Amount saved and deposited by the employee or assessee in following savings schemes shall qualify for deduction u/s 80.
1. Deposits made in Provident Funds
(i) Deposit made in Statutory Provident Funds (SPF) : Amount deposited by employee in this fund during the previous year fully qualify for deduction.
(ii) Deposit in Recognized Provident Fund (RPF) : Amount deposited during the previous year fully qualifies for deduction.
Deposits made by the employee in Unrecognized Provident Fund (URPF) : Since this fund is not recognized by the Commissioner of Income Tax , so any amount saved and deposited by the employee in this fund will not qualify for any deduction.
Deposit made in Public Provident Fund : This Provident Fund Account can be opened in the name of the employee ( assessee), spouse or children and amount deposited by the assessee during the previous year in any of these accounts shall qualify up to a maximum of Rs.70,000.
Repayment of any loan taken will not qualify for the deduction.
2. Payment of Life Insurance Premium
Actual amount of premium deposited by the employee or on his behalf by his employer or 20% of sum assured w.e. is less shall qualify for deduction. Life Insurance policies can be obtained in the name of the assesssee, spouse, and children and in case of HUF in the name of any or all the coparceners of the HUF.
The children means all the sons and daughter of the assessee whether minor or major, whether dependent upon assessee or are dependent or may be married or unmarried. It also includes step or adopted children.
Sum assured shall not include bonus or any premium assured to be returned.
3. Payment deducted out of Govt. employee’s salary towards deferred annuity
In case any amount has been deducted out of salary of Government employee for securing a deferred annuity for him or making a provision for his spouse or children, the amount so deducted but not exceeding 20% of his salary will qualify for deduction u/s 80C.
4. Payment made towards Group Insurance
Any amount deducted and deposited by employer towards employee’s group insurance shall fully qualify for deduction..
5. Deposits made in Approved Superannuation Fund
Amount deposited during the previous year shall fully qualify for deduction.
6. Payment for Deferred Annuity
Any payment made by the assessee to effect or keep in force contract for a deferred annuity will qualify for deduction u/s 80C.
7. Deposits made in Unit Linked Insurance Plan (ULIP)
Any amount deposited by the assessee in Unit Linked Insurance Plan of UTI or LIC mutual fund shall fully qualify for deduction . Amount can be deposited in the name of assessee, spouse and children.
8. Amount invested in National Savings Certificates – VIII issues.
Amount invested in National Saving Certificates-VIII issue fully qualifies for deduction u/s 80C. Interest accrued on these certificates purchased earlier is deemed to be re-invested , hence such interest also fully qualifies for deduction every year.
9. Amount invested in National Saving Scheme (NSS) -1992 : fully qualifies for deductions.
10. Amount paid to LIC under Jeevan Dhara, Jeevan Akshay policies, etc. : Fully qualify for this deduction. Investment in these plans can be made in the name of assessee and in case of HUF, in the name of any of its members.
11. Amount invested in notified Pension Fund set up by Mutual Funds or UTI : fully qualify for deductions u/s 80C.
12. Amount deposited with National Housing Bank. : fully qualify for deductions.
13. Amount deposited with an authority engaged in Housing Development or Town or Rural Development. : fully qualify for deductions
Following type of subscription will qualify for deductions :
A public sector company engaged in providing long term finance for purchase or construction of residential houses in India.
Any authority like Housing Board constituted in India for the planning, development or improvement of cities, towns and village
14. Any subscription in deposit scheme of Central Government
Any subscription to any such security of the Central Government or any such deposit scheme as Central Government may notify in Official Gazettee, specifying in this behalf, will qualify for deduction u/s 80C.
15. Term Deposits with Banks.
Term deposits with certain banks of not less than 5 years duration and as per scheme framed by Central Govt. shall also qualify for deductions u/s 80C.
16. Amount deposited or invested in Equity Linked Saving Scheme (ELSS) : qualifies for deduction up to actual amount invested.
17. Repayment of House Building loan
Any amount repaid under house building loan taken from Govt. , LIC, Bank, HDFC, HUDCO or other housing finance institutions or employer.
Amount repaid as full price or installment of price of a house purchased from Govt. or an approved agency shall qualify up to actual amount repaid.
The amount repaid must not include interest on loan or ground rent but shall include stamp duty and registration sharges.
18. Payment of Tution Fees of Children :
Any amount paid as Tution Fees ( excluding any payment towards any development fees or donation or payment of similar nature) whether at the time of admission or thereafter to :
(a) Any school , college or university or other educational institution situated in India ,
(b) for the purpose of full time education of any two children of the individual.
The amount, which shall qualify under this section, shall not exceed actual amount paid as tution fee for two children only.
19. Amount invested in Equity Shares or Debentures in an eligible issue :
Amount paid as subscription to equity shares or debenture of a public company or a public financial institution forming part of any eligible issue of capital. In case such issue is notified by CBDT, the amount invested shall qualify for deduction u/s 80C. The amount so invested in on which deduction is calmed shall not qualify for exemption of capital gain u/s 54EA or u/s 54EA or u/s 54EC.
20. Amount invested in Units or Mutual Funds
Amount paid as subscription to any units of any mutual fund. In case such unit scheme of mutual funds is notified by CBDT, the amount so invested shall qualify for deduction u/s 80C. The amount so invested in on which deduction is claimed shall not qualify for exemption of capital gain u/s 54EA or u/s 54EB or u/s 54EC.
21. Subscription to Bonds of NABARD
Any subscription to bonds issued by the National Bank of Agriculture and Rural Development as the Central Government may notify in Official Gazette, will qualify for deduction u/s 80C.
22. Following investments also qualify for deduction u/s 80C.
(i) Five year time deposit in an account under Post Office Time Deposit Rules 1981.
(ii) Deposit in an account under the Senior Citizens saving Scheme rules 2004.
Amount deposited in this two schemes is not allowed to be withdrawn for 5 years and if withdrawn before the completion of 5 years it will be deemed income of the year in which withdrawn. But it is not taxable if withdrawn by legal heirers.
(i) Deductions u/s 80C shall be allowed even if investment is made in these savings scheme out of assessee’s savings of past previous year or out of nay other income which is otherwise exempt under Income Tax Act.
(ii) Deduction u/s 80C shall be allowed out of assessee’s Gross Total Income. This deduction is not allowed out of assessee’s income of Long Term Capital Gain and income from gambling etc.
(iii) Deduction u/s 80C shall be allowed only if amount has been actually deposited or paid in these savings schemes up to 31st March . So any amount due but not paid up to 31st.March shall not qualify for this deduction.