Chapter VI A Income tax deduction list

chapter vi a income tax deduction list

Chapter VIA of the Income Tax Act provides a host of deductions that can significantly reduce your taxable income. These deductions are aimed at encouraging savings, investment, and expenditure in areas beneficial to the individual as well as society. Understanding these provisions can help you optimize your tax planning effectively.

What is Chapter VIA?

Chapter VIA encompasses Sections 80C to 80U of the Income Tax Act, 1961. Each section specifies a particular type of deduction, with conditions and limits that taxpayers must adhere to. These deductions are available to individuals and, in some cases, Hindu Undivided Families (HUFs).

Key Deductions Under Chapter VIA

1. Section 80C – Investments and Expenses

Maximum Limit: Rs. 1.5 lakh per financial year

This is the most commonly used section for tax-saving purposes. Eligible investments and expenditures in 80C include:

  • Life Insurance Premiums

  • Employee Provident Fund (EPF)

  • Public Provident Fund (PPF)

  • National Savings Certificate (NSC)

  • Tax-saving Fixed Deposits (5-year tenure)

  • Principal repayment of home loan

  • Tuition fees for children (up to 2 children)

2. Section 80CCC – Pension Funds

Maximum Limit: Included in the overall limit of Rs. 1.5 lakh under Section 80C

Deduction for contributions made to annuity plans of insurance companies to receive a pension. Read more

3. Section 80CCD – National Pension System (NPS)

80CCD Sub-sections:

  • 80CCD(1): Employee or self-employed contribution (limit is 10% of salary or gross total income).

  • 80CCD(1B): Additional deduction up to Rs. 50,000 for NPS contributions.

  • 80CCD(2): Employer’s contribution (limit is 10% of salary; not included in Rs. 1.5 lakh cap).

4. Section 80D – Health Insurance Premiums

Maximum Limit:

  • Rs. 25,000 for individuals below 60 years

  • Rs. 50,000 for senior citizens

  • Additional Rs. 50,000 for policies covering parents (senior citizens)

Covers premiums paid for health insurance policies and preventive health check-ups. Read more

5. Section 80DD – Maintenance of Disabled Dependents

Maximum Limit:

  • Rs. 75,000 for dependents with 40%-80% disability

  • Rs. 1,25,000 for dependents with severe disability (80% or more)

Covers expenditure incurred for medical treatment and maintenance of disabled dependents. Read more

6. Section 80DDB – Medical Treatment of Specified Diseases

Maximum Limit:

  • Rs. 40,000 for individuals below 60 years

  • Rs. 1,00,000 for senior citizens

Expenses for treatment of specified diseases such as cancer, chronic renal failure, etc., qualify under this section. Read more

7. Section 80E – Education Loan Interest

Maximum Limit: No upper limit

Interest paid on loans taken for higher education for self, spouse, children, or a student for whom the taxpayer is a legal guardian. Read more

8. Section 80G – Donations to Charitable Institutions

Maximum Limit: Varies (50% or 100% of the amount donated; some with and some without limits)

Donations to approved funds and organizations, such as the PM CARES Fund, qualify for this deduction. Read more

9. Section 80GG – Rent Paid

Maximum Limit: Rs. 5,000 per month or 25% of total income (whichever is lower)

Applicable for taxpayers who do not receive HRA as part of their salary. Read more

10. Section 80GGC – Donations to Political Parties

Maximum Limit: No upper limit (must not be in cash)

Covers donations to political parties or electoral trusts.

11. Section 80TTA and 80TTB – Interest Income

  • 80TTA: Deduction up to Rs. 10,000 on interest from savings accounts (for individuals below 60 years).

  • 80TTB: Deduction up to Rs. 50,000 on interest from deposits (for senior citizens).

12. Section 80U – Disability of the Taxpayer

Maximum Limit:

  • Rs. 75,000 for disability between 40%-80%

  • Rs. 1,25,000 for severe disability (80% or more)

Available to individuals with certified disabilities. Read more

Chapter VI-A Income Tax Deductions: A Comprehensive Table

Below is a detailed table of deductions under Chapter VI-A, including the relevant section, deduction limits, and key details:

SectionNature of DeductionMaximum LimitKey Details
80CInvestments and payments₹1,50,000Includes EPF, PPF, NSC, ELSS, LIC premiums, principal on home loans, tuition fees, etc.
80CCCPension Funds₹1,50,000 (combined)Premium paid for annuity plans of insurance companies.
80CCD(1)Contributions to NPS and APY₹1,50,000 (combined)Employee or individual contributions (subject to 10% of salary or 20% of gross income).
80CCD(1B)Additional NPS Contributions₹50,000Available for additional voluntary contributions to NPS.
80DHealth Insurance Premium₹25,000 / ₹50,000₹25,000 for self and family; ₹50,000 for senior citizens (including parents).
80DDMaintenance for Disabled Dependents₹75,000 / ₹1,25,000₹75,000 for 40%-80% disability; ₹1,25,000 for severe disability (>80%).
80DDBMedical Treatment for Specified Diseases₹40,000 / ₹1,00,000₹40,000 for individuals; ₹1,00,000 for senior citizens.
80EEducation Loan InterestNo LimitInterest on loans taken for higher education for self, spouse, or children.
80EEInterest on Home Loan (First-Time Buyers)₹50,000For loans sanctioned between April 1, 2016, and March 31, 2017, on loans up to ₹35 lakh.
80EEAInterest on Home Loan (Affordable Housing)₹1,50,000For loans sanctioned between April 1, 2019, and March 31, 2022.
80EEBInterest on Electric Vehicle Loan₹1,50,000Loan taken for purchasing electric vehicles.
80GDonations to Specified Funds/Charities50%-100% of AmountDepending on the organization and donation type.
80GGRent Paid (No HRA Received)₹5,000/month or 25% of total incomeFor individuals not receiving HRA.
80GGADonations for Scientific Research100% of AmountFor donations made to approved scientific research institutions.
80GGBDonations to Political Parties100% of AmountFor companies contributing to political parties.
80GGCDonations to Political Parties (Individuals)100% of AmountFor individuals contributing to political parties.
80JJAAEmployment Generation for New Workers30% of Additional Employee CostFor businesses hiring new employees.
80RRBRoyalty Income from Patents₹3,00,000For individuals earning royalty from patents.
80TTASavings Account Interest₹10,000Available to individuals and HUFs on savings account interest.
80TTBInterest Income for Senior Citizens₹50,000Applicable to senior citizens on bank deposits.
80UDisability of the Individual₹75,000 / ₹1,25,000₹75,000 for 40%-80% disability; ₹1,25,000 for severe disability (>80%).

Conclusion

Chapter VIA offers multiple avenues to reduce your tax liability while promoting investments, savings, and contributions to societal welfare. To maximize these deductions, ensure timely investments and maintain proper documentation. Consulting a CA like us can help you make the most of these provisions and achieve optimal tax planning.

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