To claim deductions while filing your income tax return (ITR), you first need to fill in the details of your income. In ITR-1 form, you are required to fill in the details of three types of income: income from salary, income from house property and income from other sources. Click here to know how to fill ITR-1 completely online.
Once you have filled all your income details, ITR-1 form automatically calculates your gross total income. To reduce your gross total income and thereby your tax liability, you have to enter details of deductions that you want to claim under sections 80C to 80U of the Income Tax Act.
Here are deductions that can be claimed to lower your tax liability under various sections of the income tax Act.
- Section 80C, 80CCC, 80CCD(1) and 80CCD(2)
Under the head ‘Part C -Deductions and Taxable Total Income’, the first three rows ask you to provide information about the investments and expenditures under sections 80C, 80CCC and 80CCD (1). The most common deductions that can be claimed under section 80C are for:
a) Premium paid for life insurance policy
b) Investments in PPF, EPF and VPF
c) Repayment of principal amount of housing loan
d) Investment in equity-linked savings scheme (ELSS) of mutual funds
e) Investments in certain post-office schemes like Sukanya Samriddhi Yojana (SSY), National Savings Certificates (NSC), Senior Citizens’ Savings Schemes(SCSS)
The total investment amount under the section 80C, 80CCC and 80CCD (1) cannot exceeds Rs 1.5 lakh as per rules for FY17-18. An additional Rs 50,000 can be claimed as deduction if the investment is made in National Pension System (NPS) in which case the maximum deduction amount that will be available is Rs 2 lakh.
Chartered Accountant Naveen Wadhwa, DGM, taxmann.com, says, “To claim additional deduction for the investment made in NPS, you will be required to enter the investment amount in the cell corresponding to 80CCD(1B). The maximum investment in 80CCD(1B) cannot exceed Rs 50,000 in a financial year.”
How to fill boxes to claim deductions under section 80C, 80CCC, 80CCD(1) and 80CCD(1B)
| Section 80C | Payment for life insurance premium, investment in Provident Funds (EPF/PPF/VPF), ELSS, home loan principal repayment, SSY, NSC, SCSS and others |
| Section 80CCC | Payment made to receive pension in future such as towards pension plans of insurance companies and mutual funds |
| Section 80CCD(1) | Payment made to receive pension from National Pension System, Atal Pension Yojana |
| Total amount | The total amount entered in the above three cells cannot exceed Rs 1.5 lakh |
| Section 80CCD(1B) | Additional investment of up to Rs 50,000 in NPS will be claimed in this row |
| Section 80CCD(2) | Deduction for employer’s contribution to NPS will come here. This cannot exceed more than 10% of (basic salary and dearness allowance, if any) |
If your employer has made a contribution to NPS on your behalf, then, too, you can claim deduction under section 80CCD(2). Even though there is no maximum ceiling in rupee terms, this deduction cannot exceed 10 percent of your salary, adds Wadhwa. Here salary means total of basic salary and dearness allowance.
Premium paid to buy a health cover is also eligible for deduction under section 80D of the Income Tax Act. A deduction of up to Rs 25,000 is available for health insurance premium paid for self, spouse, dependent children.
Wadhwa says, “If you have paid premium for health cover for your parents, then you can claim additional deduction of maximum of Rs 25,000 or Rs 30,000 depending on the age of your parents.” The maximum deduction will be of Rs 25,000 if the age of your parents is less than 60 years. If your parents are above 60 years, then maximum deduction will be of Rs 30,000.
Do keep in mind no deduction will be allowed for health insurance premium paid for independent children, parents-in-law, siblings and grandparents.
