Section 80C is a popular and well-liked section among taxpayers because it allows them to lower their taxable income by making tax-saving investments or incurring qualified costs. It enables a maximum deduction of Rs 1.5 lakh from the taxpayer's total income per year.

Individuals and HUFs can both profit from this deduction. This deduction is not available to corporations, partnership firms, or LLPs. Section 80C contains the subsections 80CCC, 80CCD (1), 80CCD (1b), and 80CCD (2b) (2).

It is vital to remember that the overall ceiling for claiming deduction, including subsections, is Rs 1.5 lakh, with an additional deduction of Rs 50,000 allowed under Section 80CCD (1b)

Here are some investment options that are allowed as deduction u/s 80C. They not only help you with saving taxes but also help you grow your money. A quick comparison for the options is tabulated below :

Interest on savings bank accounts is deducted from gross total income.

You may deduct up to Rs 10,000 from your interest income from savings accounts with banks, co-operative societies, or post offices if you are an individual or HUF. Do not forget to subtract interest from savings account from other income.

Fixed deposit, recurring deposit, and corporate bond interest income are not eligible for the section 80TTA deduction.

Deduction for House Rent Paid in Case of Non-HRA

When HRA is not received, a Section 80GG deduction is possible for rent paid. The taxpayer should not possess a residence near their place of employment, nor should their spouse or small kid.

The taxpayer should not own any other self-occupied residential property.

The taxpayer must pay and live in a rental.

Everyone is eligible for the deduction.

The following are the minimum deductions that are available:

Rent paid less 10% of total income after adjustments

5,000 rupees per month

25% of total adjusted income

Note: Adjusted Gross Total Income is obtained by subtracting certain deductions, exempt income, long-term capital gains, and income from non-residents and foreign corporations from the Gross Total Income.

Because the restrictions are automatically computed, using online ITR e-filing software like that from TODAYFILINGS can be incredibly simple. Therefore, you do not need to worry about performing difficult computations.

From FY 2016–17 onward, the monthly deduction amount has increased from Rs 2,000 to Rs 5,000.

Interest on higher education loans can be deducted.

An individual is permitted to deduct the interest paid on loans received to pursue higher education. This loan may have been taken on behalf of the taxpayer, their spouse, their children, or a student over whom they have legal custody.

The 80E deduction is available for a maximum of 8 years (starting in the year when interest repayment begins), or until all interest has been paid, whichever comes first. The amount that may be claimed is not constrained.

Deductions on Home Loan Interest for First Time Home Owners

FY 2017-18 and FY 2016-17

If the loan was taken out in FY 2016–17, this deduction is available in FY 2017–18.

Only homeowners (individuals) with a single residence on the day the loan was approved are eligible for the deduction under section 80EE. The home loan must be for less than Rs 35 lakh, and the property value must be less than Rs 50 lakh. The financial institution's loan must have been approved between April 1, 2016, and March 31, 2017.

In addition to the Rs 2 lakh deduction (on the interest component of the house loan EMI) permitted under section 24 there is an additional deduction of Rs 50,000 available on your home loan interest.

FY 2013-14 and FY 2014-15

The first-time home valued no more than Rs 40 lakh qualified for this section's deduction for the relevant financial years. You can only use this if your total loan during this time is less than Rs 25 lakh.

Loan approval must occur between April 1, 2013, and March 31, 2014. The total deduction permitted under this clause, which is permitted for the fiscal years 2013–2014 and 2014–2015, cannot exceed Rs 1 lakh.

Deduction for the premium paid for Medical Insurance.

Section 80D allows you (as a person or HUF) to deduct Rs. 25,000 for insurance for yourself, your spouse, and your dependent children. If your parents are under 60, you may also deduct an additional Rs 25,000 for their insurance. In the 2018 Budget, this sum was doubled from Rs 30,000 to Rs 50,000 for parents who are older than 60.

If both the taxpayer and the taxpayer's parent(s) are 60 years of age or older, the maximum deduction allowed by this clause is Rs. 1 lakh.

Example: Both Rahul and his father are 65 years old. The most Rahul may deduct in this situation under section 80D is Rs. 100,000.

A cumulative additional deduction of Rs. 5,000 is permitted for preventive health checks starting in the fiscal year 2015–16.

Deduction for Rehabilitation of Handicapped Dependent Relative.

Section 80DD deduction is available to a resident individual or a HUF and is available on

Expenditures made for a dependent, handicapped person's training, medical care (including nursing care), and rehabilitation

Payment or deposit made to a designated scheme for a disabled dependent relative's maintenance.

A certificate of incapacity from a recognized medical authority is necessary to claim this deduction.

As of FY 2015–16, the deduction thresholds of Rs. 50,000 and Rs. 1,000,000 have been increased to Rs. 75,000 and Rs. 1,25,000, respectively.

