All about deduction u/s 80C




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All about deduction u/s 80C

 

Section 80C

Bare Act

 

Deduction in respect of life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc.

(1) In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, in accordance with and subject to the provisions of this section, the whole of the amount paid or deposited in the previous year, being the aggregate of the sums referred to in sub-section (2), as does not exceed one hundred and fifty thousand rupees.

(2) The sums referred to in sub-section (1) shall be any sums paid or deposited in the previous year by the assessee—

 (i)  to effect or to keep in force an insurance on the life of persons specified in sub-section (4);

(ii)  to effect or to keep in force a contract for a deferred annuity, not being an annuity plan referred to in clause (xii), on the life of persons specified in sub-section (4):

Provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity;

(iii) by way of deduction from the salary payable by or on behalf of the Government to any individual being a sum deducted in accordance with the conditions of his service, for the purpose of securing to him a deferred annuity or making provision for his spouse or children, in so far as the sum so deducted does not exceed one-fifth of the salary;

(iv) as a contribution by an individual to any provident fund to which the Provident Funds Act, 1925 (19 of 1925) applies;

(v) as a contribution to any provident fund set up by the Central Government and notified by it in this behalf in the Official Gazette, where such contribution is to an account standing in the name of any person specified in sub-section (4);

(vi) as a contribution by an employee to a recognised provident fund;

(vii) as a contribution by an employee to an approved superannuation fund;

(viii) as subscription, in the name of any person specified in sub-section (4), to any such security of the Central Government or any such deposit scheme as that Government may, by notification in the Official Gazette, specify in this behalf;

(ix) as subscription to any such savings certificate as defined in clause (c) of section 2 of the Government Savings Certificates Act, 1959 (46 of 1959), as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(x) as a contribution, in the name of any person specified in sub-section (4), for participation in the Unit-linked Insurance Plan, 1971 (hereafter in this section referred to as the Unit-linked Insurance Plan) specified in Schedule II of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);

(xi) as a contribution in the name of any person specified in sub-section (4) for participation in any such unit-linked insurance plan of the LIC Mutual Fund referred to in clause (23D) of section 10, as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(xii) to effect or to keep in force a contract for such annuity plan of the Life Insurance Corporation or any other insurer as the Central Government may, by notification in the Official Gazette, specify;

(xiii) as subscription to any units of any Mutual Fund referred to in clause (23D) of section 10 or from the Administrator or the specified company under any plan formulated in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(xiv) as a contribution by an individual to any pension fund set up by any Mutual Fund referred to in clause (23D) of section 10 or by the Administrator or the specified company, as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(xv) as subscription to any such deposit scheme of, or as a contribution to any such pension fund set up by, the National Housing Bank established under section 3 of the National Housing Bank Act, 1987 (53 of 1987) (hereafter in this section referred to as the National Housing Bank), as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(xvi) as subscription to any such deposit scheme of—

 (a)  a public sector company which is engaged in providing long-term finance for construction or purchase of houses in India for residential purposes; or

 (b)  any authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both,

as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(xvii) as tuition fees (excluding any payment towards any development fees or donation or payment of similar nature), whether at the time of admission or thereafter,—

 (a)  to any university, college, school or other educational institution situated within India;

 (b)  for the purpose of full-time education of any of the persons specified in sub-section (4);

(xviii) for the purposes of purchase or construction of a residential house property the income from which is chargeable to tax under the head “Income from house property” (or which would, if it had not been used for the assessee’s own residence, have been chargeable to tax under that head), where such payments are made towards or by way of—

(a)  any instalment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis; or

(b)  any instalment or part payment of the amount due to any company or co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; or

 (c)  repayment of the amount borrowed by the assessee from—

(1)  the Central Government or any State Government, or

(2)  any bank, including a co-operative bank, or

(3)  the Life Insurance Corporation, or

(4)  the National Housing Bank, or

(5) any public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes which is eligible for deduction under clause (viii) of sub-section (1) of section 36, or

(6) any company in which the public are substantially interested or any co-operative society, where such company or co-operative society is engaged in the business of financing the construction of houses, or

(7) theassessee’s employer where such employer is an authority or a board or a corporation or any other body established or constituted under a Central or State Act, or

(8) the assessee’s employer where such employer is a public company or a public sector company or a university established by law or a college affiliated to such university or a local authority or a co-operative society; or

