DEDUCTION UNDER Sec 80CCD, 80CCE, 80D, 80DD, 80E, 80EE

OF IT ACT

Submitted by:

Shreha Shah 190401417036

BA LLB (HONS.)

2019-24

Course Teacher: Prof. Prakash Kanive

Alliance School of Law

Alliance University, Bengaluru

 Deduction under Sec 80CCD, 80CCE, 80D, 80DD, 80DDE, 80DE of IT Act

The income tax is a tax imposed on an individual's annual income. The amount of tax paid will
be proportional to the amount of money earned in a given fiscal year. Online processing is
available for Income tax payment, TDS/TCS payment, and Non-TDS/TCS payment. To make
these payments, each taxpayer must provide the required information. The entire procedure
becomes straightforward and swift.

For the fiscal year 2022-23, all inhabitants whose annual income exceeds Rs.2,500,000 are
subject to income tax. If an individual's annual income exceeds Rs.10 lakh, the maximum
amount of tax he or she could pay is 30% of their income + 4% cess.

Individuals must file ITR if their gross annual income exceeds Rs. 2,50,000 in a given fiscal
year. This limit exceeds Rs. 3,00,000 for seniors and Rs. 5,00,000 for super seniors. The
following entities are required to pay taxes and file income tax returns.

1. Artificial Judicial Persons

2. Corporate firms
3. Association of Persons (AOPs)
4. Hindu Undivided Families (HUFs)
5. Companies
6. Local Authorities
7. Body of Individuals (BOIs)

The Finance Minister of India introduced a new income tax band in the Union Budget 2020.
However, the new income tax regime is voluntary, and people can choose to submit their taxes
under the old regime or the new regime.

Many of us may be aware that investments can help us save on taxes, but we may not realize that
the Income Tax Department also offers tax breaks for spending certain personal costs (like health
check-up, paying stamp duty for home and many more). These expenses are tax-deductible under
sections 80C through 80U of the Income Tax Act (the "Act").

From an Income Tax standpoint, a deduction is the benefit received for the investment
made/expense incurred. These deductions reduce the amount of tax owed. Consequently, the
deduction reduces your gross total income (means the income on which tax has to be paid).
Consequently, minimizing the tax on your entire income, something for which we all study.

Section 80C of the Income Tax Act allows individuals to claim tax deductions for payments
made towards life insurance policies, fixed deposits, superannuation/provident funds, university
fees, and construction/purchase of residential properties.

Taxes are a vital part of our society, accounting for a significant share of the government's
income, which is used to provide individuals with certain fundamental necessities. According to
the current tax brackets, individuals who earn more than a particular amount are obligated to pay
taxes. While these taxes can be difficult on a taxpayer's bank account, the government also gives
provisions for tax savings. Tax deductions can help reduce an individual's taxable income, so
lowering their overall tax burden and allowing them to save money on taxes. A person's
eligibility for a deduction depends on a variety of criteria, with varying limits established for
different purposes.

Investments that qualify for deductions under Section 80C:

The different types of investments that may be qualified for deductions under Section 80C are:
1. Public Provident Fund Employee Provident Fund Voluntary Provident Fund Equity-
2. Linked Savings Scheme Five-Year Post Office Time Deposit
3. Five-Year Tax Savings Deposit at a Bank
4. Certificates of Savings for the Nation
5. Senior Citizens Unit-Linked Insurance Scheme
6. Sukanya Samriddhi Scheme
7. Infrastructure Securities
 8. Rural NABARD Bonds
Individuals and Hindu Undivided Families are able to get tax deductions under Section 80C of
the Income Tax Act. This sum is a mix of deductions allowed under Sections 80 C, 80 CCC, and
80 CCD. Eligible taxpayers can claim a deduction of up to Rs 1.5 lakh per year under Section
80C.

Some of the popular investments which are eligible for this tax deduction are for example,
contribution to life insurance plans (for self, spouse or children), a contribution paid to a
pension/pension fund, fees for the education of a maximum of two children.

Subsections under Section 80C

As a result of Section 80C's comprehensive list of allowed deductions, appropriate sub-sections

have been created to offer clarity to taxpayers.

Section 80CCD: The purpose of Section 80CCD is to encourage individuals to save by offering
an incentive for investing in Central Government-approved pension plans. Contributions made
by an individual and his/her employer are both eligible for a tax deduction, provided that the
deduction does not exceed 10% of the individual's salary. This deduction is only open to
individual taxpayers.
Section 80CCE: Section 80CCE allows persons to deduct up to INR 1.5 lakh from their total
gross income (before to tax calculation) if this INR 1.5 lakh is perfused in the prescribed manner.
In addition, certain specified expenses qualify for a deduction under this section 80CCE
maximum of INR 1.5 lakh.

