Tax deductions help a taxpayer reduce his taxable income so that he can save tax. Section 80 of the Income Tax Act lays out certain provisions that provide tax deductions to individuals, HUFs etc., the major ones being as follows:
Section 80C: Individuals and HUFs can claim deduction of upto Rs. 1.5 lakhs if they have invested in schemes like-
Equity Linked Saving Scheme (ELSS), Unit Linked Insurance plans (ULIP)
Term insurance, Endowment insurance
Public Provident fund (PPF), Employees Provident Fund (EPF), National Pension Scheme (NPS)
Section 80CCC: It provides deduction from total income of upto Rs. 1.5 lakhs if an individual contributes towards annuity plans of recognised insurers such as the LIC.
Section 80CCD: It provides deductions to individuals if they invest in notified pension schemes of the Central Government (NPS, APY). The maximum deduction that can be claimed is Rs.2 lakh, subject to certain conditions.
Section 80TTA: Individuals and HUFs can claim a maximum deduction of Rs. 10000 against interest income earned from savings account with a bank, post office etc.
Section 80GG: Individuals who do not receive House Rent Allowance (HRA), can claim deduction, which is the minimum of the following:
25% of adjusted total income
Rent paid minus 10% of adjusted total income
Section 80D: Individuals or HUFs can claim deduction of Rs. 25000 in case of medical insurance of self, spouse, dependent children. An additional deduction for insurance of parents is available up to Rs. 25000, if they are less than 60 years of age. If the parents are aged above 60, the deduction amount is Rs. 50000.
Section 80G: Donations in specified funds above Rs. 2000, in any mode other than cash are eligible for deduction upto either 100% or 50%, with or without qualifying limit.