Income tax deductions

Section 80C Income Tax Deduction

The most important part of deductions for any taxpayer is this one. 15,000,000 is the section's maximum exemption amount. Section 80C allows for the claim of several deductions, including PPF, EPF, term insurance, NPS, etc. The full list is shown below:-

Public Provident Fund, National Savings Certificate, Employees' Provident Fund, National Pension Scheme, Tuition, Post Office tax-saving deposits, principal repayment of a house loan, equity-linked savings plans, life insurance premiums, and five-year bank deposits Post Office Senior Citizens Savings Program and Sukanya Samriddhi Account Deposit Program.

Section 12a is beneficial for NGOs.

Section 80CCC Income Tax Deduction

The deposit paid to a life insurance company's annuity plan in order to receive a pension from the fund is included in this section's maximum deduction of $15,000.00.

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Section 80CCD Income Tax Deduction

The contribution to the Atal Pension Yojana is included in this section. For paid employees, it permits a contribution to the government-notified pension plans up to 10% of the whole pay and 20% of the gross income to non-salaried workers. Section 80 CCD allows the deduction of the contribution from taxable income. If the employer additionally makes contributions to the plan, the total amount of contributions may be tax-deductible under Section 80CCD (2).

It's crucial to keep in mind that the combined deduction under Sections 80C, 80CCC, and 80CCD (1) cannot be greater than $15,000,000. The extra tax deduction allowed under Section 80CCD (1B), which amounts to 50,000, is more than this cap.

Section 80D Income Tax Deduction

The premium for medical insurance is deductible from income under section 80D. A person or HUF may deduct the cost of their health insurance premiums under this clause. You are entitled to a deduction of up to $25,000 for your own insurance as well as the insurance of your spouse, dependent children, and parents under the age of 60. In Budget 2018, the deduction amount for parents over 60 was raised from 30,000 to 50,000.

The maximum deduction under section 80D is up to $1,000,000 if the taxpayer and the parent(s) are older than 60.

Section 80DD Income Tax Deduction

Spending for medical care for dependents who have a 40% handicap is eligible for a deduction of up to $75,000. In cases of severe impairment, this cap is set at 1, 25,000.

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