How to claim deductions under section 80C to 80U while filing ITR1 : 04-07-2019

Once you have filled in all your income details in ITR-1, you are required to fill in the details related to tax-saving deductions available under sections 80C to 80U of the Income Tax Act. These deductions can be claimed from income before levying of income tax. 

Remember even if you have made investments or incurred expenditures which can be claimed as deductions from income as specified in the Income Tax Act, you are required to claim them by entering their details in the form. If you miss out on entering the details of any of the deductions you are eligible to claim, then you will not get that deduction, without filing a revised return. Claiming a deduction helps to reduce your tax liability. 

Just like last year, this year also, ITR-1 has provided a detailed break-up column where taxpayers can enter details to claim deductions. All of these deductions will be claimed in part C of the third tab of ‘Computation of Income and Tax 

If you are filing ITR-1 online on the e-filing website of the tax department, then these details will be auto-populated from Form 24Q (TDS return filed by your employer) and your previous year ITRs. Therefore, do cross-check the information from the relevant documents available to you. 

Here’s everything you need to know about claiming deductions under sections 80C to 80U of the Income Tax Act 

  • Sections 80C, 80CCC, 80CCD(1), 80CCD(1B) and 80CCD(2)

The first three rows ask you to provide information about the investments and expenditures under sections 80C, 80CCC and 80CCD (1). The most common deductions that can be claimed under section 80C are for:
a) Premiums paid for life insurance policy

b) Investments in PPF, EPF and VPF
c) Repayment of principal amount of housing loan
d) Investment in equity-linked savings scheme (ELSS) of mutual funds
e) Investments in certain post-office schemes like Sukanya Samriddhi Yojana (SSY), National Savings Certificates (NSC), Senior Citizens’ Savings Schemes(SCSS) 

As per the current income tax laws, the total investment amount under sections 80C, 80CCC and 80CCD (1) cannot exceed Rs 1.5 lakh for FY 2018-19. 

If your employer has made a contribution to National Pension System (NPS) on your behalf, then, you can claim deduction under section 80CCD(2). Even though there is no maximum ceiling in rupee terms, this deduction cannot exceed 10 percent of your salary. 

Apart from this, an additional deduction of maximum of Rs 50,000 can be claimed if you invest in Tier I account of NPS. The deduction will be claimed in the row corresponding to section 80CCD(1B). This will take the maximum that can be claimed as deduction to Rs 2 lakh. 

How to fill boxes to claim deductions under sections 80C, 80CCC, 80CCD (1) and 80CCD(1B) 

Section 80C

Payment for life insurance premium, investment in Provident Funds (EPF/PPF/VPF), ELSS, home loan principal repayment, SSY, NSC, SCSS and others

Section 80CCC

Payment made to receive pension in future such as towards pension plans of insurance companies and mutual funds

Total amount

The total amount entered in the above three cells cannot exceed Rs 1.5 lakh

Section 80CCD(1B)

Additional investment of up to Rs 50,000 in NPS will be claimed in this row 

Section 80CCD(2)

Deduction for employer’s contribution to NPS will come here. This cannot exceed more than 10% of (basic salary and dearness allowance, if any) 

  • Section 80CCG

Investments made under Rajeev Gandhi Equity Savings Scheme (RGESS) till March 31, 2017 are eligible for deduction under section 80CCG. As per the scheme rules, the tax benefit is available for three consecutive years. For those who have invested in the scheme in FY 2016-17 are eligible for deduction in the years 2017-18, 2018-19 and 2019-20. However, while claiming deduction, individual should meet other conditions as well. 

Any investment made in scheme from FY 2017-18 is not eligible for deduction.

  • Sections 80D, 80DD and 80DDB

The deduction under section 80D is divided into three parts – (A) Health insurance premium, (B) Medical expenditure and (C) Preventive Health Check up 

An individual can claim deduction of up to Rs 25,000 for the health insurance premium paid for self, spouse and dependent children. Additional deduction of Rs 25,000 or Rs 50,000 can be claimed for the premium paid for parents depending on their age. 

The maximum deduction will be of Rs 25,000 if the age of your parents is less than 60 years. If your parents are above 60 years, then maximum deduction will be of Rs 50,000. 

