Section 80 C, 80CCC And 80 CCD of Income Tax – Who Can Claim?

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A taxpayer can claim various deductions from the total income which is subjected to tax. This helps in reducing the total amount of money on which the income tax is calculated. Individual tax payers should know about 80C , 80CCC, and 80CCD deductions and who can claim.

What is 80 C Deduction?

This section offers you the deduction on the Investments wherein, a deduction of 1,50,000 can be claimed from the total income. There would be various forms of investment that come under 80 C and if you have parked maximum of 1,50,000 in one or more investment then, you would be eligible for the 80 C deduction. This deduction can be claimed by an Individual or a Hindu Undivided Family.

So, in case an Individual has paid excess tax but invested in instruments such as LIC, PPF, tuition fees and so on, he can file the Income Tax return to get the deductions and get a refund of excess tax paid.

Income Tax Deduction

Section 80CCC

Under this section of Income Tax, an Individual can claim the deduction for the amount paid or deposited in the annuity plan of LIC or any other insurer. However, the pre-requisite would be that the plan should receive a pension from a fund referred to in Section 10(23AAB). Pension from the annuity or amount received upon surrender of the annuity, in addition to interest or bonus accrued on the annuity would be taxable in the year of receipt.

Section 80CCD

Here are the following deduction that one can get under Section 80CCD.

Employee Contribution – An Individual who can makes deposit to his pension account can avail the deduction under this section. 80CCD allows maximum deduction of 10%of salary or 20% of gross total income or Rs 1,50,000 whichever in less. For the financial year 2016-17 and before that, for the self-employed individual, maximum deduction is allowed only 10% of gross total income. But the combined maximum limit for section 80C, 80CCC, and 80CCD (1) deduction is Rs 1, 50,000, which can be availed.

Deduction for Self-Contribution to NPS –  A new section has 80CCd (1B) has been introduced in Income Tax to offer the additional deduction of maximum Rs 50,000 for the amount deposited by a taxpayer in their NPS account. Similarly, any contribution made to Atal Pension Yojna is also eligible.

Employer’s Contribution to NPS – As per section 80CCD(2) of Income Tax , additional deduction can be claimed by an Individual for employer’s contribution to employee’s pension account of up to 10% of the salary of the employee. However, there is no upper limit on the deduction.

Offering the deductions like 80 C and others is a way of government to encourage Individuals to save and put money in the government and non-government schemes. These funds in turn help the government to realize their goals and vision for the country. Therefore, an Individual gets the double benefits of return as well as deduction on the tax.

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An MBA in finance, I like to cover the wide range of topics related to Taxation, SEBI, Finance and anything that is Public Helpful. The motive is always to make it simpler for the taxpayers understand the system better and take informed decisions.

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