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ALL ABOUT TAX SAVINGS (OR DEDUCTIONS)

Guide to Section 80 Deductions

For financial year 2014-15 & 2015-16 (with changes listed for FY 2016-17)
(whatsapp://send?text=https://cleartax.in/Guide/Section80Deductions)

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DeductionsonSection80C,80CCC&80CCD
Section80C
Undersection80C,adeductionofRs1,50,000canbeclaimedfromyourtotalincome.Insimpleterms,youcanreduceuptoRs1,50,000
fromyourtotaltaxableincomethroughsection80C.ThisdeductionisallowedtoanIndividualoraHUF.
AmaximumofRs1,50,000canbeclaimedforfinancialyear201415.Thelimitforfinancialyear201516andfinancialyear201617is
alsoRs1,50,000.

Clickheretoseealltheinvestmentoptionstosave

Section80CCC:DeductionforPremiumPaidforAnnuityPlanofLICorOtherInsurer
ThissectionprovidesdeductiontoanIndividualforanyamountpaidordepositedinanyannuityplanofLICoranyotherinsurer.Theplan
mustbeforreceivingpensionfromafundreferredtoinSection10(23AAB).

Iftheannuityissurrenderedbeforethedateofitsmaturity,thesurrendervalueistaxableintheyearofreceipt.

Section80CCD:DeductionforContributiontoPensionAccount
Employee'scontributionSection80CCD(1)AllowedtoanIndividualwhomakesdepositstohis/herPensionaccount.Maximumdeduction
allowedis10%ofsalary(incaseoftaxpayerbeinganemployee)or10%ofgrosstotalincome(incaseoftaxpayerbeingselfemployed)or
Rs1,00,000whicheverisless.ThelimitofRs1,00,000hasbeenincreasedtoRs1,50,000startingfinancialyear201516(assessmentyear
201617).
DeductionforselfcontributiontoNPSsection80CCD(1B)Anewsection80CCD(1B)hasbeenintroducedforadditionaldeductionfor
amountdepositedbyataxpayertotheirNPSaccount.ContributionstoAtalPensionYojanaarealsoeligible.Deductionisallowedon
contributionuptoRs50,000.
Employer'scontributionSection80CCD(2)Deductionisallowedforemployer'scontributiontoemployeespensionaccountupto10%of
thesalaryoftheemployee.Thereisnomonetaryceilingonthisdeduction.
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DeductionsonInterestonSavingsAccount
Section80TTA:DeductionfromgrosstotalincomeforInterestonSavingsbankaccount
AdeductionofmaximumRs10,000canbeclaimedagainstinterestincomefromasavingsbankaccount.Interestfromsavingsbankaccount
shouldbefirstincludedinotherincomeanddeductioncanbeclaimedofthetotalinterestearnedorRs10,000,whicheverisless.This
deductionisallowedtoanindividualorHUF.Anditcanbeclaimedforinterestondepositsinsavingsaccountwithabank,cooperative
societyorpostoffice.Section80TTAdeductionisnotavailableoninterestincomefromfixeddepositsorrecurringdepositsorinterestincome
fromcorporatebonds.

DeductionsonHouseRent
Section80GG:DeductionforHouseRentPaidwhereHRAisnotreceived
ThisdeductionisavailableforrentpaidwhenHRAisnotreceived.Taxpayerorhisspouseorminorchildshouldnotownresidential
accommodationattheplaceofemployment.
Taxpayershouldnothaveselfoccupiedresidentialpropertyinanyotherplace.
Taxpayermustbelivingonrentandpayingrent.
Deductionavailableistheminimumof
1.Rentpaidminus10%oftotalincome
2.Rs.2000/permonth
3.25%oftotalincome
ForFinancialyear201617Forcalculatingdeductionabove,Rs2,000permonthhasbeenraisedtoRs5,000permonth.Thereforea
maximumofRs60,000perannumcanbeclaimedasadeduction.

