How to claim 80C deductions while filing income tax returns if we missed earlier?
80C deductions are crucial for tax payers as it provides some relief to them and save income tax. However, there are cases where you would have invested in 80C exempted investments, however missed to inform employer or forgot to inform employer. In such case you can still claim while filing income tax return. It also can happen that you invested in 80C investments, however filed income tax return without claiming them. How to claim 80C deductions while filing income tax returns in such case? What shoud one do to claim 80c deductions while filing ITR if we missed earlier? This article would provide some details about this.
Also Read: Which Income Tax Return (ITR) Forms to use for 2018-2019?
What is meant by 80C Deduction of Rs 1.5 Lacs?
Section 80C provides deduction in respect of specified qualifying amounts paid or deposited by the assessee in the previous year.
The following are the main provisions of section 80C—
Under section 80C, deduction is available from gross total income.
Deduction under section 80C is available only to an individual or a Hindu undivided family.
The maximum amount deductible under section 80C is Rs. 1,50,000 from the assessment year 2015-16
Which investments and payments comprise 80C as per Income Tax Act, 1961?
Here’s is a list of deductions that are eligible for exemptions u/s 80C.
1) Life insurance premium
all life insurance premium payments (including unit-linked insurance plans) are eligible for tax benefits u/s 80C. Even if the policy covers other family members, you can claim the tax benefits for the premium paid.
2) Principal repayment of home loan
when you pay a home pay EMI, there are two major components to it- principal and interest. You can claim tax benefits up to Rs. 1,50,000 on the principal paid.
3) Tax Saver Fixed deposits
The tax-saving fixed deposits can provide you benefits under this section. These deposits come with a mandatory lock-in period of 5 years and maturity period ranging between 5-10 years. The point to be noted here is that not all FD deposits attract tax benefits, only the ones made in tax savings plan.
4) Tax Saving Mutual fund investments
When you invest in a unit-linked savings scheme or a tax-saving mutual fund scheme, such investment is eligible for tax exemption u/s 80C.
5) PPF / VPF / EPF
There are different types of provident funds that one can invest in. the most popular is Public Provident Fund (PPF) which carries an annual investment limit of Rs. 1,50,000. The others are Employee Provident Fund (EPF) and Voluntary Provident Fund (VPF). Regardless of the type of fund, all are eligible for tax benefits.
6) National Saving Certificates (NSCs)
These investments come with a maturity period of 5 to 10 years.
Sukanya Samriddhi Account- this is a special bank account opened for a girl child and any amount deposited in it is eligible for exemption up to Rs. 1,50,000 per annum.
7) Education expenses
The tuition fees paid towards the education of maximum two children is eligible for exemption u/s 80C.
8) Specific investments
The investments in the following schemes also attract the deduction of 80C.
a) Post Office Time Deposit – 5 years
b) Senior Citizen Saving Scheme – 5 years
c) Pension funds
d) Infrastructure bonds
9) Sukanya Samriddhi account YojanaScheme
Also Read: What are mutual funds / stocks taxation rules from 2018 onwards
10) Deduction in respect of contribution to pension fund u/s 80CCC
This section provides deduction to an individual when he receives pension from a fund and the same is invested in any annuity of the LIC.
One should keep in view the following points:
a) Where after claiming deduction, the assessee or his nominee surrenders the annuity before the maturity, the surrender value shall be taxable under the hands of the assessee or his nominee as the case may be.
b) If deduction is claimed u/s 80CCC, pension received shall be taxable in the hands of the assessee or his nominee, as the case may be in the year of receipt.
11) Deduction in respect of contribution to Pension Scheme (NPS) notified by central government (80CCD)
A new pension scheme is applicable to the new entrants to government service. Section 80CCD is applicable if the following conditions are satisfied:
a) The tax payer is an individual.
b) He is employed by the central government (on or after January 1, 2004), or employed by any other person. He may even be self-employed.
c) He has paid any amount in his account under a pension scheme notified by the central government.
d) No deduction is available in respect of employee’s contribution which is in excess of 10% of the salary of the employee.
e) Likewise, if contribution by a taxpayer (not being an employee) exceeds 10% of his gross total income, the excess shall not be taken into consideration for the purpose of section 80CCD.
Who all are eligible to get 80C exemption?
The exemption u/s 80C is available to individuals and HUF (Hindu undivided Family). The individual may be a salaried person, or belonging to business and profession or having his proprietorship concern.
How to claim 80C deductions while filing income tax returns if we missed to claim earlier?
If you have invested in eligible 80C deductions, however, you missed to update or forgot to inform your employer, necessary tax would have got deducted by 31st March. While filing income tax returns before 31st July, one can still claim them. Visit income tax website, fill your income tax return (ITR) and claim the 80c deduction amount as part of the income tax form. However, you need preserve these proofs for 6 years so that in case of any IT scrutiny, you can show the proofs.
How to claim 80C deductions while filing income tax returns if we missed to claim in earlier years?
If an income-tax assessee has missed to claim 80C deduction in his return, he /she can claim it later on by filing a revised return. But, one thing is very important here is that if the assessee has filed his original return on time (i.e. 31st July), then only he is allowed to file the revised return, otherwise he cannot claim these deductions later on. This also indicates how significant it is to file your income tax returns on time. Here we are giving the step-by-step process of filing the revised return:
1) Go to e-filing portal here.
2) Log in with your user-id and password.
3) Go to my account.
4) Here there is an option to file the revised return. Click on it and proceed.
5) In this return, you have to mention the receipt number of original return filed and its date. You also need to mention the reason for re-filing of return.
6) Fill the details with appropriate fields including 80C claims.
One important point to note here is that the revised return can be filed within one year from the original return filed. For example- if you have submitted your original return on 15th June 2017 and forgot to claim the deduction u/s 80C or any other reason, then you can file your revised return till 15th June 2018. You also need to preserve the receipts of 80C claims which you are claiming for next few years. In case there is IT scrutinity, you need to show these proofs.
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How to claim 80C deductions while filing income tax returns if we missed earlier
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