We will cover here the complete detail about deduction under section 80C for A.Y.2016-17 &
A.Y.2017-18 (Announced in Budget 2016/ Finance Bill 2016).
There are lots of deductions comes under Chapter VI-A from section 80C to 80U like
80HH, 80RRB, 80U and more. But this article is exclusively for the deduction
comes under section 80C.
Aggregate amount of
deduction u/s 80C, 80CCC, 80CCD and new section 80CCE is restricted to
Rs.1,50,000.
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You can avail the benefit of deduction u/s 80C by
investing in the following schemes.
1. Payment for Life
Insurance Premium.
2. Payment for Deferred
Annuity Plan.
3. Deferred Annuity
Payable by Government.
4. Contribution to
Public Provident Fund.
5. Contribution to
Provident Fund set up by Central Government.
6. Contribution to
Recognised Provident Fund.
7. Contribution to
recognized superannuation fund.
8. Subscription to any
security or deposit notified by Government.
9. Subscription to
Saving Certificates.
10. Subscription for Unit Linked Insurance Plan 1971.
11. Contribution for Unit Linked Insurance Plan of LIC Mutual
Fund.
12. Payment for annuity plan of LIC or any other insurer.
13. Subscription to units of notified mutual fund.
14. Contribution to notified pension fund of mutual fund.
15. Pension fund set up National Housing Bank.
16. Subscription to a deposit scheme of public sector company
engaged in providing long term finance for housing.
17. Tuition fees of two children in India
18 Payment of installment for self-financing of a residential
property for repayment of loan.
19 Subscription to equity shares or debentures as approved for
infrastructure.
20. Subscription to any units of mutual fund as approved by the
Central Board of Direct Taxes.
21. As per the Finance Act, 2006 for F.Y. 2006-07, a term-deposit
for a fixed period of not less than five years with a scheduled bank would also
qualify for tax deduction under Section 0 C within the overall limit of Rs. 1
lakh. This deduction to some Rules.
22. Notified bonds of NABARD.
23. Deposit in an account under the Senior Citizens Savings Scheme Rules, 2004.
24. Five-years time deposit in an account under the Post Officer
Time Deposit Rules, 1981.
Some Popular Schemes
Comes Under Deduction Under Section 80C
Life Insurance Premium: You can get deduction by depositing or paying life
insurance premium in previous year. You must note here that premium paid on
behalf of wife/husband/child or any member of the family where assesse in an
HUF. Child includes adult children also, Thus, deduction is available in
respect of premium paid on a policy on the life of a married daughter.
Provident Fund & Public
Provident Fund: You can claim deduction under section 80C for the amount
deposit in provident fund also. The amount deposit in the name of
wife/husband/child or any member of the family where you are as an HUF is also
eligible for deduction u/s 80C. The
annual contribution upto Rs.1,00,000 (A.Y.2014-15) or Rs.1,50,000 (A.Y.2017-18,
A.Y.2016-17 & A.Y.2015-16) is eligible for deduction under section 80C. You
can deposit Rs.1,00,000 (A.Y.2014-15) or Rs. 1,50,000 (A.Y.2015-16) in PPF A/c
even if you have paid the amount in LIC, NSC,
ULIP etc. However, the deduction u/s 80C is available on the total contribution
of PPF, LIC, ULIP, etc. up to maximum of Rs.1,50,000 [Rs.1,00,000 for
A.Y.2014-15]. Interest on PPF is not treated as reinvestment for purpose
of section u/s 80C is available even if the contribution is made in the PPF
account of minor/major children or spouse.
National Saving Certificates (NSC): You can also get
deduction under section 80C for the amount deposit in national saving
certification along with PPF/LIC/ULIP up to maximum of Rs.1,50,000 accrued
during the year. There is no TDS deduction for repayment of NSC.
Interested accrued during the year (except for the last year) shall be deemed
to be reinvested and shall also qualify for deduction u/s 80C.
Bank Term Deposit Schemes: Amount invested in bank term deposits along with
PPF/LIC/NSC/ULIP etc. up to a maximum of Rs.1,50,000 (Rs.1 lakh for
A.Y.2014-15) is also eligible for deduction under section 80C. The maturity
period for bank term deposit schemes is 5 years.
Post Office Time Deposit Schemes: You can also opt for post office time deposit to get deduction
under section 80C up to Rs.1,50,000. You must note that the deduction is
available only to the first holder.
Mutual Fund Schemes: Some of the schemes of mutual funds are
eligible for deduction u/s 80C along with other investments give above. The
income from mutual funds is also fully exempted u/s 10 (35).
Senior Citizens Saving
Scheme, 2004: You can also get
benefit of Senior Citizens Saving Scheme to get deduction u/s 80C of
Rs.1,50,000 [Rs.1,00,000 for A.Y.2014-15]. No TDS deduction is required
if you provide form 15H/15G (as the case may be).
NABARAD Rural Bonds: The deduction is also available under
section 80C for subscription to notified bonds issued by National Bank for
Agriculture and Rural Development.
ULIP: The deduction is also eligibile for the amount deposit
in the name of himself, his/her wife/husband or his child, and an HUF in the
name of its members to any Unit Linked Insurance Plan of UTI.
Tuition Fees: You can claim the deduction of paying the
tuition fee of your two children. Here, you should note that tuition fees
eligible paid to any university, college, school or other educational
institution situated in India