Section 80C: IT Returns e-Filing with Tax Deductions
- Rajesh Kumar Kar
- Jul 15
- 8 min read
The Income Tax Act's Section 80C allows the taxpayer to deduct certain expenses and investments from their taxable income for the fiscal year. By investing in programs like the Public Provident Fund, National Savings Certificate, Equity Linked Savings Scheme, Sukanya Samriddhi Yojana, etc., a taxpayer can save money on income taxes by claiming a deduction of up to Rs. 1.5 lakhs annually. This article will examine the many investment options that allow the taxpayer to claim a deduction under Section 80C as well as other possible deductions. Keep them in mind for IT returns e-filing with tax deductions.
Table of Contents
What are Section 80C Deductions?
Since it enables them to lower their taxable income through tax-saving investments or qualified expenses, Section 80C is one of the most popular sections among taxpayers. Taxpayers can save a significant amount of money on taxes by carefully planning these investments and expenses. Only HUF and individuals are eligible to claim the Section 80C deduction. LLPs, partnership partnerships, and companies, however, are not eligible for this deduction. Section 80C allows for the annual deduction of up to Rs. 1.5 lakh from gross total income.
List of Section 80C Deductions to Be Claimed when e-Filing Tax Returns
The following table shows a list of deductions that can be claimed under Section 80C while filing your ITR returns:
Investment/Payment | Details |
Contributions by employees to EPF are eligible. | |
Deposits to a PPF account are eligible up to a maximum limit of Rs. 1.5 lakh annually. | |
Premium paid for life insurance policies for self, spouse, or children is eligible. | |
Investments in specified mutual funds with a lock-in period of three years are eligible. | |
Investment in NSC and accrued interest (except for the last year) are eligible. | |
Fixed deposits of 5 years or more with scheduled banks are eligible. | |
Deposits made for the benefit of a girl child are eligible. | |
The principal portion of the EMI paid for a home loan is eligible. | |
Stamp Duty and Registration Charges | These charges paid for a residential property are allowed as a deduction in the year of purchase of the property. |
Fees paid for the full-time education of up to two children in India are eligible. | |
Investment made by senior citizens in SCSS is eligible. | |
Premium paid towards ULIP for self, spouse, and children is eligible. | |
Investment in 5-year time deposits at post offices is eligible. | |
Employee's contribution to an approved superannuation fund is eligible. | |
Pension Plans | Contribution to specific pension plans like LIC's Jeevan Suraksha, etc. is eligible. |
Section 80C, 80CCC, 80CCD(1), 80CCE, 80CCD(1B) Deduction Limits
Investments in the pension plan are eligible for deductions under Sections 80CCC and 80CCD. When combined, Sections 80C, 80CCC, and 80CCD(1) allow for a maximum deduction of Rs 1.5 lakhs. You may, however, deduct an extra Rs 50,000 for payments to the National Pension Scheme (NPS) under 80CCD(1B). Therefore, the aggregate maximum deduction under Sections 80C, 80CCC, 80CCD(1), and 80CCD(1B) is Rs 2 lakhs. The table below gives an overview of deduction limits under these sections:
Section | Eligible Investments | Maximum Deduction Limit |
80C | Investment in Equity Linked Saving Schemes (ELSS), PPF/SPF/RPF, SSY, NSC, SCSS, payments for Life Insurance Premiums, principal sum of a home loan, etc. | Rs 1,50,000 |
Pension fund payments | Rs 1,50,000 | |
Atal Pension Yojana or other pension schemes specified by government | Employed: 10% of basic salary + DA Self-employed: 20% of gross total income | |
Total deduction under Section 80C, 80CCC, 80CCD(1) | Rs 1,50,000 | |
NPS investments (beyond Rs 1,50,000 limit under Section 80CCE) | Rs 50,000 | |
80CCD(2) | Employer’s contribution towards NPS (beyond Rs 1,50,000 limit under Section 80CCE) | Central government employer: 14% of basic salary +DA Others: 10% of basic salary +DA |
Health Insurance Premium Deductions under Section 80D
Individuals and Hindu undivided families can claim legitimate deductions under Section 80D. The annual preventive health examinations of a person's parents, spouse, dependent children, and health insurance payments can all be deducted. These are, nevertheless, constrained. Under Section 80D, the assessee may deduct Rs. 25,000 from their insurance for themselves, their spouse, and any dependent children. Assessees over 60 may claim this deduction up to a limit of Rs. 50,000. The assessee is eligible to receive an extra deduction of up to Rs. 25,000 for parents' insurance on top of the already stated claim. If the assessee and their parent or parents are both 60 years of age or older, an extra deduction of Rs. 50,000 is available.
