FACULTY OF LAW, UNIVERSITY OF LUCKNOW

Define deduction under section 80Uto 80G

Subject- Law of Taxation
Submitted To Submitted By
Mr. Atul Sharma ved prakash rao
Faculty of law B.A.LL.B(Semester VII)
180013015095

Session 2012-21

ACKNOWLEDGEMENT
I would like to express my special thanks of gratitude Mr. Atul Sharma who gave me the golden
opportunity to do this wonderful assignment of “ Define deduction under section 80Uto 80G” who
also helped me in completing my assignment. I am thankful to him.
Many people especially my classmates, have made valuable comment suggestion on this proposal
which gave us an inspiration to improve me indirectly to complete my assignment

Introduction
Individuals can claim tax deduction benefits for payments made towards life insurance
policies, fixed deposits, superannuation/provident funds, tuition fees, and
construction/purchase of residential properties under Section 80C of the Income Tax
Act.
Taxes are an integral component in our country, with them accounting for a major
portion of the income earned by the government, income which is utilized to provide
certain basic provisions to citizens. Individuals who earn more than a certain amount
are expected to pay taxes, as per the existing tax slabs. While these taxes can be harsh
on the bank balance of a taxpayer, the government also provides certain provisions
wherein one can save tax. Tax deductions can help one reduce the taxable income,
lowering their overall tax liability and thereby helping them save on taxes. The
deduction one is eligible for depends on many factors, with different limits set for
different purposes.

Tax Deductions under Section 80C

Section 80C of the Income Tax Act provides provisions for tax deductions on a number of
payments, with both individuals and Hindu Undivided Families eligible for these deductions.
Eligible taxpayers can claim deductions to the tune of Rs 1.5 lakh per year under Section
80C, with this amount being a combination of deductions available under Sections 80 C, 80
CCC and 80 CCD.
Some of the popular investments which are eligible for this tax deduction are mentioned
below.
 Payment made towards life insurance policies (for self, spouse or children)
 Payment made towards a superannuation/provident fund
 Tuition fees paid to educate a maximum of two children
 Payments made towards construction or purchase of a residential property
 Payments issued towards a fixed deposit with a minimum tenure of 5 years
This section provides for a number of additional deductions like investment in mutual funds,
senior citizens saving schemes, purchase of NABARD bonds, etc.

Subsections under Section 80C

Section 80C has an exhaustive list of deductions an individual is eligible for, which have led
to the creation of suitable sub-sections to provide clarity to taxpayers.
 Section 80CCC: Section 80CCC of the Income Tax Act provides scope for tax
deductions on investment in pension funds. These pension funds could be from any
insurer and a maximum deduction of Rs 1.5 lakh can be claimed under it. This
deduction can be claimed only by individual taxpayers.
 Section 80CCD: Section 80CCD aims to encourage the habit of savings among
individuals, providing them an incentive for investing in pension schemes which
are notified by the Central Government. Contributions made by an individual and
his/her employer, both are eligible for tax deduction, subject to the deduction being
less than 10% of the salary of the person. Only individual taxpayers are eligible for
this deduction.
 Section 80CCF: Open to both Hindu Undivided Families and Individuals, Section
80CCF contains provisions for tax deductions on subscription of long-term
infrastructure bonds which have been notified by the government. One can claim a
maximum deduction of Rs 20,000 under this Section.
 Section 80CCG: Section 80CCG of the Income Tax Act permits a maximum
deduction of Rs 25,000 per year, with specified individual residents eligible for this
deduction. Investments in equity savings schemes notified by the government are
permitted for deductions, subject to the limit being 50% of the amount invested.

Tax Deductions under Section 80D

Section 80D of the Income Tax Act permits deductions on amounts spent by an individual
towards the premium of a health insurance policy. This includes payment made on behalf of a
spouse, children, parents, or self to a Central Government health plan. An amount of Rs
15,000 can be claimed as a deduction when paid towards the insurance for spouse, dependent
children, or self, while this amount is Rs 30,000 (Union Budget 2017) if the person is over
the age of 60 years.
On February 1, 2018, Finance Minister Arun Jaitley presented the Union Budget 2018 with a
few changes in the tax deductions applicable for senior citizens. Under Section 80D, the
income tax deduction limit for senior citizens has been increased to Rs.50,000 for medical
expenditure.
Both individuals and Hindu Undivided Families are eligible for this deduction, subject to the
payment being made in modes other than cash