DeductionsonEducationLoanforHigherStudies
Section80E:DeductionforInterestonEducationLoanforHigherStudies
Deductionisallowedforinterestonloantakenforpursuinghighereducation.Thisloanmayhavebeentakenforthetaxpayer,spouseor
childrenorforastudentforwhomthetaxpayerisalegalguardian.Thedeductionisavailableforamaximumof8yearsortilltheinterestis
paid,whicheverisearlier.Thereisnorestrictionontheamountthatcanbeclaimed.

DeductionforFirstTimeHomeOwners
Section80EE:DeductionsonHomeLoanInterestforFirstTimeHomeOwners

ForFinancialYear201314andFinancialYear201415

ThissectionprovideddeductionontheHomeLoanInterestpaid.ThedeductionunderthissectionisavailableonlytoIndividualsforfirst
housepurchasedwherethevalueofthehouseisRs40lakhsorlessandloantakenforthehouseisRs25lakhsorless.AndtheLoanhas
beensanctionedbetween01.04.2013to31.03.2014.TheaggregatedeductionallowedunderthissectioncannotexceedRs1,00,000andis
allowedforfinancialyears201314&201415(Assessmentyear201415and201516).

Thisdeductionisnotavailableforfinancialyear201516(assessmentyear201617).
ForFinancialYear201617
ThissectionwasrevivedinBudget2016andisapplicablestartingFY201617.Thedeductionunderthissectionisavailableonlytoan
Individualwhoisafirsttimehomeowner.ThevalueofthepropertypurchasedmustbelessthanRs50Lakhsandhomeloanmustbeless
thanRs35lakhs.AndtheLoanmustbetakenfromafinancialinstitutionandmustbesanctionedbetween01.04.2016to31.03.2017.Under
thissection,anadditionaldeductionofRs50,000canbeclaimedonhomeloaninterest.ThisisinadditiontodeductionofRs2,00,000
allowedundersection24oftheincometaxactforaselfoccupiedhouseproperty.Thereisnorestrictiononthenumberofyearsforwhichthis
deductioncanbeclaimed.

DeductionsonRajivGandhiEquitySavingScheme(RGESS)
Section80CCG:RajivGandhiEquitySavingScheme(RGESS)
TheRajivGandhiEquitySavingScheme(RGESS)waslaunchedafterthe2012Budget.InvestorswhosegrosstotalincomeislessthanRs.
12lakhscaninvestinthisscheme.Uponfulfilmentofconditionslaiddowninthesection,thedeductionislowerof,50%ofamountinvestedin
equitysharesorRs25,000.

DeductionsonMedicalInsurance
Section80D:DeductionforpremiumpaidforMedicalInsurance

Forfinancialyear201415DeductionisavailableuptoRs.15,000/toataxpayerforinsuranceofself,spouseanddependentchildren.If
individualorspouseismorethan60yearsoldthedeductionavailableisRs20,000.Anadditionaldeductionforinsuranceofparents(fatheror
motherorboth)isavailabletotheextentofRs.15,000/iflessthan60yearsoldandRs20,000ifparentsaremorethan60yearsold.
Therefore,themaximumdeductionavailableunderthissectionistotheextentofRs.40,000/.(FromAY201314,withintheexistinglimita
deductionofuptoRs.5,000forpreventivehealthcheckupisavailable).
Forfinancialyear201516DeductionisraisedfromRs15,000toRs25,000.ThedeductionforseniorcitizensisraisedfromRs20,000toRs
30,000.Foruninsuredsuperseniorcitizens(morethan80yearsold)medicalexpenditureincurreduptoRs30,000shallbeallowedasa
deductionundersection80D.However,totaldeductionforhealthinsurancepremiumandmedicalexpensesforparentsshallbelimitedtoRs
30,000.

