Indian tax laws contain certain provision, which are intended to act as an incentive for achieving certain desirable socio economic objective. These provisions are contained in income tax act, 1961, chapter VI –A are in the form of deductions (80C TO 80U) from the gross total income. By reducing the chargeable income, these provision reduce the tax liability of an assesse.
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.
When we compute the total income from each head and treatment of clubbing income and set off loses are done, we received the gross total income. Certain deductions under section 80-c to 80-u are available to claimed from gross total income. However, the following income does not include in GTI while clamming the deduction section 80-c to 80-u
(a) Long term capital gain
(b) Short term capital gain which is taxed at special rate of 15%
(c) winning from lotteries, race horses, card game i.e casual income
Each of these sections caters to a specific type of investments or expenses. For instance, Section 80CCD is for pension scheme deductions. In other words, if you are investing any amount towards your future pension plans, you can claim deductions under this section.
Similarly, for any LIC Deduction, Section 80CCC is handy. For all investments related to LIC annuity plans that you buy during a fiscal year, you can claim deductions under this section. The final pension that you receive might be subject to income taxes at a later stage, but this is for the premium that you pay up front.
Section 80C is the most popular section that a vast majority of taxpayers utilize. This includes investment under various instruments such as Equity Linked Savings Scheme or ELSS, National Pension Scheme, tax saving Fixed deposits, Unit linked insurance plans (ULIP) or PPF Deduction.
Chapter VIA has various heads under which you can not only invest and save money but at the same time save money in the form of taxes. The following are all the details that you would need to know about Chapter VIA.
Deductions under chapter VIA are framed in order to give the benefit to the Assesse so that he can lower his total income thereby reducing the taxes.
The maximum tax exemption limit under Section 80C has been retained as Rupees 1.5 Lakh only. The various investment avenues or expenses that can be claimed as tax deductions under section 80c are as below:-
- PPF (Public Provident Fund)
- EPF (Employees’ Provident Fund)
- Five-year Bank or Post Office Tax saving Deposits
- NSC (National Savings Certificates)
- Kid’s Tuition Fees
- Post office Senior Citizen Savings Scheme
- Principal repayment of Home Loan
- NPS (National Pension System)
- Life Insurance Premium
- SSA (Sukanya Samriddhi yojna Account Deposit Scheme)
Contribution to annuity plan of LIC (Life Insurance Corporation of India) or any other Life Insurance Company for receiving pension from the fund is considered for tax benefit. The maximum allowable Tax deduction under this section is Rupee 1.5 Lakh.
SEC 80 U
Section 80U offers tax benefits if an individual suffers a disability, while Section 80DD offers tax benefits if an individual taxpayer’s dependent family member(s) suffers from a disability. This article is centred around discussing the tax benefits available under Section 80U.
Deduction from gross total income of an individual or HUF, up to a maximum of Rs. 10,000/-, in respect of interest on deposits in savings account with a bank, co-operative society or post office can be claimed under this section. Section 80TTA deduction is not available on interest income from fixed deposits.