{"id":6844,"date":"2022-02-09T17:30:52","date_gmt":"2022-02-09T12:00:52","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=6844"},"modified":"2022-05-25T18:21:55","modified_gmt":"2022-05-25T12:51:55","slug":"income-tax-deduction","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/income-tax-deduction\/","title":{"rendered":"Income Tax Deduction Under 80C, 80D and 80CCD: Overview, Types and Benefits"},"content":{"rendered":"\n<p>While filing your <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-income-tax\/\">income tax<\/a> return, you must have come across various sections mentioned in the <a href=\"https:\/\/www.tickertape.in\/blog\/itr-forms\/?utm_source=blog&amp;utm_medium=article\">ITR form<\/a>. If you are unaware of their particulars, chances are that you are missing out on various tax savings benefits.&nbsp;<\/p>\n\n\n\n<p>The Income Tax Act, 1961 provides the opportunity (and the rules regulating the same) to avail various deductions before calculating your taxable income. Before paying your taxes, it is of utmost importance to see what these deductions are so that you do not end up paying more tax than you need to.&nbsp;<\/p>\n\n\n\n<p>All the deductions come under certain sections of the Act. Let us first understand what deductions are before we get into detail.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/income-tax-deduction\/#What-are-tax-deductions\" title=\"What are tax deductions?\">What are tax deductions?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/income-tax-deduction\/#Deductions-under-Section-80C\" title=\"Deductions under Section 80C\">Deductions under Section 80C<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/income-tax-deduction\/#Deductions-under-Section-80D\" title=\"Deductions under Section 80D\">Deductions under Section 80D<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/income-tax-deduction\/#Deductions-Under-Section-80CCD\" title=\"Deductions Under Section 80CCD&nbsp;\">Deductions Under Section 80CCD&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/income-tax-deduction\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" id=\"what\"><span class=\"ez-toc-section\" id=\"What-are-tax-deductions\"><\/span>What are tax deductions?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Tax deductions are claims that an individual can make in order to reduce the amount of total taxable income, which in turn reduces the tax liability of the person.<\/p>\n\n\n\n<p>For instance, assume that your income is Rs. 20 lakh and you are liable to pay tax at 5%. Your tax liability will be Rs. 1 lakh. Now, you noticed that you are eligible for deductions of Rs. 2 lakh on account of certain investments made by you.&nbsp;In such a case, your taxable income comes down to Rs. 18 lakh,&nbsp; thereby reducing your tax liability to Rs. 90,000.<\/p>\n\n\n\n<p>Depending on your investment or expense nature, the deductions are classified under different sections. Let us read in detail the provisions given under Section 80C, 80D, and 80CCD of the Act.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"80c\"><span class=\"ez-toc-section\" id=\"Deductions-under-Section-80C\"><\/span>Deductions under Section 80C<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Section 80C of the Income Tax Act was enacted in April 2006. This section describes what expenditures and investments are exempt or allow deductions on them while filing the return and to what limit. Certain investments like <a href=\"https:\/\/www.tickertape.in\/blog\/ppf-vs-mutual-fund\/?utm_source=blog&amp;utm_medium=article\">PPF<\/a>, tax saver FDs, <a href=\"https:\/\/www.tickertape.in\/blog\/is-nps-good\/?utm_source=blog&amp;utm_medium=article\">NPS<\/a>, and more come under this section. You can claim a total deduction up to an amount of Rs. 1.5 lakh.