DeductionsonMedicalExpenditureforaHandicappedRelative
Section80DD:DeductionforRehabilitationofHandicappedDependentRelative
Deductionisavailableon:
1.Expenditureincurredonmedicaltreatment,(includingnursing),trainingandrehabilitationofhandicappeddependentrelative
2.Paymentordeposittospecifiedschemeformaintenanceofdependenthandicappedrelative.
Wheredisabilityis40%ormorebutlessthan80%fixeddeductionofRs50,000.
Wherethereisseveredisability(disabilityis80%ormore)fixeddeductionofRs1,00,000.Acertificateofdisabilityisrequiredfrom
prescribedmedicalauthority.
Note:Apersonwith'severedisability'meansapersonwith80%ormoreofoneormoredisabilitiesasoutlinedinsection56(4)ofthe'Persons
withdisabilities(Equalopportunities,protectionofrightsandfullparticipation)'Act.
CertificatecanbetakenfromaSpecialistasspecified.
Patientsgettingtreatedinaprivatehospitalarenotrequiredtotakethecertificatefromagovernmenthospital.
Patientsreceivingtreatmentinagovernmenthospitalhavetotakecertificatefromanyspecialistworkingfulltimeinthathospital.Such
specialistmusthaveapostgraduatedegreeinGeneralorInternalMedicineoranyequivalentdegree,whichisrecognisedbythe
MedicalCouncilofIndia.
CertificateinForm10Iisnolongerrequired.Thecertificatemusthavenameandageofthepatient,nameofthediseaseorailment,

name,address,registrationnumberandthequalificationofthespecialistissuingtheprescription.Ifthepatientisreceivingthe
treatmentinaGovernmenthospital,itshouldalsohavenameandaddressoftheGovernmenthospital.
Forfinancialyear201516ThedeductionlimitofRs50,000hasbeenraisedtoRs75,000andRs1,00,000hasbeenraisedtoRs1,25,000.

DeductionsonMedicalExpenditureonSelforDependentRelative
Section80DDB:DeductionforMedicalExpenditureonSelforDependentRelative
AdeductionRs.40,000/ortheamountactuallypaid,whicheverislessisavailableforexpenditureactuallyincurredbyresidenttaxpayeron
himselfordependentrelativeformedicaltreatmentofspecifieddiseaseorailment.
ThediseaseshavebeenspecifiedinRule11DD.Acertificateinform10IistobefurnishedbythetaxpayerfromanyRegisteredDoctor.
IncaseofseniorcitizenthedeductioncanbeclaimeduptoRs60,000oramountactuallypaid,whicheverisless.
Forfinancialyear201516forveryseniorcitizensRs80,000isthemaximumdeductionthatcanbeclaimed.

DeductionsforPersonsufferingfromPhysicalDisability
Section80U:DeductionforPersonsufferingfromPhysicalDisability
DeductionofRs.50,000/toanindividualwhosuffersfromaphysicaldisability(includingblindness)ormentalretardation.Incaseofsevere
disability,deductionofRs.100,000canbeclaimed.CertificateshouldbeobtainedfromaGovt.Doctor.TherelevantruleisRule11D.Thisisa
fixeddeductionandnotbasedonbillsorexpenses.
Forfinancialyear201516ThedeductionlimitofRs50,000hasbeenraisedtoRs75,000andRs1,00,000hasbeenraisedtoRs1,25,000.

DeductionfordonationstowardsSocialCauses
Section80G:DeductionfordonationstowardsSocialCauses
ThevariousdonationsspecifiedinSec.80Gareeligiblefordeductionuptoeither100%or50%withorwithoutrestrictionasprovidedinSec.
80G.80GdeductionnotapplicableincasedonationisdoneinformofcashforamountoverRs10,000.

