Also Refer this
Section 80CCD(2) : With effect from 1st April 2012, which gives a benefit to the National Pension System (NPS).
Section 80CCD(2) contributions will not be part of the Rs. 1 lakh tax deduction limit under Section 80C, your employer's contribution on your behalf will be a tax free benefit for you.
Understanding the NPS scheme offered by employer
This section covers both salaried and non-salaried individual.
Deduction for employee’s contribution is available subject to a maximum of 10% of salary.
Employers’ contribution is also subject to the said limit of 10% of salary. It is important to note that employer’s contribution shall not be counted for computing the overall limit of Rs.100000.
Thereafter the employee can claim deduction for the same under 80CCD.
Section 80C and other sub sections i.e 80CCC, categorized under two:
1. Investment option deductions (market linked + Fixed income)
2. Expenses related deductions
Equity-linked savings scheme
Life Insurance Premium (section 80C)
Life Insurance Premium up to Rs 1,00,000 is allowed for yourself, your spouse or your children.
No. Life insurance premium paid for your parents or your in-laws is not eligible for deduction.
If you are paying premium for more than one insurance policy, all the premiums can be included, subject to the limit of Rs. 1 lakh.
If you are 60, you can invest in Senior Citizens' Savings Scheme while earning a higher return. Currently, senior citizens get a 9.3 per cent annual interest on deposits. The investment qualifies for deduction under Section 80C but the interest is taxable.The amount invested into SCSS is eligible for tax deduction under Section 80C thus reducing your taxable income in the year of investment.
Deduction from taxable income under Section 80C is available to individual taxpayers up to a maximum amount of Rs1 lakh for education expenses incurred for one's children.
Each parent can claim the deduction for the tuition fees paid for up to two children each, thereby covering a maximum of four children in a family.
This deduction is available to the parent who has made the payment, to the extent of the tuition fee actually paid or Rs1 lakh, whichever is lower.
The deduction can be claimed only for full-time courses including( pre-nursery and play school). Part-time, distance learning courses, private tuitions and coaching classes are not covered.
The Equated Monthly Installment (EMI) that you pay every month to repay your home loan consists of two components – Principal and Interest.
- Any payment towards the cost of purchase/ construction of a new residential property is eligible for deduction under this section. This includes repayment of the principal amount of loan which taken from Government, banks, cooperative bank, LIC, National housing bank, Taxpayer’s employer where such employer is Public sector company/University/Cooperative society.
- Cost of purchase, Stamp duty charges, registration charges and other expenses for the purpose of transfer of such house property to the tax payer. Interest payment on such loan taken on house purpose is not eligible for deduction under this section. cost of repair, renovation of residential property not eligible for section 80C deduction.
- First, for deduction in respect to interest on home loan under section 24
- Secondly, deduction in respect to repayment of home loan under section 80C.
Budget 2010 has introduced one more avenue for you to save tax – Infrastructure Bond, This is an extension of Section 80C. The Income Tax Act allows you an additional rebate (in addition to the limit allowed under Section 80C), An investment upto a maximum of Rs. 20,000 in infrastructure bonds would be deductible from your taxable income. Thus, your taxable income would reduce by the investment you make in these infrastructure bonds, subject to an upper limit or ceiling of Rs. 20,000.
This section is a boost for infrastructure development in the country. There is an expectation that the investment limit in this section may be raised for the next year.
Update for Section 80CCF: (April 11, 2012)