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| Chapter VI-A Deductions |
Introduction
Tax season can feel overwhelming, especially with the many deductions available under Chapter VI-A of the Income Tax Act, 1961. Section 80 of Chapter VI-A offers a wide range of deductions that help individuals and Hindu Undivided Families (HUFs) lower their taxable income. This guide will introduce you to the framework, scope, and key sections under Section 80, empowering you to plan your tax-saving investments and expenses effectively.
1. What Is Chapter VI-A?
Chapter VI-A spans Sections 80C to 80U of the Income Tax Act. These sections cover deductions for:
- Savings and investments (e.g., 80C: PPF, ELSS, life insurance)
- Insurance and medical expenses (e.g., 80D: health insurance premiums)
- Education and home loans (e.g., 80E: education loan interest)
- Donations and rent payments (e.g., 80G: charitable donations; 80GG: rent)
- Business and infrastructure (e.g., 80IA: infrastructure projects)
- Miscellaneous benefits (e.g., 80TTA: savings interest)
These deductions reduce your gross total income, leading to lower tax liability.
2. Scope of Section 80
Section 80 brings together all these deductions into a single umbrella. Its benefits include:
- Wide applicability: Available to resident individuals and HUFs. Many apply only under the old tax regime (Section 115BAC exceptions noted).
- Flexible choices: Mix and match from various sections based on your goals—retirement, health, education, home purchase, and more.
- Tax planning: With proper planning, you can reduce taxable income significantly, sometimes to zero under certain sections.
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| Old vs. New Tax Regime |
3. Old vs. New Tax Regime
As of FY 2024-25 (AY 2025-26), taxpayers may choose between:
| Regime | Deductions Allowed under Sec. 80 |
|---|---|
| Old | All Sections 80C–80U available |
| New (115BAC) | Limited: 80CCD(2), 80JJAA, 80CCH |
Most Chapter VI-A benefits are not available under the new regime, except for employer NPS contributions, Agniveer fund, and new employment incentives.
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| Major Deduction Categories |
4. Major Deduction Categories (Summary Table)
Below is a quick look at key Sections under 80:
| Section | Purpose | Max Deduction |
|---|---|---|
| 80C | Savings & Investments | ₹1,50,000 |
| 80D | Health Insurance | ₹25,000 – ₹50,000 |
| 80E | Education Loan Interest | No limit |
| 80G | Charitable Donations | 50% / 100% |
| 80GG | Rent Payments | Least of 5 formulas |
| 80TTA/80TTB | Savings/Deposit Interest | ₹10,000 / ₹50,000 |
Note: This is not exhaustive. Future posts will cover each section in detail.
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| How to Plan Your Tax-Saving Strategy |
5. How to Plan Your Tax-Saving Strategy
- Assess goals: Retirement, education, health, home ownership, charity.
- Prioritize investments: Use 80C for core savings; add 80CCD(1B) for extra NPS.
- Cover essentials: Insure health (80D), plan children’s education (80E), consider home loan interest (80EE series).
- Track donations and rent: Maintain proofs to claim 80G and 80GG.
- Review regime choice: Compare old vs. new regime benefits each year.
- Stay updated: Monitor amendments and budget changes.
Conclusion & Next Steps
Section 80 deductions offer powerful ways to lower your tax liability if you plan wisely. In our next post, we’ll dive deep into Sections 80C, 80CCC, and 80CCD—your primary tools for savings and retirement planning.
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This post is part of the “Mastering Section 80 Deductions for FY 2025-26” series by Commerce Tutors.