IT Returns e-Filing with Tax Deductions under Section 80C
The process of claiming deductions under Section 80C is simple. You can include these deductions in your Income Tax Return (ITR) filing in the following manner:
Step 1- Obtain documentation of premium payments and investments: You must have supporting documents in order to claim these deductions. This contains Section 80C investment receipts.
Step 2- Open your ITR account and log in: To start the filing procedure, go into your account on the Income Tax Department's e-filing portal or via services like TaxBuddy.
Step 3- Fill out the ITR form with the deduction details: Enter the entire amount of qualifying investments in the designated fields under "Deductions" on the ITR form for Section 80C.
Step 4- Verify and Submit Your ITR: Once all required fields have been completed, verify your data, look for mistakes, and submit your return. Verify that the stated deductions correspond with the supporting documentation.
Step 5- Keep Records for Future Use: Although you are not required to provide hard copies of your documents at the time of filing, it is crucial to keep all evidence of your investment and premium payments in case the Income Tax Department looks into them later.
Conclusion
You can save money and safeguard your financial future by significantly lowering your taxable income through tax savings under Section 80C. You may maximize these deductions by carefully arranging your premiums and investments. Understanding these clauses is essential to maximizing your tax strategy, regardless of whether you are investing in health insurance, PPF, or EPF. Platforms like TaxBuddy streamline the filing process and guarantee that you comply with the most recent legislation while claiming all allowable deductions.
Frequently Asked Questions
Can I claim the 80C deductions when filing my ITR if I have not submitted proof to my employer?
If you did not submit such investments to your company, you can still claim them on your income tax return. Just ensure that the investments were made prior to the fiscal year's end, which is March 31, 2025.
For which year can I claim the 80C investment as a deduction for an investment made on 30 April 2025.?
Investments made during that fiscal year may be deducted from your ITR. If you make an investment on April 30, 2025, for example, you can deduct it from your taxes for FY 2025–2026.
What is section 80CCD(1)?
Contributions to the National Pension plan are deductible under Section 80CCD (1). Under 80CCD(1), an employee may deduct up to 10% of their base pay + dearness allowance. 20% of self-employed people's income can be deducted, up to a maximum of Rs 1.5 lakh under section 80C.
What is section 80CCD(2)?
Section 80CCD(2) addresses the tax deductions that companies can claim for employee payments to the pension plan. For example, you can deduct up to 14% (under the new regime) or 10% (under the old regime) of your total income if your firm makes contributions to your employee's pension account.
What is 80C deduction under Chapter VI A?
Section 80C allows for the deduction of investments made in certain ways. Popular investments that qualify for this deduction include Sukanya Samriddhi Yojana (SSY), National Saving Certificates (NSC), and Public Provident Funds (PPF).
Can a company take benefit of Section 80C?
Section 80C only applies to individuals or Hindu Undivided Families (HUFs). As a result, a business cannot benefit from Section 80C.
Can I claim an 80C deduction for the life insurance premium paid?
When you pay life insurance premiums to any insurance company—public or private—approved by the Insurance Regulatory and Development Authority of India, you are eligible for a deduction under Section 80C. Therefore, an 80C deduction can be claimed for the premiums you pay to private insurance firms.
