DIY Filing with Section 80C, 80D, and 24(b) Deductions in TaxBuddy
- Rashmita Choudhary
- Sep 4
- 10 min read
Taxpayers in India can reduce their taxable income through various deductions under the Income Tax Act, 1961. These deductions provide an opportunity to lower their overall tax liability, helping individuals save money on taxes while complying with the regulations. Sections 80C, 80D, and 24(b) are among the most commonly used sections for tax-saving purposes, offering substantial benefits. The ability to claim these deductions plays a significant role in financial planning and optimising tax obligations. Let's explore how these deductions work, whether they are available under the new tax regime, and how you can efficiently claim them through platforms like TaxBuddy.
Table of Contents
Understanding Section 80C Deductions
Section 80C of the Income Tax Act allows taxpayers to claim deductions for specific investments and expenses, making it one of the most popular sections for tax-saving. The total limit under this section is ₹1.5 lakh per financial year, and it applies to a wide range of financial instruments. These include contributions to Provident Fund (PF), Public Provident Fund (PPF), National Savings Certificate (NSC), life insurance premiums, and tuition fees for children, among others.
The section encourages individuals to invest in long-term savings and retirement schemes, which ultimately helps taxpayers build a financially secure future while reducing their immediate tax burden. By utilizing the full ₹1.5 lakh limit, taxpayers can effectively lower their taxable income.
Is Section 80C Available in the New Tax Regime?
In the new tax regime, taxpayers are offered lower tax rates but at the cost of forgoing certain exemptions, deductions, and rebates. Unfortunately, Section 80C is not available under the new tax regime. This means that taxpayers opting for the new regime cannot claim deductions for investments made in eligible instruments like PPF, EPF, and life insurance premiums.
While the new tax regime offers simplified tax filing, it removes many tax-saving opportunities, including those under Section 80C. Therefore, individuals who have significant investments in these eligible instruments may prefer the old tax regime, where they can continue claiming these deductions and enjoy the benefits of long-term savings.
How Section 80D Deductions Work
Section 80D of the Income Tax Act provides taxpayers with an opportunity to claim deductions for premiums paid toward health insurance policies. This section is designed to encourage individuals to invest in health insurance, which helps protect them and their families from the financial burden of medical expenses. Health insurance not only provides essential coverage for unexpected medical costs but also promotes the overall well-being of taxpayers.
Under Section 80D, deductions are available for premiums paid for health insurance policies covering the taxpayer, their spouse, children, and parents. These deductions are available irrespective of whether the individual has opted for a government or private insurance policy. The key benefit of this provision is that it extends the scope of deductions to the taxpayer’s immediate family and their parents, which can significantly reduce their taxable income.
Maximum Deductions Available Under Section 80D
The maximum deductions available under Section 80D vary based on the age of the insured individual or their family members. The following are the maximum allowable limits:
₹25,000 for individuals below 60 years of age: For individuals who are under 60 years of age, a maximum deduction of ₹25,000 is available for premiums paid on health insurance policies covering themselves, their spouse, and dependent children. This means that a taxpayer can claim this amount as a deduction if they purchase a health insurance policy for themselves and their family.
₹50,000 for senior citizens (aged 60 years or more): For senior citizens (aged 60 years or more), the deduction limit is increased to ₹50,000. This higher deduction is aimed at encouraging senior citizens to secure health insurance, considering that medical expenses tend to rise with age, and health insurance can help alleviate some of these financial burdens.
₹25,000 for premiums paid for parents under 60 years of age: In addition to the taxpayer's own health insurance, Section 80D also allows deductions for premiums paid for health insurance policies covering their parents. For parents who are under 60 years of age, the maximum deduction allowed is ₹25,000.
₹50,000 for senior citizen parents: If the taxpayer's parents are senior citizens (60 years or older), the deduction limit is increased to ₹50,000 for premiums paid for their health insurance coverage. This provision further emphasizes the importance of securing health insurance for senior citizens, who may face more frequent medical issues.
Critical Illness Policies
Section 80D not only allows deductions for premiums paid for regular health insurance policies but also extends the benefit to premiums paid for critical illness policies. These policies specifically cover major health issues, such as cancer, heart disease, kidney failure, and other life-threatening conditions. Critical illness insurance helps reduce the financial strain that such illnesses can cause, offering a lump sum payout to the insured in the event of a diagnosed critical illness.
The inclusion of critical illness policies under Section 80D promotes the idea of specialized health coverage for taxpayers and encourages them to secure themselves and their families against severe medical conditions that could otherwise be financially devastating.
