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Tata Capital > Blog > Loan for Home > How Much Tax Can Be Saved Under Sections 80C, 80D, and 80G?

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How Much Tax Can Be Saved Under Sections 80C, 80D, and 80G?

How Much Tax Can Be Saved Under Sections 80C, 80D, and 80G?

Paying taxes is a civic responsibility, and the Income Tax Act of India offers several legal provisions to help taxpayers reduce their taxable income through deductions. Sections such as 80C, 80D, and 80G allow eligible individuals to claim deductions on specific investments, expenses, and donations, provided they opt for the old tax regime. These deductions are not available under the new tax regime, which offers concessional tax rates without most exemptions. Whether you are a salaried individual, a self-employed professional, or a business owner, understanding these sections can support more informed financial and tax planning under applicable laws.

Section 80C: A Popular Instrument for Tax Deductions

An individual or a Hindu Undivided Family (HUF) can avail deductions under this section for specific investments made and expenses incurred up to ₹1.5 lakh in a financial year. It is considered the most trustworthy tax saver under 80C, offering a large variety of investment options that not only secure your future but also cut down your tax payables.

Eligible Investments Under 80C:

These options are some of the most commonly used tax savers under 80C, helping you balance both wealth creation and tax reduction.

Investment OptionDescription
Life Insurance PremiumsThe premiums paid for self, spouse, or children can be deducted.
Public Provident Fund (PPF)Tax-free, government-backed, long-term savings scheme.
ELSS (Equity Linked Saving Scheme)Market-linked returns since these are tax-saving mutual funds.
Employee Provident Fund (EPF)Contributions by salaried employees qualify under Section 80C.
5-Year Tax-Saving Fixed DepositsBank FDs for 5 years offering fixed returns.
Sukanya Samriddhi YojanaDesigned for the girl child, offering attractive returns and tax benefits.
National Savings Certificate (NSC)Low-risk, fixed-return savings instrument.
Tuition FeesAllowed for up to two children’s full-time education in India.
Home Loan Principal RepaymentThe principal portion repaid is eligible for deduction.
National Pension System (NPS)Contributions as a tax saver under 80C.

How Much Tax Can Be Saved?

If you invest ₹1.5 lakh under Section 80C, you can save up to ₹46,800 in taxes yearly. This is when you are in the highest tax slab (30%). That makes this section one of the most potent weapons for legally reducing taxable income. 

Section 80D: Health Insurance & Tax Deduction Summary

You can avail tax benefits for premiums paid for availing health insurance under section 80D and the cost of preventive full health check-ups.

 It is valid for policies bought for yourself, your spouse, your kids, and your parents.

Dedication Limits:

CategoryWho is CoveredDeduction LimitNotes
Self + Family (below 60 years)You, Spouse & Dependent ChildrenUp to ₹25,000Applicable only if all are under 60 years of age
Parents (below 60 years)Either parent (if below 60)Up to ₹25,000Separate deduction from self + family
Parents (60 years and above)Either or both parents (senior citizens)Up to ₹50,000Higher deduction due to senior citizen status
Self + Family (if any are 60 or above)You or your spouse is a senior citizenUp to ₹50,000Enhanced deduction applies
Preventive Health Check-upFor self, family or parentsUp to ₹5,000 (included)This is part of the overall ₹25K/₹50K limit
Medical Expenses (no insurance)Senior citizens without health insuranceUp to ₹50,000Can claim expenses instead of a premium
Maximum Total DeductionSelf + Senior Citizen ParentsUp to ₹1,00,000If both categories are eligible

Section 80G: Deduction on Donations to Charitable Trusts

This section allows you to claim deductions on donations made to prescribed charitable institutions and government relief funds.

Types of Donations & Deduction Rates:

Type of DonationClaim LimitExamples
100% Deduction (No Limit)No limitPM National Relief Fund, National Defence Fund
50% Deduction (No Limit)No limitNehru Memorial Fund, Indira Gandhi Memorial Trust
100% Deduction (With Limit)Max 10% of incomeGovt schemes for family planning
50% Deduction (With Limit)Max 10% of incomeMost registered charitable trusts and NGOs

Qualifying Limit:

For some donations, you can only claim up to 10% of your adjusted gross total income.

Combining Sections for Maximum Benefit

Assuming that you belong to the 30% income tax slab, and you have paid the following eligible payments in the financial year:

SectionPayment MadeDeduction Claimed
80C₹1,50,000 invested in ELSS & PPF₹1,50,000
80D₹25,000 (self + family) + ₹50,000 (parents)₹75,000
80G₹50,000 donation to a 100% eligible institution₹50,000
Total Deduction₹2,75,000

Total deductions claimed: ₹2,75,000

Tax rate applicable (30%):


₹2,75,000 × 30% = ₹82,500 saved in taxes

Conclusion

In the old tax regime, Sections 80C, 80D, and 80G provide you with smart ways to lower your taxable income with the help of those eligible investments, health insurance, and charity.

By exercising the deductions wisely, taxpayers can save up to ₹82,500 in a year in the 30% tax slab. Whether you are self-employed or on a salary, having reliable planning in each of these areas will allow you to reach cash flow targets and reduce your tax burden.

Tax planning is simple with Tata Capital.

Tata Capital is committed to providing you with the means to achieve financing for your goals. Whether you are looking to compare home loan options or searching for the best tax-saving investment plans, our experts offer a wide range of investment alternatives to suit you all the way.

Visit Tata Capital.

Download the Tata Capital App for instant access to tax calculators, investment options, and home loan EMI planners.

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FAQs

Can I claim 80D for parents without bills?

To avail of Section 80D benefits for your parents, valid proof like insurance premium receipts or medical bills is required.

How much medical expense can I claim under 80D?

You can claim up to ₹50,000 per financial year for medical expenses for senior citizens (if they are uninsured). 

What is the maximum limit for Section 80D?

You can claim up to ₹1,00,000 under Section 80D when covering health insurance for your family and senior citizen parents.

How much tax can be saved under 80G?

You can save tax equivalent to 50% or 100% of your donation amount, depending on the eligibility of the organisation and limits set under Section 80G.
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