80C and 80D Deductions


80C and 80D are deductions available under the Indian Income Tax Act, 1961. Lower your tax burden considerably by filing 80 C & 80 D deductions.

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Difference Between 80C and 80D Deduction

80C is a tax deduction available to individuals and Hindu Undivided Families (HUFs) for specified investments and expenditures. It includes investments in tax-saving fixed deposits, public provident fund (PPF), life insurance premiums, and tuition fees for children, among others.

80D is a tax deduction available to individuals and HUFs for medical insurance premiums paid for self, spouse, children, and dependent parents. This deduction is available in addition to the 80C deduction.

Benefits of 80C and 80D Deductions

There are several benefits to claiming deductions under Section 80C and 80D of the Income Tax Act in India:

  • Tax Savings: By claiming deductions under these sections, individuals can reduce their taxable income and subsequently lower their tax liability
  • Inflation Proofing: Some investments, such as those in Public Provident Fund (PPF) or National Savings Certificate (NSC), are inflation-proof and provide a good rate of return. This helps to preserve the purchasing power of money in the long term
  • Financial Security: Investments made under these sections can be used as a safety net in times of financial crisis or emergencies
  • Retirement Planning: Investments made under Section 80C can be used for retirement planning as they offer long-term stability and tax benefits
  • Health Insurance: Deductibles under Section 80D can be used to cover medical expenses and protect against unforeseen medical emergencies
  • Education Planning: Investments made under Section 80C can be used for education planning for children and provide tax benefits as well
  • National Development: Some investments, such as those in NSC or PPF, contribute to the development of the country and its economy.

Checklist Provisions of 80C and 80D

Section 80C of the Income Tax Act of 1961 in India allows individuals to claim deductions on certain investments and expenses up to a maximum limit of ₹1.5 lakh per financial year. Some of the investments and expenses that are eligible for deductions under Section 80C include.

  • Contributions to certain specified pension funds, such as the Employees' Provident Fund (EPF) and the Public Provident Fund (PPF)
  • Premiums paid for certain life insurance policies
  • Contributions made to certain specified provident funds, such as the Employees' Provident Fund (EPF) and the National Pension Scheme (NPS)
  • Tuition fees paid for children's education (up to a maximum of two children)
  • Repayment of home loan principal

How to File 80C and 80D Deductions?

To file 80C and 80D deductions, you will need to follow the following steps:

  • Gather all the Necessary Documents: To file 80C and 80D deductions, you will need to have a copy of your PAN (Permanent Account Number) card, salary slips, and proof of investments made under 80C
  • Select the Appropriate Form: 80C and 80D deductions can be claimed while filing your income tax returns through Form 10E or Form 16. Form 10E is for salaried individuals, while Form 16 is for those who are self-employed
  • Fill in the Details: Once you have selected the appropriate form, you will need to fill in the relevant details such as your name, PAN number, salary, and the amount invested under 80C and 80D
  • Claim the Deductions: Once you have filled in all the necessary details, you can claim the deductions under 80C and 80D by entering the total amount invested in the designated section of the form.

Documents Required for Filing 80C and 80D

For 80C

  • Life insurance premium receipts
  • Contribution receipts of provident fund
  • Deposit receipt of senior citizen saving schemes
  • Mutual fund subscription receipts
  • Other relevant receipts.

For 80D

  • Income tax act does not specify any particular document for deductions
  • As a suggestion, one must hold doctor prescription, medicine bills, receipt of consultation fees, diagnostic test bills.

Why Vakilsearch?

Vaklsearch’s expert chartered accountants team will contact you and help you file your 80C and 80D deductions. Taxpayers and firms across India choose Vakilsearch every year to do their taxes and claim their deductions. Our team will be completely transparent in the entire process, and we will inform you about the benefits of filing tax returns. Our support team will check your queries and get back to you promptly.

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