Choose one of the options depending on the payment made by you and enter the amount:
| Option | Condition | Maximum Amount |
| Self and Family | Age below 60, premium paid for self, spouse and children only | Rs 25,000 |
| Self (Senior Citizen) and Family | Age 60 and above, premium paid for self, spouse and children only | Rs 30,000 |
| Parents | If parents age is below 60 | Rs 25,000 |
| Parents (Senior Citizen) | If parents age is 60 or above | Rs 30,000 |
| Self and family including Parents | Your age and your parents’ age is below 60 | Rs 25,000 + Rs 25,000 =Rs 50,000 |
| Self and family including senior citizen parents | Your age is below 60 but your parents age is 60 or above | Rs 25,000 + Rs 30,000 = Rs 55,000 |
| Self (senior citizen) and family including senior citizen parents | You and your parents age is 60 years and above | Rs 30,000 + Rs 30,000 = Rs 60,000 |
You can claim this deduction only if you have made payment using any mode except for cash like Net banking or cheque. You are eligible to claim deduction for both new policy and renewal of existing health insurance policy, adds Wadhwa.
Section 80DD allows you to claim the deduction for expenses made for a disabled dependent or if you have paid for any scheme framed by LIC or any other insurer for taking care of a disabled dependent. Dependent individual includes spouse, any child (son/daughter), parents, (except for in-laws) siblings (brother/sister).
Wadhwa says, “Section 80DD deduction can be claimed only if dependent individual is suffering from specified diseases as mentioned in the Act and is either disabled or severely disabled.” Some of these diseases include blindness, hearing impairment etc.
The maximum deduction amount available depends on the nature of disability. If the dependent individual has disability of at least 40 percent, then you can claim up to Rs 75,000. On the other hand, if the dependent has severe disability of atleast 80 percent, then the maximum amount available is Rs 1.25 lakh.
To claim this deduction, you are required to furnish a medical certificate from a government hospital as per the format suggested in the Form 10-IA, adds Wadhwa.
Section 80DDB covers expenses made for the treatment of specified diseases either on self or a dependent. The maximum deduction allowed under this section depends on the age of the person on whom money is being spent for the treatment.
Age and maximum amount of deduction under section 80DDB
| Age of the person i.e. the patient | Maximum deduction allowed |
| Age below 60 years | Rs 40,000 |
| Age 60 and above but below 80 years (Senior Citizen) | Rs 60,000 |
| Age 80 years and above (Super Senior Citizen) | Rs 80,000 |
This deduction can be claimed only if you have a prescription for such medical treatment from the specialist doctor. The prescription must contain name and age of the person and name of the disease he/she is suffering from along with the name, address, registration number, and qualification of the specialist doctor. If treatment is being received in a government hospital, then it must have name and address of that hospital as well.
While claiming deductions under section 80DDB, the maximum amount of deduction available will be reduced by the amount of reimbursement, if any, received from the employer or insurance company, adds Wadhwa
- Section 80E: Interest on loan taken for higher education
If you have paid interest in FY 2017-18 on an education loan taken for the higher education (i.e. graduation or post graduation) of self, spouse or children, then you can claim this deduction. Wadhwa says, “There is no limit on the maximum amount claimed as deduction. However, this deduction is available for up to 8 years starting from the year in which interest payment began or until interest is paid in full.”
You can claim additional deduction of Rs 50,000 on the interest paid on home loan if you satisfy the following conditions:
a) The loan taken by you must be sanctioned between April 1, 2016 and March 31, 2017.
b) The home loan taken must not exceed Rs 35 lakh
c) The value of house purchased by you must not exceed Rs 50 lakh
d) The house for which loan is taken should be your first house.
You can claim this deduction, only if you have exhausted the limit available to you under the head ‘Income from house property’.
- Section 80G: Donation to eligible funds, charitable funds etc.
If you have made donation to specified funds and/or notified institutions as notified for this purpose by the Income Tax department, then you are eligible to claim deduction under this section. However, the amount of deduction that you can claim depends on the type of institution you have given your donation to.
While claiming this deduction, you are also required to fill in the details of the institutions to which donation has been made in the sixth tab ’80G’. The sixth tab is divided into 4 sections and deduction can be claimed as either 100 percent or 50 percent of the amount donated with subject to ‘With’ or ‘Without’ the upper limit.
