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Calculation of Deduction u/s 80C, 80CCC, 80CCD

Calculation of Deduction under Section 80C, 80CCC, 80CCD

The taxpayers have the tendency of making inappropriate assumptions regarding the deductions to be claimed under the Income Tax Act. While Calculating the deduction the taxpayers think in their benefits and miscalculate the deduction amount. But while filing the return online they cannot claim more than the maximum limit. So, let us understand the calculation of Deduction under section 80C, 80CCC, 80CCD. These sections allow a taxpayer to claim the deduction for the amount paid by him for the life insurance and PF Schemes. Following are some examples of the Calculation of Deduction under Section 80C, 80CCC, and 80CCD:

Example 1:

Mr. A is an individual taxpayer. He pays the LIC premium of Rs.20,000/year and contributes to the PF scheme recognized by the Central Government the amount of Rs. 5,000/Month. How much deduction is he liable for?

Answer: 
Particular Amount
LIC Premium (u/s 80C)    20,000
Contribution (u/s 80CCD) 5,000 x 12 60,000
Total 80,000

 

He can claim the deduction of Rs. 80,000 from his gross income.

Calculation of Deduction under Section 80C, 80CCC, 80CCD - CONSULTEASE.COM - Google Chrome 2018-08-06 12.20.28

Example 2:

Mr. X has the following expenses:

Expenses For Amount
Life Insurance Premium (Self) 20,000
Life Insurance Premium (Spouse) 20,000
Pension Fund Scheme (Central Govt Approved) 5,000/Month
Pension Fund Scheme (other) 50,000

 

Answer:
Particular Amount
Life Insurance Premium (Self) (u/s 80C)   50,000
Pension Fund Scheme (Central Govt Approved) (u/s 80CCD) 5,000 x 12 60,000
Pension Fund Scheme (other) (u/s 80CCC) 5,000 x 12 60,000
Total 1,70,000
Maximum Deduction  Limit 1,50,000
Deduction can be claimed 1,50,000

 

The maximum limit inclusive of all these sections is Rs. 1,50,000. So, No further deduction can be claimed under these sections.

The maximum limit is mentioned in each section but the overall limit for these sections are restricted up to the limit of Rs. 1,50,000. If, you are taking the deduction under these sections please be aware of this fact and calculate the deduction amount carefully.

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Profile photo of Neeraj Rohilla Neeraj Rohilla

New Delhi, India

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