Additional Benefits
Preventive Health Check-ups: Section 80D also provides a provision for preventive health check-ups. Taxpayers can claim a maximum deduction of ₹5,000 within the existing limits for expenses related to preventive health check-ups for themselves, their spouse, children, or parents. These check-ups can help in early detection of health issues, thus reducing overall healthcare costs and promoting better health management.
Cumulative Benefit: The deductions under Section 80D can be claimed cumulatively for both the taxpayer and their family members. For example, a taxpayer who is under 60 and pays premiums for themselves, their spouse, children, and parents may be eligible to claim the full ₹25,000 deduction for their own coverage, plus ₹25,000 for premiums paid for their parents if they are under 60. If their parents are senior citizens, the deduction increases to ₹50,000, providing further financial relief.
Is Section 80D Available in the New Tax Regime?
Like Section 80C, Section 80D is not available under the new tax regime. Taxpayers opting for the new tax regime forgo deductions related to health insurance premiums, which are available under the old tax regime. This is one of the significant trade-offs when choosing between the two tax regimes.
For individuals with substantial medical insurance premiums, the old tax regime may be more beneficial, as it allows them to claim deductions under Section 80D, potentially reducing their taxable income by a considerable amount.
Maximizing Section 24(b) Deductions
Section 24(b) allows taxpayers to claim deductions on the interest paid on loans taken for the purchase, construction, or renovation of a residential property. The maximum deduction under Section 24(b) is ₹2 lakh per annum for a self-occupied property. The deduction applies to interest payments made on home loans during the financial year.
This deduction is particularly beneficial for individuals with home loans, as it helps reduce taxable income, especially for first-time homebuyers. It is important to note that if the property is let out, the entire interest paid on the loan is eligible for deduction under this section without any upper limit. This section provides substantial tax relief for homeowners by reducing the burden of interest payments.
How to Claim Section 80C, 80D, and 24(b) Deductions with TaxBuddy
TaxBuddy makes it easy to claim deductions under Section 80C, 80D, and 24(b) by providing an intuitive platform that guides users through the process. Here's how you can claim these deductions using TaxBuddy:
For Section 80C:
Input your eligible investments and expenses such as PPF contributions, life insurance premiums, NSC, and tuition fees into TaxBuddy’s system.
The platform will automatically calculate the total deductions, ensuring that you maximize your savings up to the ₹1.5 lakh limit.
For Section 80D:
Enter your health insurance premiums and those paid for your family members, including senior citizens.
TaxBuddy helps track the eligibility and deductions based on the premium amounts and your age group, making sure you claim the maximum possible deductions.
For Section 24(b):
Enter details of your home loan, including the amount of interest paid during the year.
TaxBuddy will calculate the deduction, ensuring that you claim the full ₹2 lakh deduction on your self-occupied property or more for a rented property.
By using TaxBuddy’s expert-driven and AI-powered tools, you can ensure that you claim all your eligible deductions accurately, reduce your taxable income, and maximize your tax refund.
Conclusion
Sections 80C, 80D, and 24(b) provide taxpayers with excellent opportunities to save on taxes while investing in their future and securing their health. While the old tax regime offers these deductions, the new tax regime does not, so choosing the right option based on your financial situation is crucial. Using TaxBuddy ensures that you make the most of these deductions, file your taxes accurately, and maximize your refund. With its seamless and AI-driven platform, TaxBuddy simplifies tax filing and helps you achieve your financial goals efficiently. For anyone looking for assistance in tax filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1: Can I claim deductions under Section 80C and 80D in the new tax regime?
No, deductions under Sections 80C and 80D are not available under the new tax regime. The new tax regime offers reduced tax rates in exchange for forgoing deductions and exemptions, such as those under Section 80C (for investments in PPF, NSC, etc.) and Section 80D (for health insurance premiums). If you wish to claim these deductions, you must opt for the old tax regime, which provides the option to claim various exemptions and deductions but comes with higher tax rates.
Q2: How can I maximize my tax savings under Section 80C?
To maximize your tax savings under Section 80C, you can invest in several eligible instruments, including Public Provident Fund (PPF), National Savings Certificates (NSC), Employee Provident Fund (EPF), Tax-saving Fixed Deposits (FDs), and Equity-Linked Saving Schemes (ELSS). You can also make payments towards life insurance premiums, children’s tuition fees, and home loan principal repayment. The total deduction available under Section 80C is ₹1.5 lakh per financial year, and planning your investments strategically can help you fully utilize this limit.
