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Deduction available under section 80C 0

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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)
A list of other investments that are eligible for deduction under section 80C. are enumerated below:
  • 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:
    1. Public Provident Fund
    2. Approved superannuation fund
    3. Unit-linked Insurance Plan, 1971
    4. Unit-linked Insurance Plan of LIC Mutual Fund
    5. Approved annuity plan of LIC
    6. Pension fund which is set up by mutual fund or by the administrator or the specified company
    7. National Housing Bank (Tax Saving) Term Deposit Scheme, 2008
    8. additional account under NPS
    9. Senior Citizens Savings Scheme Rules, 2004
  • Subscription to:
    1. National Savings Certificates (VIII issue)
    2. units of any mutual fund or from the administrator or the specified company
    3. 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.
    4. specified equity shares or debentures or units of mutual fund
    5. 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

Frequently Asked Questions

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Who are eligible to claim deductions under Section 80C of the Income Tax Act?

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Only individuals and HUF are eligible to claim deductions under Section 80C of the Income Tax Act.


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Can I claim a deduction of Section 80C if I opt to pay tax under Section 44AD or 44ADA?

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Yes, even if you report your income under section 44AD or 44ADA, you can claim the deduction under section 80C.


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Are recurring deposits covered under the list of investments under section 80C for tax deduction?

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No, deduction under 80C is not available for investments made in recurring deposits.


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I have made an 80C eligible investment on 2 April 2021. In which year can I claim such investment as a deduction from my income?

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80C deduction can be claimed in the income tax return (ITR) for the year in which you have made such an eligible investment. Based on this, your investment of 2 April 2021 can be claimed as an 80C deduction in the ITR of Financial Year(FY) 2021-22.


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Can I avail the 80C deduction when filing the ITR even if I have not submitted the investment proofs to my employer?

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Proofs of eligible investments made by you must be submitted to your employer before the end of an FY, say by 31 March 2021 for FY 20-21’s ITR. It is submitted to ensure that the employer considers these tax-saving investments while determining your taxable income and the tax deduction thereon. Suppose you could not submit these proofs to your employer. You can still claim deductions of such investments at the time of filing your ITR as long as these investments were made before the end of the relevant FY.


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Will the interest received on the tax-saving FD be taxable?

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Yes, the interest received on the tax-saving FD will be taxable. However, in the case of a senior citizen (60 years and above), a deduction of FD interest to the extent of INR 50,000 can be claimed under section 80TTB.


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Can I get any tax benefit on the principal and interest repayment on a home loan under section 80C?

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You can claim a deduction of only the principal repayment from your total income under section 80C. However, the overall deduction limit for such repayment and all other eligible investments shall be restricted to INR 1,50,000. Say, for e.g., if you have made a 5-year FD investment of INR 1,00,000 and principal repayment of INR 1,00,000 towards the home loan. You can claim a deduction of only INR 1,50,000 under 80C and not INR 2,00,000. Deduction of interest in respect of home loan serviced by you cannot be claimed under section 80C.
However, it can be claimed under section 24(b) while computing your ‘Income from House Property’. To know more, refer to the article ‘When can you claim both HRA exemption and interest deduction on a home loan’ (may give a link to this article)


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Can I avail the deduction under section 80C regarding principal repayment of a home loan serviced for an under-construction house in India?

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No. Deduction under section 80C for principal repayment of a home loan can be claimed only in respect of a house whose construction is completed.


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What is the senior citizen saving scheme (SCSS), and can I claim a deduction of any contribution made to SCSS under section 80C?

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SCSS is a retirement benefits scheme for senior citizens that encourages them to invest a lump sum and create a regular income stream during retirement. Investment in SSC leads to a tax benefit in the form of deduction under section 80C upto INR 1,50,000.


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Can I get any tax benefit on the stamp duty or registration fee paid for my house?

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Yes, you can claim a deduction of stamp duty or registration fee paid in respect of your new house purchased in the year of payment under section 80C


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Can I claim a deduction of the life insurance premium paid by me for my parents?

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No, only the life insurance premium you pay for policies of yourself, your spouse and your child can be claimed as a deduction under 80C.


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Are there any lock-in periods for the eligible investments?

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​​​​​​​​To claim the deductions under 80C in respect of eligible investments, it is necessary to hold such investments for a minimum time period. However, certain investments by default have a lock-in period and are not explicitly required under section 80C. All such lock-in-periods for the various investments discussed under 80C are provided below:

Public Provident Fund The Public Provident Fund account matures only after 15 years. However, part of the money can be withdrawn after the completion of 5 complete FY.
Sukanya Samriddhi Yojana Account The minimum amount is required to be deposited for 15 years. This account will mature after 21 years from the date of deposit or till her marriage, whichever is earlier. Partial withdrawal is allowed for the child’s higher education after she turns 18.
Mutual Funds (Equity Linked Saving Scheme) 3 years
Fixed deposits 5 years. If you withdraw from the FD before completing 5 years, then the deduction allowed earlier will now be added back to your income and taxed accordingly.
National Saving Certificate 5 Years.
Senior Citizen Saving Scheme 5 years
Unit Linked Insurance Plan Minimum 5 years
National Pension Scheme Up to retirement

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