Income Tax Act: Section 80C of the Income Tax Act gives you many types of exemptions. With its help, you can avail income tax exemption of up to Rs 1.5 lakh in a financial year. Only individual income taxpayers and HUF (Hindu Undivided Families) can avail the benefit of this section. So let us understand what is Section 80C and how it can benefit you.
Only those in the old tax regime will get the benefit.
If you are still in the old tax regime, then you can avail its benefit. However, for this you will have to do a little planning. Many options like NSC, ULIP, PPF are available in this. By taking advantage of these you can save a lot of tax. The deduction available under Section 80C of the Income Tax Act is divided into several categories. Their information is as follows.
Section 80C
Under this, you can get tax exemption on investments made in provident funds like EPF and PPF. Apart from this, Life Insurance Premium, Equity Linked Saving Scheme, Home Loan, Sukanya Samriddhi Yojana, NSC and SCSS also come under this purview.
Section 80CCC
Under this, you can avail tax exemption on investments made in pension plans and mutual funds.
Section 80CCD (1)
Under this, you get tax exemption on investments in government-backed schemes like National Pension System and Atal Pension Yojana.
Section 80 CCD (1B)
Contribution up to Rs 50 thousand in NPS is exempted under this section.
Section 80 CCD (2)
The employment provider’s share in NPS is entitled to exemption under this section.
Now we are going to give you information about some such options, by investing in which you can avail tax exemption.
life insurance premium
The premium paid for a life insurance policy will give you tax benefits. In this you can take a policy for yourself, wife and children. Members of Hindu Undivided Family (HUF) are also entitled to similar benefits.
Public Provident Fund
Any contribution made in PPF also gives you tax relief under Section 80C. In this you can deposit maximum Rs 1.5 lakh.
NABARD Rural Bond
Even if you have invested money in NABARD Rural Bonds, you get tax relief.
Unit Linked Insurance Plan
ULIP plans give you better returns in the long run. Tax exemption can be obtained by investing Rs 1.5 lakh annually.
National Savings Certificate
NSC is counted among low risk schemes. Its maturity occurs in 5 to 10 years. You can invest any amount of money in this. But, the discount will be available only on Rs 1.5 lakh.
tax saving FD
These can be purchased from any bank or post office. Their lock in period is 5 years.
EPF
The returns received on Employee Provident Fund give you tax exemption along with the total interest. To avail this benefit, your job should be for at least 5 years.
infrastructure bonds
Infrastructure bonds also give you the benefit of tax exemption under 80C.
ELSS
You also get tax exemption under ELSS. However, the lock-in period of these schemes is 3 years.
Senior Citizens Saving Scheme
You can avail tax exemption by investing up to Rs 1.5 lakh annually in SCSS. In this it is mandatory for you to be above 60 years of age.
home loan
You can also avail tax relief by repaying the principal of home loan.
Sukanya Samriddhi Yojana
You get 8.2 percent annual interest on this scheme being run for daughters. Tax relief is also given under this scheme.
read this also