Ministry of Finance has notified certain deductions from Gross Total Income of an assessee.

Below are deductions as updated by finance act, 2015

SECTION NATURE OF DEDUCTION REMARKS

This section has been introduced by the

Finance Act, 2005. Broadly speaking, this
section provides deduction from total
income in respect of various investments/
expenditures/payments in respect of which
tax rebate u/s 88 was earlier available. The
total deduction under this section is limited
to Rs. 1.50 lakh only.

Deductions can be claimed for:

Provident Fund (PF) & Voluntary
Provident Fund (VPF) : PF is automatically
deducted from your salary. Both you and
your employer contribute to it. While
employer’s contribution is exempt from tax,
your contribution (i.e., employee’s
contribution) is counted towards section
80C investments. You also have the option
to contribute additional amounts through
voluntary contributions (VPF). Current rate
of interest is 8.5% per annum (p.a.) and is
tax-free.
Public Provident Fund (PPF): Among all
80C
the assured returns small saving schemes,
Public Provident Fund (PPF) is one of the
best. Current rate of interest is 8.70% tax-
free (Compounded Yearly) and the normal
maturity period is 15 years. Minimum
amount of contribution is Rs 500 and
maximum is Rs 1,50,000. A point worth
noting is that interest rate is assured but not
fixed.
Life Insurance Premiums: Any amount
that you pay towards life insurance premium
for yourself, your spouse or your children
can also be included in. Please note that life
insurance premium paid by you for your
parents (father / mother / both) or your in-
laws is not eligible for deduction under
section 80C. If you are paying premium for
more than one insurance policy, all the
premiums can be included. It is not
necessary to have the insurance policy from
Life Insurance Corporation (LIC) – even
insurance bought from private players can
be considered here.
Equity Linked Savings Scheme
(ELSS): There are some mutual fund (MF)
schemes specially created for offering you
tax savings, and these are called Equity
Linked Savings Scheme, or ELSS. The
investments that you make in ELSS are
eligible for deduction under Sec 80C.
Home Loan Principal Repayment: The
Equated Monthly Installment (EMI) that you
pay every month to repay your home loan
consists of two components – Principal and
Interest.The principal component of the EMI
qualifies for deduction under Sec 80C. Even
the interest component can save you
significant income tax – but that would be
under Section 24 of the Income Tax Act.
Please read “Income Tax (IT) Benefits of a
Home Loan / Housing Loan / Mortgage”,
which presents a full analysis of how you
can save income tax through a home loan.
Stamp Duty and Registration Charges
for a home: The amount you pay as stamp
duty when you buy a house, and the
amount you pay for the registration of the
documents of the house can be claimed as
deduction under section 80C in the year of
purchase of the house.
Sukanya Samriddhi Account : Sukanya
Samriddhi Account meaning Girl Child
Prosperity Scheme is a special deposit
scheme launched by Prime Minister
Narendra Modi on 22 January 2015 for girl
child. The scheme of Sukanya Samriddhi
Account came into effect via notification of
Ministry of Finance. The notification details
are Notification No. G.S.R.863(E) Dated
02.12.2014. Scheme will be governed by
‘Sukanya Samriddhi Account Rules, 2014’.

 Per girl child only single account is

allowed. Parents can open this account
for maximum two girl child. In case of
twins this facility will be extended to
third child
 Minimum deposit amount for this
account is ₹ 1,000/- and maximum is ₹
1,50,000/- per year
 Money to be deposited for 14 years in
this account.
 Interest rate for this account is 9.1% per
annum, calculated on yearly basis,
Yearly compounded.
 Passbook facility is available with
Sukanya Samriddhi account.
 From FY 2014-14 the interest earned
on account will be tax exempted. As per
 Finance Bill 2015-16.
National Savings Certificate (NSC) (VIII
Issue):
NSC is a time-tested tax saving instrument
with a maturity period of Five and Ten
Years. Presently, the interest is paid @
8.50% p.a. on 5 year NSC and 8.80% Per
Annum on 10 year NSC. Interest is
Compounded Half Yearly. While the
minimum investment amount is Rs 100,
there is no maximum amount. Premature
withdrawals are permitted only in specific
circumstances such as death of the holder.
Investments in NSC are eligible for a
deduction of up to Rs 150,000 p.a. under
Section 80C. Furthermore, the accrued
interest which is deemed to be reinvested
qualifies for deduction under Section 80C.
However, the interest income is chargeable
to tax in the year in which it accrues.
Infrastructure Bonds: These are also
popularly called Infra Bonds. These are
issued by infrastructure companies, and not
the government. The amount that you invest
in these bonds can also be included in Sec
80C deductions.
Pension Funds – Section 80CCC: This
section – Sec 80CCC – stipulates that an
investment in pension funds is eligible for
deduction from your income. Section
80CCC investment limit is clubbed with the
limit of Section 80C – it means that the total
deduction available for 80CCC and 80C is
Rs. 1.50 Lakh.This also means that your
investment in pension funds up to Rs. 1.50
Lakh can be claimed as deduction u/s
80CCC. However, as mentioned earlier, the
total deduction u/s 80C and 80CCC can not
exceed Rs. 1.50 Lakh.
5-Yr bank fixed deposits (FDs): Tax-
saving fixed deposits (FDs) of scheduled
banks with tenure of 5 years are also
entitled for section 80C deduction.
Senior Citizen Savings Scheme 2004
(SCSS): A recent addition to section
80Clist, Senior Citizen Savings Scheme
(SCSS) is the most lucrative scheme
among all the small savings schemes but is
meant only for senior citizens. Current rate
of interest is 9.20% per annum payable
quarterly. Please note that the interest is
payable quarterly instead of compounded
quarterly. Thus, unclaimed interest on these
deposits won’t earn any further interest.
 Interest income is chargeable to tax.

