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      Tax Saving Via Deductions Under Section 80C, 80CCC, 80CCD, and 80D

      • 5 min read
      • Last Modified Date: February 8, 2023
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      Looking for tax saving hacks on your investments? Use these tax saving techniques via Sections 80C, 80CCD, 80CCC, and 80D.  Sections 80C, 80CCD, 80CCC, and 80D of IT Law offer deductions based on different limits. The tax saving deductions mentioned above are a type of governmental assistance that assists taxpayers in minimizing the income of an individual and tax burden for a financial year. It also encourages payers who pay taxes to conserve and invest, which helps individuals establish a future that is financially solid. Deductible eligibility is determined by a number of factors, with different criteria specified for specific aims.

      Tax savings or tax breaks help individuals reduce their total tax burden, and tax liability, and eventually save money on their taxes. Several individuals tried to lower their taxes by making an investment in tax-advantaged techniques. The amount of tax that can get avoided depends on the type of tax advantage claimed.

      Sections 80C, 80CCD, 80CCC, and 80D of the IT Law offer tax saving deductions based on different limits. The deductions mentioned above are a type of governmental assistance that assists taxpayers in minimizing the income of an individual that is taxable and a tax burden for a financial year. It also encourages payers who pay taxes to conserve and invest, which helps individuals establish a future that is financially solid. Deductible eligibility is determined by a number of factors, with different criteria specified for specific aims.

      In this article, you will learn about the many investments and expenditure areas that will allow you to minimize the income that is taxable.

      Also, read Best Tax Saving Schemes and Plans.

      Tax Saving Synopsis

      Tax saving can get done via Sections 80C and 80D, along with the  Section 80C sub-sections. These get explained in this table below. Section 80CCC, Section 80CCD (1), Section 80CCD (1b), and Section 80CCD (2) are also explained here.

      Section 80 C

      LIC, EPF, PPF premiums, payments of principal on housing loans, ELSS, stamp duties, and register fees made for the acquisition of a property; SSY, NSC, ULIP, SCSS, 5-year FDs., Infra. Bonds, and also other investment vehicles are all liable for deductions under Section 80C.

      Section 80CCC

      Section 80CCC allows for a tax saving or tax break on annuities pension plan payments. But, taxation is required during the year in which the pension of the annuity is paid, along with any money returned when gets relinquished, along with any accumulated interests or bonuses.

      Section 80CCD (1)

      Below is the highest deduction for employees who contribute per 80CCD (1) section:

      – 10 percent of the gross pay (if persons paying the tax are employees)

      – 20 percent of overall gross earnings (if persons are self-employed)

      – Rs. 1, 50,000 lacs(maximum allowable under 80C Section ) (the limit gets allowed 80C Section )

      Section 80CCCD (1b)

      Extra deductions of Rs. 50, 000/- is allowed for money placed into NPS. The contribution made to the APY is tax deductible as well.

      Section 80CCD (2)

      An employer is liable for deductions of max. Of 10 percent of the base wage + the allowance for depreciation as their contributions under this clause. The perks in this area are only available to persons who get a salary.

      Section 80D

      Section 80D allows taxpayers of tax deductions on premiums made for medical coverage for themself, their spouses, parents, and children who are dependent. The deduction is available to HUFs and individuals.

      The highest amount for deduction is determined by one’s age. Rs. 25,000/- deduction gets allowed for the taxpayer, his or her spouse, and any children that are dependent. A Rs. 25,000/- extra deduction becomes accessible for the insurance for parents 60. If insurers—you, spouse, or parents—are above 60, a Rs. 50,000/- deduction rather than Rs. 25,000/- is allowed.

      TAx SAVING VIA SECTION 80C DEDUCTIONS: DEDUCTION FOR YOUR INVESTMENTS

      Individual people and HUFs are eligible to deduct specific contributions from their taxes under the terms of Section 80C IT Act, which went into effect on 1st April 2006. As a result, the most popular methods of deducting taxes get detailed below.

      Section 80C allows a maximal exemption value of 1.5 lakh annually, which includes deductions permitted under Subsections 80C, 80CCC, and 80CCD.

      Investment vehicles indicated below can get disregarded. These qualify for a Section 80C deduction.

      Name of Investment Vehicle

      Risks

      Rate of Interest

      Return Filing Requirements

      Lock-out period (In years)

      ELSS

      Risk related to equity

      Expected: 12 percent to 15 percent  

      No

      3

      PPF

      Zero Risk 

      7.6 percent

      Yes

      15

      NPS

      Risk related to equity

      Expected: 8 percent to 10 percent 

      No

      Until Retired

      NSC

      Zero Risk 

      8.1 percent

      Yes

      5

      FDs

      Zero Risk 

      Expected: 7 percent to 9 percent 

      Yes

      5

      ULIPs

      Risk related to equity

      Expected: 8 percent to 10 percent 

      No

      5

      SSY

      Zero Risk 

      8.6 percent

      Yes

      21

      SCSS

      Zero Risk 

      8.3 percent

      Yes

      5

      TA SAVING VIA SECTION 80CCC DEDUCTIONS: DEDUCTION FOR PREMIUM OF ANNUITIES MADE UNDER INSURANCE PLAN

      This clause allows for the deduction of tax on investments on the pension fund. These types of pension funds may be provided by any insurer, and a maximum deduction of 1.5 lacs may be asked. An individual is the only taxpayer who may use this deduction.

