FAQ on Section 80C of Income tax Act (Part 2)

CMA Ramesh Krishnan , Last updated: 21 February 2011  
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Continuation of my previous article…

  1. Is fixed deposit in Bank is eligible for deduction?

Only Tax-saving fixed deposits (FDs) of scheduled banks with tenure of 5 years are also entitled for section 80C deduction

  1. Is the deduction for deposit under Senior citizen is allowable?

Yes. Deposit in bank under specified senior citizen scheme is allowable deduction under 80C.

  1.  Are Recurring deposits in Bank eligible for deduction?

No, Bank recurring deposits (RD) not eligible deduction under 80C

  1. Can we claim the employer contribution to EPF?

No. Only employee contribution can be claimed under this section.

  1. Is the Infrastructure bond investment covered under 80C?

Investment in infrastructure bonds covered under section 80CCF as separate deduction Rs.20, 000/- per annum along with section 80C

  1. Can Education fees claim under 80E & 80C both?

No, under 80E only interest payment on education loan for own or any dependents can be claimed, but section 80C allows only tuition fees for maximum 2 children allowable.

  1. Are there any minimum holding period for these investments under the act?

Yes. Deduction allowable under this section having some holding period.

ULIP schemes/ Bank Fixed deposits/Senior citizen scheme deposits/House property – 5 years & LIC- 2 years

  1. While clubbing income of the minor with parent’s income, the investments made by minor under section 80 also can be claimed as deduction?

Yes. In case of clubbing minor income with parent’s income, the minor`s investment u/s.80C also can be considered

  1. Is Investment in Kishan vikas Pathra (KVB) eligible u/s.80C?

No. Deposit in Kishan Vikas pathra is not eligible under this section

  1. What is maximum deduction allowable under section 80C?

Aggregate deduction maximum of Rs.1 lakh allowable under section 80C, 80CCC& 80CCD.

Thank you,

CMA. Ramesh Krishnan

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Published by

CMA Ramesh Krishnan
(Cost & Management Accountant)
Category Taxpayers   Report

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