Section 80C/ 80CCC/ 80CCD
Deductions in respect of Investment

Section 80C 

Section 80C provides for a deduction from the Gross Total Income, of savings in specified modes of investments. The deduction under section 80C is available only to an individual or HUF. The maximum permissible deduction under section 80C is Rs. 1,50,000.

The followings are the investments/ contributions eligible for deduction

1. Premium paid in respect of life insurance policy - Premium paid for insurance on the life of the individual, spouse, or any child (minor or major) and in the case of HUF, any member thereof. This will include a life policy and an endowment policy.
2. Investment in a five-year Post Office time deposit. or
3. Investment in Tax Saver Fixed Deposits for 5 years.
4. Contribution to the approved annuity plan of LIC.
5. Deposit in Senior Citizens Savings Scheme Rules, 2004.
6. Contribution to SPF/PPF/RPF i.e Statutory Provident Fund (SPF), Public Provident Fund (PPF), Recognised Provident Fund (RPF).
7. Subscription towards notified units of a mutual fund or UTI.
8. Any sum paid or deposited in Sukanya Samridhi Account.
9. Payment of tuition fees to any university, college, school, or other educational institutions within India for full-time education for maximum 2 children. : This benefit is only for the amount of tuition fees for full-time education and shall not include any payment towards development fees or donation or payment of similar nature and payment made for education to any institution situated outside India.
10. Contribution to additional accounts under NPS.
11. Repayment of housing loan including stamp duty, registration fee, and other expenses.
12. Subscription to National Savings Certificates VIII.
13. Subscription to certain equity shares or debentures.
14. Subscription to certain units of mutual fund
15. Contribution to approved superannuation Fund.
16. Unit-linked Insurance Plan 1971.
17. Contribution to Unit-linked Insurance Plan of LIC Mutual Fund.
18. Subscription to notified bonds issued by NABARD.
19. Premium paid in respect of a contract for a deferred annuity.
20. Subscription to notified deposit scheme
21. Contribution to National Housing Bank (Tax Saving) Term Deposit Scheme, 2008
22. Any sum deducted from the salary payable of a Government employee for securing a deferred annuity
23. Contribution to notified pension fund set up by mutual fund or UTI

Section 80CCC (Deduction in respect of contribution to certain pension funds)

Under section 80CCC, you can claim an income tax deduction for investments in certain specified pension funds. These funds include

• The annuity plans of LIC (Life Insurance Corporation of India) and
• Those specified under section 10 (23AAB) for the income tax act.

Under Section 80CCC, the maximum permissible deduction is Rs 1,50,000. [Further, the overall limit of Rs. 1,50,000 prescribed in section 80CCE will continue to be applicable i.e. the maximum permissible deduction under sections 80C, 80CCC, and 80CCD(1) put together is Rs. 1,50,000].

This deduction will be applicable, where an assessee, being an individual, has in the previous year paid or deposited any amount out of his income chargeable to tax to effect or keep in force a contract for any annuity plan of LIC of India or any other insurer for receiving a pension from the fund set up by LIC or such other insurer, he shall be allowed a deduction in the computation of his total income.

For this purpose, the interest or bonus accrued or credited to the assessee’s account shall not be reckoned as a contribution.

Section 80CCD (Deduction in respect of contribution to pension scheme notified by the Central Government)

Section 80CCD provides deduction in respect of contributions made to the pension scheme notified by the Central Government. Accordingly, in the exercise of the powers conferred by section 80CCD(1), the Central Government has notified the New Pension Scheme (NPS) and ‘Atal Pension Yojana (APY)’ as a pension scheme, contribution to which would qualify for deduction under section 80CCD in the hands of the individual.

Amount of deduction -

• Section 80CCD(1) - Provides a deduction for the amount paid or deposited by an employee in his pension account subject to a maximum of 10% of his salary. The deduction in the case of a self-employed individual would be restricted to 20% of his gross total income in the previous year.
  
  
• Section 80CCD(1B) - Provides for an additional deduction of up to Rs. 50,000 in respect of the whole of the amount paid or deposited by an individual assessee under NPS in the previous year, whether or not any deduction is allowed under section 80CCD(1).
  
  
• Whereas the deduction under section 80CCD(1) is subject to the overall limit of Rs 1,50,000 under section 80CCE (i.e., the maximum permissible deduction under sections 80C, 80CCC and 80CCD(1) put together is Rs.1,50,000), the deduction of upto Rs. 50,000 under section 80CCD(1B) is in addition to the overall limit of Rs. 1,50,000 provided under section 80CCE.
  
  
• Under section 80CCD(2), the contribution made by the Central Government or any other employer in the previous year to the said account of an employee is allowed as a deduction in the computation of the total income of the assessee.
  
  
• The entire employer’s contribution would be included in the salary of the employee. However, deduction under section 80CCD(2) would be restricted to 14% of salary, in case of a contribution made by the Central Government, and to 10% of salary, in case of a contribution made by any other employer. 
  
  Note : if an individual opts for the New Tax Regime, the deduction under Section 80C/ 80CCC/80CCD(1) /80CCD(1B)  will not be claimable. However the deduction under Section 80CCD(2) will be eligible. 
  

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