Tax Deductions Available for Business Owners (Section 80C to 80U)
Here’s a comprehensive overview of tax deductions available for business owners in India under Sections 80C to 80U of the Income Tax Act, 1961, applicable for Assessment Year 2025-26:
✅ 1. Section 80C – Investment-Based Deductions
Applicable to: Individual business owners and HUFs
Limit: Up to ₹1.5 lakh
Eligible Investments/Expenses:
Life insurance premiums
PPF (Public Provident Fund) contributions
ELSS (Equity Linked Saving Scheme) mutual funds
Principal repayment on home loan
Tuition fees for children (max. 2 children)
NSC, 5-year tax-saving FD, Sukanya Samriddhi Yojana
✅ 2. Section 80CCC – Pension Plan Contributions
Applicable to: Individual business owners
Limit: Part of ₹1.5 lakh limit under 80C
Deduction for investment in pension plans from LIC or other insurers.
✅ 3. Section 80CCD – NPS Contributions
Applicable to: Individuals (including self-employed)
80CCD(1): Deduction for self-contribution to NPS (within ₹1.5 lakh limit of 80C)
80CCD(1B): Additional deduction of ₹50,000 for NPS contribution (over and above ₹1.5 lakh)
✅ 4. Section 80D – Medical Insurance Premium
Applicable to: Individuals & HUFs
For self, spouse, children: Up to ₹25,000 (₹50,000 if senior citizen)
For parents: Additional ₹25,000 (₹50,000 if senior citizens)
✅ 5. Section 80DD – Disabled Dependent
Applicable to: Resident Individuals/HUF
Deduction: ₹75,000 (disability ≥ 40%) / ₹1,25,000 (severe disability ≥ 80%)
For maintenance, medical treatment, or LIC scheme for disabled dependents
✅ 6. Section 80DDB – Medical Expenses for Specified Diseases
Applicable to: Resident Individuals/HUF
Deduction up to ₹40,000 (₹1,00,000 if for senior citizen) for treatment of specified diseases like cancer, Parkinson's, etc.
✅ 7. Section 80E – Interest on Education Loan
Applicable to: Individuals (self, spouse, children)
No limit; allowed for 8 years
✅ 8. Section 80EE – First-Time Home Buyers
Applicable to: Individuals
Deduction up to ₹50,000 for interest on home loan (conditions apply)
✅ 9. Section 80EEA – Additional Home Loan Interest (Affordable Housing)
Deduction up to ₹1.5 lakh (conditions: stamp duty < ₹45 lakh, loan sanctioned between Apr 2019–Mar 2022)
✅ 10. Section 80G – Donations to Charitable Institutions
Applicable to: All assessees (including businesses)
50% or 100% deduction with/without restriction depending on the recipient institution
✅ 11. Section 80GG – Rent Paid (No HRA Received)
Applicable to: Individuals not receiving HRA
Deduction up to ₹5,000/month or 25% of total income or excess of rent over 10% of income (least of these)
✅ 12. Section 80GGA – Donations for Scientific Research or Rural Development
Applicable to: All taxpayers not having income from business/profession
100% deduction for donations to specified institutions
✅ 13. Section 80GGC – Contributions to Political Parties
Applicable to: Individuals (other than companies/local authorities)
100% deduction for contributions (non-cash)
✅ 14. Section 80IA/80IB/80IBA – Profit-Linked Deductions for Businesses
Applicable to eligible businesses in infrastructure, housing, power, etc.
(Subject to detailed conditions and sectors)
✅ 15. Section 80JJA – Business of Collecting and Processing Biodegradable Waste
100% of profits for 5 years from the start of operations
✅ 16. Section 80JJAA – Employment Generation
Applicable to: Businesses under audit
Deduction of 30% of salary paid to new employees (for 3 years)
✅ 17. Section 80TTA/80TTB – Interest on Savings Accounts
80TTA: Deduction up to ₹10,000 (Non-senior citizens)
80TTB: Deduction up to ₹50,000 (Senior citizens; includes FD interest)
✅ 18. Section 80U – Deduction for a Person with Disability
Applicable to: Resident individuals
₹75,000 (disability ≥ 40%) or ₹1,25,000 (severe disability ≥ 80%)
📝 Note:
These deductions are not allowed under the New Tax Regime (Section 115BAC), except for 80CCD(2) (employer’s NPS contribution) and 80JJAA (new employees).
Business owners need to maintain records of investments and expenses to claim these deductions during ITR filing.
