Claim 80C & 80D Together to Maximize Tax Savings
Bhavika Rajput- 9 hours ago
- 7 min read
Sections 80C and 80D of the Income Tax Act provide significant avenues to reduce taxable income by claiming deductions for specific investments and expenses. Section 80C focuses on savings and investment instruments, while Section 80D covers health insurance premiums and preventive health check-ups. Claiming these deductions together is a widely used and effective method to maximize tax savings under the old tax regime. Understanding what qualifies under each section, their limits, and the proper filing process is key to optimizing your tax benefits legally and efficiently.
Table of Contents
How to Claim 80C and 80D Deductions Together?
Sections 80C and 80D deductions can be claimed together under the old tax regime to maximize tax savings. Section 80C allows deductions up to ₹1.5 lakh for investments like PPF, ELSS, life insurance premiums, and tuition fees, while Section 80D offers additional deductions for health insurance premiums and preventive health check-ups—up to ₹25,000 for self, spouse, and children, plus ₹25,000 or ₹50,000 for parents depending on their age. To claim both, select the old tax regime when filing your ITR, gather all relevant proofs for investments and insurance premiums, and accurately report the eligible amounts separately in the deduction section of your return. This combined approach reduces taxable income effectively and ensures maximum legal tax benefits.
Understanding Section 80C Deductions
Section 80C is one of the most popular tax-saving provisions available to taxpayers. It allows a deduction of up to ₹1.5 lakh from your total taxable income annually for specified investments and payments. Eligible instruments under 80C include Public Provident Fund (PPF), Employee Provident Fund (EPF), Equity Linked Savings Scheme (ELSS), life insurance premiums, National Savings Certificate (NSC), 5-year fixed deposits with banks, tuition fees for children’s education, and principal repayment of home loans. By investing in or paying towards these instruments, taxpayers can legally reduce their taxable income, thereby lowering their tax liability. Proof of investments or payments must be maintained to substantiate claims during filing or any subsequent tax scrutiny.
Understanding Section 80D Deductions
Section 80D provides tax benefits for amounts paid towards health insurance premiums and preventive health check-ups. This deduction is available up to ₹25,000 annually for premiums paid for self, spouse, and dependent children. Additionally, if health insurance is taken for parents, an extra deduction of up to ₹25,000 (if parents are below 60 years) or ₹50,000 (if parents are senior citizens) can be claimed. Preventive health check-up expenses up to ₹5,000 are also eligible within the overall 80D limit. The section encourages taxpayers to secure their health and that of their family by offering tax incentives, thus promoting financial preparedness for medical emergencies. Receipts and bills for insurance premiums and check-ups should be preserved for documentation purposes.
Can You Claim 80C and 80D Together?
Yes, taxpayers can claim deductions under both Sections 80C and 80D together in the same financial year under the old tax regime. These sections are independent of each other, meaning claiming a deduction under one does not reduce the deduction limit available under the other. This allows taxpayers to maximize their overall tax savings by combining eligible investments and payments for both tax benefits, effectively lowering their taxable income and tax outgo. This combined claim must be supported by valid proofs for both investments and insurance premiums when filing the Income Tax Return (ITR).
Is Claiming 80C and 80D Allowed in the New Tax Regime?
The new tax regime, introduced under Section 115BAC, generally does not permit most deductions under Chapter VI-A, including Sections 80C and 80D, with only limited exceptions such as the employer’s contribution to the National Pension System (Section 80CCD(2)). Taxpayers who opt for the new tax regime for lower slab rates cannot claim 80C and 80D deductions together or separately. Hence, those looking to benefit from these deductions must file under the old tax regime. It is important to carefully evaluate the tax savings under both regimes before choosing which is more beneficial for your financial situation.
How to Claim 80C and 80D Deductions Together in Your ITR
To claim 80C and 80D deductions together:
Select the Old Tax Regime: Choose the old tax regime while filing your ITR since only this regime allows these deductions.
Collect Proofs: Gather all necessary documents such as investment receipts for 80C and health insurance premium receipts or preventive check-up bills for 80D.
Fill the Deductions Section: Enter the total eligible amount under Section 80C (up to ₹1.5 lakh) and Section 80D (up to the applicable limits depending on your family’s health insurance coverage).
Cross-Verify Details: Ensure that the claimed amounts match the proofs submitted and are within allowable limits.
File and Verify: Submit the ITR online and complete the verification process via Aadhaar OTP, net banking, or other available methods to complete your filing.Maintaining organized records of all documents helps in easy reference if the Income Tax Department raises any queries or sends notices.
Tips to Maximize Tax Savings Using Sections 80C and 80D
Diversify Investments Under 80C: Spread your ₹1.5 lakh limit across multiple eligible instruments like PPF, ELSS, and life insurance to maximize returns and risk management.
Include Family Members in 80D Claims: Ensure health insurance premiums for spouse, dependent children, and parents (especially senior citizens) are included to fully utilize the higher deduction limits.
Plan Early: Start investments and insurance payments early in the financial year to avoid last-minute delays or missed deadlines.