 (d)  stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee,

but shall not include any payment towards or by way of—

(A)  the admission fee, cost of share and initial deposit which a shareholder of a company or a member of a co-operative society has to pay for becoming such shareholder or member; or

(B)  the cost of any addition or alteration to, or renovation or repair of, the house property which is carried out after the issue of the completion certificate in respect of the house property by the authority competent to issue such certificate or after the house property or any part thereof has either been occupied by the assessee or any other person on his behalf or been let out; or

(C)  any expenditure in respect of which deduction is allowable under the provisions of section 24;

(xix) as subscription to equity shares or debentures forming part of any eligible issue of capital approved by the Board on an application made by a public company or as subscription to any eligible issue of capital by any public financial institution in the prescribed form.

Explanation.—For the purposes of this clause,—

 (i)  “eligible issue of capital” means an issue made by a public company formed and registered in India or a public financial institution and the entire proceeds of the issue are utilised wholly and exclusively for the purposes of any business referred to in sub-section (4) of section 80-IA;

(ii)  “public company” shall have the meaning assigned to it in section 3 of the Companies Act, 1956 (1 of 1956);

(iii) “public financial institution” shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956);

(xx) as subscription to any units of any mutual fund referred to in clause (23D) of section 10 and approved by the Board on an application made by such mutual fund in the prescribed form:

Provided that this clause shall apply if the amount of subscription to such units is subscribed only in the eligible issue of capital of any company.

Explanation.—For the purposes of this clause “eligible issue of capital” means an issue referred to in clause (i) of the Explanation to clause (xix) of sub-section (2);

(xxi) as term deposit—

 (a)  for a fixed period of not less than five years with a scheduled bank; and

 (b)  which is in accordance with a scheme framed and notified, by the Central Government, in the Official Gazette for the purposes of this clause.

Explanation.—For the purposes of this clause, “scheduled bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), or a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), or a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank, being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934);

(xxii) as subscription to such bonds issued by the National Bank for Agriculture and Rural Development, as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(xxiii) in an account under the Senior Citizens Savings Scheme Rules, 2004;

(xxiv) as five year time deposit in an account under the Post Office Time Deposit Rules, 1981;

20[(xxv) being an employee of the Central Government, as a contribution to a specified account of the pension scheme referred to in section 80CCD—

 (a)  for a fixed period of not less than three years; and

 (b)  which is in accordance with the scheme as may be notified by the Central Government in the Official Gazette for the purposes of this clause.

Explanation.—For the purposes of this clause, “specified account” means an additional account referred to in sub-section (3) of section 20 of the Pension Fund Regulatory and Development Authority Act, 2013 (23 of 2013).]

(3) The provisions of sub-section (2) shall apply only to so much of any premium or other payment made on an insurance policy, other than a contract for a deferred annuity, issued on or before the 31st day of March, 2012, as is not in excess of twenty per cent of the actual capital sum assured.

Explanation.—In calculating any such actual capital sum assured, no account shall be taken—

 (i)  of the value of any premiums agreed to be returned, or

(ii)  of any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.

(3A) The provisions of sub-section (2) shall apply only to so much of any premium or other payment made on an insurance policy, other than a contract for a deferred annuity, issued on or after the 1st day of April, 2012 as is not in excess of ten per cent of the actual capital sum assured :

Provided that where the policy, issued on or after the 1st day of April, 2013, is for insurance on life of any person, who is—

(a)  a person with disability or a person with severe disability as referred to in section 80U, or

(b)  suffering from disease or ailment as specified in the rules made under section 80DDB,

the provisions of this sub-section shall have effect as if for the words “ten per cent”, the words “fifteen per cent” had been substituted.

Explanation.—For the purposes of this sub-section, “actual capital sum assured” in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account—

(i) the value of any premium agreed to be returned; or

(ii) any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.

(4) The persons referred to in sub-section (2) shall be the following, namely:—

(a)  for the purposes of clauses (i), (v), (x) and (xi) of that sub-section,—

  (i)  in the case of an individual, the individual, the wife or husband and any child of such individual, and

 (ii)  in the case of a Hindu undivided family, any member thereof;

(b)  for the purposes of clause (ii) of that sub-section, in the case of an individual, the individual, the wife or husband and any child of such individual;

(ba) for the purposes of clause (viii) of that sub-section, in the case of an individual, the individual or any girl child of that individual, or any girl child for whom such person is the legal guardian, if the scheme so specifies;

(c)  for the purposes of clause (xvii) of that sub-section, in the case of an individual, any two children of such individual.

