How Much Tax Can You Save Under Sections 80C, 80D, and 80G?

Everyone has the same goal of becoming stable. Although it necessitates careful preparation and a diverse portfolio, different ways to invest include fixed deposits, savings plans, and life insurance. There are many tax schemes to reduce taxes for an individual. Granting gifts and aiding medical causes also increased the advantages. Knowing all the potential tax deductions, saving taxes might be a wise financial move. 

We shall now discuss tax deductions under the three sections.

Tax Under Section 80C 

Deduction for investments

Deduction Limit: – ₹1,50,000

It is one of the most favored and well-liked areas for taxpayers. This is because you can reduce your annual tax liability by a maximum of Rs. 150,000.

Investments Eligible for Deductions and Tax Savings Under Section 80C

• Life insurance: It consists of tax-deductible premium payments. The taxpayer makes the deposits for all the needed life insurance plans. This safeguards your life and also reduces taxes in certain areas. 
• Sukanya Samriddhi Yojana: It is a welfare program for girls that qualifies for a tax deduction.
• Equity Linked Savings Scheme: It’s a mutual fund investment. The plan has a fixed lock-in period and offers market-linked returns. 
• Public Provident Fund (PPF)
• Employees’ Provident Fund (EPF)
• 5-year tax-saving Fixed Deposits (FDs)
• Senior Citizen Savings Scheme (SCSS)
• National Savings Certificates (NSC)
• Tuition fees were paid for two dependent children.
• Repayment of the principal balance of a mortgage, etc.

This reduction for real estate purchases is available for individuals and HUFs. Corporations, partnership businesses, and LLPs are not eligible for this deduction.

The total greatest deduction allowed under sections:

Each 80CCE, 80CCE-1, 80CCE-2, and 80CCE-3 costs Rs. 150,000.

Tax Under Section 80D 

Deduction for: health insurance policy premiums paid

Deduction Limit: Subject to Specific Conditions

Health insurance coverage for:

1. For family (spouse and dependent children), an amount of ₹25,000.
2. For a family including parents, the amount is ₹50,000.
3. For a family (below 60 years of age), parents (above 60 years of age), and oneself, an amount of ₹25,000 + ₹50,000 = ₹75,000
4. For a family (with members above 60 years), senior citizen parents, and oneself, an amount of ₹50,000 + ₹50,000 = ₹1,00,000

 For health checkup costs under Section 80D, a tax credit of 5,000 is also available. 

The exemption for physicals includes the 25,000 rebate on health insurance. A premium rate of 20,000 reimbursements may be available to people who paid 5,000 for medical exams.

Tax Under Section 80G

Deduction for: money given to charitable organizations

Deduction Limit: As stated in the section, either up to 100% or 50% with or without restrictions.

The Government of India offers tax deductions under Section 80G. This way, it expresses gratitude to the ones who pay taxes. Individuals, corporations, and firms can all deduct it.

Section 80GGA permits tax deductions for certain contributions. The contributions made in support of 

•  Rural development 
•  Scientific research projects.
• Donations with a tax 100% deduction
• Fund set up by a State Government for the poor for medical relief. 
• National Illness Help Fund
• National Blood Donor Council or State Blood Donor Council
• The Army Central Welfare Fund.
• The National Trust for the Welfare of Persons with Many Disabilities
• National Sports Fund
• National Cultural Fund
• Fund for Technology Development and Application
• National Children’s Fund
• Chief Minister’s Relief Fund about any state or union territory.
• National Defense Fund by the Central Government
• Prime Minister’s National Relief Fund
• National Foundation for Communal Harmony
• An approved university or educational institution of national eminence
• October 1, 1993, and October 6, 1993. Maharashtra’s Chief Minister’s Relief Fund
• Swachh Bharat Abhiyan (applicable from the financial year 2014-15)
• Funds to Clean Ganga (applicable from the financial year 2014-15)
• National Fund for Controlling Drug Abuse (applicable from the financial year 2015-16)
• Chief Minister’s Earthquake Relief Fund, Maharashtra
• Any fund established by the state government that aids earthquake victims
• The Prime Minister’s Armenia Earthquake Relief Fund
• Africa (Public Contributions—India) Fund
• Donations with a 50% tax deduction
• Prime Minister’s Drought Relief Fund
• Jawaharlal Nehru Memorial Fund
• The Rajiv Gandhi Foundation
• Indira Gandhi Memorial Trust

On adjusted gross income, the following charities are eligible for 100% tax deductions. Donations result in a 10% reduction in the tax amount.

• The government or any approved local authority, institution, or association promotes family planning.
• Donations to the following organizations are eligible for a 50% deduction. For adjusted gross income, they are subject to a 10% reduction.
• The government or any local authority for any philanthropic endeavours. But this doesn’t include family planning.
• Any other institution or fund that complies with Section 80 G’s requirements
• Any company listed in Section 10 (26 BB) for the interests of the minority community.
• Any organization established in India with the mandate to address the need for a residential area in the city or village or to repair or renovate any public building.

Conclusion

A tax deduction is a beneficial provision made on the taxpayer’s total gross income. The Income Tax Act of 1961 contains many clauses that include tax deduction schemes. The one that offers tax deductions for investments is Section 80C, and it is the most well-known of them all. Then two other parts provide tax advantages for medical bills. They also provide gifts to charities. The two significant parts are sections 80D and 80G. To make greater use of these tax benefits while submitting your ITR, be sure you understand them!

As a result, Section 80’s coverage of these sections allows you to reduce your tax liability. You can deduct taxes from your taxable income if you have these. The tax obligation decreases as the income decreases. Use these areas for your needs to avoid paying taxes with your hard-earned money.

For further details, you can visit Piramal Finance. Piramal Finance provides excellent financial services and advice.