Deduction for Medical Expenditure on Self or Dependent Relative

For individuals and HUFs below age 60

A resident individual or a HUF is eligible for a deduction of up to Rs. 40,000. It can be used to cover any costs associated with the treatment of specific medical conditions for the owner or any of his dependents. Such a deduction is possible for a HUF in relation to medical costs related to these designated illnesses for any HUF member.

For senior citizens and super senior citizens

The individual or HUF taxpayer may claim a deduction of up to Rs 1 lakh if the elderly person for whose benefit the costs were incurred. Up till FY 2017–18, a senior citizen and a super senior citizen may each claim a deduction of Rs. 60,000 and Rs. 80,000. Unlike before, this is now a standard deduction that is available to all senior citizens, including super senior citizens, up to Rs 1 lakh.

For reimbursement claims

The amount of the deduction that the taxpayer may claim under this section shall be reduced by any reimbursement of medical expenses by an insurer or employer.

Also keep in mind that in order to claim such a deduction, you must obtain a prescription for such medical treatment from the relevant specialist. Take a look at our in-depth article on Section80DDB

Deduction for Person suffering from Physical Disability

A resident with a physical impairment (including blindness) or mental retardation is eligible for a deduction of Rs. 75,000. One may be eligible for a deduction of Rs. 1,25,000 in cases of extreme disability.

Section 80U deduction limits for FY 2015–16 were increased from Rs. 50,000 to Rs. 75,000 and from Rs. 1,000,000 to Rs. 1,25,000.

Deduction for donations towards Social Causes

The various donations listed in section 80G may be deducted up to 100% or 50%, with or without limitations.

Any cash donations made in excess of Rs 2,000 will no longer be deductible as of FY 2017–18. To qualify for an 80G deduction, donations over Rs 2000 must be made using a different payment method than cash.

Donations with 100% deduction without any qualifying limit

National Defense Fund set up by the Central Government

Prime Minister’s National Relief Fund

National Foundation for Communal Harmony

An approved university/educational institution of National eminence

Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district

Fund set up by a State Government for the medical relief to the poor

National Illness Assistance Fund

National Blood Transfusion Council or to any State Blood Transfusion Council

National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities

National Children's, Sports and Cultural Fund

Fund for Technology Development and Application

Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory

The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996

The Maharashtra Chief Minister’s Relief Fund during October 1, 1993 and October 6,1993

Donations with 50% deduction without any qualifying limit

Jawaharlal Nehru Memorial Fund

Prime Minister’s Drought Relief Fund

Indira Gandhi Memorial Trust

The Rajiv Gandhi Foundation

Contribution to the following is tax deductible at 100% up to 10% of adjusted gross total income.

To be used by the government or any recognized local authority, institution, or group to advance family planning

Contribution by a Company to the Indian Olympic Association or to any other authorized organization or institution operating in India for the purpose of building facilities for sports and games there or of sponsoring sports and games there.

Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income

Any other institution or fund that complies with Section 80G(5)

To be used by the government or any local authority for any philanthropic endeavors other than to support family planning

Any organization created in India with the intent to address and address the housing accommodation needs or to plan, develop, or improve cities, towns, villages, or both.

Any company listed in Section 10(26BB) for advancing the interests of the minority community

For any notified temple, mosque, gurudwara, church, or other building that needs repairs or renovations.

Deduction on contributions given by companies to Political Parties

Article 80GGB An Indian firm is permitted to deduct its contributions to political parties or electoral trusts. For contributions made in any manner other than cash, deductions are permitted.

Deduction on contributions given by any person to Political Parties

Any sum given to a political party or electoral trust may be deducted by an individual taxpayer under section 80GGC. Companies, municipal governments, and artificial juridical persons sponsored entirely or partially by the government are not eligible for it. Only if you pay in a method other than cash are you eligible for this deduction.

Deduction with respect to any Income by way of Royalty of a Patent

80RRB Deduction is possible for up to Rs. 3 lakh or the amount of the income received, whichever is smaller, for any royalties earned for patents registered on or after April 1, 2003 under the Patents Act, 1970.

The taxpayer must be an Indian resident and an individual patentee. A certificate in the required format, duly signed by the required authority, must be provided by the taxpayer.

Deduction of Interest on Deposits for Senior Citizens

With the introduction of a new section 80TTB in the 2018 budget, senior citizen deposit interest income will now be eligible for deductions. The maximum deduction allowed is Rs. 50,000.

There will be no further deductions permitted under section 80TTA. The threshold level for TDS on interest income payable to seniors will also be increased by amending section 194A of the Act in addition to section 80 TTB. According to the most recent Budget, the former cap of Rs 10,000 was raised to Rs 50,000.