Tax Deduction Under Sec 80C
Saving Income Tax or Minimise Income tax on your income
through legal ways is not so tough now. government has allowed individuals and
HUF to save tax under sec 80C.
Under section 80C, an individual or
HUF is allowed for the deduction of Rs 1,50,000 from your total income.
Mean to say, you can reduce your taxable income up to Rs 1,50,000 with the help
of section 80C.
Below mentioned options are
available to invest under sec 80C but Maximum deduction cannot exceed Rs
1,50,000
1. Investment in PPF
a. A maximum of Rs 1,50,000 is allowed to be invested in one
financial year.
b. Minimum
investment required each year is Rs 500
c. Interest on
PPF account is fully tax free
d.
PPF account matures after 15 years but Money can be withdrawn after 5 years
e. for
individuals you are allowed to deposit in the name of your spouse or child and
claim a tax deduction in your tax return for deposits made
f.
for HUF deposit can be done in the name of any member of the family
2. National Saving
Certificates (NSC's)
a.
Maturity Period of NSC is % Year
b.
Interest earned on it is taxable
3. Sukanya Samridhi
Yojna Read more
a. Maximum
of Rs 1,50,000 can be deposited in the Sukanya Samridhi Yojna in the name of a
girl child
b.
Interest earned is fully exempted from tax
c. Minimum of
Rs 1,000 must be deposited in a year
4. ELSS (Mutual
Funds) Read more
a. ELSS is one
of the type of Mutual Fund Investment
b. Fund
invested in ELSS have a lock in period of 3 Years
c. return on
ELSS schemes are not fixed, it depends on various economic conditions and
equity market movements
d. Rate of
return is much higher than other options of Sec 80C but some risk is also
associated because of equity markets
5. ULIPS (Unit Linked
Insurance Plans)
6. 5 Year Fixed Deposit
in Post Office
7. 5 Year Fixed Deposit
with Bank
8. Deposit in Senior
Citizen Saving Scheme
9. Subscription to any
notified securities/notified deposits scheme. e.g. NSS
10. Contribution to notified Pension
Fund set up by Mutual Fund or UTI
11. Sum paid as subscription to Home
Loan Account Scheme of the National Housing Bank or contribution to any
notified deposit scheme/pension fund set up by National Housing Bank.
12. Subscription to deposit scheme
of a public sector, company engaged in providing housing finance (public
deposit scheme of HUDCO