Section 123 is the substantive equivalent of 1961 s. 80 C — the most-utilised individual-tax deduction. Individual or HUF assessee allowed deduction of aggregate sums (per Schedule XV) NOT EXCEEDING ₹ 1,50,000 from gross total income.…
123
Section 123 is the substantive equivalent of 1961 s. 80 C — the most-utilised individual-tax deduction. Individual or HUF assessee allowed deduction of aggregate sums (per Schedule XV) NOT EXCEEDING ₹ 1,50,000 from gross total income.…
Section 123 — ₹ 1.5 LAKH BASKET DEDUCTION (1961 s. 80C SUCCESSOR)
Section 123 is the substantive equivalent of 1961 s. 80C — the most-utilised individual-tax deduction. Individual or HUF assessee allowed deduction of aggregate sums (per Schedule XV) NOT EXCEEDING ₹ 1,50,000 from gross total income. Schedule XV enumerates qualifying investments / payments: LIC premium / PF / EPF / VPF / PPF / NSC / ELSS-MF / Sukanya-Samriddhi / 5-year FD / housing-loan-principal / tuition-fees / Senior-Citizens-Savings-Scheme / etc. Available ONLY under OLD regime (s. 195 new regime forfeits this deduction).
SCHEDULE XV — QUALIFYING ITEMS (1961 s. 80C(2) successor)
Typical qualifying contributions: (a) Life Insurance premium (own / spouse / children); (b) Recognised PF contribution; (c) PPF contribution (₹ 1.5 lakh max per family); (d) Voluntary PF; (e) NSC subscription / accrued interest reinvestment; (f) ELSS-MF investment (3-year lock-in); (g) Sukanya Samriddhi Account (girl-child); (h) 5-year tax-saving bank FD; (i) Senior Citizens Savings Scheme (60+); (j) Housing-loan principal repayment; (k) Tuition fees (max 2 children, India-only); (l) Stamp-duty + registration on house purchase. Aggregate ₹ 1.5 lakh — basket-cap; individual-item limits may apply (e.g., PPF ₹ 1.5 lakh, NSC no individual cap, etc.).
PLANNING NOTES
(i) For individual / HUF clients, optimal s. 123 utilisation depends on liquidity / risk-profile / lock-in-tolerance. (ii) ELSS-MF (3-year lock + market-linked returns) typically best risk-adjusted option for younger assessees; PPF (15-year lock + tax-free) for conservative profile. (iii) For salaried earners, EPF (employer-deducted) automatically counts; top-up VPF / PPF to reach ₹ 1.5 lakh. (iv) For housing-loan EMI payers, principal portion automatically counts — track from bank statement. (v) Tuition-fees: only TUITION (not transport / books / activity / development fee); only 2 children per assessee.
CROSS-REFERENCES