Income Tax Deductions List: Deductions Under Section 80C, 80CCC, 80CCD, and 80D for FY 2023-24 (AY 2024-25)

Income Tax Deductions List: Deductions Under Section 80C, 80CCC, 80CCD, and 80D for FY 2023-24 (AY 2024-25)
Table of Contents

Introduction

As the financial year 2023-24 has come to an end, it’s essential to understand the various income tax deductions available to taxpayers. These deductions can significantly reduce your taxable income, thereby lowering your overall tax liability. This comprehensive guide covers the key deductions available under Sections 80C, 80CCC, 80CCD, and 80D, helping you make informed decisions to optimize your tax savings. This Income Tax Deductions List will guide you through the various benefits and help you maximize your savings while preparing for your ITR Return Filing.

  1. Section 80C: Deductions for Investments and Payments

Section 80C is one of the most popular and widely used sections for tax-saving investments and expenses. The maximum deduction available under Section 80C is 1,50,000.

Eligible Investments and Payments

Investments and Payments

  • Public Provident Fund (PPF): Contributions to a PPF account qualify for deduction under Section 80C. The interest earned is tax-free, and the account has a 15-year tenure.
  • Employee Provident Fund (EPF): Employee contributions to EPF are eligible for deduction under Section 80C. The employer’s contribution is exempt from tax up to a certain limit.
  • National Savings Certificate (NSC): Investments in NSC are eligible for tax deduction. The interest earned is taxable, but it qualifies for a deduction under Section 80C.
  • Sukanya Samriddhi Yojana: Contributions to this scheme, aimed at securing the future of a girl child, qualify for deductions. The interest and maturity amounts are tax-free.
  • 5-Year Fixed Deposit: A fixed deposit with a tenure of five years or more with a scheduled bank qualifies for a deduction under Section 80C.
  • Life Insurance Premium: Premiums paid for life insurance policies for yourself, your spouse, and your children are eligible for deduction. The policy must comply with certain conditions regarding the sum assured.
  • Tuition Fees: Tuition fees paid for up to two children’s education in India can be claimed under Section 80C.
  • Principal Repayment of Home Loan: The principal portion of your home loan repayment qualifies for deduction under Section 80C.
  1. Section 80CCC: Deduction for Pension Funds

Section 80CCC provides deductions for contributions to certain pension funds. The maximum deduction available under this section is 1,50,000, which is shared with Section 80C.

Eligible Contributions:

  • Pension Plans: Contributions made to annuity plans or pension funds offered by insurance companies qualify for deductions under Section 80CCC. The pension received from these plans is taxable.
  1. Section 80CCD: Deductions for National Pension Scheme (NPS)

Section 80CCD focuses on contributions to the National Pension Scheme (NPS) and offers an additional deduction over and above Section 80C.

Subsections:

  • Section 80CCD(1): Employee contributions to NPS qualify for deductions up to 10% of salary (basic + dearness allowance) for salaried individuals and 20% of gross income for self-employed individuals, subject to a cap of 1,50,000 (including Section 80C and 80CCC).
  • Section 80CCD(1B): An additional deduction of 50,000 is available for contributions to NPS. This is over and above the 1,50,000 limit of Section 80C.
  • Section 80CCD(2): Employer contributions to NPS up to 10% of the employee’s salary (basic + dearness allowance) qualify for an additional deduction. This is not part of the 1,50,000 limit of Section 80C.
  1. Section 80D: Deductions for Medical Insurance

Section 80D provides deductions for premiums paid for medical insurance and preventive health check-ups. This section encourages taxpayers to secure health insurance for themselves and their families.

Eligible Deductions:

  • Self, Spouse, and Children: Premiums paid for medical insurance for self, spouse, and dependent children qualify for a deduction up to 25,000. If the insured is a senior citizen, the limit increases to 50,000.
  • Parents: Premiums paid for medical insurance for parents are also eligible for deductions. If the parents are below 60 years, the limit is 25,000. For senior citizen parents, the limit is 50,000.
  • Preventive Health Check-up: Expenses incurred on preventive health check-ups up to 5,000 are eligible for deduction within the overall limits mentioned above.
  • Medical Expenditure for Senior Citizens: For senior citizens (aged 60 years and above) not covered under any health insurance, medical expenditure up to 50,000 can be claimed.

Strategic Tax Planning Tips

Strategic Tax Planning Tips

To maximize your tax benefits, consider the following strategies:

  • Utilize the Full Limit of Section 80C: Ensure you are fully utilizing the 1,50,000 limit under Section 80C by investing in a combination of eligible schemes and making qualifying payments.
  • Additional NPS Contributions: Take advantage of the additional 50,000 deduction under Section 80CCD(1B) by contributing more to your NPS account.
  • Health Insurance for All: Invest in health insurance policies for yourself, your family, and your parents to avail deductions under Section 80D. Consider comprehensive policies that cover a wide range of medical expenses.
  • Preventive Health Check-ups: Keep records of expenses incurred on preventive health check-ups to claim deductions within the specified limits.
  • Pension Plans: Evaluate pension plans under Section 80CCC to secure your retirement and gain tax benefits.

Conclusion

Understanding the various deductions under Sections 80C, 80CCC, 80CCD, and 80D can help you effectively plan your finances and reduce your tax liability for the financial year 2023-24 (assessment year 2024-25). By strategically investing and making eligible payments, you can optimize your tax savings while ensuring financial security for yourself and your family. Refer to the Income Tax Deductions List for a comprehensive overview of these deductions and how they can benefit you.

For more personalized advice and detailed planning, consider consulting with a tax professional who can guide you based on your unique financial situation.

Call to Action

For more insights on tax planning and to ensure you make the most of available deductions, Stay updated with the latest tax news, tips, and professional advice, including a comprehensive Income Tax Deductions List, to secure your financial future. Contact Apkireturn at +91 766-515-6000.

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