Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Direct Tax »
Open DEMAT Account in 24 hrs
 Income tax exemption: 4 financial instruments you can still invest into before March 31
 CBDT drops small tax demands but not TCS, TDS claims
 ITR Refund: Awaiting money from Income Tax? Here's why you have not yet received your amount
 Income Tax Notice: What to do if you receive a Section 143 (1) notice from taxman?
 Average tax return processing time cut to 10 days: CBDT
 7 types of Income Tax Notice ITR filers may receive for AY 2023-24
 ITR filing: Do these advance preparations before filing your income tax return
 What are the strategies to maximize tax refunds after submitting an income tax return (ITR)?
 ITR filing: Tax rules on income from house property that your should know
 CBDT likely to issue rules on angel tax next week
 Pension Taxation: Everything you need to know for ITR filing

Income Tax deductions under section 80C cost Rs 75,000 crore to the government
July, 24th 2019

Deductions permitted under section 80C of Income Tax Act have cost the government over Rs 75,000 crore in the year ended March 2019. Income Tax Act allows deduction of certain investments and expenses incurred by taxpayers while calculating their tax liabilities under the Act. Although, the Union government permits deductions, exemptions and rebates under 27 different sections and sub-sections, the deductions permitted under section 80C are the most widely used and they have the largest revenue implication for the government’s finances.

In the financial year 2018-19, the cumulative tax implication of five deductions permitted under section 80C of the Income Tax Act was Rs 75,245 crore, which was over 14% of the total income tax collected by the government in the year.

With the rising expectations of middle class, the deductions and exemptions permitted under the Income Tax Act have gone up in recent years. In 2016-17, the total revenue implication of these deductions was Rs 64,790 crore which went up by Rs 10,455 crore in 2018-19, an increase of 16%.

Section 80C deductions cover several things like repayment of principal component of housing loan and investments into fixed deposits, NSC and provident funds that can be deducted from an individual or HUF tax payer’s income while calculating his tax liability for a financial year.

ALSO READ: Explained: Why Modi govt is keen to pass Dam Safety Bill and what it will change

Deductions permitted under 80C
Under the section 80C of Income Tax Act, taxpayers can claim deductions of up to Rs 1.5 lakh from their taxable income in a financial year on the investments made in public provident fund (PPF), national saving certificates (NSC), and also investments in eligible mutual funds and UTI.

These deductions also cover investment in eligible fixed deposits (FDs) and bonds, other investment eligible for section 80C deductions.

Deductions of income under the section 80C of Income Tax Act are also admissible for payment of life insurance premium, payment of tuition fee for two children and repayment of the principal component of housing loan. These deductions also cover payment of stamp duty, registration fee and other expenditure on purchase or construction of a residential house.

20,000 and growing: India’s start-ups take root in all 29 states

Expenses eligible for 80C deductions
Payment of life insurnace premium.
Medical insurance premium for an individual, spouse and children.
Deposit in provident fund/superannuation fund.
Deposits in Public Provident Fund (PPF).
Investment in eligible FDs and bonds.
Investment in five years FDs eligible for deduction under 80C.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2024 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting