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Income Tax Chapter VI-A Deductions

Deduction under Income Tax help you save taxes. So, the income tax deduction reduce your gross income (means the income on which, tax has to be paid).Thereby, reducing your tax on your total income.

There are a number of deductions available under various sections that will bring down your taxable income. You can seek Deduction under Chapter VI A, which will help you reduce your taxable income. There are a lot of deductions available under various sections to help you bring down the taxable income. For example, you can claim deductions under sections 80C, 80CCC, 80CCD, 80CCE and 80D.

The most popular one is section 80C of Chapter VIA. Other preferred deductions under chapter VIA are 80D, 80E, 80G and so on. Let us discuss some of the important deductions under chapter VIA that a taxpayer can claim:

Section 80C: 

Under Section 80C, a taxpayer can claim a deduction for the investments made and expenses incurred up to INR 1,50,000 in a financial year. Section 80C allows individuals and HUFs to claim tax deduction.

Some of the eligible deduction under Section 80C of the Income Tax Act are:

i) Contribution to Public Provident Fund (PPF)

ii) Investment Tax Saving Fixed Deposit

iii) Investment in National Pension Scheme (NPS)

iv) Investment in National Savings Certificate (NSC)

v) Sukanya Samriddhi Yojana

vi) Life Insurance Premium

vii) Tuition Fees

viii) Repayment of Housing Loan

Section 80CCC:

Section 80CCC income tax deduction is with respect to the contributions made towards pension plans by an individual.

An important highlight of Section 80CCC is that its deduction limit is clubbed along with the limits of sections 80CCD and 80C. That is why the maximum deduction limit is Rs 1,50,000 under 80CCC.

Section 80CCD:

Tax benefits are applicable on contributions made to the NPS by salaried and self-employed assesses as well as their employers.

The applicable tax deduction that can be claimed is 10% of salary (basic and dearness allowance) for salaried assesses or 10% of gross income for the self-employed can be claimed with the maximum deduction of up to INR 1.5 lakhs.

Section 80D:

Section 80D of the Income Tax Act provides income tax deductions related to the medical insurance premium paid for you and your family members.

Health insurance premium paid for Self, Spouse or dependent children is tax deductible upto Rs 25,000. If any one of the persons specified is a senior citizen and Mediclaim Insurance premium is paid for such senior citizen then the deduction amount will be Rs. 50,000.

Section 80E:

A taxpayer is allowed to claim deduction under Chapter VI-A for the Repayment of Education Loan (Section 80E) and for the Repayment of Home Loan.

Only an individual can claim this deduction. The deduction allowed is the total interest part of the EMI paid during the financial year.

Section 80EE:

Tax deduction under Section 80EE of the Income Tax Act 1961, can be claimed by first-time home buyers for the amount they pay as interest on home loan.

Section 80EE provides certain criteria that help the tax-payer to claim an additional deduction up to Rs. 50,000/-. This benefit is on the interest paid on the home loan and is not part of Section 80C of the Income Tax Act, 1961.

Section 80G:

As per the provisions of section 80G of Income-tax Act, 1961, deductions are available for donations to certain notified funds, charitable institutions or other institutions/ funds set up by the Government of India.

Section 80GG:

Section 80GG under the Income Tax Act, 1961, provides tax relief to those individuals who do not receive any house rent allowance but are paying rent for the stay.

Least of the following amount is available as deduction under this section:
a) Rent paid in excess of 10 percent of total income
b) 25% of the total income
c) Rs 5,000 per month

Section 80GGB:

This section of the Income Tax Act 1961 mainly deals with donations and contributions made by Indian Companies towards political parties or electoral trusts.

Section 80RRB:

The Section 80RRB offers tax incentives to patent holders, providing tax relief to resident individuals who receive an income by means of royalty on their patent.

Section 80U:

If you are suffering from a disability, then you can claim deduction under section 80U. But if you claim deduction under this section, then any other individual cannot claim deduction on your behalf under section 80DD as mentioned above.

If a person is suffering from at least 40% disability, he/she can claim a tax deduction upto Rs. 75,000 on the taxable income under section 80U.

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Note: This Post was last updated on January 23, 2023

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