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Deduction in respect of Life Insurance Premium, Deferred Annuity, Contribution to Provident Fund, Subscription to certain Equity Shares or Debenture, etc. [Section 80C]

(A)        Which assessees are allowed Deduction U/s 80C

This deduction is allowed only to the following assessees from their gross total income computed as per provisions of the Act:

(i)            an Individual; or

(ii)           a Hindu Undivided Family.

(B) Deduction allowed on account of the following Savings / Investment cannot exceed Rs. 1,50,000:

The above assessees shall be entitled to a deduction of whole of the amount paid or deposited in the previous year, being the aggregate of sum referred to below as does not exceed Rs. 1,50,000

(1)          any sum paid by an individual to effect or to keep in force an insurance on the life of:

(a)          an individual himself,

(b)          his / her spouse, and

(c)           any child of such individual.

The children may be married / unmarried, dependent/not dependent on the individual.

In the case of Hindu Undivided Family (HUF) the premium should be paid on the life of any
member of the family.

(2)          any contribution by the employee towards a statutory provident fund or recognised provident fund. The deduction in this respect is allowable to an individual only;


(3)          any contribution to a public provident fund by an individual or HUF.

 

(4)          any contribution by an employee to an approved superannuation fund:

 

(5)          any subscription by an individual or HUF to National Savings Certificates (VIII or IX Issue). Any interest accrued on these certificates which is deemed to be reinvested also qualifies for deduction;

(6)          any contribution by an individual or HUF for participation in the Unit Linked Insurance Plan of the Unit Trust of India or Unit Linked Insurance Plan of LIC Mutual Fund

 

(7)          Payment made by an individual or HUF to effect or keep in force a contract for notified annuity plan of the Life Insurance Corporation or any other insurer.

 

New Jeevan Dhara, New Jeevan Dhara - I and New Jeevan Akshay, New Jeevan Akshay-I and New Jeevan Akshay-II are the schemes which have been notified;

(8)          any subscription by an individual or HUF to any deposit scheme or contribution to any pension fund set up by the National Housing Bank.

(9)          a subscription by an individual or HUF to any notified deposit scheme of:

(a)           a public sector company which is engaged in providing long-term finance for construction or purchase of houses in India for residential purposes: or

(b)          any authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both;

(10)        any sum paid by an individual as tuition fees provided following conditions are satisfied:

(i)            Such sum should have been paid as tuition fees excluding any payment towards development fees or donation or payment of similar nature.

(ii)           It should have been paid at the time of admission or thereafter.

(iii)          It is paid to any university, college. school or other educational institution situated within India.

(iv)          It is paid for the purpose of full-lime education.

(v)           It is paid for any two children of such individual.

(11)        any payment by an individual or HUF for purchase or construction of a residential house property, the income from which is chargeable to tax under the head Income from house property.

(12)        any sum deposited in a term deposit—


(a)           for a fixed period of not less than 5 years with a scheduled bank: and

 

(b)          which is in accordance with a scheme framed and notified by the Central Government in the Official Gazette for the purposes of this clause.

 

(13)        Subscription to such bonds issued by the National Bank for Agriculture and Rural Development (NABARD) as the Central Government may, by notification in the Official Gazette, specify in this behalf.

 

(14)        Any sum deposited in an account under the Senior Citizens Saving Scheme Rules, 2004.

 

(15)        Any sum deposited as 5 years-time deposit in an account under the Post Office Time Deposit Rules, 1981.

 

(16)        any sum contributed by an employee of the Central Government, to a specified account of the pension scheme referred to in section 80CCD—


(a)           for a fixed period of not less than 3 years: and

 

(b)          which is in accordance with the scheme as may be notified by the Central Government in the Official Gazette for the purposes of this clause.


Note :

 

1.            The deduction is allowed only when the specified amount has been actually paid during the previous year.

 

2.            Deduction under section 80C is not available from Long-Term Capital Gains and Short-Term Capital Gain covered under section 111A.

 

 

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