest starts getting paid) or till the entire interest is paid, whichever is earlier. | No limit |
| 80EEB | Interest on Loan for Electric Vehicle If the loan is approved between 1 January 2019 and 31 March 2023. | 1,50,000 |
| 80GG | Rent Paid (for those not receiving HRA) | – Rent paid minus 10% of total income – Rs. 5000/- per month – 25% of total income whichever is lower in above. |
| 80RRB | Royalty on Patents. Registered on or after 1 April 2003 under the Patents Act 1970. | Up to 3,00,000 or the income received, whichever is less. |
| 80QQB | Royalty income of authors. Authors of India who are earning royalty or copyright income. | Up to 3,00,000 or the income received, whichever is less. |
| 80TTA | Interest on Savings Accounts. Can be claimed by individual or HUF. | 10,000 |
| 80TTB | Interest on Deposits (for senior citizens) | 50,000 |
Claims for Home Loan (For Old tax regime only):
(Reference: https://cleartax.in/s/house-property)
Note: Deductions can not be claimed under the new tax regime, but if the house property is rented out then the interest paid on such loan can be claimed as a deduction against such rental income (https://cleartax.in/s/section-115bac-features-new-tax-regime-benefits)
| Section | Deduction Details | Maximum Limit (₹) |
|---|---|---|
| 80C | Principal Repayment of home loan. Stamp duty & registration charges paid for a home loan (first year only). | 1,50,000 |
| Section 24(b) | Interest paid for the home loan. (For the acquisition, construction, or repair of the property) | 2,00,000 |
| 80EE | Interest on Home Loan (First-time Home Buyers) Conditions applied: – Available only to individuals. Not applicable to taxpayers: HUF, AOP, a company, or any other. – The loan taken and sanctioned between 1 April 2016 and 31 March 2017. – The loan amount should be 35 lakh or less. – The house value should be Rs 50 lakh or less. – You should not own any other house property. | 50,000 after 2,00,000 in section 24 is exhausted. |
| 80EEA | Interest on Home Loan. (First-time Home Buyers) Conditions applied: – Available only to individuals. Not applicable to taxpayers: HUF, AOP, a company, or any other. – The loan taken and sanctioned between 1st April 2019 and 31st March 2022. – Stamp duty value should be Rs 45 lakh or less. – The loan amount should be 35 lakh or less. – You should not own any other house property. | 1,50,000 after 2,00,000 in section 24 is exhausted. |