Do keep in mind no deduction will be allowed for health insurance premium paid for independent children, parents-in-law, siblings and grandparents. There are seven options given in the drop-down menu. You can choose the one applicable to you 

Choose one of the options depending on the payment made by you and enter the amount: 

Option Condition Maximum Amount
Self and Family Age below 60, premium paid for self, spouse and children only 

 
Rs 25,000
Self (Senior Citizen) and Family 

 
Age 60 and above, premium paid for self, spouse and children only 

 
Rs 50,000
Parents If parents age is below 60 

 
Rs 25,000
Parents (Senior Citizen) If parents age is 60 or above 

 
Rs 50,000
Self and family including Parents 

 
Your age is below 60 but your parents age is 60 or above 

 
Rs 25,000 + Rs 50,000 = Rs 75,000 

 
Self and family including senior citizen parents 

 
Your age is below 60 but your parents age is 60 or above 

 
Rs 25,000 + Rs 50,000 = Rs 75,000 

 
Self (senior citizen) and family including senior citizen parents 

 
You and your parents age is 60 years and above 

 
Rs 50,000 + Rs 50,000 = Rs 1 lakh 

 

You can claim this deduction only if you have made payments using any mode except for cash like Net banking or cheque. You are eligible to claim deduction for both new policy and renewal of existing health insurance policy 

The second option of medical expenditure is available to you if you satisfy two conditions. These conditions are:
i) Medical expenditure must be incurred on yourself if you’re senior citizen or on your senior citizen parents, and
ii) Individual on whom expenditure is incurred should not be covered under any health insurance policy. 

The maximum deduction available is Rs 50,000. Only three options are available in the drop down menu. 
Choose the one appropriate to you.

Option Condition Maximum Amount
  Self and Family (Senior Citizen) 

  Age 60 and above   Rs 50,000
Parents (Senior Citizen) If parents age is 60 or above 

 
Rs 50,000
Self and family including parents (Senior Citizen) 

 
You and your parents age is 60 years and above 

 
Rs 50,000 + Rs 50,000 = Rs 1 lakh 

 

The third option is preventive health check-up. The maximum deduction available here is of Rs 5,000. The deduction for preventive health check-up comes under the overall ceiling of Rs 25,000 or Rs 50,000, whichever is applicable. This deduction can be claimed by entering details in the row corresponding to ‘Preventive health check-up’ 

The drop down menu provides three options as follows: 

Option Maximum Amount
Self and Family Rs 5,000
Parents Rs 5,000
Self and family including parents 

Rs 5,000

Section 80DD allows you to claim the deduction for expenses made for a disabled dependent or if you have paid for any scheme framed by LIC or any other insurer for taking care of a disabled dependent. Dependent individual for which deduction under this section can be claimed includes spouse, any child (son/daughter), parents, (except for in-laws) and siblings (brother/sister) 

Chartered Accountant, Naveen Wadhwa, DGM, Taxmann.com says, “Section 80DD deduction can be claimed by a taxpayer only if he incurs some expenditure to support his dependent family member who is suffering from disability or severe disability. To claim this deduction, you are required to furnish a medical certificate from the medical authorities as per the format given in the Form 10-IA (for three specified diseases – Autism, Cerebral Palsy or Multiple disability) or in form prescribed under the Rights of Persons with Disabilities Act, 2016.”

The maximum deduction amount available depends on the nature of disability. If the dependent individual has disability of at least 40 percent, then you can claim up to Rs 75,000 as deduction. On the other hand, if the dependent has severe disability of at least 80 percent, then the maximum deduction available is Rs 1.25 lakh. 

Section 80DDB covers expenditure for the treatment of specified diseases either on self or a dependent. The maximum deduction allowed under this section depends on the age of the person on whom money is being spent for the treatment. 

Age and maximum amount of deduction under section 80DDB

Age of the person i.e. the patient  Maximum deduction allowed

Age below 60 years Rs 40,000 

Age 60 and above (Senior Citizen) Rs 1 lakh 

This deduction can be claimed only if you have a prescription for such medical treatment from a specialist doctor. The prescription must contain name and age of the person and name of the disease he/she is suffering from along with the name, address, registration number, and qualification of the specialist doctor. If treatment is being received in a government hospital, then it must have name and address of that hospital as well. 

“While claiming deductions under section 80DDB, the maximum amount of deduction available will be reduced by the amount of reimbursement of treatment cost, if any, received from the employer or insurance company”, adds Wadhwa 

  • Section 80E: Interest on loan taken for higher education

If you have paid interest in FY 2018-19 on an education loan taken for the higher education (i.e., graduation or post graduation) of self, spouse or children, then you can claim this deduction. Wadhwa says, “There is no limit on the maximum amount claimed as deduction. However, this deduction is available for up to 8 years starting from the year in which interest payment began or until interest is paid in  full

  • Section 80EE: Payment of interest on home loan

This is an additional deduction available on the payment of interest on home loan. An additional deduction of Rs 50,000 can be claimed if the following conditions are satisfied: 
a) The loan taken by you was sanctioned between April 1, 2016 and March 31, 2017;
b) The home loan taken does not exceed Rs 35 lakh;
c) The value of house purchased by you does not exceed Rs 50 lakh;
d) The house for which loan is taken is your first house.

You can claim this deduction only if you have exhausted the limit available to you under the head ‘Income from house property’ under section 24 for Rs 2 lakh. 

  • Section 80G: Donation to eligible funds, charitable funds etc.

