02 August 2025
Sure! Here’s a clear interpretation of **Section 80C** of the Income Tax Act with examples, focusing on the deductions available under this section.
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### What is Section 80C?
* **Section 80C** allows an individual or Hindu Undivided Family (HUF) to claim deduction from their total income on certain investments/payments made during the financial year. * The maximum deduction allowed under this section is **₹1,50,000** per year.
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### Common Eligible Investments/Payments under Section 80C:
| Investment/Payment Type | Description | Example | | ---------------------------------------- | ---------------------------------------------------- | -------------------- | | **Life Insurance Premium** | Premium paid for policy on self, spouse, or children | Paid ₹50,000 premium | | **Employees Provident Fund (EPF)** | Contribution made to EPF | ₹20,000 contribution | | **Public Provident Fund (PPF)** | Deposit in PPF account | ₹70,000 deposited | | **National Savings Certificate (NSC)** | Purchase of NSC certificates | ₹10,000 investment | | **Tuition Fees** | Tuition fees paid for children’s education | ₹40,000 tuition fees | | **Principal Repayment on Home Loan** | Principal portion of EMI paid | ₹1,00,000 repaid | | **Sukanya Samriddhi Yojana** | Deposit under this scheme | ₹30,000 deposited | | **Five-Year Fixed Deposit with Banks** | Tax-saving FD with lock-in period of 5 years | ₹50,000 deposited | | **Senior Citizen Savings Scheme (SCSS)** | Investment in SCSS | ₹50,000 invested | | **Equity-Linked Savings Scheme (ELSS)** | Investment in tax-saving mutual funds | ₹1,00,000 invested |
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### How Section 80C Works — Example:
Let’s say Mr. A has the following investments/payments in FY 2023-24:
| Investment/Payment | Amount (₹) | | -------------------------------- | ---------- | | Life Insurance Premium | 50,000 | | PPF Deposit | 70,000 | | Tuition Fees | 40,000 | | Principal Repayment on Home Loan | 60,000 | | Total | 2,20,000 |
**Deduction Allowed = ₹1,50,000 (Maximum limit under 80C)** So Mr. A can claim deduction of ₹1,50,000 even though he paid ₹2,20,000 in total.
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### Important Notes:
* **Total deduction under 80C is capped at ₹1,50,000 per annum.** * Section 80CCC and 80CCD(1) are related sections for other deductions but combined with 80C, the overall limit may be higher. * To claim deduction, proof of investment/payment (receipts) must be maintained. * If investment/payment is in joint name, only the contribution of the assessee is eligible.
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Would you like me to provide interpretation and examples for any other specific sections you mentioned like 7, 6, 6A, 8, etc.?
CAclubindia
