Wednesday, 2 July 2014

Deductions on Section 80C, 80CCC & 80CCD

Section 80C

This section has been introduced by the Finance Act 2005. Broadly speaking, this section provides deduction from total income in respect of various investments / expenditures / payments.


  1. Life Insurance Premium for individuals. The policy must be in the assesse's or spouse's or any child's name. For a HUF, it may be on life of any member of HUF. The 80C deduction is valid on insurance policies purchased after 1st April, 2012 only if the premium is less than 10% of sum assured. Benefits for existing purchased policies continue.
  2. Sum paid under contract for deferred annuity for an individual on the life of the assesse, spouse or any child.
  3. Sum deducted from salary payable to Govt. Servant for securing deferred annuity for self-spouse or child Payment limited to 20% of salary.
  4. Contribution made under Employee's Provident Fund Scheme.
  5. Contribution to PPF for individual can be in the name of the assesse, the spouse or any child. For a HUF, it can be in the name of any member of the family.
  6. Contribution by employee to a Recognised Provident Fund.
  7. Sum deposited in 10/15 year account of Post Office Saving Bank
  8. Subscription to any notified securities/notified deposits scheme. e.g. NSS
  9. Subscription to any notified savings certificate, Unit Linked Savings certificates. e.g. NSC VIII issue.
  10. Contribution to Unit Linked Insurance Plan of LIC Mutual Fund e.g. Dhanrakhsa 1989
  11. Contribution to notified deposit scheme/Pension fund set up by the National Housing Scheme.
  12. Payments of instalments or part payments of loan taken for buying or constructing residential house property. However, if the property is transferred before the expiry of 5 years from the end of the financial year in which possession of such property is obtained by him, the aggregate amount of deduction of income so allowed for various years shall be liable to tax in that year.
  13. Contribution to notified annuity Plan of LIC (e.g. Jeevan Dhara) or Units of UTI / notified Mutual Funds.
    Note if in case of such contributions the deduction under Section 80CCC has already been availed, the rebate under Section 88 would not be allowable.
  14. Subscription to units of a Mutual Fund notified u/s 10(23D).
  15. Subscription to deposit scheme of a public sector, company engaged in providing housing finance.
  16. Subscription to equity shares/ debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions.
  17. Tuition fees paid to any school, college, university or other educational institution situated within India for the purpose of full time education of any two children.
  18. An additional deduction upto a maximum of Rs. 20,000/- will be available from Assessment Year 2011-12 (FY 2010-11) for investment in Infrastructure Bonds.

Section 80CCC: Deduction in respect of Premium Paid for Annuity Plan of LIC or Other Insurer

Payment of premium for annuity plan of LIC or any other insurer Deduction is available upto a maximum of Rs. 100,000.
The premium must be deposited to keep in force a contract for an annuity plan of the LIC or any other insurer for receiving pension from the fund.

Section 80CCD: Deduction in respect of Contribution to Pension Account

Deductions to the extent of 10% of one's salary are available on deposits made by a Central government servant in one's pension account.
If the Central Government makes any contribution to the pension account, deduction of such contribution to the extent of 10% of salary shall be allowed. Further, in any year where any amount is received from the pension account such amount shall be charged to tax as income of that previous year.

Remember: The limit for maximum deduction available under Sections 80C, 80CCC and 80CCD (combined together) is Rs. 1,00,000/- (Rs. one lac only).

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