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Income Tax Deductions List – Deductions on Section 80C, 80CCC, 80CCD & 80D – FY 2023-24 (AY 2024-25)

by Ashiana / / 5827 views/ Reading Time: 4 minutes

Managing your income tax effectively is key to securing your financial future. For FY 2023-24 (AY 2024-25), several deductions are available under Sections 80C, 80CCC, 80CCD, and 80D of the Income Tax Act. These provisions not only reduce your taxable income but also encourage savings and investments. Let’s explore these deductions in detail.

Income Tax Deductions List - Deductions on Section 80C, 80CCC, 80CCD & 80D - FY 2023-24 (AY 2024-25)

What is Tax Deduction?


A tax deduction is a provision in tax laws that allows taxpayers to reduce their taxable income by accounting for certain eligible expenses, investments, or contributions. These deductions are designed to encourage specific financial behaviors, such as saving for the future, investing in health insurance, or contributing to retirement plans. By lowering taxable income, deductions effectively reduce the overall tax liability.

How Does It Work?


Let’s break it down with an example:

  • Imagine your gross annual income is ₹10 lakh.
  • You invest ₹1.5 lakh in the Public Provident Fund (PPF), which is eligible for a tax deduction under Section 80C.
  • This investment reduces your taxable income to ₹8.5 lakh (₹10 lakh – ₹1.5 lakh).

Your taxes will be calculated based on₹8.5 lakh instead of₹10 lakh, saving you money.

Types of Deductions


Deductions are categorized under various sections of the Income Tax Act, such as:

  • Section 80C: Investments in PPF, ELSS, and tax-saving FDs.
  • Section 80CCC: Contributions to pension funds.
  • Section 80CCD: Contributions to the National Pension System (NPS).
  • Section 80D: Premiums paid for health insurance.

Purpose of Tax Deductions


The government uses tax deductions as an incentive to:

  • Promote savings and financial discipline.
  • Encourage investment in infrastructure, education, and healthcare.
  • Support long-term planning for retirement and emergencies.

By taking advantage of these provisions, taxpayers can reduce their tax burden and align their financial goals with long-term security and growth.

How to save on Income tax in India for Salaried Employees 


Income Tax Deductions List in India


1. Section 80C: A Maximum Deduction of ₹1.5 Lakh


Section 80C is one of the most popular sections for tax-saving investments and expenses. The maximum deduction under Section 80C is ₹1,50,000 per year. Here’s a list of eligible investments and expenses:

Eligible Investments:

  • Public Provident Fund (PPF): A government-backed scheme offering tax-free returns.
  • Employee Provident Fund (EPF): Contributions by employees and employers towards retirement funds.
  • Equity-Linked Savings Schemes (ELSS): Mutual funds with a lock-in period of 3 years.
  • National Savings Certificate (NSC): Fixed-income savings bond.
  • 5-Year Fixed Deposit (FD): Tax-saving FDs with scheduled banks.
  • Sukanya Samriddhi Yojana (SSY): Savings for a girl child’s education and marriage.
  • Senior Citizen Savings Scheme (SCSS): Designed for individuals above 60.
  • Unit Linked Insurance Plan (ULIP): Combines insurance and investment.

Eligible Expenses:

  • Tuition Fees: Paid for up to two children’s education.
  • Principal Repayment of Home Loan: For loans taken for residential properties.
  • Stamp Duty and Registration Charges: For purchasing a house.

2. Section 80CCC: Deductions on Pension Plans


Section 80CCC allows deductions for contributions made to specific pension funds.

  • Maximum Deduction: ₹1,50,000 (inclusive of Section 80C limit).
  • Eligible Investments: Pension funds offered by life insurance companies.

3. Section 80CCD: Deductions on NPS and APY Contributions


Section 80CCD encourages individuals to save for retirement. It applies to the National Pension System (NPS) and Atal Pension Yojana (APY) contributions.

Subsections Under 80CCD:

  • 80CCD(1): Contributions made by the individual (up to ₹1.5 lakh or 10% of salary for salaried individuals, 20% of gross total income for self-employed).
  • 80CCD(1B): An additional deduction of up to ₹50,000 for contributions to NPS.
  • 80CCD(2): Employer’s contribution to NPS (up to 10% of salary) is deductible over and above the ₹1.5 lakh limit.

