DEDUCTIONS U/s 80C

SECTION 80C

Deduction in respect of Life Insurance Premia, deferred annuity, contribution to provident fund etc;

• Applicability : Individual and Hindu Undivided Family (HUF)
• Contribution should be made in approved investment schemes.
• Deduction is allowed on Payment Basis.
• The maximum deduction under 80C is Rs.1,00,000.
• Investment should not be made out of income chargeable to tax.

Eligible investments / contributions:

1. Life Insurance / Annuities.
2. Employee Welfare Funds.
3. Central Government / Post Office Savings / Other Notified Schemes.
4. Housing.
5. Others.

Mode of Investment:

1. Payment of Insurance Premium:

• It is allowed on the life of assessee , spouse, children.
• Maximum amount of deduction is 20% of sum assured.
• The premium should be paid on or before year end.
• Interest paid on late payment of premium amount is not allowed.

    2.Contribution made to SPF / PPF / RPF :

• Assessee can contribute Minimum of Rs.500 or Maximum of Rs.1,00,000 p.a to PPF A/C.

   3.Payment of Tuition fees:

• Tuition fee paid to university, college, educational institution, school for persuing full time education in INDIA.
• Deduction is allowed to a maximum of two children.
• It should be full time education.
• It should be in INDIA.
• Development charges, deposits, donations are not allowed.

  4.Housing loan repayment:

• Principal repayment of housing loan is allowed as deduction.
• Interest on housing loan is allowed as deduction U/S 24 under the head income from the head House Property.

 5.Contribution to mutual funds:

     Contribution made to mutual funds is allowed as deduction under section 80C

 6.Central Government / Post office scheme / Other Notified Schemes:

• Subscription to any notified security of the Central Government.
• Investments in National Savings Certificates.
• Subscription to any notified saving certificate..
• Contribution to an individual to a pension fund set up by a mutual fund notified u/s 10(23D) or UTI as the Central Government may specify.
• Term Deposit for a period of not less than 5 years with a scheduled bank in accordance with a scheme framed by the Central Government.
• Subscription to bonds issued by National Bank for Agriculture and Rural Development (NABARD).
• 5 years term deposit in an account under Post Office Term Deposit Scheme.
• Deposit in an account under the Senior Citizens Saving Scheme.

Deduction:

The aggregate of the eligible contributions mentioned above shall be allowed as deduction to the extent of Rs.1,00,000.