(5) Where, in any previous year, an assessee—

(i)  terminates his contract of insurance referred to in clause (i) of sub-section (2), by notice to that effect or where the contract ceases to be in force by reason of failure to pay any premium, by not reviving contract of insurance,—

 (a)  in case of any single premium policy, within two years after the date of commencement of insurance; or

 (b)  in any other case, before premiums have been paid for two years; or

(ii) terminates his participation in any unit-linked insurance plan referred to in clause (x) or clause (xi) of sub-section (2), by notice to that effect or where he ceases to participate by reason of failure to pay any contribution, by not reviving his participation, before contributions in respect of such participation have been paid for five years; or

(iii) transfers the house property referred to in clause (xviii) of sub-section (2) before the expiry of five years from the end of the financial year in which possession of such property is obtained by him, or receives back, whether by way of refund or otherwise, any sum specified in that clause,then,—

(a)  no deduction shall be allowed to the assessee under sub-section (1) with reference to any of the sums, referred to in clauses (i), (x), (xi) and (xviii) of sub-section (2), paid in such previous year; and

(b)  the aggregate amount of the deductions of income so allowed in respect of the previous year or years preceding such previous year, shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year.

(6) If any equity shares or debentures, with reference to the cost of which a deduction is allowed under sub-section (1), are sold or otherwise transferred by the assessee to any person at any time within a period of three years from the date of their acquisition, the aggregate amount of the deductions of income so allowed in respect of such equity shares or debentures in the previous year or years preceding the previous year in which such sale or transfer has taken place shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year.

Explanation.—A person shall be treated as having acquired any shares or debentures on the date on which his name is entered in relation to those shares or debentures in the register of members or of debenture-holders, as the case may be, of the public company.

(6A) If any amount, including interest accrued thereon, is withdrawn by the assessee from his account referred to in clause (xxiii) or clause (xxiv) of sub-section (2), before the expiry of the period of five years from the date of its deposit, the amount so withdrawn shall be deemed to be the income of the assessee of the previous year in which the amount is withdrawn and shall be liable to tax in the assessment year relevant to such previous year:

Provided that the amount liable to tax shall not include the following amounts, namely:—

(i)  any amount of interest, relating to deposits referred to in clause (xxiii) or clause (xxiv) of sub-section (2), which has been included in the total income of the assessee of the previous year or years preceding such previous year; and

(ii) any amount received by the nominee or legal heir of the assessee, on the death of such assessee, other than interest, if any, accrued thereon, which was not included in the total income of the assessee for the previous year or years preceding such previous year.

(7) For the purposes of this section,—

(a)  the insurance, deferred annuity, provident fund and superannuation fund referred to in clauses (i) to (vii);

(b)  unit-linked insurance plan and annuity plan referred to in clauses (xii) to (xiiia);

(c)  pension fund and subscription to deposit scheme referred to in clauses (xiiic) to (xiva);

(d)  amount borrowed for purchase or construction of a residential house referred to in clause (xv),

of sub-section (2) of section 88 shall be eligible for deduction under the corresponding provisions of this section and the deduction shall be allowed in accordance with the provisions of this section.

(8) In this section,—

 (i)  “Administrator” means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);

(ii)  “contribution” to any fund shall not include any sums in repayment of loan;

(iii) “insurance” shall include—

(a)  a policy of insurance on the life of an individual or the spouse or the child of such individual or a member of a Hindu undivided family securing the payment of specified sum on the stipulated date of maturity, if such person is alive on such date notwithstanding that the policy of insurance provides only for the return of premiums paid (with or without any interest thereon) in the event of such person dying before the said stipulated date;

(b)  a policy of insurance effected by an individual or a member of a Hindu undivided family for the benefit of a minor with the object of enabling the minor, after he has attained majority to secure insurance on his own life by adopting the policy and on his being alive on a date (after such adoption) specified in the policy in this behalf;

(iv) “Life Insurance Corporation” means the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956);

(v)  “public company” shall have the same meaning as in section 3 of the Companies Act, 1956 (1 of 1956);

(vi) “security” means a Government security as defined in clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944);

(vii) “specified company” means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);

(viii) “transfer” shall be deemed to include also the transactions referred to in clause (f) of section 269UA.