4. Section 80D: Deductions for Health Insurance Premiums


Section 80D allows deductions for premiums paid for medical insurance and preventive health check-ups.

Deduction Limits:

  • Self, Spouse, and Dependent Children:
  • Up to ₹25,000 for individuals below 60 years.
  • Up to ₹50,000 for senior citizens.
  • Parents:
  • Additional ₹25,000 for parents below 60 years.
  • Additional ₹50,000 for senior citizen parents.
  • Preventive Health Check-up:
  • Up to ₹5,000 within the above limits.

Eligibility:

  • Premiums must be paid for policies covering self, spouse, children, or parents.
  • Payments should be made digitally (except for preventive check-ups).

Benefits of Tax Deductions


Tax deductions are not just about reducing tax liabilities; they also provide additional benefits, such as:

  • Encouraging Investments: Sections like 80C motivate taxpayers to save and invest in long-term financial instruments.
  • Promoting Retirement Planning: Sections 80CCC and 80CCD incentivize savings for retirement.
  • Supporting Health Expenses: Section 80D eases the financial burden of healthcare costs through deductions for health insurance premiums.
  • Reducing Financial Stress: Tax benefits help individuals achieve financial security while fulfilling life goals like education, housing, and retirement planning.

Income Tax Exemptions for Salaried Employees 2023-24


Salaried individuals can claim multiple deductions and exemptions to optimise their tax outgo. Apart from the deductions under Sections 80C, 80CCC, 80CCD, and 80D, here are some additional exemptions:

  1. House Rent Allowance (HRA)

Salaried individuals can claim HRA exemption if they live in rented accommodations. The exemption amount is the least of the following:
  • Actual HRA received.
  • 50% of salary (40% for non-metro cities).
  • Rent paid minus 10% of salary.

  1. Standard Deduction

A flat ₹50,000 deduction is available to all salaried employees.

  1. Leave Travel Allowance (LTA)

Exemption is available for travel expenses incurred during leave within India, subject to specific conditions.

  1. Professional Tax

Deduction on the professional tax paid, up to ₹2,500 per annum.

  1. EPF Contributions

Employers’ contributions to the Employee Provident Fund (EPF) are tax-exempt up to specific limits.

These exemptions and deductions, when combined, significantly reduce the tax burden on salaried employees.

Other Key Points to Remember


  • New vs. Old Tax Regime: Deductions under these sections only apply if you choose the old tax regime.
  • Proof of Investments: Ensure that you keep receipts and documentation for all investments and expenses claimed.
  • Combined Limit: Sections 80C, 80CCC, and 80CCD(1) collectively have a maximum limit of ₹1.5 lakh.

Also read: What is Repo Rate and Its Impact on Real Estate?

Wrapping Up


Efficient tax planning is crucial to financial stability. Understanding and utilizing deductions under Sections 80C, 80CCC, 80CCD, and 80D allows taxpayers to optimize their savings while meeting financial goals. Additionally, salaried individuals can benefit from specific exemptions tailored to their needs.

Start early, track your investments, and make informed decisions to maximize your benefits for FY 2023-24 (AY 2024-25). By leveraging the available deductions and exemptions, you can reduce your tax liability and secure your financial future.
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Category: Real Estate, Investment,

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Q1. What are the eligible deductions for 80C?

Section 80C of the Income Tax Act provides tax exemptions for specific investments and expenditures. By investing in various financial assets like the Public Provident Fund (PPF), National Savings Certificate (NSC), and Equity Linked Savings Scheme (ELSS), you can claim tax deductions up to Rs. 1.5 lakh.

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, not INR 2,00,000. Deduction of interest regarding a home loan serviced by you cannot be claimed under section 80C.

The exemption limit for individuals under 60 is Rs. 2.5 lakh. Senior citizens aged 60 and above but below 80 have a higher exemption limit of Rs. 3 lakh. For super senior citizens aged 80 and above, the exemption limit increases further to Rs. 5 lakh.

About The Author

Ashiana, Ashiana Housing build homes. Homes surrounded by vast green spaces and fresh breeze. Homes cocooned in secured gated complexes. Homes where futures are forged and there are opportunities to grow. And Homes in environments brimming with healthy activity, trust and respect. At heart, we build communities with care.

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