Deductions under Section 80C and 80GG

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SECTION 80C
SECTION 80C

It’s that time of the year, when you must be brainstorming about how to reduce your tax  Deductions liability by saving some taxes. Here are various Sections under which you can claim deductions and reduce your Tax Liability. SECTION 80C You can get a tax deduction of 1,50,000 under section 80C, this deduction can be claimed from the tax payer’s total income. In short you can save 1,50,000 from your taxable income through 80C, this tax exemption is applicable for individuals as well as HUFs.

SECTION 80C

In the financial year 2016-2017 you can claim a tax deduction of upto 1,50,000, in the year 2017-2018 you will get a tax deduction of 1,50,000 under section 80C.

SECTION 80CCC

This section talks about the tax deduction for the Premium Paid for Annuity Plan for LIC or Other Insurer. Under this section a tax payer can get tax deduction for any amount that is paid for a LIC plan or Other Insurer or any amount which is deposited in annuity plan. The deposited value of an annuity is taxable for that particular year if it is withdrawn before its maturity.

SECTION 80CCD

Under this section, tax deduction is allowed to an individual who deposits some amount of their income to their pension account. Tax reduction allowed under this section is 10% of the income, if that person is a salaried employee, 10% of net annual income if that person is self-employed or 1,50,000 if the other two conditions are not applicable. This were the statistics for Financial Year 2016-2017. In the financial 2017-2018 the tax reduction for self-employed individuals can go upto 20% which was earlier 10% of the gross salary.

SECTION 80GG

This section mainly deals with the tax deduction on the house rent paid where House Rent Allowance (HRA) is not received. To claim this deduction the tax payer should be living in the house on rent and paying rent. The tax payer should not have any other self-occupied property. The tax payer, spouse or minor children should not own any self-occupied residential property. The deduction available to the tax payer is 25% of the total income. Paid rent minus 10% of the total income, 5000/- per month. For the financial year 2016-2017, deduction amount has gone up from 2000/- per month to 5000/- per month. So, according to the new rule maximum 60,000/- can be claimed for deduction, by the tax payer.

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SECTION 80G

Section 80G talks about the tax deductions for donations towards social causes, the deduction can be 100% or 50% depending on the eligibility of the social cause. This deduction is not applicable for an amount that is paid in cash and is above Rs. 10,000. Any donation more than Rs. 2000 in cash would not be considered under this section. Donations above Rs. 2000 should be given in any other form except cash from the financial year 2017-18.

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The Donations which fall under 100% deduction category are as follows: –

  • National Illness Assistance Fund
  • National Blood Transfusion Council or to any State Blood Transfusion Council
  • National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
  • National Sports Fund
  • National Cultural Fund
  • Fund for Technology Development and Application
  • National Children’s Fund
  • Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
  • National Defence Fund set up by the Central Government
  • Prime Minister’s National Relief Fund
  • National Foundation for Communal Harmony
  • An approved university/educational institution of National eminence
  • Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
  • Fund set up by a State Government for the medical relief to the poor
  • The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
  • The Maharashtra Chief Minister’s Relief Fund during October 1, 1993 and October 6,1993
  • Chief Minister’s Earthquake Relief Fund, Maharashtra
  • Any fund set up by the State Government of Gujarat especially for providing relief to the victims of earthquake in Gujarat
  • Any organisation or fund to which Section 80G(5C) applies for providing aid to the earthquake victims in Gujarat or
  • Prime Minister’s Armenia Earthquake Relief Fund
  • Africa (Public Contributions — India) Fund etc…

The donations that fall under 50% deduction category are: –

  • Indira Gandhi Memorial Trust
  • The Rajiv Gandhi Foundation
  • Jawaharlal Nehru Memorial Fund
  • Prime Minister’s Drought Relief Fund

 

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