- Date : 26/06/2023
- Read: 3 mins
The government encourages savings and investments through various tax benefits. Chapter VI A of the Income Tax Act discusses deductions investors can claim to save taxes.
- Taxpayers can claim deductions given in Chapter VI A of the Income Tax Act and make tax-saving investments.
- Deductions can be claimed as per Section 80C to 80U.
- Under Chapter VI A, taxpayers can know how to save taxes and invest money strategically.
For taxpayers looking for ways to save taxes, Chapter VI A of the Income Tax Act offers various deductions. These provisions are essential to encourage investments and offer the public tax benefits. Let's learn more about them.
Sections under Chapter VI A of the Income Tax Act
The key provisions under this chapter are as follows:
Section 80C
Here, the deductions are provided regarding life insurance premium, contribution to provident fund and superannuation fund, subscription of certain equity shares, mutual funds, bonds of NABARD, 5-year post office time deposit, etc. The maximum deduction limit is Rs. 1.5 lakhs.
Also Read: Have a look at the 8 best ELSS mutual funds in India for tax saving investments
Section 80CCC
The deduction is provided to individuals who contributed to certain pension funds. 80C and 80CCD (1) allow Rs. 1.5 lakhs as a deduction.
Section 80CCD (1)
It allows deduction on an employee’s contribution to the Central Government's pension scheme, i.e., 10% of the income. In any other case, the deduction is restricted to 20% of the gross total income.
Section 80D
Individuals and HUFs (Hindu Undivided Family) can avail the 80D deduction specifically for health insurance premiums. A premium of Rs. 25,000 is paid to the individual and Rs. 50,000 for senior citizens, if any, is insured. The maximum limit under Section 80D is Rs. 1 lakh.
Section 80DD
The 80DD deduction is provided to resident individuals or HUFs. It involves maintenance, including medical treatment of a disabled dependent. A flat deduction of Rs. 75,000 is provided.
Section 80EE
Deduction of up to Rs 50,000 would be allowed regarding interest on loans taken for residential house property.
Section 80G
Assesses can enjoy deductions on donations made to charitable institutions, with varying limits based on categories, ranging from 100% to 50% of the total donation.
Also read: All about claiming the 80G deduction on donations
Section 80GG
This deduction is for individuals who don't receive a house rent allowance. The limit is Rs. 5000 per month or 25% of the total income, whichever is less.
Section 80TTA and 80TTB
Individuals can claim a deduction of Rs. 10,000, while resident senior citizens can avail a Rs. 50,000 deduction under 80TTB.
Section 80U
Depending on the severity of disability, individuals can avail a deduction of up to Rs. 1.25 lakhs.
Maximise your tax savings with strategic investments by leveraging deductions available under Chapter VI A of the Income Tax Act. These will help you make informed investment decisions and optimise your tax liability.
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Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.
