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.
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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