<\/p>\n\n\n\n<p>A comparative analysis of the investments that are tax-deductible is given as follows:&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Investment<\/strong><\/td><td><strong>Type of investment<\/strong><\/td><td><strong>Lock-in period<\/strong><\/td><td><strong><a href=\"https:\/\/www.tickertape.in\/blog\/rate-of-return\/\">Rate of return<\/a><\/strong><\/td><td><strong>Tax benefits<\/strong><\/td><td><strong>Level of risk<\/strong><\/td><\/tr><tr><td><br><a href=\"https:\/\/www.tickertape.in\/blog\/difference-between-ulip-and-mutual-funds\/?utm_source=blog&amp;utm_medium=article\">Unit Linked Insurance Plan<\/a> (ULIP)<\/td><td><br>Insurance + Wealth creation&nbsp;<\/td><td><br>5 yrs<\/td><td><br>Varies from plan to plan but around 8-10%<\/td><td><br>Up to 1.5 lakh annually<\/td><td><br>Moderate<\/td><\/tr><tr><td><br>Tax-Saving Fixed Deposits<\/td><td><br>Debt investment<\/td><td><br>5 <meta charset=\"utf-8\">yrs<\/td><td><br>5-6%<\/td><td><br>Up to 1.5 lakh annually<\/td><td><br>Low<\/td><\/tr><tr><td><br><a href=\"https:\/\/www.tickertape.in\/blog\/how-to-invest-in-elss\/?utm_source=blog&amp;utm_medium=article\">ELSS<\/a> (<a href=\"https:\/\/www.tickertape.in\/blog\/what-is-equity\/\">Equity<\/a> Linked Savings Schemes)<\/td><td><br><br>Mutual fund<\/td><td><br><br><br>3 <meta charset=\"utf-8\">yrs<\/td><td><br><br><br>Varies from scheme to scheme but around 12-15%<\/td><td><br><br><br>Up to 1.5 lakh annually<\/td><td><br><br><br>High<\/td><\/tr><tr><td><br>PPF (Public Provident Fund)<\/td><td><br>Debt investment<\/td><td><br><br>15 <meta charset=\"utf-8\">yrs<\/td><td><br>7.1% forFY2021-2022(revised annually)<\/td><td><br>Up to 1.5 lakh annually, on interest earned and on maturity amount<\/td><td><br>Low<\/td><\/tr><tr><td><br>SSY (<a href=\"https:\/\/www.tickertape.in\/blog\/sukanya-samriddhi-yojana-eligibility-benefits-how-to-apply-withdrawal-rules-and-more\/\">Sukanya Samriddhi Yojana<\/a>)<\/td><td><br>Debt investment<\/td><td><br>21 <meta charset=\"utf-8\">yrs<\/td><td><br>7.6% (revised quarterly)<\/td><td><br>Up to 1.5 lakh annually, on interest earned and on maturity amount<\/td><td><br>Low<\/td><\/tr><tr><td><br>National Savings Certificate (NSC)<\/td><td><br>Fixed income<\/td><td><br>5 <meta charset=\"utf-8\">yrs<\/td><td><br>6.8% (revised quarterly)<\/td><td><br>Up to 1.5 lakh annually, interest taxed after 5 yrs<\/td><td><br>Low<\/td><\/tr><tr><td><br>National Pension System (<a href=\"https:\/\/www.tickertape.in\/blog\/is-nps-good\/\">NPS<\/a>)<\/td><td><br>Retirement plan<\/td><td><br>Until retirement<br><\/td><td><br>9-12%<\/td><td><br>Up to 2 lakh<\/td><td><br>High<\/td><\/tr><tr><td><br><a href=\"https:\/\/www.tickertape.in\/blog\/senior-citizens-savings-scheme-scss-benefits-eligibility-account-opening-interest-rate\/\">Senior Citizen Savings Scheme<\/a> (SCSS)<\/td><td><br>Debt investment<\/td><td><br>5 <meta charset=\"utf-8\">yrs<\/td><td><br>8.60%<\/td><td><br>Up to 1.5 lakh<\/td><td><br>Low<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Apart from these, the deduction can also be claimed on the following:<\/p>\n\n\n\n<ul><li>Children\u2019s tuition fees (up to 2 children).<\/li><li>Interest on a home loan up to Rs. 50,000.<\/li><li>The principal amount of home loan up to Rs. 1.5 lakh.<\/li><li>Registration charges and <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-stamp-duty-and-why-pay-it\/\">stamp duty<\/a> on the purchase of a home\/property.<\/li><li>Infrastructure bonds and NABARD rural bonds up to Rs. 1.5 lakh.<\/li><li>Five-year <a href=\"https:\/\/www.tickertape.in\/blog\/post-office-time-deposit-benefits-tax-deduction-account-opening-premature-withdrawal\/\">post office time deposit scheme<\/a>.<\/li><li><a href=\"https:\/\/www.tickertape.in\/blog\/types-of-life-insurance\/?utm_source=blog&amp;utm_medium=article\">Life insurance<\/a>.<\/li><li>Pension plans from insurance companies.<\/li><\/ul>\n\n\n\n<p>It must be noted that the Rs. 1.5 lakh limit is inclusive of deductions on all of the investments and not for each individual investment.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"80d\"><span class=\"ez-toc-section\" id=\"Deductions-under-Section-80D\"><\/span>Deductions under Section 80D<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><a href=\"https:\/\/www.tickertape.in\/blog\/tax-saving-on-health-insurance\/?utm_source=blog&amp;utm_medium=article\">Section 80D<\/a> lists the maximum deduction an individual or HUF can claim pertaining to medical expenses. This includes medical insurance, health checkups, and so on. The deduction amount is different for all individuals, depending on their age.