Tax deductions under Sections 80C, 80CCC, 80CCD, and 80D | Academy Tax4wealth

1. TaxDeductionsUnderSections80C,80CCC,80CCD,and 80D

2. Taxdeductionscanhelpapersonreducetheiroveralltaxburden,lowertheir taxableincome,andultimatelysavemoneyontaxes.Manypeopleattemptto lowertheirincometaxesbyinvestingintax-advantagedtechniques.Howmuch tax can be avoided depends on the type of tax advantage claimed. Tax DeductionsunderSections80C,80CCD,80CCC,and80DoftheIncome TaxActofferdeductionssubjecttodifferentlimits.Theaforementioned deductionsareatypeofgovernmentassistancethatassiststaxpayersinlowering theirtaxableincomeandtaxburdenforanygivenfiscalyear.Theyalsoencourage taxpayerstosaveandinvest,whichhelpsthemestablishastablefinancialfuture. Deductioneligibilityisdeterminedbyanumberoffactors,withdifferentcriteria specifiedforspecificaims. Inthisblog,youwilllearnaboutthemanyinvestmentsandexpenditure categoriesthatwillallowyoutodeductyourtaxableincome. Overview - 80C,80CCC,80CCD,and 80D: Sections80Cand80D,aswellasthesubsectionsofSection80C,are explainedinthissection,includingSection80CCC,Section80CCD(1), Section80CCD(1b),andSection80CCD(2a)(2). Section80C: InvestmentsinPPF,EPF,LICpremiums,EquityLinkedSavingsPlans, principalpaymentsonhouseloans,stampdutyandregistrationfeesforthe acquisitionofproperty,SukanyaSmriddhiYojana(SSY),NationalSavings Certificate(NSC),SeniorCitizenSavingsScheme(SCSS),ULIP,tax-savingFixed Depositsforfiveyears,InfrastructureBonds,andotherfinancialinstrumentsare alleligiblefordeductionsundersection80C. Section80CCC: Paymentsmadetoannuitypensionplansaredeductiblefromincome undersection80CCC.Taxes,however,mustbepaidonthepensionreceived

3. fromtheannuityaswellasanymoneyreturneduponsurrender,includingany accumulatedinterestorbonuses. • 3.Section80CCD (1): • Accordingtosection80CCD(1),anemployee'scontributionmaybededucted uptothefollowingamount: • Tenpercentofgrosscompensation(incase thetaxpayerisan employee) • Twentypercentof overall revenue (in case of self-employment) • ₹1.5Lakh(maximumallowable underSection80C) (limitpermitted underSection80C) Section80CCCD (1b): Anadditionaldeductionof50,000maybemadeforfundsplacedintoanNPS account.Also,contributionsmadetotheAtalPensionYojanaaretaxdeductible. Section80CCD(2): Employers may deduct as their contribution under this provision up to 10% of the basic pay plus the depreciation allowance. The perks in this area are only available topersonswhoaresalariedemployeesandnotindependentcontractors. Section80D: According to Section 80D, ataxpayer maywrite off the tax they paid onmedical insurancepremiumsforthemselves,theirspouse,theirparents,andany dependentchildren.ThisdeductionisavailabletobothindividualsandHUF. Themaximumdeductionamountisinfluencedbyage.Adeductionof$25,000is allowedforthetaxpayer,theirspouse,andanydependentchildren.Anexcess deductionof$25,000isavailableforinsurancepremiumspaidforparentsunder theageof60.Adeductionof$50,000ratherthan$25,000isallowedifany insurer—you,yourspouse,oryourparents—isolderthan60.

4. DEDUCTIONUNDERSECTION80C: (DeductiononInvestments)- BothindividualsandHUFareeligibletodeductspecificcontributionsfromtheir taxesunderSection80CoftheIncomeTaxAct,whichtookeffectonApril1, 2006.Thus,we'veexaminedthemethodsthataremostfrequentlyusedtodeduct incometaxes. Section80C'sannualexemptioncapof1.5lakhrupeesiscomprisedofthe deductionspermittedbySubsections80C,80CCC,and80CCD. Theinvestmentsthatarenowmentionedcanbededucted,making themeligibleforSection80Cdeductions.

6. DEDUCTION UNDER SECTION 80CCC (AnnuityPaymentPaidUnderAnyInsurancePlanIsDeductible) Thisclausepermitstaxdeductionsforpensionfundinvestments.Thesepension fundsmaybeprovidedbyanyinsurer,andamaximumdeductionof1.5lakh rupeesmaybeaskedfor.Individualtaxpayersaretheonlyoneswhoareeligible tousethisdeduction. DEDUCTIONUNDERSECTION80CCD: (DeductionforContributiontoPensionAccount) Section80CCD(1) (Employee)- Taxdeductionsareavailableforemployeecontributionsupto10%ofbasicpay anddearnessallowances(DA)uptoRs.1.5lakh. Section80CCD(1b)(Self)- Underthisclause,theemployer'scontributioniseligibleforadeductionupto 10%ofbasicplusDA.Theemployer'scontribution,however,isaseparate deductionbecauseitisnotincludedinthe1.5lakhpermittedunderSection 80C. Section80CCD (2)(Employment): Theonlyotherpartthatallowsforanextraexemptionofupto50,000inNPSis thisone.Pleasetakenoticethatthetaxbenefitofanextra50,000isinadditionto the1.5lakhsclaimedunderallotherinvestments. Inconclusion,thecombinedtaxadvantagesunderSection80CCD(1)+ Section80CCD(1B)may,undercertainconditions,reachamaximumof2 Lakhsfortheapplicablefinancialyear. Medicalinsurancepremiumsaredeductible.

7. HinduUndividedFamiliesandindividualsarebotheligiblefordeductionsHinduUndividedFamiliesandindividualsarebotheligiblefordeductions underSection80D.Onemaydeductthecostoftheirhealthinsurancepremiums aswellasthecostoftheirannualpreventivehealthexamsforthemselves,their spouse,theirdependentchildren,andtheirparents,butonlytotheextent permittedbythelimitationsandguidelinessetforthinSection80Dofthe IncomeTaxActof1961. Inconclusion,theassessesisqualifiedtodeduct$25,000forinsurancefor themselves,theirspouses,andtheirdependentchildrenunderSection80D.If theassessorisolderthan60,theyareeligibleforthisreductionuptoamaximum of50,000.Overandabovetheaforementionedclaim,theassessesarealso qualifiedforafurtherdeductionofupto25,000forparentinsurance.Also,ifthe parentsareabove60,adiscountof50,000rupeesispossible. Overall,thehighestdeductionavailableunderthisprovisionis$100,000ifthe assessesandhisorherparent(s)areboth60yearsofageorolder. Formoreinfo,Visitusat:https://academy.tax4wealth.com/blog