 

Crux of Section 80C(1)

Applicability

  • Individual &
  • HUF

 

Maximum amount of deduction:

 

The aggregate of amount paid or deposited referred to in 80C(2) can be claimed as deductionupto Rs.1,50,000/-.

 

Crux of Section 80C(2), 80C(3) & 80C(3A)

  • Life Insurance Premium:
  • In the case of an individual, the individual, the wife or husband and any child of such individual, and
  • In the case of a Hindu undivided family, any member thereof;
  • Maximum 10% of actual capital sum insured allowed as deduction on policy issued on or after 01/04/2012.
  • Maximum 20% of actual capital sum insured allowed as deduction on policy issued on or before 31/03/2012.
  • Maximum 15% where the policy, issued on or after the 1st day of April, 2013, is for insurance on life of any person, who is—a person with disability or a person with severe disability as referred to in section 80U, or suffering from disease or ailment as specified in the rules made under section 80DDB.

Meaning of Actual Sum Insured:

The minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, but excludes

  • the value of any premium agreed to be returned; or
  • any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.
  • Deferred Annuity:

Contract for Deferred annuity for the individual, the wife or husband and any child of such individual; other thanannuity plan of the Life Insurance Corporation or any other insurer as the Central Government may, by notification in the Official Gazette, specify.

Provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity.

 

  • Deferred annuity (Deduction by employer from Salary):

Deduction from the salary payable by or on behalf of the Government to any individual being a sum deducted in accordance with the conditions of his service, for the purpose of securing to him a deferred annuity or making provision for his spouse or children, in so far as the sum so deducted does not exceed one-fifth of the salary.

  • Contribution by an individual to any provident fund to which PF Act, 1925 applies.

 

  • Contribution to any provident fund set up by the Central Government and notified by it in this behalf in the Official Gazette, where such contribution is to an account;

In the case of an individual, the individual, the wife or husband and any child of such individual, and

      In the case of a Hindu undivided family, any member thereof;

  • Contribution by an employee to a recognised provident fund;
  • Contribution by an employee to an approved superannuation fund;
  • Subscription, in the name of, the individual, the wife or husband and any child of such individual, and in the case of a Hindu undivided family, any member thereof;to any such security of the Central Government or any such deposit scheme as that Government may, by notification in the Official Gazette, specify in this behalf.

SukanyaSamridhi Scheme has been notified to provide that any sum paid or deposited during the previous year in the said scheme, by an individual in the name of-

  • Girl Child of the Individual; or
  • Any girl child for whom such individual is the legal guardian.

 

 

 

  • Subscription to National Saving Certificates VIII:

Subscription to any such savings certificate as defined in clause (c) of section 2 of the Government Savings Certificates Act, 1959, as the Central Government may, by notification in the Official Gazette, specify in this behalf.

  • Contribution in Unit Linked Insurance Plan, 1971:

Contributions in the name of the individual, his spouse or any child of the individual for participation in unit linked insurance plan 1971 specified in Schedule II of the Unit Trust of India. In case of HUF, the contribution can be in the name of any member.

  • Contribution in Unit Linked Insurance Plan of LIC Mutual Fund:

Contributions in the name of the individual, his spouse or any child of the individual for participation in unit linked insurance plan of LIC Mutual fund referred to in clause (23D) of section 10 as CG may, by notification in the official Gazette, specify in this behalf. In case of HUF, the contribution can be in the name of any member.

  • Contributions of approved annuity plan of LIC:

Contributions to approved plans of LIC (New Jeevan Dhara and New Jeevan Akshay, New Jeevan Dhara I and New Akshay I, II and III) or any other insurer (Tata AIG Easy Retire Annuity Plan of TATA AIG Life Insurance Company Ltd.) as the Central Government may, by notification in the official Gazette, specify in this behalf.

(M)Subscriptions towards notified units of mutual fund or UTI (Equity linked Saving Scheme):

Subscription to any units of any mutual fund referred to in section 10(23D) or from the administrator or the specified company under any plan formulated in accordance with such scheme notified by the Central Government.

(N) Contribution to notified pension fund set up by mutual fund or UTI:

Contribution by an individual to a pension fund set up by an Mutual Fund referred to in section 10(23D) or by the Administrator or the Specified Company (i.e. UTI- Retirement benefit pension fund setup by specified company referred to in section 2(h) of the Unit Trust of India Act, 2002 as a pension fund).