Keep Documentation Ready: Retain all receipts, certificates, and bills digitally or physically for smooth verification.
Combine With Other Deductions: Where eligible, combine 80C and 80D claims with other deductions like 80E (education loan interest) or 80TTA (interest on savings accounts) for additional savings.
Use Expert Platforms: Leverage apps like TaxBuddy that offer reminders, expert guidance, and filing support to optimize deductions and avoid errors.
Comparison of Section 80C and Section 80D Deductions
Feature | Section 80C | Section 80D |
Maximum Deduction | Up to ₹1.5 lakh per financial year | Up to ₹1 lakh depending on insured family members and senior citizen status |
Types of Eligible Expenses | Investments, insurance premiums, tuition fees, home loan principal repayment | Health insurance premiums, preventive health check-ups |
Who Can Claim | Individuals and Hindu Undivided Families (HUFs) | Individuals and HUFs |
Tax Regime Applicability | Only old tax regime | Only old tax regime |
Documentation Needed | Investment proofs, receipts | Insurance premium receipts, medical bills |
How TaxBuddy Simplifies Claiming 80C and 80D Deductions
TaxBuddy offers a user-friendly platform to claim Sections 80C and 80D deductions with ease. The app provides:
Personalized Tax Planning: Tailored recommendations to maximize eligible deductions based on your financial profile.
Expert Assistance: Access to tax experts who help ensure correct claim amounts and documentation.
Automated Reminders: Alerts for investment deadlines and insurance premium payments to avoid missing out on deductions.
Easy Filing and Verification: A seamless interface for filing your ITR, with built-in checks to minimize errors and avoid notices.Using TaxBuddy reduces the complexity of tax filing and helps taxpayers make the most of their deduction entitlements efficiently.
Conclusion
Claiming deductions under Sections 80C and 80D together is a smart way to significantly lower your taxable income and boost your overall tax savings. These sections cover a wide range of investments, payments, and insurance premiums, allowing taxpayers to reduce their tax burden effectively when filing under the old tax regime. Proper planning, timely investments, and maintaining accurate documentation are crucial to maximize these benefits. Using a reliable platform like TaxBuddy can simplify the entire process by providing expert guidance, personalized tax planning, and seamless filing support. For anyone looking for assistance in tax filing, I highly recommend you download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
Frequently Asked Question (FAQs)
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy offers both self-filing and expert-assisted plans. Users can choose the option that suits their comfort level and tax complexity, with expert support available for detailed guidance and review to ensure error-free filing.
Q2. Which is the best site to file ITR?
TaxBuddy is considered one of the best platforms for ITR filing due to its user-friendly interface, expert assistance, and comprehensive support. It helps taxpayers claim all eligible deductions, including Sections 80C and 80D, ensuring maximum tax benefits.
Q3. Where to file an income tax return?
Income tax returns can be filed on the official Income Tax Department’s e-filing portal or through authorized intermediaries like TaxBuddy, which provide a secure and simplified filing experience with added features like document management and personalized support.
Q4. Can I claim both 80C and 80D deductions in the same financial year?
Yes, under the old tax regime, you can claim deductions under both Sections 80C and 80D simultaneously without any overlap in limits, allowing you to maximize your total tax savings.
Q5. What is the maximum deduction allowed under Section 80C?
Section 80C allows a maximum deduction of ₹1.5 lakh per financial year on eligible investments and payments such as PPF, ELSS, life insurance premiums, tuition fees, and more.
Q6. How much can I claim under Section 80D?
Section 80D permits deductions of up to ₹25,000 for health insurance premiums paid for self, spouse, and dependent children. An additional deduction of ₹25,000 (₹50,000 if parents are senior citizens) is allowed for insurance premiums paid for parents.
Q7. Are Sections 80C and 80D deductions available under the new tax regime?
No, under the new tax regime, most deductions under Chapter VI-A, including 80C and 80D, are not available. Taxpayers must opt for the old regime to claim these deductions.
Q8. What documents are required to claim deductions under Sections 80C and 80D?
For 80C, documents include investment proofs like PPF passbooks, ELSS statements, insurance premium receipts, and tuition fee receipts. For 80D, health insurance premium receipts and bills for preventive health check-ups are required.
Q9. Can I claim health insurance premiums paid for my parents under Section 80D?
Yes, you can claim health insurance premiums paid for your parents under Section 80D. If your parents are senior citizens, the deduction limit increases to ₹50,000.
Q10. How can I avoid errors while claiming 80C and 80D deductions?
Ensure all claimed deductions match supporting documents, double-check your ITR entries, keep thorough records, and consider using expert-assisted platforms like TaxBuddy to minimize errors.
Q11. Does TaxBuddy provide reminders for tax-saving investments and payments?
Yes, TaxBuddy’s platform includes features such as reminders and notifications to help taxpayers stay on track with their investments and premium payments, ensuring no deduction opportunities are missed.
Q12. Can I file a revised return if I missed claiming deductions under 80C or 80D earlier?
Yes, you can file a revised return within the stipulated time frame to include any missed deductions or correct errors, helping you claim eligible tax benefits that were previously overlooked.
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