The premium must be deposited to

keep in force a contract for an annuity
plan of the LIC or any other insurer for
Payment of premium for annuity plan of LIC
receiving pension from the fund. The
80CCC or any other insurer Deduction is available
Finance Act 2015 has enhanced the
up to a maximum of Rs. 1,00,000/-
ceiling of deduction under Section
80CCC from Rs.100,000 to Rs.
1,50,000 with effect from A.Y. 2016-17
Where the Central Government
makes any contribution to the pension
account, deduction of such
contribution to the extent of 10% of
salary shall be allowed. Further, in any
Deposit made by an employee in his year where any amount is received
80CCD pension account to the extent of 10% of his from the pension account such
salary. amount shall be charged to tax as
income of that previous year. The
Finance Act, 2009 has extended
benefit to any individual assesse, not
being a Central Government
employee.
Subscription made by individual or
HUF to the extent of Rs. 20,000 to
Subscription to long term infrastructure notified long term infrastructure bonds
80CCF
bonds is exempt from A.Y. 2011-12 onwards.
This deduction is discontinued w.e.f.
A.Y. 2013-14.
The deduction was 50% of amount
invested in such equity shares or ₹
25,000, whichever is lower. The
Investment under Rajiv Gandhi Equity
80CCG maximum Investment permissible for
Savings Scheme, 2013
claiming deduction under RGESS is
Rs. 50,000. The benefit is in addition
to deduction available u/s Sec 80C.
The premium is to be paid by any
mode of payment other than cash and
the insurance scheme should be
framed by the General Insurance
Corporation of India & approved by
Payment of medical insurance premium.
the Central Govt. or Scheme framed
Deduction is available up to Rs.25,000/ for
by any other insurer and approved by
self/ family and also up to Rs. 25,000/- for
the Insurance Regulatory &
insurance in respect of parent/parents of the
Development Authority. The premium
assessee. In case of senior citizens, a
80D should be paid in respect of health
deduction up to Rs.25,000/- shall be
insurance of the assessee or his
available under this Section. Insurance
family members. The Finance Act
premiume of senior citizen parent/ parents
2008 has also provided deduction up
of the assessee also eligible for enhanced
to Rs. 15,000/- in respect of health
deduction of Rs. 30000/-
insurance premium paid by the
assessee towards his parent/parents.
w.e.f. 01.04.2011, contributions made
to the Central Government Health
Scheme is also covered under this
 section.
Deduction of Rs.40,000/ — In respect of (a)
expenditure incurred on medical treatment,
(including nursing), training and
The handicapped dependent should
rehabilitation of handicapped dependent
be a dependent relative suffering from
relative. (b) Payment or deposit to specified
a permanent disability (including
scheme for maintenance of dependent
blindness) or mentally retarded, as
handicapped relative. W.e.f. 01 .04.2004
certified by a specified physician or
the deduction under this section has been
psychiatrist.Note: A person with
80DD enhanced to Rs.50,000/- Further, if the
severe disability means a person with
dependent is a person with severe disability
80% or more of one or more
a deduction of Rs.1,00,000/– shall be
disabilities as outlined in section 56(4)
available under this sectionBudget 2015
of the “Persons with Disabilities (Equal
has Further Proposed to hike the limit from
opportunities, Protection of Rights and
A.Y. 2016-17 to Rs. 75000 from existing Rs.
Full Participation) Act.,”
50,000/- and for person with severe
disability to Rs. 1.25 lakh from existing Rs.
1 Lakh.
Expenditure must be actually incurred
by resident assessee on himself or
Deduction of Rs.40,000/- in respect of
dependent relative for medical
medical expenditure incurred. W.e.f.
treatment of specified disease or
01.04.2004, deduction under this section
ailment. The diseases have been
shall be available to the extent of
specified in Rule 11DD. A certificate in
Rs.40,000/- or the amount actually paid,
form 10I is to be furnished by the
80DDB whichever is less.In case of senior citizens,
assessee from a specialist working in
a deduction up to Rs.60,000/- shall be
a Government hospital.Budget 2015
available under this Section.Budget 2015
has Proposed for the purpose of
has proposed deduction of Rs. 80000/- for