<\/p>\n\n\n\n<p>The deductions are as follows:<\/p>\n\n\n\n<ul><li>For the <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-an-insurance-premium\/\">insurance premium<\/a> for self, spouse, and unemployed children, a deduction of up to Rs. 25,000 is allowed. If parents below 60 yrs of age are also included, the maximum deduction amount rises to Rs. 50,000.<\/li><li>For insurance premium for self, spouse, unemployed children, and parents above the age of 60, a deduction of up to Rs. 75,000 is allowed.<\/li><li>If individuals themselves are above the age of 60 yrs, a deduction of up to Rs. 1 lakh is allowed on the insurance premium for self, spouse, dependent children, and parents.&nbsp;&nbsp;<\/li><\/ul>\n\n\n\n<p>In this context, a dependent child refers to either an unemployed male child under the age of&nbsp;25 yrs or an unemployed and unmarried female child.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"80ccd\"><span class=\"ez-toc-section\" id=\"Deductions-Under-Section-80CCD\"><\/span>Deductions Under Section 80CCD&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Section 80CCD is a subsection of Section 80C and covers the deductions available to individuals for their investment in the National Pension System. It is further divided into 3 parts: 80CCD (1), 80CCD (1B), 80CCD (2).<\/p>\n\n\n\n<ul><li>Section 80CCD (1) gives the details for the deductions available on the employee\u2019s contribution to NPS. Under this section, a maximum deduction of 10% of basic salary + <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-dearness-allowance\/\">dearness allowance<\/a> is permitted for salaried individuals. For other non-salaried individuals, the limit is 10% of gross income. For self-employed individuals, this limit is 20%. In total, a maximum deduction of Rs. 1.5 lakh can be availed.&nbsp;<\/li><li>Section 80CCD (1B) allows an additional deduction of up to Rs. 50, 000, which raises the total deduction amount to Rs. 2 lakh.<\/li><li>Section 80CCD (2) deals with the deductions available on the employer\u2019s contribution to NPS. This section applies to salaried individuals only. Deductions of upto 10% of their basic salary + dearness allowance or 10% of the contribution made by the employer can be claimed.&nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It is very important for you as a taxpayer to educate yourself on the various deductions available.&nbsp; It permits you to avail the maximum benefits while paying taxes. Moreover, you can make smart investment choices that not only give you good returns but also result in tax savings. Many other deductions are available under other sections of the Act. Make sure to read up on them to mitigate your tax liability.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Want to know about income tax deductions? Click here to know more about the exemptions that happen under sections 80C, 80D, 80CCC and find out how you can save tax!<\/p>\n","protected":false},"author":45,"featured_media":6164,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"no","footnotes":""},"categories":[8,1741],"tags":[1296,1297,1295],"acf":[],"modified_by":"Neera Bhardwaj","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/12\/6-2.png?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/6844"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/45"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=6844"}],"version-history":[{"count":3,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/6844\/revisions"}],"predecessor-version":[{"id":8813,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/6844\/revisions\/8813"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/6164"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=6844"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=6844"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=6844"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}