Deductions under section 80C - Tax Saving Calculator
When you make savings in specified modes of investments, you will be eligible for a benefit under Income-tax Act, wherein section 80C provides for a deduction of such investments from the Gross Total Income, thereby lowering the tax payable. However, the deduction under section 80C is only available to an individual or HUF, and the maximum permissible deduction is INR 1,50,000.
You may directly compute the deduction amount using the calculator provided below. Here’s a step-by-step guidance on how to use the calculator:
- Select the assessment year(AY) for which you want your taxes to be calculated (if you have made the investment in the year 2020-21, then your AY shall be 2021-22)
- Select the status to indicate whether you are an individual or HUF
- If you selected ‘individual’ above, enter the premium amount paid by you for life insurance policies of yourself, your spouse and your child. However, if you selected ‘HUF’, the premium paid by the HUF for any or all of the HUF members will require to be entered. (note that the calculator is not designed to consider the year when a policy was issued. Deduction amount varies based on that)
- Enter the amount invested in a term deposit of not less than 5 years with any scheduled bank.
- Suppose you have made any other investments eligible for deduction under section 80C (refer to the list below). In that case, you may select it from the dropdown list and enter the investment amount in the following box.
These steps will lead you to an amount exempted under section 80C, which shall reduce your taxable amount. (the box after others is greyed out, and the final answer doesn’t change in the calculator)
- Premium paid for life insurance policy
Premium paid on insurance policies of self, spouse or child (minor or major). In the case of HUF, the premium paid for any member. It can be either a life policy or an endowment policy. The deduction limit shall be as follows:
Particulars Deduction u/s 80C Policies issued before 1.4.2003 20% of actual capital sum assured Here, capital sum assured shall include the minimum sum assured but exclude:
- the bonus over and above the amount of sum assured
- the premium agreed to be returned
Policies issued between 1.4.2012 and 1.4.2013 10% of actual capital sum assured Policies that are issued on or after 1.4.2013 Where the insurance is taken on the life of a person with any disability or disease as mentioned in section 80U or 80DDB, respectively: 15% of actual capital sum assured
Others: 10% of actual capital sum assured
- Premium paid for a contract of deferred annuity taken on the life of the self, spouse or any child, provided such contract does not contain any terms for the exercise of an option to receive cash payments instead of the payment of the annuity.
It is pertinent to note here that a contract for a deferred annuity can be entered into with any person and not necessarily with an insurance company.
- Any amount invested in the Sukanya Samridhi Scheme in the name of your daughter or any girl child for whom you are a legal guardian.
- Contribution to:
- Public Provident Fund
- Approved superannuation fund
- Unit-linked Insurance Plan, 1971
- Unit-linked Insurance Plan of LIC Mutual Fund
- Approved annuity plan of LIC
- Pension fund which is set up by mutual fund or by the administrator or the specified company
- National Housing Bank (Tax Saving) Term Deposit Scheme, 2008
- additional account under NPS
- Senior Citizens Savings Scheme Rules, 2004
- Subscription to:
- National Savings Certificates (VIII issue)
- units of any mutual fund or from the administrator or the specified company
- notified deposit scheme of a public sector company that provides long-term finance for construction or purchase of houses in India for residential purposes or any other deposit scheme concerned with housing accommodation or planning, improvement or development of cities, towns and villages or both.
- specified equity shares or debentures or units of mutual fund
- notified bonds issued by NABARD
- Investment in five-year fixed deposit (FD) of Scheduled Bank or Post Office
- Repayment of housing loan principal amount(including stamp duty, registration fee and other expenses)
- Payment of tuition fees to any school, college, university or other educational institutions within India for full-time education for maximum 2 children