Permissible deductions under Section 80C of Income Tax Act

Deductions permitted u/s 80C of Income Tax Act

Eligible Investments u/s 80C

1. Life insurance premium-

(i) Not exceeding 10%* of sum assured

(ii) On the life of-

-Individual, Self, Spouse and / or children

-HUF, any member of the family

(iii) Deduction to be withdrawn if the Assessee terminates the policy within 2 years

2. Contribution by employee to statutory or Recognised Provided Fund. Loan repayment is not eligible for deduction.

3. Contribution to Public Provident Fund _
Minimum Rs.500 Maximum Rs.1,00,000 in a Financial Year

(*In respect of insurance policy issued on or after 1.4.2013 a higher limit of 15% is available to a person with a disability or with severe disability or suffering from specified decease or ailment.)

4. Tuition fee (excluding donation, development fee and building fund fee) for education of 2 children of individual.

5. FDR for 5 years or more with any scheduled Bank.

6. Repayment of Housing Loan-

-Loan from Govt., Bank, Co-operative Bank, LIC, NHB HUDCO, HDFC etc.
-Towards cost of purchase or construction of residential house.
-Such house not to be transferred for 5 years.
-Cost includes stamp duty registration etc. Cost does not include money paid for acquiring shares etc. for becoming member of Co-operative society etc.

7. Contribution by employee to Provident Fund, Public Provident Fund, Recognised Provident Fund and Approved superannuation fund.

8. Deposit in 10/15 year post office saying Bank (CTD)

9. NSC and Interest accrued thereon.

10. ULIP Plans (Blocking Period 5 Years).

11. Annuity plan of LIC or any other insurer.

12. Units Equity Linked Saving Scheme (ELSS) of Mutual Funds (Blocking Period 3 Years.)

13. Pension Fund of Mutual Fund etc.

14. Deposit Scheme/Pension Fund of NHB.

15. Notified Deposit Scheme of -

Public Sector Co. providing long-term finance for purchase or construction of residential houses in India.

Any authority constituted in India for the purpose of housing or planning, development or improvement of cities, towns and villages.

16. Approved Equity Shares/Debentures.

17. Notified Bonds of NABARD.

18. 5 year time deposit under Post Office Time Deposit Rules, 1981

Deduction in respect of contribution to certain pension funds of LIC or other insurance company (Section 80CCC)

(i) Only for Individual.

(ii) Payment to LIC or any insurer in approved Annuity Plan for Pension.

(iii) Any amount withdrawn upon surrender is taxable.

(iv) Pension received from the plan is taxable.

Deduction in respect of employee's contribution to pension scheme of Central Government or notified pension scheme. (Section 80CCD)

a. Deduction , lower of-

(i) 10% of his salary

(ii) Amount deposited in Pension Scheme notified by Central Govt.

Employer's contribution to NPS will not be a part of this ceiling.

Deduction in respect of investment made under Rajiv Gandhi Equity Saving Scheme. (Section 80CCG)

A resident individual whose gross in come does not exceed Rs. 12 lacs (Rs. 10 lacs for A. Y. 2013-14) acquiring listed equity shares or listed units of an equity oriented fund (listed equity shares for A. Y. 2013-14) under Rajiv Gandhi Equity Saving Scheme is allowed deduction upto 50% of the amount invested subject to a maximum of Rs. 25,000. The investment is locked in for a period of 3 years.