Cracking the Code of Chapter VI A: Tips and Tricks for Tax Optimization

Author name: Vipin Sharma

Created date: 09-05-2024

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Earning money in today’s time is important, filing ITR is also important for being compliance tension free, but saving tax is more important than all these things to keep more money with you. You can save so much of money by saving taxes with help of deductions and exemptions. There are so many deductions and exemptions in Income Tax Act, 1961. These all deductions are covered in chapter VI (A) of Income Tax Act.

What is Chapter VI (A)?

Chapter VI (A) of income tax covers sub sections of section 80, these sections allows tax payers to get relief from tax burden by get some deductions and exemptions in tax. You can avail these deductions by investing money in tax saving schemes, eligible expense, charities or donations and so more. These deductions are covered in section 80C, 80CCC, 80CCD, 80CCE, 80D to 80U

Sections	Income Tax Deduction	Eligible person	Maximum deduction
Section 80C	Investing in options like LIC, PPF, Sukanya Samriddhi Account, Mutual Funds, FD, child tuition fee, ULIP, etc	Individual Or HUF	Upto Rs 1,50,000
Section 80CCC	Investment in Pension Funds	Individuals	Upto Rs 1,50,000
Section 80CCD (1)	Atal Pension Yojana and National Pension Scheme Contribution	Individuals	Upto Rs 1,50,000
Section 80CCD(1B)	Atal Pension Yojana and National Pension Scheme Contribution (additional deduction)	Individuals	Upto Rs 50,000
Section 80CCD(2)	National Pension Scheme Contribution by Employer	Individuals	Amount Contributed or 14% of Basic Salary + Dearness Allowance (in case the employer is Government) 10% of Basic Salary+ Dearness Allowance(in case of any other employer) - Whichever is lower
Section 80D	Medical Insurance Premium, preventive health checkup and Medical Expenditure	Individual Or HUF	Upto Rs 25,000 and Up to 50,000 for Senior Citizen Parents
Section 80DD	Medical Treatment of a Dependent with Disability	Individual Or HUF	Normal Disability (atleast 40% or more but less than 80%): Rs 75000/- Severe Disability (atleast 80% or more) : Rs 125000/-
Section	Medical expenditure for	Individual Or HUF	Senior Citizens: Upto Rs 1,00,000
80DDB	treatment of Specified Diseases	Individual Or HUF	Others: Upto Rs 40,000
Section 80E	Interest paid on Loan taken for Higher Education	Individual	No limit (Any amount of interest paid on education loan)upto 8 assessment years
Section 80EE	Interest paid on Housing Loan	Individual	Upto Rs 50,000 subject to some conditions
Section 80EEA	Interest Paid on Housing Loan	Individual	Upto Rs 1,50,000/- subject to some conditions
Section 80EEB	Interest paid on Electric Vehicle Loan	Individual	Upto Rs 1,50,000 subject to some conditions
Section 80G	Donation to specified funds/institutions. Institutions	All Assessee (Individual, HUF, Company, etc)	100% or 50% of the Donated amount or Qualifying limit, Allowed donation in cash upto Rs.2000/-
Section 80GG	Income Tax Deduction for House Rent Paid	Individual	Rs. 5000 per month 25% of Adjusted Total Income Rent paid - 10% of Adjusted Total Income - whichever is lower
Section 80GGA	Donation to Scientific Research & Rural Development	All assessees except those who have an income (or loss) from a business and/or a profession	100% of the amount donated. Allowed donation in cash upto Rs.10,000/-
Section 80GGB	Contribution to Political Parties	Companies	100% of the amount contributed No deduction available for the contribution made in cash
Section 80GGC	Individuals on contribution to Political Parties	Individual HUF AOP BOI Firm	100% of the amount contributed. No deduction available for the contribution made in cash
Section 80RRB	Royalty on Patents	Individuals (Indian citizen or foreign citizen being resident in India)	Rs.3,00,000/- Or Specified Income - whichever is lower
Section 80QQB	Royalty Income of Authors	Individuals (Indian citizen or foreign citizen being resident	Rs.3,00,000/- Or Specified Income - whichever is lower
Section 80TTA	Interest earned on Savings Accounts	Individual Or HUF (except senior citizen)	Upto Rs 10,000/-
Section 80TTB	Interest Income earned on deposits(Savings/ FDs)	Individual (60 yrs or above)	Upto Rs 50,000/-
Section 80U	Disabled Individuals	Individuals	Normal Disability: Rs. 75,000/- Severe Disability: Rs. 1,25,000/-