Donations made to specified funds and/or institutions notified by the Income Tax Department are eligible for deductions under section 80G. Remember the amount of deduction that can be claimed by you will depend on the type of institution to which you have given your donation. 

While claiming this deduction, you are also required to fill in the details of the institutions to which donation has been made in the sixth tab ’80G’. The sixth tab is divided into 4 sections and deduction can be claimed as either 100 percent or 50 percent of the amount donated with subject to ‘With’ or ‘Without’ the upper limit. 

‘With’ upper limit: Deduction of either 50 percent or 100 percent of the amount donated can be claimed with a ceiling of 10 percent of your gross adjusted income.
‘Without’ upper limit: Deduction of either 50 percent or 100 percent with no maximum ceiling. 

Gross adjusted income is your gross total income minus (a) all exempted income, (b) long-term capital gains and (iii) all deductions under section 80C to 80U except for 80G. 

This year ITR-1 asks you to provide the break-up of the amount donated in cash and via cheque. If you have made donation in cash, then the maximum amount you can claim as deduction is Rs 2,000. 

  • Section 80GG: Rent Paid

You can claim this deduction only if you have paid rent in FY 2018-19 but you have not received house rent allowance (HRA) from your employer. If you are a self-employed person, living in a rented accommodation, then also you can claim deduction under section 80GG. Least of the following amount is available as deduction under this section:
a) Rent paid in excess of 10 percent of total income
b) 25% of the total income
c) Rs 5,000  per month

Here total income is calculated as gross total income minus long-term capital gains, short-term capital gains where securities transaction tax has been paid and deductions available under sections 80C to 80U except for 80GG. It is important to note that the if you have income taxable under the head Capital Gains, then you cannot file return in ITR-1 

There are certain conditions attached while claiming this deduction. To claim deduction, you should not own a house either in your name, spouse, minor child or as member of Hindu Undivided Family (HUF), at the place of employment and at the place of residence. If you own a house in any other place, you can claim 80GG deduction, provided that the house you own is on rent, adds Wadhwa. 

  • Section 80GGA, 80GGC, 80QQB, 80RRB

If you have made donations to an institution carrying out scientific research or to a university or college approved by the government, then you can claim deduction under Section 80GGA. To claim the deductions under this section, you are required to enter the details in the seventh tab of the ITR-1 form. 

If the donation has been made in cash, then the maximum amount that can be claimed as deduction under this section is Rs 10,000. If donation is made using any mode except for cash, then there is no limit on the amount of deduction. The tab asks you to furnish the following information: 

a) Relevant clause under which deduction is claimed
b) Name and address of donee
c) PAN of donee
d) Amount of donation made in cash and by other mode. 

Section 80GGC allows you deduction for donation made to political parties. There is no maximum limit on the deduction amount but can only be claimed if the donation is made using any mode other than cash. 

Section 80QQB allows deduction of Rs 3 lakh if you have received lump sum royalty payments on books written by you. The book written by you should not be textbooks for school and college. If you have not received any lump-sum amount of royalty then deduction will be restricted to 15 percent of the book’s revenue in that year. 

Any royalty income received by you on a patent registered on or after April 1, 2003 will be eligible for deduction under section 80RRB. The maximum deduction that can be claimed under this section is Rs 3 lakh. 

The above deductions (section 80QQB and 80RRB) cannot be claimed if you are filing ITR-1. You need to file ITR-2 or ITR-3 as applicable to claim this deduction. 

  • Section 80TTA: Income from interest on saving bank account

Interest earned on your savings account balance either held with a bank or post office is taxable. However, you can claim deduction up to Rs 10,000 on the interest earned either from your savings bank account or post office savings account, or from both. Interest amount exceeding Rs 10,000 will be added to your income and will be taxed at rates applicable to your income. This deduction can be claimed only by individuals whose age is below 60 years.

  • Section 80TTB: Interest on deposits in case of senior citizens

Announced in Budget 2018, interest received by senior citizens (age 60 years and above) from the deposits held either with bank or post office can be claimed as a deduction up to Rs 50,000 per FY. This covers interest received from savings account, fixed deposit and from post office schemes such as Senior Citizens’ Savings Scheme (SCSS), Post office Savings Account and so on. 

  • Section 80U: Person with disability

If you are suffering from a disability, then you can claim deduction under section 80U. If you claim deduction under this section, then any other individual cannot claim deduction on your behalf under section 80DDB as mentioned above 

The maximum limit available under section 80U is same as section 80DD. 

Disability of atleast 40% of specified diseases

Rs 75,000

Severe Disability of at least 80% of any kind

Rs 1.25 lakh 

Once you have filled the corresponding cells with the amount of deductions under sections 80C to 80U that you are eligible to claim, the online form will automatically calculate your total income (minus deductions entered by you) on which you are required to pay tax. All your tax details will be automatically calculated. 

Source : PTI