- ‘With’ upper limit: Deduction of either 50 percent or 100 percent can be claimed with the ceiling of 10 percent of the gross adjusted income.
- ‘Without’ upper limit: Deduction of either 50 percent or 100 percent with no maximum ceiling.
Gross adjusted income is your gross total income minus (a) all exempted income, (b) long-term capital gains and (iii) all deductions under section 80C to 80U except for 80G.
Also Read: All you need to know about claiming 80G deduction
If you have made donation in cash, then the maximum amount you can claim as deduction is Rs 2,000.
- Section 80GG: Rent Paid
You can claim this deduction only if you have paid rent in FY 2017-18 but you have not received house rent allowance (HRA) from your employer. Wadhwa says, “If you are a self-employed person, living in a rented accommodation, then you can claim deduction under section 80GG.” Least of the following amount is available as deduction under this section:
a) Rent paid in excess of 10 percent of total income
b) 25% of the total income
c) Rs 5,000 per month
Here total income is calculated as gross total income minus long-term capital gains, short-term capital gains where securities transaction tax has been paid and deductions available under section 80C to 80U except for 80GG. It is important to note that the if you have income taxable under the head Capital Gains, then you cannot file return in ITR-1.
There are certain conditions attached while claiming this deduction. To claim deduction, you should not own a house either in your name, spouse, minor child or as member of Hindu Undivided Family (HUF), at the place of employment and at the place of residence. If you own a house in any other place, you can claim 80GG deduction, provided that the house is on rent, adds Wadhwa.
- Section 80GGA, 80GGC, 80QQB, 80RRB
You can claim deduction under section 80GGA if you have made donation to an institution carrying out scientific research or to a university or college approved by the government. If you have made donation in cash, then the maximum limit on deduction is Rs 10,000. On the other hand, if you have made donation using any mode other than cash, then there is no limit on the maximum amount that can be claimed as deduction.
Section 80GGC allows you deduction on donation made to political parties. There is no maximum limit on the deduction amount but can only be claimed if the donation is made using any mode other than cash.
Section 80QQB allows deduction of Rs 3 lakh if you have received lump sum royalty payments on books written by you. The book written by you should not be textbooks for school and college. If you have not received any lump-sum amount of royalty then deduction will be restricted to 15 percent of the book’s revenue in that year.
Any royalty income received by you on a patent registered on or after April 1, 2003 will be eligible for deduction under section 80RRB. The maximum deduction that can be claimed under this section is Rs 3 lakh.
- Section 80TTA: Income from interest on savings bank account
Interest earned on your savings account deposits either held with a bank or post office is taxable. However, you can claim deduction up to Rs 10,000 on the interest earned either from your savings bank account or post office savings account or from both. Interest amount exceeding Rs 10,000 will be added to your income and will be taxed at rates applicable to your income.
Before claiming this deduction, ensure that you have mentioned total interest earned from savings accounts in the ‘Income from other sources’ row.
- Section 80U: Person with disability
If you are suffering from a disability, then you can claim deduction under section 80U. If you claim deduction under this section, then any other individual cannot claim deduction on your behalf under section 80DDB as mentioned above, adds Wadhwa.
The maximum limit available under section 80U is same as section 80DD.
| Percentage of disability | Deduction allowed |
| Disability of atleast 40% of specified diseases | Rs 75,000 |
| Severe Disability of at least 80% of any kind | Rs 1.25 lakh |
Once you have filled the corresponding cells with the amount of deductions under sections 80C to 80U that you are eligible to claim, the online form will automatically calculate your total income (minus deductions entered by you) on which you are required to pay tax. All your tax details will be automatically calculated.
The next step is to check and make sure that your TDS that has already automatically been filled in tab 4 called ‘Taxes paid’ by the software is correct as per the TDS certificates received by you. The ITR1 online form automatically downloads your TDS details from your Form 26AS and fills the related boxes. Click to know how to check ‘Tax Details’, which is the next step in filling ITR1.
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