Section 80C – Any adjustment in Section 80C of the Income Tax Act specifically affects taxpayers, meaning that the expenditure is carefully checked for such adjustments. Section 80C is by far the most effective way to save income. It helps taxpayers to minimize their taxable income by making contributions and another spending, thus saving on the taxes they pay.
Below are some of the section 80C deduction opportunities available under the Income Tax Act, 1961:
Section 80C of the Income Tax Act specifies a range of instruments which not only provide income tax savings opportunities, as well as provide investment returns during the policy term. The complete cap of 80C as set out in the Income Tax Act, 1961 is ₹1.5 lakh per FY.
Life Insurance Premium
When you purchase a life insurance policy for yourself, your partner or children, you will demand an 80C deduction from the premium paid to the policy. That being said, whether you pay a premium to your family, you would not be entitled to receive the reward. If you have more than one scheme, you can demand tax advantages for all of them up to the cap of ₹1.5 lakh as per Section 80C of the Income Tax Act.
So if you’re a HUF, you would still be entitled to receive certain income tax savings exclusion incentives on the sum of the premium.
Purchasing life insurance will allow you save income tax u/s 80C of the Income Tax Act, as it not only lets you mitigate your tax burden but also helps to shield the loved ones financially from unexpected threats to life. One form of life insurance is Term Insurance, that offers the family with an amount covered on the occasion of an unforeseen situation.
Public Provident Fund (PPF)
The Public Provident Fund (PPF) is a government scheme which helps you to spend as little as ₹500 to ₹1.5 lakh in a particular FY. Under the terms of Section 80C of the Income Tax Act, your taxable income will be limited by the amount you spend in the investment.
Further, the interest you obtain in just such a fund is tax-free, which ensures that you can achieve an all-around monetary benefit within Section 80C by investing in PPF.
Employees’ Provident Fund (EPF)
Under Section 80C of the Income Tax Act, the payment of workers to the EPF account is indeed liable for 80C deductions. Whereas company donation is tax-free and not eligible as 80C deduction.
Equity Linked Savings Scheme (ELSS)
ELSS is yet another form of the investment plan that is protected by Section 80C, wherein you profit from income tax deductions on the sum you pay into the fund. Such a scheme gives you higher returns as the money is deposited in mutual securities, but it should be remembered that capital investment is vulnerable to higher market-related uncertainties.
There really is no maximum cap on the amount one can spend in ELSS. Nevertheless, only benefit from income tax savings up to the overall limit set out in Section 80C.
Unit Linked Insurance Plan
Unit Related Insurance Plan offers a dual life and investment value. Section 80C also offers an income tax savings bonus, up to Rs. 1.5 lakh, on the amount paid. You will benefit from tax-deduction payments up to either 10% of the value of the insurance or annual premiums, whichever one is lesser. Investing in ULIPs would allow you to appreciate the ability to optimize your investments via a range of market-linked fund opportunities.
Tax Saver Fixed Deposits
Tax Saver Fixed Deposits (FDs) often fall u/s 80C deduction. Any investment you create with a bank for a term of 5 years is liable for tax deductions up to the maximum set out in Section 80C of the Income Tax Act, 1961.
National Pension Scheme (NPS)
The investment made to the National Pension Fund is tax-free u/s 80CCD, which would be a section of Section 80C of the Income Tax Act. That being said, the total deduction u/s 80C and Section 80CCD could not be more than ₹1.5 lakh.
In the event that you contribute an extra ₹50,000 underneath the NPS (above and beyond the In the event that you contribute an extra ₹50,000 underneath the NPS (above and beyond the
In other terms, you will demand a tax deduction for donations made to NPS of up to ₹1.5 lakh & ₹50,000 according to Section 80C & Section 80CCD (1B) accordingly.
Home Loan Principal Repayment
If you have a home mortgage from any financial institution, you can use 80C deduction of maximum ₹1.5 lakh on your home mortgage principal repayment amount.
Sukanya Samriddhi Yojana
Sukanya Samriddhi Yojana is a female child savings plan and seems to be liable for an 80C deduction from the Income Tax Act. This account is for a kid below 10 years of age. This account will be created for a max of 2 girl children and is entitled to income tax deductions u/s 80C of the Income Tax Act.
Senior Citizens Savings Scheme
The Senior Citizens Saving Scheme is really for elderly people at least 60 years of age. Older people that have enrolled for the Voluntary Retirement Scheme (VRS) may opt for it at the age of 55. Any investment made under that same policy is qualified for 80C deduction with a cumulative 80C limit of just ₹1.5 lakh.
National Savings Certificate
Any amount invested underneath the National Savings Certificate may also be asserted under Section 80C deductions. Not just the investment sum, as well as the interest earned during the first 4 years, are liable for deduction within Section 80C of the Income Tax Act. You will decrease taxable income by ₹1.5 lakh (Section 80C limit).
This article is just the summary of section 80C. If you want to know to full details in downloadable version – Section 80C