Donationswith100%deductionwithoutanyqualifyinglimit:
NationalDefenceFundsetupbytheCentralGovernment
PrimeMinister'sNationalReliefFund
NationalFoundationforCommunalHarmony
Anapproveduniversity/educationalinstitutionofNationaleminence
ZilaSakshartaSamiticonstitutedinanydistrictunderthechairmanshipoftheCollectorofthatdistrict
FundsetupbyaStateGovernmentforthemedicalrelieftothepoor
NationalIllnessAssistanceFund
NationalBloodTransfusionCouncilortoanyStateBloodTransfusionCouncil
NationalTrustforWelfareofPersonswithAutism,CerebralPalsy,MentalRetardationandMultipleDisabilities
NationalSportsFund
NationalCulturalFund
FundforTechnologyDevelopmentandApplication
NationalChildren'sFund
ChiefMinister'sReliefFundorLieutenantGovernor'sReliefFundwithrespecttoanyStateorUnionTerritory
TheArmyCentralWelfareFundortheIndianNavalBenevolentFundortheAirForceCentralWelfareFund,AndhraPradeshChief
Minister'sCycloneReliefFund,1996
TheMaharashtraChiefMinister'sReliefFundduringOctober1,1993andOctober6,1993
ChiefMinister'sEarthquakeReliefFund,Maharashtra
AnyfundsetupbytheStateGovernmentofGujaratexclusivelyforprovidingrelieftothevictimsofearthquakeinGujarat
Anytrust,institutionorfundtowhichSection80G(5C)appliesforprovidingrelieftothevictimsofearthquakeinGujarat(contribution
madeduringJanuary26,2001andSeptember30,2001)or
PrimeMinister'sArmeniaEarthquakeReliefFund
Africa(PublicContributionsIndia)Fund
SwachhBharatKosh(applicablefromfinancialyear201415)
CleanGangaFund(applicablefromfinancialyear201415)
NationalFundforControlofDrugAbuse(applicablefromfinancialyear201516)

Donationswith50%deductionwithoutanyqualifyinglimit.
JawaharlalNehruMemorialFund
PrimeMinister'sDroughtReliefFund
IndiraGandhiMemorialTrust
TheRajivGandhiFoundation

Donationstothefollowingareeligiblefor100%deductionsubjectto10%ofadjustedgrosstotalincome
Governmentoranyapprovedlocalauthority,institutionorassociationtobeutilisedforthepurposeofpromotingfamilyplanning
DonationbyaCompanytotheIndianOlympicAssociationortoanyothernotifiedassociationorinstitutionestablishedinIndiaforthe
developmentofinfrastructureforsportsandgamesinIndiaorthesponsorshipofsportsandgamesinIndia.

Donationstothefollowingareeligiblefor50%deductionsubjectto10%ofadjustedgrosstotalincome
AnyotherfundoranyinstitutionwhichsatisfiesconditionsmentionedinSection80G(5)
Governmentoranylocalauthoritytobeutilisedforanycharitablepurposeotherthanthepurposeofpromotingfamilyplanning
AnyauthorityconstitutedinIndiaforthepurposeofdealingwithandsatisfyingtheneedforhousingaccommodationorforthepurpose
ofplanning,developmentorimprovementofcities,towns,villagesorboth
AnycorporationreferredinSection10(26BB)forpromotinginterestofminoritycommunity
Forrepairsorrenovationofanynotifiedtemple,mosque,gurudwara,churchorotherplace.

DeductionsonContributionbyCompaniestoPoliticalParties
Section80GGB:DeductiononcontributionsgivenbycompaniestoPoliticalParties
DeductionisallowedtoanIndiancompanyforamountcontributedbyittoanypoliticalpartyoranelectoraltrust.Deductionisallowedfor
contributiondonebyanywayotherthancash.
Politicalpartymeansanypoliticalpartyregisteredundersection29AoftheRepresentationofthePeopleAct.Contributionisdefinedasper
section293AoftheCompaniesAct,1956.

DeductionsonContributionbyIndividualstoPoliticalParties
Section80GGC:DeductiononcontributionsgivenbyanypersontoPoliticalParties
Deductionisallowedtoataxpayerforanyamountcontributedtoanypoliticalpartyoranelectoraltrust.Deductionisallowedforcontribution
donebyanywayotherthancash.
Politicalpartymeansanypoliticalpartyregisteredundersection29AoftheRepresentationofthePeopleAct.

