As the fiscal year 2024–2025 draws to a close, you still have until march 31, 2025, to make your tax-saving investments. Taxpayers were able to reduce their tax obligations under the previous income tax regime by claiming deductions under different provisions of the Income Tax Act.
 
However, there are very limited tax deductions available under the current tax scheme.
 
Section 80C, which permits a maximum deduction of ₹1.5 lakh on particular investments and costs, is one of the most popular tax-saving provisions.  Let's examine this section's specifics and how it can help you.

What Is Section 80C?

Hindu Undivided Families (HUFs) and individual taxpayers were able to claim a tax deduction of up to ₹1.5 lakh on qualified investments and expenses under Section 80C under the previous tax regime.
 
Eligible Investments Under Section 80C

Here are the key financial instruments and expenses that qualify for deductions:

Life Insurance Premiums - Premiums paid for life insurance policies.
Equity-Linked Savings Scheme (ELSS) - Investment in tax-saving mutual funds.
Employees' Provident Fund (EPF) Contribution - Employee's share of EPF deposits.
Voluntary Provident Fund (VPF) Contribution - Additional deposits in the EPF account.
LIC's Annuity Plans - Contributions to annuity plans by lic or other insurers.
National Pension System (NPS) - Deposits made under NPS for retirement planning.
Public Provident Fund (PPF) - Investments in PPF accounts.
Tax-Saver Fixed Deposits (FDs) - Five-year fixed deposits in banks.
Sukanya Samriddhi Yojana - Deposits made for a girl child's future under this scheme.
Senior Citizen Savings Scheme (SCSS) - Investment in a scheme for senior citizens.
National Savings Certificate (NSC) - Investment in NSC issued by the government.
ULIPs (Unit Linked Insurance Plans) - Insurance cum investment plans.
Children's Tuition Fees - Payment of tuition fees for up to two children.
NABARD Bonds - Subscription to specific bonds issued by NABARD.
Repayment of home Loan Principal - Principal repayment of a home loan.

Comprehending the 80CCC and 80CCD Related Sections
 
Two other sections, in addition to Section 80C, support tax deductions for retirement and pension planning:
 
Section 80CCC
 
Investments made in annuity plans offered by lic or other insurance companies are eligible for tax benefits under this clause.
Any withdrawal or surrender amount from such programs is likewise considered taxable income, as is any pension paid from them.
Section 80CCD
 
This section, which is further broken down into three sections, addresses contributions to pension plans such as the National Pension System (NPS):

1. Section 80CCD (1)

Allows tax deduction on deposits made in pension accounts under the central government Pension Scheme.
Salaried employees can claim up to 10% of their salary, with a maximum deduction of ₹1.5 lakh.
The total deduction under Sections 80C, 80CCC, and 80CCD (1) cannot exceed ₹1.5 lakh.

2. Section 80CCD (1B)

Offers an additional deduction of ₹50,000 for voluntary contributions to NPS.
Up to 60% of the maturity amount from NPS (received as a lump sum) is tax-free, but monthly annuity income is taxable.

3. Section 80CCD (2)

Provides tax benefits for the employer's contribution to an employee's NPS account.
The deduction is 10% of the salary.
Under the new tax regime (effective april 1, 2020), employees can continue to claim tax benefits for employer contributions under this section.
 
 
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SIBY JEYYA

17/03/2025 09:11 AM