claiming deduction under the section
seniot citizen aged 80 year or More from
assessee will be required to obtain a
A.Y. 2016-17
prescription from a specialist doctor
instead of Certificate.
This provision has been introduced to
provide relief to students taking loans
for higher studies. The payment of the
interest thereon will be allowed as
deduction over a period of up to 8
years. Further, by Finance Act, 2007
Deduction in respect of payment in the deduction under this section shall be
previous year of interest on loan taken from available not only in respect of loan for
80E
a financial institution or approved charitable pursuing higher education by self but
institution for higher studies. also by spouse or children of the
assessee. W.e.f. 01.04.2010 higher
education means any course of study
pursued after passing the senior
secondary examination or its
equivalent from any recognized
school, board or university.
Vide Finance Act 2013, an individual
is allowed a deduction up to a limit of
Rs 1,00,000 being paid as interest on
Deduction in respect of interest on loan
80EE a loan taken from a Financial
taken for residential house property
Institution, sanctioned during the
period 01-04- 2013 to 31-03-2014
(loan not to exceed Rs 25 lakhs) for
 acquisition of a residential house
whose value does not exceed Rs 40
lakhs. However the deduction is
available if the assessee does not
own any residential house property on
the date of sanction of the loan.
The various donations specified in
Donation to certain funds, charitable Sec. 80G are eligible for deduction up
80G
institutions etc. to either 100% or 50% with or without
restriction as provided in Sec. 80G
(1) Assessee or his spouse or minor
child should not own residential
Deduction available is the least of(i) Rent accommodation at the place of
80GG paid less 10% of total incomeii. Rs.2000 per employment.(2) He should not be in
monthiii. 25% of total income receipt of house rent allowance.(3) He
should not have a self-occupied
residential premises in any other place
Section 80TTA is introduced wef A.Y.
2013-14 to provide deduction to an
individual or a Hindu undivided family
in respect of interest received on
Deduction in respect of interest on deposits deposits (not being time deposits) in a
80TTA
in savings account savings account held with banks,
cooperative banks and post office.
The deduction is restricted to Rs
10,000 or actual interest whichever is
lower.
Deduction of Rs.50,000/- to an individual
who suffers from a physical disability
(including blindness) or mental retardation.
Further, if the individual is a person with
severe disability, deduction of Rs.75,000/-
shall be available u/s 80U.W.e.f. 01.04.2010
Certificate should be obtained on
this limit has been raised to Rs. 1
80U prescribed format from a notified
lakh.Budget 2015 proposed to amend
‘Medical authority’.
section 80U to raise limit of deduction in
respect of a person with disability from Rs.
50,000/- to Rs. 75,000 and for person with
severe disability from one lakh rupees to
one hundred and twenty five thousand
rupees.
Finance Act 2013 has provided relief
in the form of rebate to individual
taxpayers, resident in India, who are
in lower income bracket, i. e. having
Rebate Of Rs 5000 For Individuals Having
87A total income not exceeding Rs
Total Income up to Rs 5 Lakh
5,00,000/-. The amount of rebate is
Rs 2000/- or the amount of tax
payable, whichever is lower. WEF
A.Y. 2014-15.
Deduction in respect of any income by way The assessee who is a patentee must
of royalty in respect of a patent registered be an individual resident in India. The
80RRB
on or after 01.04.2003 under the Patents assessee must furnish a certificate in
Act 1970 shall be available as :-Rs. 3 lacs the prescribed form duly signed by the
 or the income received, whichever is less. prescribed authority along with the
return of income.
The assessee must be an individual
Deduction in respect of royalty or copyright
resident in India who receives such
income received in consideration for
income in exercise of his profession.
authoring any book of literary, artistic or
80QQB To avail of this deduction, the
scientific nature other than text book shall
assessee must furnish a certificate in
be available to the extent of Rs. 3 lacs or
the prescribed form along with the
income received, whichever is less.
return of income.