DeductionsonIncomebywayofRoyaltyofaPatent
Section80RRB:DeductionwithrespecttoanyIncomebywayofRoyaltyofaPatent
Deductionforanyincomebywayofroyaltyforapatentregisteredonorafter01.04.2003underthePatentsAct1970shallbeavailableupto
Rs.3lakhsortheincomereceived,whicheverisless.ThetaxpayermustbeanindividualresidentofIndiawhoisapatentee.Thetaxpayer
mustfurnishacertificateintheprescribedformdulysignedbytheprescribedauthority.

DeductionsonInvestmentinLongTermInfrastructureBonds[REMOVED]
Section80CCF:InvestmentinLongTermInfrastructureBonds
ThissectionisnolongervalidfromAY201213.

Section80DeductionTable
Section
Section
80C

Deductionon
InvestmentinPPF
Employee'sshareofPFcontribution
NSCs
LifeInsurancePremiumpayment
Children'sTuitionFee
PrincipalRepaymentofhomeloan
InvestmentinSukanyaSamridhiAccount
ULIPS
ELSS
Sumpaidtopurchasedeferredannuity
Fiveyeardepositscheme
SeniorCitizenssavingsscheme
Subscriptiontonotifiedsecurities/notifieddepositsscheme
ContributiontonotifiedPensionFundsetupbyMutualFundorUTI.
SubscriptiontoHomeLoanAccountSchemeoftheNationalHousingBank
Subscriptiontodepositschemeofapublicsectororcompanyengagedinprovidinghousingfinance
ContributiontonotifiedannuityPlanofLIC
Subscriptiontoequityshares/debenturesofanapprovedeligibleissue
SubscriptiontonotifiedbondsofNABARD

FY201516
Rs.1,50,000

80CC

ForamountdepositedinannuityplanofLICoranyotherinsurerforpensionfromafundreferredtoinSection10(23AAB).

80CCD(1)

Employee'scontributiontoNPSaccount(maximumuptoRs1,00,000forFY201415)

80CCD(2)

Employer'scontributiontoNPSaccount

Maximumupto10%
ofsalary

80CCD(1B)

AdditionalcontributiontoNPS

Rs.50,000

80TTA(1)

InterestIncomefromSavingsaccount

Maximumupto
10,000

80GG

ForrentpaidwhenHRAisnotreceivedfromemployer

Leastofrentpaid
minus10%oftotal
incomeRs.2000/per
month25%oftotal
income

80E

Interestoneducationloan

Interestpaidfora
periodof8years

80EE

Interestonhomeloanforfirsttimehomeowners

Nil

80CCG

RajivGandhiEquitySchemeforinvestmentsinEquities

Lowerof50%of
amountinvestedin
equitysharesorRs
25,000

80D

MedicalInsuranceSelf,spouse,children
MedicalInsuranceParentsmorethan60yearsoldor(fromFY201516)uninsuredparentsmorethan80yearsold

Rs.25,000
Rs.30,000

80DD

Medicaltreatmentforhandicappeddependantorpaymenttospecifiedschemeformaintenanceofhandicapped
dependant
Disabilityis40%ormorebutlessthan80%
Disabilityis80%ormore
Rs.75,000
Rs.1,25,000

80DDB

MedicalExpenditureonSelforDependentRelativefordiseasesspecifiedinRule11DD
Forlessthan60yearsold
Formorethan60yearsold
Formorethan80yearsold

80U

Selfsufferingfromdisability:
Individualsufferingfromaphysicaldisability(includingblindness)ormentalretardation.
Individualsufferingfromseveredisability

LowerofRs
40,000orthe
amount
actuallypaid
LowerofRs
60,000orthe
amount
actuallypaid
LowerofRs
80,000orthe
amount
actuallypaid

Rs.75,000

Rs.1,25,000

80GGB

Contributionbycompaniestopoliticalparties

Amountcontributed
(notallowedincash)

80GGC

Contributionbyindividualstopoliticalparties

Amountcontributed
(notallowedincash)

80RRB

DeductionsonIncomebywayofRoyaltyofaPatent

LowerofRs3,00,000
orincomereceived

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