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Deduction-under-section-80C-80CCC-and-80CCD

 

Deduction under section 80C 80CCC and 80CCD

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See the related post : Deductions under chapter VI-A
 
Introduction-

The aggregate amount of deduction under sections 80C, 80CCC and Section 80CCD (1) in respect of Life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc. shall not exceed Rs.1, 50,000/-.

The deduction allowed under section 80 CCD(1B) is an additional deduction in respect of any amount paid in the NPS up to Rs. 50,000/-. However, the contribution made by the Central Government or any other employer to a pension scheme u/s 80CCD (2) shall be excluded from the limit of Rs.1, 50,000/- provided under this section.

 
1. Deductions under section 80C/80CCC/80CCD (1) is allowed up to Rs. 1,50,000, the details are as under-
 
A. Deduction under Section 80C-
  • Any Payment of Insurance premium on the life of the individual, spouse or any child of an Individual.
  • Any contribution made by an Individual to (but shall not include any sums in repayment of loan or advance)- to any Provident Fund to which the Provident Fund Act, 1925 applies; or any provident  fund  set  up  by  the  Central Government and notified by it in the Official Gazette  where such contribution is to an  account standing in the name of an individual, or spouse or children.
  • Any “contribution” by an employee to a “Recognized Provident Fund” or an “Approved Superannuation Fund”.
  • Any amount deposited during the financial year in the name of girl child of an employee, by an employee or by legal guardian in “Sukanya Samriddhi Account” scheme of Central Government.
  • Any sum deposited in “National Savings Certificate-VIII issue”.
  • Any sum deducted from the salary payable by, or, on behalf of the Government to any individual, being a sum deducted in accordance with the conditions of his service for the purpose of securing to him a deferred annuity or making provision for his spouse or children, in so far as the sum deducted does not exceed 1/5th of the salary.
  • Any subscription made to effect or keep in force a contract for such annuity plan of the LIC or any other insurer as the Central Government may, by notification in the Official Gazette, specify i.e. New Jeevan Dhara, New Jeevan Dhara-I, New Jeevan Akshay, New Jeevan Akshay-I and New Jeevan Akshay-II and Jeevan Akshay-III.
  • Any subscription made to any such deposit scheme of, or,  any contribution made to any such pension fund set  up by, the National Housing Bank, as the Central Government may,  by  notification in the Official Gazette, specify  in this behalf;
  • Any amount paid in respect of re-payment of loans  borrowed  from Government,  or any bank or Life Insurance Corporation, or National Housing Bank,  or certain other categories of institutions  engaged in the   business  of  providing   long  term  finance  for construction or purchase of houses in India.  The stamp duty, registration fee and other expenses incurred for the purpose of transfer shall   also be covered.  
  • Tuition fees, whether at the time of admission or thereafter, paid to any university, college, school or other educational institution situated in India, for the purpose of full-time education of any two children of the employee. The development fees or donation or capitation fees or payment of similar nature are not included in Tuition fees.
  • Any contribution made by an individual to  any  pension  fund  set  up by any Mutual  Fund  referred to in  section 10(23D), or, by the Administrator or the specified company defined  in Unit Trust of India (Transfer of Undertaking & Repeal) Act, 2002, as the Central  Government  may,  by notification in  the  Official Gazette, specify in this behalf;
  • Subscription to  equity   shares  or  debentures forming  part of any eligible issue of capital made by a public company, which is approved by the Board or by any public finance institution.
  • Investment as a term deposit for a fixed period of not less than five years with a scheduled bank, which is in accordance with a scheme framed and notified by the Central Government, in the Official Gazette for these purposes.
  • Subscription to such bonds issued by the National Bank for Agriculture and Rural Development (NBARD), as the Central Government may, by such notification in the Official Gazette, specify in this behalf.
  • Any investment in an account under the Senior Citizens Savings Scheme.
  • Any investment as five year time deposit in an account under the Post Office Time Deposit.
 
See the related post : How to E file Income Tax Return
 
B. Section 80C(3) & 80C(3A) states that in case of Insurance Policy other than contract for a deferred annuity the amount of any premium or other payment made is restricted to-

Particulars

Amount of Deduction

Policy issued before 1st April 2012

20% of sum assured

Policy issued on or after 1st April 2012

10% of sum assured

 

Policy issued on or after 1st April 2013 - In cases of persons with disability or person with severe disability as per Sec 80 U or suffering from disease or ailment as specified in rules made under Sec 80DDB.

15% of sum assured

 

 

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

Section 80CCC allows an employee deduction of an amount paid or deposited  for any annuity  plan of  Life Insurance  Corporation of India or any other  insurer  for  receiving  pension  from  the Fund referred  to  in  section 10(23AAB). However, the deduction shall exclude interest or bonus accrued or credited to the employee's account, if any and shall not exceed Rs. 1,50,000.

 

 
D. Deduction in respect of contribution to pension scheme of Central Government (Section 80CCD)-

Section 80CCD (1) allows an employee, being an individual employed either by the Central Government on or after 01.01.2004 or being any other employer, a  deduction of an amount paid or deposited  under a National Pension System. The deduction shall not exceed an amount equal to 10% of his salary (includes Dearness Allowance but excludes all other allowance and perquisites). 

 

2. Deduction under section 80CCD (1B) - Deduction under section 80CCD (1B) is allowed up to Rs. 50,000. Investment in National Pension Scheme (NPS) is the best and only solution available to save tax. As per section 80CCD(1B), an assessee referred to in 80CCD(1) shall be allowed an deduction in computation of his income, of the whole of the amount paid or deposited in the previous year in his account under the pension scheme notified or as may be notified by the Central Government, which shall not exceed Rs. 50,000.  The deduction of Rs. 50,000 shall be allowed whether or not any deduction is allowed under sub-section (1).  However, the same amount cannot be claimed both under sub-section (1) and sub-section (1B) of section 80CCD.

 

3. Deduction under section 80CCD (2) - Deduction under section 80CCD (2), where any contribution in the said pension scheme is made by the Central Government or any other employer then the employee shall be allowed a deduction from his total income of the whole amount contributed by the Central Government or any other employer subject to limit of 10% of his salary of the previous year.
 



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