Can I claim both 80C and 80D?
Yes. Both these sections allow for deductions.
Can I claim an HRA deduction under Section 80C?
No, Section 10(13A), not Section 80C, is where HRA (House Rent Allowance) claims are made. You may make a claim under Section 80GG if you pay rent but do not receive HRA.
Can I claim a tax deduction for donations under Section 80C?
No, Section 80C does not apply to donations. Section 80G allows you to claim deductions for qualified donations.
Is the entire EPF contribution eligible for deduction under 80C?
No. Only the employee's portion of the EPF payment is eligible for benefits.
Is the interest earned through these instruments eligible for tax deductions under 80C?
No. With the exception of NSCs, where reinvested interest is eligible for a deduction under 80C for the year in which it occurs, interest earned is often subject to taxation under other sections.
What does Section 80C entail in the broader framework of income tax planning?
Section 80C of the Income Tax Act, 1961, is a cornerstone provision that enables individual taxpayers and Hindu Undivided Families (HUFs) to deduct up to ₹1.5 lakh from their gross total income through specified investment avenues and qualifying expenditures, thereby legally reducing their taxable income.
Can salaried, self-employed, and retired individuals equally leverage Section 80C?
Yes, Section 80C is uniformly applicable across all individual taxpayers, irrespective of income source. Salaried individuals typically use employer-backed instruments like EPF, while self-employed and retirees often rely on instruments like PPF or ELSS to claim eligible deductions.
What financial instruments are considered eligible for Section 80C deductions?
The section includes a curated list of investments and expenditures such as Public Provident Fund (PPF), National Savings Certificates (NSC), Employee Provident Fund (EPF), Sukanya Samriddhi Yojana, Life Insurance Premiums, 5-year tax-saving fixed deposits, and Equity Linked Saving Schemes (ELSS), among others.
Are educational expenses covered under Section 80C?
Yes, tuition fees paid towards full-time education for up to two children can be claimed, provided the institution is located in India and is legally recognized. Note that ancillary costs like donations, development fees, or transport charges are not covered under this clause.
How is deduction under Section 80C reported during income tax return e-filing?
In your ITR form (whether filed through a portal or app), you must navigate to the deductions section under Chapter VI-A. Enter your contributions accurately under Section 80C, supported by corresponding documentary evidence, even if not immediately required at the time of filing.
Is it possible to exceed the ₹1.5 lakh threshold with cumulative 80C investments?
Yes, taxpayers often invest in multiple 80C-compliant instruments that cumulatively surpass the cap. However, the tax benefit is restricted to ₹1.5 lakh in total per financial year. The excess serves only savings or long-term planning objectives, not tax reduction.
Are documentary proofs mandatory for claiming deductions during online filing?
While submission of physical or scanned documents is not mandated during e-filing, you are legally obliged to preserve proof of investment for at least six assessment years. In case of assessment or scrutiny, failure to produce these could lead to disallowance of deductions and additional tax liability.
Can both spouses claim deduction on the same Section 80C investment?
No, a single investment can’t be claimed by both spouses unless both have made separate financial contributions from their own income. For instance, if a PPF contribution is made from one spouse’s account, only that person can claim the deduction.
Is the Section 80C deduction compatible with the new tax regime under Section 115BAC?
No. Taxpayers opting for the concessional tax rates under the new regime must forgo most exemptions and deductions, including 80C. Therefore, if you aim to maximize deductions, especially on savings and investments, you must remain in the old tax regime.
What common misconceptions or oversights occur while claiming Section 80C benefits?
Taxpayers often assume that all insurance premiums qualify, overlook lock-in periods (especially in ELSS or FDs), or erroneously claim HRA under 80C (instead of Section 10(13A)). Another common lapse is under-reporting eligible tuition fees or misclassifying mutual fund investments not meant for tax savings.
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