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Income Tax Deductions FY 2020-21 / AY 2021-22

Section

Deduction Limit

Investments / Expenses




80C

Up to Rs. 150,000/-

In (80C, 80CCC & 80CCD(1) together)

  • Life Insurance Premium
  • P.P.F. (Public Provident Fund) Investment
  • E.P.F. (Employee’s Provident Fund)
  • N.S.C. (National Savings Certificate) Investment & Accrued Interest
  • ELSS Mutual Funds (Equity Linked Saving Schemes)
  • Five years Bank or Post Office Tax Saving Deposits
  • S.C.S.S (Post Office Senior Citizen Savings Scheme)
  • Principle repayment of Home Loan
  • Kid’s Tuition Fees
  • Sukanya Samriddhi Account Deposit scheme

80CCC

Contribution to annuity plan of L.I.C. or any other Life Insurance Company for receiving pension from the fund is considered for tax benefit.

80CCD(1)

Allowed to an Individual who makes deposits to his/her Pension account (like NPS). Maximum deduction allowed is 10% of salary (in case of taxpayer being an employee) or 10% of gross total income (in case of tax payer being self-employed).

80CCD(1b)

Additional deduction

Up to Rs. 50,000/-

Amount deposited by a taxpayer to their NPS account. Contributions to Atal Pension Yojana are also eligible.

80D

Up to Rs. 25,000/- &

Rs. 50,000/- for Senior citizens

Mediclaim / Health Insurance Premium

80E

Not Applicable

Interest on Loan taken for Higher Education shall be deducted under this section.

  • An Individual can claim this deduction
  • The loan should be taken from any Bank/Financial institutions or any approved Charitable institutions.
  • The loan should be taken to pursue Higher Study in India or outside India. Higher studies include all the fields of study pursued after passing the senior secondary examination or its equivalent. It includes both vocational as well as regular courses.
  • There is no maximum limit on deduction amount.
  • The deduction available from the year in which the assessee start repaying the loan. It is available only for 8 years starting from the year in which the assessee start repaying the loan until the interest is fully repaid whichever is earlier.


80EE

Up to Rs. 50,000/-

Home Buyers can claim an additional Tax deduction of up to Rs 50,000 on home loan interest payments. The below criteria has to be met for claiming tax deduction under section 80EE.

  • The home loan should have been sanctioned in FY 2016-17.
  • Loan amount should be less than Rs 35 Lakh.
  • The value of the house should not be more than Rs 50 Lakh &
  • The home buyer should not have any other existing residential house in his name.

80EEB

Up to Rs. 150,000/-

  • Interest on loan taken for Purchase of Electric Vehicle shall be deducted under this section.
  • Only an Individual can claim this deduction.
  • The loan must be sanctioned during 1st April 2019 to 31st March 2023.

80G

100% (generally in case of government funds) or 50% (generally in case of non-governmental funds)

Contributions made to certain relief funds and charitable institutions. This deduction can only be claimed when the contribution has been made via cheque or draft or in cash. But deduction is not allowed for donations made in cash exceeding Rs 2000. In-kind contributions such as food material, clothes, medicines etc do not qualify for deduction under section 80G.

80GG

Up to Rs. 60,000/-

Self employed or Salaried assessee can claim deduction under this section if they have not received House Rent Allowance u/s 10(13A) at any time during the same financial year.

80GGC

Deduction Amount should not exceed the Taxable Value.

  • Any Individual can claim deduction under this section if he/she made any donation towards any Political Party or Electoral Trust.
  • Political Party should be registered with Election commission. Electoral Trust should be registered.
  • Donation should be from bank cheque, debit/credit card, demand draft, net banking etc. and should not made in cash.

80TTA

Up to Rs. 10,000/-

Interest on deposits in SAVINGS BANK ACCOUNT , co-operative society or post office can be claimed under this section. Section 80TTA deduction is not available on interest income from fixed deposits.

80TTB

Up to Rs. 50,000/-

Interest on deposits in SAVINGS BANK ACCOUNT, FIXED BANK ACCOUNT or POST OFFICE. Only Senior Citizens can enjoy this benefit, also Sec. 80TTA is not applicable for Senior Citizens.

 

Other Rebates:

24(b)

Up to Rs. 200,000/- in case of self occupied property or no maximum limit if the property is let out

Interest on housing loan is allowable as deduction on accrual basis not on paid basis (even if account books are kept on cash basis) if capital is borrowed for the purpose of purchase, construction, repair, renewal or reconstruction of the house property. Deduction can be claimed for two or more housing loans.

87A

Up to Rs.12,500/-

This rebate is available on tax on total income to a resident individual if his total income does not exceed Rs. 500,000/-

 

Also Income Tax Exemptions are available under Sec.10 of Income Tax Act, 1961, such as,

  • PPF Interest or any payment from Statutory Provident Fund- Sec 10(11)
  • Gratuity - Sec 10(10) - Upto Rs. 20 lakh.
  • Maturity or Bonus amount received under a Life Insurance Policy - Sec 10(10D)
 

Click here to read all exemptions available under Sec 10 of Income Tax Act.

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