Income tax assessees can reduce their taxable income by Rs 1.5 lakh a year under Section 80 of the Income Tax Act. This deduction, available to individuals or members of Hindu Undivided Families (HUFs), can be claimed against investment in life insurance policies, contributions towards provident fund and subscription to equities under the ELSS or Equity-Linked Saving Scheme. Eligible assessees can claim tax benefit of up to Rs 1.5 lakh in a financial year by utilising provisions for deductions under Section 80 of the Income Tax Act. (Also Read: Fixed Deposit Interest Rates Offered By Banks On Deposits Below Rs. 1 Crore)
Here are key things to know about deductions under Section 80 of the Income Tax Act:
1. Under Section 80C of the Income Tax Act, a total deduction of Rs 1.5 lakh can be claimed from the total income under certain conditions.
2. Section 80C also empowers a taxpayer to save for future by allowing him or her to invest in a wide range of saving schemes such as senior citizens savings scheme, provident fund, the Sukanya Samridhi savings scheme, ULIPs (Unit-Linked Insurance Plans) and ELSS (Equity Linked Savings Schemes) and contribution to notified pension fund set up by mutual fund or UTI.
3. Section 80C also helps an individual to consider investing in long-term real estate projects by allowing deductions on equated monthly instalments for repayment of principal amount of home loan.
4. Over and above the deductions up to Rs 1.5 lakh, an additional Rs 50,000 can be saved by making contribution towards National Pension Scheme (NPS) under Section 80CCD (1) of the Income Tax Act.
5. Also, under Section 80D, an additional deduction of Rs 75,000 from the total income can be made against premium paid towards for medical insurance for self, spouse, dependent children and parents (senior citizen).