Meaning of Specified Company

A Company formed under Companies Act, 2013 and whose entire capital is subscribed by such financial institutions or banks as may be specified by the Central Government by notification in the official Gazette, for the purpose of transfer and vesting of the undertaking.

Meaning of Administrator

A person or body of persons appointed as Administrator by the Central Government. The Central Government shall appoint a person or a body of persons as the “Administrator of the specified undertaking of the Unit Trust of India” for the purpose of taking over the administration thereof and the Administrator shall carry on the management of the specified undertaking of the Trust for and behalf of the Central Government.

Meaning of specified undertaking:

It includes all business, assets, liabilities and properties of the Trust representing and relatable to the scheme and Development Reserve Fund.

(O)Contribution to National Housing Bank (Tax Saving) Term deposit Scheme, 2008:

Subscription to any deposit scheme or contribution to any pension fund set up by the National Housing Bank i.e. National Housing Bank (Tax Saving) Term Deposit Scheme, 2008.

National Housing Bank (NHB), had launched two deposit schemes in December, 2008 namely SUNIDHI Term Deposit Scheme&SUVRIDDHI Tax Saving Term Deposit Scheme. The Bank has decided to discontinue aforementioned Term deposit schemes w.e.f. 1stAugust, 2017. Therefore, no new deposit(s) or any request for renewal of the deposit(s) will be accepted on or after 1st August, 2017. However the existing deposits will continue to be serviced till their maturity.

(P)Subscription to Notified deposit Scheme:

HUDCO Public Deposit Scheme qualifies under Section 80C of Income-tax Act, 1961. The minimum lock in period of 5 years.

(Q)Payment of tuition fees to any university, college, school or other educational institution within India for full time education for maximum two children.

  • Payment of tuition fees by an individual assesse at the time of admission or thereafter to any university, college, school or educational institutions within India.
  • For full time education and maximum two children of the individuRal.
  • Not include any payment towards development fees or donation or payment of similar nature.
  • Not include payment made for education to any institution situated outside India.

Note: Fees paid to Nursery School, Creches& play schools also eligible for Deduction u/s 80C.

 

(R)Repayment of housing loan including stamp duty, registeration fee and other expenses.

  • Any payment made towards the cost of purchase or construction of a new residential house property.
  • The income from such property
  • should be chargeable to tax under the head Income from House property, if the Property given on Rent,or
  • which would chargeable to tax under the head Income from house Property, if it had not been used for assessee’s own residence.
  • The approved payments are as follows:
  • Any instalment or part paymentof the amount dueunder any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis; or
  • Any instalment or part payment of the amount due to any company or co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; or
  • Repayment of the amount borrowed by the assessee from

(1)  Central Government or any State Government, or

(2)  Any bank, including a co-operative bank, or

(3)  Life Insurance Corporation, or

(4)  National Housing Bank, or

(5) Any public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes which is eligible for deduction under clause (viii) of sub-section (1) of section 36, or

(6) Any company in which the public are substantially interested or any co-operative society, where such company or co-operative society is engaged in the business of financing the construction of houses, or

(7) The assessee’s employer where such employer is an authority or a board or a corporation or any other body established or constituted under a Central or State Act, or

(8) The assessee’s employer where such employer is a public company or a public sector company or a university established by law or a college affiliated to such university or a local authority or a co-operative society.

  • Stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee.

 

The following amounts do not qualify for deductions

  • Admission Fee, Cost of share and initial deposit which a shareholder of a company or a member of a co-operative society has to pay for becoming a shareholder or member; or
  • The cost of any addition or alteration to, or renovation or repair of, the house property which is carried out after the issue of the completion certificate in respect of the house property by the authority competent to issue such certificate or after the house property or any part thereof has either been occupied by the assessee or any other person on his behalf or been let out; or

 

  • Any expenditure in respect of which deduction is allowable under the provisions of section 24of Income Tax Act, 1961.

