H o w t o S a v e Ta x L e g a lly W it h In c o m e Ta x

D e d u c t io n s Fr o m 8 0 C t o 8 0 G ?

It is prudent tomakeinvestments under dierent investment instruments that not only

giveyoupeaceof mindfor thefuturebut alsohelpyoutolessenyour incometaxburden.

Everyone can save Income tax legally by appropriately utilising the Income tax
deductions oered by the Income tax department of India.

It is prudent to make investments under dierent investment instruments that

not only give you peace of mind for the future but also help you to lessen your
income tax burden.

Similarly there are certain medical expenditures that can be claimed for
deduction fromyour taxable income. Lets understand these Income Tax
Deductions one by one:

1. Income Tax Deduction Under Section 80C

Under Section 80C you can invest upto 1,50,000/- fromyour annual income
and claimdeduction for the same fromyour taxable income. There are various
investment instruments specied under Section 80C viz: Public Provident Fund

(PPF), Contribution to Employee Provident Fund (EPF), Mutual Funds, Equity

Oriented Mutual Funds, Fixed Deposits (FD), National Savings Certicate (NSC),
Repayment of Principal Amount on Home Loan, Life Insurance Policy.
2. Income Tax Deduction Under Section 80CCC and 80CCD

Section 80CCC deals with investment in annuity/pension plans of Insurance

companies. The investment made under these pension plans comes under the
combined limit of 1,50,000/- with deductions under Section 80C.

Section 80CCD relates to contribution made to National Pension Scheme (NPS)

of Central Government. An amount upto 50,000/- is deducted fromtaxable
income over and above the 1,50,000/- limit.

3. Income Tax Deduction Under Section 80TTA

Section 80TTA allows for a deduction of upto 10,000/- for interest earned on
savings account. You need to specify the interest earned fromsavings account
under Income fromother Sources and then claima deduction upto 10,000/-
under this section.

4. Income Tax Deduction Under Section 24

Section 24 of Income Tax Act deals with deduction on Interest Accrued/Levied

on Home Loan. So investing in a home by taking home loan is prudent as you
can claimdeduction for the interest levied on it. If the home is self-occupied
then you can claimupto 2,00,000/- fromdeduction, however if the home on
which the home-loan is taken, is not self-occupied then you can claimfor all the
interest accrued on it minus any rent received.

5. Income Tax Deduction Under Section 80D

Section 80D deals with Mediclaimor Health Insurance bought for self, spouse or
dependent children/parents. An amount of 25,000/- can be claimed for
preventive health check-ups and health insurance bought for self, spouse and
dependent children whereas in case of preventive health check-ups and health
insurance purchased for senior citizens, you can claim30,000/-. This
deduction is over and above the 1,50,000/- limit of Section 80C.

6. Income Tax Deduction Under Section 80DD, 80U and 80DDB

Section 80DD deals with deduction for upto 1,25,000/- for medical expenditure
incurred on a disable spouse/children/siblings/parents including medical
insurance.

Section 80U deals with deduction for upto 1,25,000/- for a person certied
with 40%or 80%disability for medical expenditure incurred on self including
medical insurance.

Section 80DDB deals with deduction upto 80,000 for dependent above 80
years, 60,000 for senior citizen and 40,000 for self/spouse/children/parents
for medical expenditure incurred on treating the below mentioned specied
diseases:
- Chronic Renal Failure

- Malignant Cancers

- Hematological Disorders

- Neurological Diseases

- AIDS

7. Income Tax Deduction Under Section 80E

Section 80E deals with payment of Interest on Education loan taken for
self/spouse/dependent children. There is no cap on the amount that can be
claimed for deduction fromyour taxable income under Section 80E.

8. Income Tax Deduction Under Section 80G

Section 80G points to Donations made to specied government organizations

as well as some specied NGOs. Although for most of the list there is no limit to
which you can donate and claimdeduction under 80G, there are certain
organizations like political parties to which you cannot make a donation more
than 10%of your Gross Total Income.

9. Income Tax Deduction Under Section 80GG

Section 80GG deals with deduction upto 60,000/- for rent paid by an
individual. This deduction is for those individuals who do not get the benet of
HRA exemption or havent claimed the deduction for rent paid under other
another section.

10. Income Tax Deduction Under Section 80CCG

Section 80CCG deals with investments made in Equity Savings Scheme and you
can claima deduction under Section 80CCG for upto 25,000/-. This deduction
can be claimed by rst-time investors who are investing in listed shares or
mutual funds with a lock-in period of 3 years.