Section 80C deduction

In practice

Payroll handles 80C in two passes. At the start of the year, employees on the old regime declare what they plan to invest, and TDS is projected on that. Towards the end of the year, usually around January, they submit proof, and anything not proved is removed before the last few months' TDS is recalculated.

The employee's own PF and any VPF are picked up from payroll itself, so the employee should not declare them again. As an example, someone whose PF deduction is ₹1,800 a month already has ₹21,600 counted for the year before adding any insurance premium or ELSS.

The common mistake is accepting a proof that does not qualify, such as a home loan statement showing only interest, or a tuition receipt that includes transport and development fees, which are typically not eligible. Check what the receipt actually shows, and confirm current eligibility rules before the proof window opens.

Questions that involve Section 80C

• How does HRMagix handle the Old vs. New Income Tax Regime choices?Answered on Questions & Answers
• Can employees compare the old and new tax regimes before declaring?Answered on Payroll