Q3: How does Section 80D help me save on taxes?
Section 80D allows deductions for premiums paid towards health insurance policies. You can claim deductions for yourself, your spouse, children, and your parents. The maximum deduction available is ₹25,000 for individuals below 60 years of age and ₹50,000 for senior citizens (aged 60 years or more). This deduction can be claimed for premiums paid for medical insurance, as well as for preventive health check-ups. By including your parents’ health insurance premiums under this section, you can increase your total deductible amount.
Q4: Can I claim the full interest on my home loan under Section 24(b)?
Yes, under Section 24(b), you can claim deductions on interest paid on a home loan. If the property is self-occupied, you can claim up to ₹2 lakh in interest deductions. For rental properties, the entire interest amount paid on the home loan is deductible, with no upper limit. It’s important to note that the property must be used for self-occupation or rental purposes; otherwise, the deduction may not apply.
Q5: Can TaxBuddy help me file my taxes and claim these deductions?
Yes, TaxBuddy offers a seamless platform for filing taxes and claiming deductions like those under Sections 80C, 80D, and 24(b). TaxBuddy’s system automatically identifies eligible deductions and guides you through the process of entering the necessary details, ensuring that you maximize your savings and file your returns accurately. With expert assistance and a user-friendly interface, TaxBuddy makes the tax filing process hassle-free.
Q6: What is the difference between the old and new tax regimes?
The primary difference between the old and new tax regimes is that the old tax regime allows taxpayers to claim exemptions and deductions such as HRA, 80C, 80D, and others, while the new tax regime offers lower tax rates but eliminates these deductions and exemptions. If you do not have significant deductions, the new tax regime might offer more savings due to the reduced tax rates. However, if you have considerable deductions, the old regime could be more beneficial.
Q7: Can I switch between the old and new tax regime every year?
Yes, you can switch between the old and new tax regimes every year. However, the choice you make in a given year must be followed for the entire assessment year. This flexibility allows you to choose the most beneficial regime based on your income and available deductions. It’s important to evaluate your deductions and exemptions each year to decide which regime offers better tax savings.
Q8: How do I know which tax regime is best for me?
To determine which tax regime is best for you, evaluate your income, eligible deductions, and exemptions. If you have significant deductions and exemptions (like HRA, 80C investments, or home loan interest), the old tax regime may be more beneficial. If your deductions are minimal, the new tax regime with lower tax rates may save you more money. TaxBuddy can help you analyze both regimes and make an informed choice based on your financial situation.
Q9: What are the key deadlines for filing ITR for FY 2024-25?
The deadlines for filing ITR for FY 2024-25 (Assessment Year 2025-26) are as follows:
September 15, 2025 for individuals and non-audit businesses.
October 31, 2025 for businesses requiring audits.
November 30, 2025 for businesses with transfer pricing.
December 31, 2025 for belated returns.
These deadlines apply to most taxpayers, but specific due dates may vary depending on your business or income type. TaxBuddy helps ensure you meet these deadlines and avoid penalties.
Q10: What documents do I need to file my ITR?
To file your ITR, you will need several important documents, including:
Form 16(issued by your employer if you're a salaried individual).
Bank statements showing interest income or other earnings.
TDS certificates (Form 16A, 16B, or 16C) if TDS is deducted.
Proof of deductions under sections like 80C, 80D, and others.
Loan statements for home loans and other deductions.
Capital gains statements if you’ve sold assets.
Investment proofs such as PPF, NPS, and insurance premiums.
TaxBuddy allows you to easily upload and organize these documents for accurate filing.
Q11: Can I file ITR for previous years if I missed the deadline?
Yes, you can file a belated return for previous years, but penalties may apply. For any missed deadlines, the tax department allows you to file a return up to a year after the end of the relevant assessment year. However, filing after the deadline may attract a late fee, interest on unpaid taxes, and delays in refund processing. TaxBuddy helps you manage belated returns, ensuring compliance and minimizing penalties.
Q12: How can TaxBuddy help me with post-filing issues like tax notices?
TaxBuddy provides comprehensive post-filing support, including assistance if you receive a tax notice. If your ITR is selected for scrutiny or if discrepancies are found, TaxBuddy’s expert team can help you respond to the notice, file revised returns, and ensure that the issue is resolved promptly. TaxBuddy’s customer service is always ready to assist with any queries after your return is filed, making the process smoother even after the filing is complete.
Comments