When I filed my first income tax return, I had no clue what “Section 80C” even meant. Like many salaried people, I just relied on what my HR told me or what my Form 16 showed. But one day, when I sat with a friend who’s a CA, I realized I was losing out on huge tax-saving opportunities simply because I didn’t know what deductions I was eligible for.
That day changed the way I looked at taxes. I started learning — not everything at once, but step by step. And today, I want to share that same knowledge with you. This article will explain, in simple words, what each major tax deduction section from 80C to 80U means, and how you can legally reduce your taxable income in 2025.
Let’s dive in, the human way.Why Tax Deductions Matter So Much
Imagine earning ₹7 lakh per year. Without any deductions, your taxable income is ₹7 lakh. But what if you invested in PPF, paid health insurance, lived in a rented house, or had a dependent with a disability?
All of these things can legally bring down your taxable income — sometimes by ₹3–5 lakh or more.
The Income Tax Act, 1961, allows individuals to claim various deductions under Chapter VI-A — from Section 80C to 80U — to reduce their tax burden. And trust me, it’s easier to understand than it sounds.
Section-wise Tax Deduction List from 80C to 80U
1. Section 80C – Your First and Most Important Tool (Limit ₹1.5 Lakh)
- Public Provident Fund (PPF)
- Employee Provident Fund (EPF)
- Life Insurance Premiums
- ELSS Mutual Funds
- National Savings Certificate (NSC)
- 5-year tax-saving Fixed Deposits
- Principal repayment of home loan
- Tuition fees for children
My story: I started with just ₹500/month in ELSS. I didn't know much, but it gave me decent returns and tax savings both. That small start turned into a habit.
2. Section 80CCC – Pension Plans
If you contribute to pension funds like LIC’s annuity plans, you can claim a deduction here.
Note: The combined limit of 80C + 80CCC + 80CCD(1) is ₹1.5 lakh.
3. Section 80CCD(1) – NPS Contribution
Applies to your own contributions to NPS.
Limit: 10% of salary (Basic + DA) for salaried, 20% for self-employed.
4. Section 80CCD(1B) – Extra ₹50,000 Deduction
This is over and above 80C. If you invest in NPS Tier-1, you can claim ₹50,000 more.
My story: I started a ₹2,000/month SIP in NPS just for this reason. It gave me ₹24,000 per year in tax benefit.
5. Section 80CCD(2) – Employer’s NPS Contribution
Deductible up to 10% of your salary. No upper monetary limit.
Tip: Ask your HR if your company offers this benefit.
6. Section 80D – Health Insurance Premiums
- ₹25,000 for self, spouse, and kids
- ₹25,000 extra for parents under 60
- ₹50,000 for senior citizen parents
Total possible benefit: ₹1,00,000
My story: I paid ₹18,000 for my parents’ premium. I saved tax and felt secure.
7. Section 80DD – Disabled Dependents
- ₹75,000 (disability 40% to 80%)
- ₹1.25 lakh (disability above 80%)
Medical certificate required.
8. Section 80DDB – Treatment of Specified Illnesses
- ₹40,000 deduction for patients under 60
- ₹1 lakh for senior citizens
Need prescription from a govt. specialist.
9. Section 80E – Education Loan Interest
Full deduction on interest paid, for 8 years. No limit.
Example: My brother’s MBA loan gives him ₹25,000 in annual tax savings.
10. Section 80EE – First-time Home Buyers
Up to ₹50,000 interest deduction (loan under ₹35 lakh, property under ₹50 lakh).
11. Section 80EEA – Affordable Housing Loans
Extra ₹1.5 lakh deduction on interest for loans sanctioned after April 1, 2019.
12. Section 80G – Donations
50% or 100% deduction for donations to eligible organizations. No cash donation above ₹2,000 allowed.
13. Section 80GG – Rent Paid (Without HRA)
Deduction up to ₹5,000/month or 25% of total income (lesser). Rent receipts needed.
14. Section 80GGC – Donations to Political Parties
100% deduction if paid via non-cash modes.
15. Section 80TTA – Interest on Savings Account
Up to ₹10,000 deduction (for people under 60).
16. Section 80TTB – Interest for Senior Citizens
Up to ₹50,000 deduction on all interest income.
17. Section 80U – For Persons with Disability (Self)
- ₹75,000 (disability 40% to 80%)
- ₹1.25 lakh (above 80%)
Government disability certificate required.
Final Thought That Changed My Tax Life
At first, all these sections felt overwhelming. But I took it one at a time. Now I plan taxes in advance, not in March. This habit saved me thousands every year and helped me make better financial decisions.
Your Salary Is Yours – Don't Let It Disappear in Taxes
These deductions aren’t loopholes. They are legal benefits. Use them wisely. It’ll make a big difference — not just to your tax bill, but also to your peace of mind.