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Deduction Under Section 80 C ( How to Find Out)

1.7.      Deduction under section 80C- How to find out

Section 80C has been inserted from the assessment year 2006-2007 onwards. Section 80C provides deduction in respect of specified qualifying amounts paid deposited by the assessee in the previous year.

The following are the main provisions of the newly inserted Section 80C. :

  1. Under Section 80C , deduction would be available from Gross Total Income.

  2. Deduction under section 80C is available only to individual or HUF.

  3. Deduction is available on the basis of specified qualifying investments / contributions / deposits / payments made by the taxpayer during the previous year.

  4. The maximum amount deduction under section 80C , 80CCC, and 80CCD can not exceed  Rs.1 lakh.

The Deduction is calculated as per the following steps –

Step-1  : Gross qualifying Amount which is the aggregate of the following…

    1. Life Insurance Premium

    2. Payment in respect of non-commutable deferred annuity.

    3. Any sum deducted form salary payable to Govt. employee for the purpose of securing him a deferred annuity.

    4. Contribution towards Statutory Provident Fund and Recognised Provident Fund.

    5. Contribution towards 15-year Public Provident Fund

    6. Contribution towards an Approved Superannuation Fund.

    7. Subscription to National Saving Certificates, VIII Issue.

    8. Contribution for participating in the Unit-linked Insurance Plan (ULIP) of UTI.

    9. Contribution for participating in the Unit-linked Insurance Plan (ULIP) of LIC Mutual Fund.

    10. Payment to notified annuity plan of LIC

    11. Subscription towards notified Units of Mutual Fund or UTI.

    12. Contribution to notified Pension Fund set up by Mutual Fund or UTI.

    13. Any sum paid as subscription to Home Loan Account Scheme of the National Housing Bank.

    14. Any sum paid as Tuition Fees for full time education of any 2 children of an individual.

    15. Any payment towards the cost of purchase / construction of a residential Property.

    16. Amount invested in approved Debenture of , and equity shares in, public company engaged in infrastructure.

    17. Amount deposited in as Term Deposit for a period of 5 years or more in accordance with a scheme framed by the Government.

    18. Subscription to any notified Bonds of National Bank for Agriculture and Rural Development ( NABARD)

    19. Amount deposited under Senior Citizens Saving Scheme.

    20. Amount deposited in 5 Year Time Deposit in Post Office.

Step-2  : Net Qualifying Amount :
Deduction u/s 80C is available on the basis of Net Qualifying Amount which is determined as under …

    1. Gross Qualifying Amount ; or

    2. Rs. 1,50,000 [ Rs. 1,00,000 upto A.Y. 2014-2015]

      Whichever is LESS.

Step-3  : Amount of Deduction :
Amount Deduction u/s 80C is computed as under :

    1. Net Qualifying Amount ; or

    2. Rs. 1,50,000 [ Rs. 1,00,000 upto A.Y. 2014-2015]

Whichever is LESS.

The aggregate deduction u/s 80C, 80CCC, and 80 CCD can not exceed Rs. 1,50,000.

Allowances Under Section-17(3) under Head 'Salary' Income
Chart Showing Computation of 'Salary' Income
Computation of 'Gross Salary' Income
Computation of 'Net Salary' Income :
Deduction Under Section 80 C ( How to Find Out)
Exemption Specified in Income Tax Rules in 'Salary' Income
'Perquisies' and 'Income Tax - ( Taxable and Exempted) - Salary :
Computation of 'Profit in Lieu of Salary' (Sec-17(3)
Computation of Income Under Head 'Salaries' under Income Tax

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