Deduction Under Section 80 C of Income Tax Act with the Automatic Form 16 Part B and A&B ( One by One preparation) For FY 2016-17

Download the Automated Form 16 Part B and Part A&B for the Financial Year 2016-17 ( This Excel Utility can prepare Form 16 One by One Form 16 Part B & Part A&B)

A. Section 80C:- Entitles an employee to deductions for the whole of amounts paid or deposited in the current financial year in the following schemes, subject to a limit of Rs.1,50,000/-: 

(1) Payment of insurance premium to effect or to keep in force an insurance on the life of the individual, the spouse or any child of the individual.

(2) Any payment made to effect or to keep in force a contract for a deferred annuity, not being an annuity plan as is referred to in item (7) herein below on the life of the individual, the spouse or any child of the individual, 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;

1) Provident Fund

2) Saving certificates

3) Unit-linked insurance plan of the LIC Mutual Fund referred to section 10 (23D) and as notified by the Central Government

4) Any sums paid by an assessee for the purpose of purchase or construction of a residential house property

5) Tuition fees

6) Term deposit for a fixed period not below 5 Years

8) Deduction in respect of contribution to certain pension funds (Section 80CCC)

9) Deduction in respect of contribution to pension scheme of Central Government

10) Deduction U/s 80CCD(1) Max Limit Rs.1.5 Lakh

11) Deduction U/s 80CCD(2) deduction made by the employer to the employee ( this amount this amount calculated out of 1.5 Lakh)

12) Deduction U/s 80CCD(1B) Max Limit Rs. 50,000/- as additional deduction out of 80C 1.5 Lakh.

(Section 80CCD):  Section 80CCD(1) & 80CCD(1B):- allows an employee, being an individual employed by the Central Government or any other employer, on or after the 01.01.2004, a deduction of an amount paid or deposited out of his income chargeable to tax under a pension scheme as notified vide

Notification F. N. 5/7/2003- ECB&PR dated 22.12.2003 or as may be notified by the Central

Government. However, the deduction shall not exceed an amount equal to 10% of his salary(includes Dearness Allowance but excludes all other allowance and perquisites).

As per Section 80CCD(2), where an employee receives any contribution in the said pension scheme from the Central Government or any other employer then the employee shall be allowed a deduction from his total income of the whole amount contributed by the Central Government or any other employer subject to limit of 10% of his salary of the previous year. However, if any amount is standing to the credit of the employee in the pension scheme referred above and deduction has been allowed as stated above and the employee or his

nominee receives this amount together with the amount accrued thereon, due to the reason of

(i) Closure or opting out of the pension scheme or

(ii) Pension received from the annuity plan purchased and taken on such closure or opting out then the amount so received during the FYs shall be the income of the employee or his nominee for that Financial Year and accordingly will be charged to tax.

Where any amount paid or deposited by the employee has been taken into account for the purposes of this section, a deduction with reference to such amount shall not be allowed under section 80C.

Further, it has been specified that w.e.f 01.04.09 that any amount received by the employee from the new pension scheme shall be deemed not to have received in the previous year if such the amount is used for purchasing an annuity plan in the previous year.

It is emphasized that as per the section 80CCE the aggregate amount of deduction under sections 80C, 80CCC and Section 80CCD(1) shall not exceed Rs.1,50,000/-. However, the contribution made by the Central Government or any other employer to a pension scheme u/s 80CCD(2) shall be excluded from the limit of Rs.1,50,000/- provided under this Section. And also new additional Section 80CCD(1B) Max Limit Rs.50 thousand can be excluding the limit of 80C 1.5 lakh.