Tax planning: Deductions other than Under Section 80 C

There is an old saying “A penny saved is a penny earned”. A proper financial planning and investing towards this can help a lot. Tax saving investments are widely considered as one of the most popular vehicle in this direction. 

The most preferred or known way of investment for an individual is under Section 80C of the Income Tax Act ,1961, which allows a deduction of Rs. 1,50,000/- from the Gross Taxable Income.

The options available for gaining the said deductions are investment in PPF, LIC, EPF, Tax saving Fixed Deposit and Mutual Funds.

Here, we will discuss about other deductions available which will help reducing the tax liability, in other words, will help enhance the annual savings.

Under Section 80CCD: National Pension Scheme

Section 80CCD (1) of The Income Tax Act, 1961 deals with providing tax deductions to all the tax payers who contributes to national pension scheme (NPS). The deduction is available to both salaried individuals and the self-employed. The maximum tax deductions allowed is Rs.1.5 lakh. This limit is inclusive of Section 80C limit.

In case of salaried individuals, the maximum deduction cannot exceed 20% of his/her annual salary (Basic + Dearness Allowance). For non-salaried individuals, the maximum deduction cannot exceed 20% of the gross total income for the particular financial year.

Contribution to NPS now qualifies under the exempt-exempt-exempt (EEE) mode of taxation wherein –  Ø  the amount contributed to NPS,

 Ø the income generated and

 Ø the amount of maturity, 

are all exempted from tax. 

Section 80CCD(1B): The total exemption limit under Section 80CCD(1B) is Rs. 50,000/- and is independent of exemptions under Sec 80 C. The deduction is available to both salaried and self-employed individuals.

Section 80D: Payment of health insurance premium 


Under Section 80D of the Income Tax Act, the assessee can claim a tax deduction for premiums paid for self and family members.

The maximum deduction which can be claimed is Rs 25,000 per year on premiums paid for self, spouse, and children. There is an additional deduction of Rs 25,000 if the parents are less than 60 years. And if the parents are more than 60 years then the deduction amount will be a maximum of Rs. 50,000. Thus a maximum total deduction of Rs 50,000 or Rs 75,000 respectively can be claimed.

Section 80DD: Expenses Incurred Towards Treatment of a Disabled Person

This deduction is available to Individuals and Hindu Undivided Families (HUF) paying for the treatment and wellbeing of a disabled family member. Such claims are granted only to the family of such dependent individuals.

The conditions to be met for claiming the deduction:

Ø  The coverage limit is determined based on the percentage of disability, wherein people having 40-80% disability are eligible for deduction up to Rs 75,000;

Ø  The disability higher than 80% can claim up to Rs 1.25 Lakh inclusive of all related expenses. Such claims are granted only to the family of such dependent individuals.

Section 80DDB: Expenses Incurred Towards Treatment of Individuals with Specific Disease or Disability

This deduction is available to Individuals and Hindu Undivided Families (HUF) paying for the treatment of dependent family members diagnosed with certain specific diseases.  

A maximum deduction of Rs 40,000 can be taken by individuals below the age of 60. Such waiver consequently increases to Rs 1 Lakh for senior citizens (60-80 years) and super senior citizens (above 80 years). 

Such waivers can be received for the treatment of critical illness such as neurological diseases (causing 40% or higher disability), malignant cancers, AIDS, chronic renal disease, and hematological ailments. 

Section 80E: Repayment of an education loan

The assessee can claim a deduction under this section on the amount paid as interest for an education loan for self, spouse, children, or any student to whom the assesse is a legal guardian. There is no limit to claim the deduction for interest paid in a financial year.

It can only be availed for an education loan taken for higher studies.

The deduction amount starts from the year he/she starts repaying the educational loan, till the next seven years or until the total interest is paid, whichever is earlier.

This deduction can only be claimed if the loan is taken from an approved financial institution and not from any friends or family member.

Section 80EE: Interest payment of the home loan for first-time buyers

This deduction is available for a first–time home buyer. The assessee can claim a deduction of up to Rs 50,000. This amount is over and above deduction under Section 24 which is Rs. 2,00,000 i.e interest on housing loan repayment.

The conditions to be met for claiming the deduction:

Ø  The individual taxpayer should be a first–time home buyer;

Ø  Value of the house should be Rs 50 lakhs or less;

Ø  Loan taken for the house must be Rs 35 lakhs or less;

Ø  The loan must be sanctioned by a Financial Institution or a Housing Finance Company;

Ø  The loan must be sanctioned between 01.04.2016 to 31.03.2017.

Section 80EEA: Interest payment of the home loan for first-time buyers

This deduction is available for a first –time home buyer then the assessee can claim a deduction of up to Rs 1,50,000. This amount is over and above deduction under Section 24 which is Rs. 2,00,000 i.e interest on housing loan repayment.

The conditions to be met for claiming the deduction:

Ø  The individual taxpayer should be a first –time home buyer;

Ø  He/She should not be entitled to deduction under section 80EE.

Ø  The stamp duty value of the house should be below Rs 45 lakh.

Ø  The home loan should be sanctioned between April 1, 2019, and March 31, 2020.

Section 80EEB: Interest paid on loan taken for the purchase of an electric vehicle

The deduction is available to those assessees who have taken loan for the purchase of electric vehicle. In such cases, deduction of up to Rs 1,50,000 can be claimed.

The conditions to avail this deduction is that the loan should be sanctioned between April 1, 2019, to March 31, 2023.

Section 80G: Donations paid towards eligible trusts/charities

All taxpayers (individuals/companies/Hindu Undivided Families) are eligible to make donations to charity under Section 80G and claim a deduction, subject to limits set down by the government. NRIs are also entitled to the benefits under Section 80G, provided their donations are to eligible trusts or institutions.

Ø  Donations should be paid through taxable or exempted income only

Ø  Donations which are paid in cash or cheque are eligible (donations in the form of clothes, food, medicines, etc. are not eligible)

Ø  Donations should be made to valid and registered trusts only

Section 80GG: Rent paid for accommodation

This deduction can be claimed if the assessee do not get house rent allowance (HRA) as part of the salary, or if the assesseee is a self-employed person.

The deduction under Section 80GG is given to the least of the following:

a) Total rent paid minus 10% of basic salary

b) Rs 60,000 per year (Rs 5,000 per month)

c) 25% of the adjusted gross total income

Section 80TTA:Tax savings on interest earned from savings bank account

The deduction is available to all individual taxpayers and HUF who earn a savings bank interest. This is for all individuals other than senior citizens. The maximum  deduction is Rs 10,000.

Section 80TTB: Interest from deposits in case of senior citizens

This deduction can be claimed by a senior citizen up to Rs 50,000 in respect of interest on savings and interest on fixed deposit with a bank or a post office or a co-operative bank.

Section 80U: Income Tax Benefits Extended Towards Disabled Individuals

This deduction is available to disabled individuals such disability has to be certified by a registered medical authority.

Incapacitated individuals suffering from 40-80% disability can claim Rs 75,000, while people suffering from higher than 80% disability are entitled to maximum Rs 1.25 Lakh through tax benefits. 

Tax planning is an intrinsic part of an even financial life. Thus, the understanding of available tax deductions other than under Section 80C can help to reduce the burden of income tax liability and help to make better financial decisions. There are also other ways to reduce the tax liability of a salaried person by taking the exemption of HRA, LTA, Food Coupons and the other allowances.

Having rich experience in various profiles related to Taxation, Audit, Accounting, etc., within India and Abroad.

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