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What are Section 80 Deductions?
Section 80 under Income Tax Act, 1961 allows taxpayers to avail tax exemptions and lower their taxable income. Investing in certain activities makes the taxpayer eligible to avail tax deductions of up to Rs 150,000 in a financial year under Section 80 C.
Taxes form an important part in governing a country. They allow the government to provide and develop basic infrastructures and facilities to the citizens, which help the country progress. However, taxes can sometimes be complicated and can be seen as burning a hole in taxpayers’ pockets. To balance the needs of the taxpayers, the government in India introduced Section 80 deductions. There are various types of deductions which the taxpayers can avail under Section 80.
Some of the most common activities eligible for tax deductions are:
• Investment in life insurance policies
• Superannuation/Provident fund payments
• Tuition fees paid for children’s education (max. 2)
• Buying property
• Fixed deposit payments with a minimum tenure of 5 years
Some of the section under which you can avail deductions
Section 80 C deductions
Section 80CCC: Under this section, investments in pension funds make the taxpayer eligible for tax deductions up to Rs 150,000.
Section 80CCD: This section provides incentive for investment in pension schemes notified by the central government.
Section 80CCF: This section provides tax deductions on long-term infrastructure bonds notified by the government. Open to both individuals and Hindu Undivided Family (HUF), the maximum deduction available under this is Rs 20,000.
Section 80CCG: Under this, investments in equity savings schemes notified by the government are eligible for deductions up to Rs 25,000 in a year.
Section 80D
This section provides deductions for investments in central government health insurance plans. The premium paid can be on behalf of the spouse, children, parents, or self. The taxpayer can avail a maximum deduction of Rs 15,000 and Rs 30,000 if the taxpayer is above the age of 60.
Section 80E
This section helps availing tax deductions on the interest payment of a loan taken for education.
Section 80G
This section aims to encourage donations to funds and charitable organisations and offers tax benefits on monetary donations.
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