A deduction from total income is allowed to be deducted from the total income while calculating the Income Tax to be paid by the Assessee because economies with high inflation rates like in India, People’s savings are necessary to sustain the optimum level of demand which helps to boost manufacturing, services, and jobs in the country. The government encourages people to save by providing them tax deduction under section 80C to 80U for various investments, expenses, and payments made by the individual or an HUF in a given financial year.

Various sections for tax deduction

SectionDeduction onLimits/Condition for deduction

Section 80C

  • Investment in PPF
  • Employee’s share of PF contribution
  • NSCs
  • Life Insurance Premium payment
  • Children’s Tuition Fee
  • Principal Repayment of home loan
  • Investment in Sukanya Samridhi Account
  • ELSS
  • Sum paid to purchase deferred annuity
  • 5 year deposit scheme
  • Senior Citizens savings scheme
  • Subscription to notified securities/notified deposits scheme
  • Mutual Fund or UTI notified contribution to Pension Fund.
  • Contribution to Home Loan Scheme
  • Contribution to deposit scheme of a public sector or company engaged in providing housing finance
  • Contribution to notified annuity Plan of LIC
  • equity shares/ debentures subscriptions
  • NABARD bonds subscription

Rs. 1,50,000


For money deposited in LIC for any annuity plan or to any other insurer for pension.


Employee’s contribution to NPS account


Employer’s contribution to NPS account

Maximum up to 10% of salary


Additional contribution to NPS

Rs. 50,000


Interest Income from Savings account

Maximum up to 10,000


For rent paid when HRA is not received from employer

Least of rent paid minus 10% of total income or Rs. 5000/- per month or 25% of total income


education loan interest

Interest paid duration of 8 years


home loan interest for the first time home owners

Rs 50,000


Rajiv Gandhi Equity Scheme for investments in Equities

Lower of – 50% of amount invested in equity shares or Rs 25,000


Medical Insurance – Self, spouse, children Medical Insurance of Parents under 60-80 years old or (from FY 2015-16) uninsured parents more than 80 years old

  • Rs. 25,000
  • Rs. 30,000


Handicapped medical treatments /maintenance payements of handicapped person –

  • Disability is 40% or more but less than 80%
  • Disability 80% or more

  • Rs. 75,000
  • Rs. 1,25,000


Medical Expenditure on Self or Relative for diseases specified in Rule 11DD

  • For less than 60 years old
  • For more than 60 years old
  • For more than 80 years old
  • Lower of Rs 40,000 or the amount actually paid
  • Lower of Rs 60,000 or the amount actually paid
  • Lower of Rs 80,000 or the amount actually paid


Self suffering from disability:

  • Person suffering from any physical disability or mental retardation.
  • Person suffering from disorder

  • Rs. 75,000
  • Rs. 1,25,000


Political parties contribution by companies

Amount contributed (not allowed in cash)


Political parties contribution by Person

Amount contributed (not allowed in cash)


Income deductions by Royalty of a Patent

Lower of Rs 3,00,000 or income received

For any help on ITR Filing feel free to consult the tax experts at LegalRaasta. You can file ITR yourself via our ITR software or get CA’s help on filing income tax return. You can also use the option of Business ReturnBulk Return or Revised Return Filing.