Tax Deductions under Section 80D

Section 80D of the Income Tax Act allows individuals to deduct money spent on the premium of
a health insurance coverage. This comprises payments paid to a Central Government health plan
on behalf of a spouse, children, parents, or oneself. The deduction for insurance premiums paid
for a spouse, dependent children, or oneself is Rs 15,000 (Union Budget 2017), but Rs 30,000
(Union Budget 2017) if the taxpayer is above 60 years old.

On February 1, 2018, Finance Minister Arun Jaitley delivered the Union Budget 2018 with a few
modifications to the senior citizen tax discounts. Under Section 80D, the income tax deduction
limit for medical expenses for older persons has been doubled to Rs. 50,000.

Under Section 80DD of the Income Tax Act of 1961, all Indian residents are entitled for tax
deductions. To claim the deduction, a person must present medical certifications, prescription
drug invoices, and all other supporting documentation.

In the past several years, the cost of medical care has increased, making it harder for the lower
and middle classes of Indian society to obtain medical care. Under Section 80DD of the Income
Tax Act of 1961, the Indian government may now offer some assistance to certain groups of
persons, notably those who are disabled or severely disabled and who are reliant on government
assistance. Prior to delving into the specifics, it is necessary to note that the income tax has
undergone rate modifications and small amendments, but the legal or relief aspects must still be
based on the 1961.

Individuals and Hindu Undivided Families qualify for this deduction, provided the contribution
is paid in a manner other than cash.

Subsections under Section 80D

Further subdivision of Section 80D into two sub-sections clarifies the benefits accessible to
taxpayers.

Section 80DD: Section 80DD enables tax deductions in two circumstances, with a deduction of
Rs 75,000 for a normal disability and Rs 1.25 lakh for a severe handicap. This deduction may be
claimed for the expenses listed below.
On contributions given for the treatment of disabled dependents
Amount paid as premium for the acquisition or maintenance of an insurance policy for a
dependent
The allowable deduction for a moderate impairment is Rs 75,000 and for a severe disability it is
Rs 1,250,000. This deduction is applicable to both Hindu Unmarried Families and resident
persons. In this scenario, the dependent might be a spouse, sibling, parent, or kid.

Allowable deduction under section 80DDB for medical care of a dependent with a specific
ailment.

 Can be claimed by an Individual or HUF

 Allowed to Resident Indians
 When taxpayer has spent money on treatment of the dependent
 Dependent shall mean spouse, children, parents and siblings
 In case the dependent is insured, and some payment is also received from an insurer or
reimbursed from an employer, such insurance or reimbursement received shall be
subtracted from the deduction.

Section 80 E: With the expansion of the Indian economy and the increase in income
levels, expenditures on education have also expanded, making up the second-largest
portion of the wallets of middle-class households in the country.

The costs associated with getting an education can result in tax savings. Under section
80E of the Income Tax Act of 1961, you may deduct from your taxable* income the
amount of interest paid on a loan taken out for higher study.

Section 80E allows a deduction for the entire interest paid on an EMI throughout the tax
year. To pursue higher education, a bank or financial institution must provide the loan.
One must get a document from the bank detailing separately the principle and interest
amounts of the education loan paid throughout the fiscal year. Because no deduction is
permitted on the amount of principal repaid.
Interest payments made throughout the fiscal year may be deducted from taxable income.
There is no maximum amount that can be deducted. The deduction is allowed for up to
eight years or until the interest is paid, whichever comes first. It applies even if you took
out a loan for your spouse, your children, or a student for whom you are the legal
guardian.

To maximize the section 80E tax benefit, it is recommended to pay off the student loan
within the following eight years. This part may be utilized by parents to provide their
children the finest opportunity in higher education and to ensure their jobs as well. If
parents desire to send their children abroad to study and take out a loan to do so, they can
also claim a deduction under section 80E. The deduction is applicable to any post-high
school courses completed at a government-recognized school, institution, or university.

Section 80 EE: Section 80EE permits tax deductions on the interest component of a
residential mortgage loan obtained from any financial institution. This part allows you to
claim a deduction of up to Rs 50,000 every fiscal year. You may continue to claim this
deduction until the debt has been completely returned.

This section's deduction is only applicable to people. This implies that whether you are a
HUF, an AOP, a corporation, or any other type of taxpayer, you are not eligible for this
benefit. The maximum deduction is Rs 50,000. It exceeds the Rs 2 lakh limit specified in
Section 24 of the Income Tax Act. To be eligible for this deduction, you cannot own any
other residence on the day when a financial institution approves your loan. The 2019
Union Budget has added a new Section 80EEA to prolong the tax advantages of the
interest deduction up to Rs 1.5 million for housing loans carried out for affordable
housing between 1 April 2019 and 31 March 2022. The taxpayer should be a first-time
homebuyer and should not be eligible for a Section 80EE deduction.