Subsections under Section 80D

Section 80D is further subdivided into two sub-sections, offering clarity on the benefits
available to taxpayers.
 Section 80DD: Section 80DD provides provisions for tax deductions in two cases,
with the permitted deduction being Rs 75,000 for normal disability and Rs 1.25
lakh if it is a severe disability. This deduction can be claimed in case of the
following expenditures.
 On payments made towards the treatment of dependants with disability
 Amount paid as premium to purchase or maintain an insurance policy for such
dependant
The permitted deduction is Rs 75,000 for normal disability and Rs 1.25 lakh for a severe
disability. Both Hindu Undivided Families and resident individuals are eligible for this
deduction. The dependant, in this case can be either a spouse, sibling, parents or children.
 Section80DDB: Section 80DDB can be utilised by HUFs and resident individuals
and provides provisions for deductions on the expense incurred by an
individual/family towards medical treatment of certain diseases. The permitted
deduction is limited to Rs 40,000, which can be increased to Rs 60,000 (Union
Budget 2015) if the treatment is for a senior citizen.The deduction under Section
80DDB for senior citizens and very senior citizens has been increased to Rs.1 lakh
in Union Budget 2018.

Tax Deductions under Section 80E

Under Section 80E of the Income Tax Act has been designed to ensure that educating oneself
doesn’t become an additional tax burden. Under this provision, taxpayers are eligible for tax
deductions on the interest repayment of a loan taken to pursue higher education. This loan
can be availed either by the taxpayer himself/herself or to sponsor the education of his/her
ward/child. Only individuals are eligible for this deduction, with loans taken from approved
charitable organizations and financial institutions permitted for tax benefits.

Subsections of Section 80E

 Section80EE: Only individual taxpayers are eligible for deductions under Section
80EE, with the interest repayment of a loan taken by them to buy a residential
property qualifying for deductions. The maximum deduction permitted under this
section is Rs 3 lakhs.

Tax Deductions under Section 80G

Section 80G encourages taxpayers to donate to funds and charitable institutions, offering tax
benefits on monetary donations. All assessees are eligible for this deduction, subject to them
providing proof of payment, with the limit of deductions decided based on a few factors.
  100% deductions without any limit: Donations to funds like National Defence Fund,
Prime Minister’s Relief Fund, National Illness Assistance Fund, etc. qualify for
100% deduction on the amount donated.
 100% deduction with qualifying limits: Donations to local authorities, associations or
institutes to promote family planning and development of sports qualify for 100%
deduction, subject to certain qualifying limits.
 50% deduction without qualifying limits: Donations to funds like the PMs Drought
Relief fund, Rajiv Gandhi Foundation, etc. are eligible for 50% deduction.
 50% deduction with qualifying limit: Donations to religious organisations, local
authorities for purposes apart from family planning and other charitable institutes
are eligible for 50% deduction, subject to certain qualifying limits.
The qualifying limit refers to 10% of the gross total income of a taxpayer.

Subsections of Section 80G

Under Section 80G has been further subdivided into four sections to simplify understanding.
 Section 80GG: Individual taxpayers who do not receive house rent allowance are
eligible for this deduction on the rent paid by them, subject to a maximum
deduction equivalent to 25% of their total income or Rs 2,000 a month. The lower
of these options can be claimed as deduction.
 Section 80GGA: Tax deductions under this section can be availed by all assessees,
subject to them not having any income through profit or gain from a business or
profession. Donations by such members to enhance social/scientific/statistical
research or towards the National Urban Poverty Eradication Fund are eligible for
tax benefits.
 Section 80GGB: Tax deductions under this section can be availed by Indian
Companies only, with the amount donated by them to a political party or electoral
trust qualifying for deductions.
 Section 80GGC: Under this section, funds donated/contributed by an assessee to a
political party or electoral trust are eligible for deduction. Local authorities and
artificial juridical persons are not entitled to the tax deductions available under
Section 80GGC.
 Conclusion
The Indian government reduced the tax rate for people earning between Rs. 2.5 lakhs to Rs. 5
lakhs, from 10% to 5%, during the FY2017 Union budget. Furthermore, budget 2020 also
reduced the tax rates for other income slabs. This was aimed at reducing the tax liability for a
large percentage of the Indian population as well as at encouraging a greater number of
income earners to pay tax. So, if you are eligible to pay tax, ensure you pay your taxes and
file returns in time to avoid any penalties
 Bibliography
Taxmann’s Income Tax Act
Taxation Laws by dr. Jyoti Rattan
https://gfgc.kar.nic.in
https://cleartax.in
https://dor.gov.in/