INCOME TAX DEDUCTIONS U/s 80C FOR F.Y 2019-20 & A.Y 2020-21,WITH AUTOMATED INCOME TAX ARREARS RELIEF CALCULATOR U/S 89(1) WITH FORM 10E FOR F.Y. 2019-20

The maximum tax exemption limit under Section 80C has been retained at Rs 1.5 Lakh only. The various investment avenues or expenses that can be claimed as tax deductions under section 80c are as below;

PPF (Public Provident Fund)
EPF (Employees’ Provident Fund)
Five year Bank or Post office Tax Saving Deposits
NSC (National Savings Certificates)
ELSS Mutual Funds (Equity Linked Saving Schemes)
Kid’s Tuition Fees
SCSS (Post office Senior Citizen Savings Scheme)
Principal repayment of Home Loan
NPS (National Pension System)

Income Tax benefits are currently available on Tier-1 deposits only (FY 2018-19). The contributions by the government employees (only) under Tier-II of NPS will also be covered under Section 80C for deduction up to Rs 1.5 lakh for the purpose of income tax, with a three-year lock-in period. This is w.e.f April 2019.

Life Insurance Premium
Sukanya Samriddhi Account Deposit Scheme

Section 80CCC

Contribution to the annuity plan of LIC (Life Insurance Corporation of India) or any other Life Insurance Company for receiving a pension from the fund is considered for tax benefit. The maximum allowable Tax deduction under this section is Rs 1.5 Lakh.

Section 80CCD

The employee can contribute to the Government notified Pension Schemes (like National Pension Scheme – NPS). The contributions can be up to 10% of the salary (salaried individuals) and Rs 50,000 additional tax benefit u/s 80CCD (1b) was proposed in Budget 2015.

As per the Budget 2017-18, the self-employed (individual other than the salaried class) can contribute up to 20% of their gross income and the same can be deducted from the taxable income under Section 80CCD (1) of the Income Tax Act, 1961.

To claim this deduction, the employee has to contribute to Govt recognized Pension schemes like NPS. The 10% of the salary limit is applicable for salaried individuals only and the Gross income is applicable for non-salaried. The definition of Salary is only ‘Dearness Allowance.’ If your employer also contributes to the Pension Scheme, the whole contribution amount (10% of salary) can be claimed as tax deduction under Section 80CCD (2).

The Centre will now contribute 14% of basic salary to Govt employees’ pension corpus, up from 10%. This is w.e.f April 2019.

Kindly note that the Total Deduction under section 80C, 80CCC and 80CCD(1) together cannot exceed Rs 1,50,000 for the financial year 2019-20. The additional tax deduction of Rs 50,000 u/s 80CCD (1b) is over and above this Rs 1.5 Lakh limit.

Contributions to ‘Atal Pension Yojana‘ are eligible for Tax Deduction under section 80CCD.