      TAX SAVING VIA SECTION 80CCD DEDUCTIONS: DEDUCTION FOR CONTRIBUTION TO PENSION ACCOUNT

      • SECTION 80CCD (1) (For Employees) 

      Employee contributions of a maximum of 10 percent of basic pay + DA of a maximum of 1.5 lacs are tax deductible.

      • SECTION 80CCD (1b) (For Self)

      Employer contributions of a maximum of 10 percent of basic pay + DA are deductible underneath this clause. The contribution of the employer, on the other hand, is a separate deduction because it does not get included in the 1.5 lacs permitted under Sec. 80C.

      • SECTION 80CCD (2) (Employment)

      Section 80CCD (2) is the sole part in which an extra deduction of a maximum of Rs. 50,000/- in NPS is tax deductible. Bear in mind that the extra tax saving or advantage of Rs. 50,000/- is already in supplementary to the 1.5 lacs claimed on all the other investments.

      To summarize, the overall tax advantages under Section 80CCD (1) + Section 80CCD (1B) for the given fiscal year might be as much as Rs. 2 lacs, depending on the specific circumstances.

      TAX SAVING VIA SECTION 80D DEDUCTIONS: DEDUCTION FOR PREMIUM FROM MEDICAL INSURANCE

      An individual and HUFs get entitled to tax savings via Section 80D deduction. An individual may deduct the price of their health insurance premiums, along with the cost of their own, spouse’s, children’s that are dependent, and parents’ yearly preventative health checks, but only within the constraints and requirements provided in Section 80D.

      In brief, the taxpayer is entitled to receive a Section 80D deduction of Rs. 25,000/- for insurance for himself, his spouse, and any children that are dependent. If the taxpayer is over 60, he is entitled to this deduction to the highest of Rs. 50,000/-. In addition to the claim specified above, the taxpayer is liable for an extra deduction of maximum of Rs. 25,000/- for parental insurance. Furthermore, if the father and mother of the taxpayer are above 60, the deduction allowed is Rs. 50,000/-. Overall, if both the taxpayer and his parent(s) are 60 or older, the maximum deduction available under this provision is Rs. 100,000/-.

      Conclusion

      As seen above, you can take advantage of these sections above for tax savings. As investors, you can massively decrease your tax burden if you have the necessary expertise. Taxpayers, for instance, can cut their tax expenditures by up to Rs. 50,000/- to Rs. 65,000/- by reaping the benefits of the deductions listed above.

      Based on tax bracket of the HUF o person, an Rs.150,000 /- reduction from overall taxable income leads to massive savings on tax. You can utilize investment alternatives to lower your tax obligation.

      Are you also looking for an investment vehicle that gives you better yields? And also helps in tax saving? Well, you can start investing in real estate. Investors utilize real estate to build wealth. It’s a sure-fire approach to amassing wealth. How so? This is largely owed to its favorable tax treatment. Investments in real estate provide sheltering from tax via expenses of operating, depreciation, etc. Assetmonk provides the most attractive real estate investment opportunities in Hyderabad, Chennai, and Bengaluru. It also has high-quality properties with greater rental revenue and IRRs spanning from 14% to 21%. If you’re still looking for a good investing partner, visit Assetmonk and get started right away.

      Tax Saving via Deductions Under Section 80C 80CCC 80CCD and 80D FAQs

      The advantages of Section CCD are the same as those of Section 80C, which means that deductions earned under Section 80CCD cannot be claimed again under Section 80C. The total deduction limit under sections 80C, 80CCC, and 80CCD is Rs. 2 lacs, with an extra deduction of Rs. 50,000/- permitted by section 80CCD subsection 1B.

      Sections 80C, 80CCD, 80CCC, and 80D of the IT Act offer deductions with distinct limits. The deductions above are a type of government assistance that assists taxpayers in minimizing the income of an individual and tax burden for a financial year.

       It enables the highest deduction of Rs 1.5 lacs from the taxpayer’s total income annually.  HUFs and individuals can profit from this deduction. This is not accessible to LLPs or partnership businesses. Section 80C contains the subsections 80CCC, 80CCD (1), 80CCD (1b), and 80CCD (2).

      Tax deductions can only be accessed by individuals who pay tax. It can also get accessed by anyone who has contributed to the purchase or continuation of annuities plan from insurance providers or LIC. The highest deduction available throughout a fiscal year is Rs. 1,50,000/-.

      Deduction under section 80D is for Medical expenditure on the health of Resident senior citizens and very senior citizen for whom no amount is paid to effect/keep in force an insurance on the health.

      The highest deduction for Section 80D for an individual under the age of 60 is Rs. 25,000/-.

      Among the options are ULIPs, ELSS, and Child Plans. Section 80C allows for a tax exemption of up to Rs 1.5 lakh.

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