 

(S) Subscription to certain equity shares or debentures:

  • Subscription to equity shares or debentures forming part of any eligible issue of capital approved by the board on an application made by a public company or as subscription to any eligible issue of capital by any public financial institution in the prescribed form.
  • A lock-in period of three years is provided in respect of such equity shares or debentures.
  • In case of an sale or transfer of shares or debentures within three years of the date of acquisition, the aggregate amount of deductions allowed in respect of such equity shares or debentures in the previous year or years preceding allowed in respect of such equity shares or debentures in the previous year or years preceding the previous year in which such sale or transfer has taken place shall be deemed to be the income of the assesse of such previous year and shall be liable to tax in the assessment year relevant to such previous year.
  • A person shall be treated as having acquired any shares or debentures on the date on which his name is entered in relation to those shares or debentures in the register of members or of debenture-holders, as the case may be, of the public company.
  • Public companyshall have the meaning assigned to it in section 3 of the Companies Act, 1956 (1 of 1956);
  • Public financial institution shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956);
  • Eligible issue of capital means an issue made by a public company formed and registered in India or a public financial institution and the entire proceeds of the issue are utilised wholly and exclusively for the purposes of any business of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facility {Refer Section 80-IA(4)}.

 

(T)Susbcription to certain units of Mutual Funds:

  • Subscription to any units of any mutual fund referred to in clause (23D) of section 10 and approved by the Board on an application made by such mutual fund in the prescribed form.
  • Units should be subscribed only in the eligible issue of capital of any company.
  • Eligible issue of capital means an issue made by a public company formed and registered in India or a public financial institution and the entire proceeds of the issue are utilised wholly and exclusively for the purposes of any business of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facility {Refer Section 80-IA(4)}.

(U)Investment in five year Term deposit:

 

  • Investment in Term deposit for a period not less than five Years with a scheduled bank.
  • Which is in accordance with a scheme framed and notified by the Central Government in the Official Gazette.
  • Scheduled Bankmeans:
  • The State Bank of India constituted under the State Bank of India Act, 1955,or
  • A subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959,or
  • A corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980,or
  • Any other bank, being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934.

(V)Subscription to notified bonds issued by NABARD:

  • Subscription to such bonds issued by the National Bank for Agriculture and Rural Development, as the Central Government may, by notification in the Officialin senior Citizen Gazette, qualifies for deduction under section 80C;

(W)Deposit in Senior Citizen Saving Scheme Rules, 2004:

  • Deposit in an account under the Senior Citizens Savings Scheme Rules, 2004 qualifies for deduction under section 80C.

Eligibility for Senior Citizen Saving Scheme:

The following people/groups are eligible to opt for Senior Citizen Saving Scheme:

  1. Senior citizens of India aged 60 years or above.
  1. Retirees who have opted for the Voluntary Retirement Scheme (VRS) or Superannuation in the age bracket 55-60. Here the investment has to be done within a month of receiving the retirement benefits.
  1. Retired defense personnel with a minimum age of 50 years.
  1. HUFs and NRIs are not allowed to invest in this scheme.

Investment Amount in Senior Citizen Saving Scheme:

  1. An individual can invest a maximum amount of Rs.15lakh, individually or jointly in an SCSS account (in multiples of Rs.1,000).
  1. The amount invested in the scheme cannot exceed the money that has been received on retirement. Hence, the individual can invest either Rs.15 lakh or the amount received as a retirement benefit, whichever is lower.

  1. The account can be opened by cash for an amount below Rs.1 lakh and by cheque for an amount exceeding Rs.1 lakh.

(X) Investment in five year Post Office Deposit:

  • Investment in five year time deposit in an account under post office Time Deposit Rules, 1981 qualifies for deduction under section 80C.

(Y) Contribution to additional account under NPS:

  • Contrubution by a Central Government employee to additional account under NPS (Specified Account) referred to in Section 80CCD for a fixed deposit of not less than 3 years and which is in accordance with the scheme notified by Central Government for this purpose qualifies for deduction under section 80C.(National Pension Scheme Tier-II Tax Saver Scheme, 2020)
  • It may be noted that only the contribution to the additional account under NPS will qualify for deduction under section 80C.
  • There are two types of NPS Account i.e Tire-I and Tier-II, to which an Individual can contribute.
  • Section 80CCD provides deduction in respect of contribution to individual to individual pension account (Tier-I Account) under the NPS.{Refer Section 20(2)(a) of PFRDA, 2013}
  • Deduction under section 80C is allowable in respect of contribution by Central Government employee to Additional Account (Tier-II Account) of NPS.{Refer Section 20(3) of PFRDA, 2013}
  • Section 80C qualify for deduction which are not allowed under section 80CCD.
  • Tier-II account is the additional account under NPS, contribution to which would qualify for deduction under section 80C only in the hands of a Government Employee.

Conclusion:

An Individual can claim more than Rs.1,50,000 deduction from the Gross Total Income by opting both the sections 80C & 80CCD.




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