Section 80C of Income Tax Act - 80C Deduction List

Seeking different ways to save some tax on your investment in India? If so, your first route to it is Section 80C of the Income Tax Act, 1961. Through this section, you can claim up to INR 1,50,000 tax deductions on your investments in several financial assets like ELSS, PPF, NSC, etc., and reduce your tax liability. Section 80C provides you with several tax-saving options through allowable expenses and various investments.

Want to know more about this section? Well, then you are at the right destination. In this blog, we will talk about who can claim deductions under this section, the available tax deductions, and the exemptions it offers. So, let's begin reading.

Who Can Claim Section 80C Deductions?

Here is who can claim tax deductions under Section 80C:

Indian and Non-Resident Indians (NRIs):

According to the Income Tax Act, 1961, both Indian residents and Non-Resident Indians (NRIs) are eligible to claim deductions under Section 80C. This category includes both salaried and self-employed professionals, such as doctors and business individuals.

Hindu Undivided Family (HUFs):

Under the Income Tax Act, 1961, Hindu Undivided Families (HUFs) are considered separate assessable entities. Considering this, in an accounting year, they can claim up to INR 1,50,000 tax benefits under Section 80C. In addition, they have the flexibility to invest in several instruments such as Equity Linked Savings Schemes (ELSS), life insurance, and tax-saving Fixed Deposits (FDs) to claim tax deductions under Section 80C.

Senior Citizens and Others:

Senior citizens are those aged 60 and above. Under Section 80C of the Income Tax Act, 1961, these individuals can claim tax benefits. All investments mentioned in Section 80C, as well as specific options such as the Senior Citizen Savings Scheme (SCSS), can be used to claim tax deductions under this section.

These are the people who can claim tax deductions under Section 80C. Moving ahead, let's compare the available tax deductions for them.

Section 80C Deduction Comparison for Indians, NRIs, and HUFs

Here is a comparison of available deductions under Section 80C of the Income Tax Act for Indians, NRIs, and HUFs:

The table above shows the investments available for Indian residents and Non-Resident Indians to claim under Section 80C of the Income Tax Act. Moving further, let's examine the investments eligible under this section and their associated risk comparison.

Eligible Investments Under 80C and Risk Comparison

The table below compares several features of the deduction options available under Section 80C. It simplifies the process for taxpayers to select the one that suits them the most.

Apart from the above-stated investments, under Section 80C, expenses incurred in the principal repayment of a home loan and tuition fees of children can also be claimed as tax deductions.

This was all about the comparison of different investments that are part of the Section 80C deduction list and their risk factor. Moving ahead, let's know the tax deduction limits under different sections.

Deduction Limits Under Sections 80C, 80CCC, 80CCD(1), 80CCE, and 80CCD(1B)

Through Sections 80CCC and 80CCD, you can claim tax deductions for investments in pension schemes. The combined tax deductions you get from Sections 80C, 80CCC, and 80CCD(1) are up to INR 1,50,000. Apart from this, under Section 80CCD(1B), you can claim an extra tax deduction for National Pension Scheme (NPS) payments made. Hence, the total available tax deductions you can claim are INR 2,00,000 under Sections 80C, 80CCC, 80CCD(1), and 80CCD(1B). Confused? Have a look at the table below and resolve all your doubts.

These are the tax deduction limits under different sections.

Moving further, let's better understand section 80C through an example.

Section 80C – An Illustration

Mr. D, who is a taxable person in India, has an annual salary income of INR 10,00,000. In addition, he also has other income of INR 1,00,000. Apart from this, he has made an investment of INR 1,50,000 in the Public Provident Fund (PPF). Now, using Section 80C, let's know the difference in tax implications for claimed and unclaimed tax deductions.

Hence, by claiming a tax deduction using Section 80C of the Income Tax Act, 1961, Mr. D has saved INR 36,400 under the old tax regime.

Now, moving forward, how to claim tax deduction using this section.

How to Claim Section 80C Deductions

To claim tax deductions under Section 80C, consider the points stated below:

• Before 31st March of the fiscal year, invest in eligible investments that come under Section 80C.
• Gather proofs such as ELSS statements, deposit slips, and insurance premium receipts.
• To adjust TDS, specify the investments you made to your employer.
• Under Chapter VI-A, report the investments and file your Income Tax Return (ITR).
• Note: Section 80C deductions are available only under the Old Tax Regime. Taxpayers opting for the New Regime under Section 115BAC cannot claim these deductions.

This is how you can claim tax deductions under Section 80C and enjoy the tax benefits.

Final Word

Using Section 80C of the Income Tax Act during tax filing is a strategic way to achieve several financial goals, including wealth accumulation, funding education, and retirement planning. By understanding and utilizing the various provisions under this section, individuals across different income tax slabs can minimize their tax liability and secure their financial future.

Furthermore, if you need more guidance on this section or want assistance in claiming tax benefits under it, connect with Savetaxs. We have a team of experts who can provide you with a better understanding of this section and help you claim tax benefits efficiently.