Income Tax Savings Option: People keep adopting many types of techniques to save tax, keep investing money in many types of tax saving schemes, as the date of filing tax is approaching, they start investing to save tax. The efforts have also intensified, let us know in the news how much tax can be saved through Section 80C…
Income Tax Section 80C: 31st March is coming closer, hence the investment efforts for tax saving have also intensified. These days, especially salaried professionals start looking for tax saving options. In tax savings, Section 80C of the Income Tax Act, 1961 is discussed the most. This is one of the most frequently used deductions. Usually investors use this option to save tax. Whether you can avail tax benefit under Section 80C or not depends on the tax system you choose. Tax benefit under Section 80C is available only to those who opt for the old tax system. Those who opt for the new system cannot avail tax benefits under Section 80C.
What is Section 80C of IT Act?
Section 80C works as a tax deduction for the purpose of reducing taxable income and subsequently reducing tax liabilities. This provision includes specific investment and payment options, which can reduce taxable income up to Rs 1.5 lakh. You can also invest more than Rs 1.5 lakh in investment options under 80C. But according to tax saving, the tax benefit will be only up to Rs 1.5 lakh. Most of the tax saving investment options covered under 80C have lock-in. For example 5 year FD, ELSS.
These are the options for investment
If you want to take advantage of Section 80C of the Income Tax Act 1961, there are many investment options. Like EPF, Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), National Savings Certificate (NSC), Equity Linked Savings Scheme or Tax Saving Mutual Fund (ELSS), Tax Saving FD (Fixed Deposit), National Pension. System (NPS) and Senior Citizens Savings Scheme (SCSS), premium payment of life insurance, Unit Linked Insurance Plan (ULIP). Apart from this, you can also claim income tax exemption under Section 80C only on tuition fees for the education of two children, part of the principal amount included in the home loan installment, stamp duty and registration charges on the purchase of a house, etc. In these investment options, you can avail tax exemption on deposits up to Rs 1.50 in a financial year.
What comes under Income Tax Section 80CCC?
Section 80CCC of the Income Tax Act allows deduction in income tax that can be claimed for purchasing certain annuity plans or pension funds offered by public insurance companies. It is necessary that one should be eligible for such funds in terms of section 10 (23AAB).
There is no exemption under these types of policies, where income paid like bonuses and interest earned are always taxable. These deductions can be claimed by both resident and non-resident Indians, whereas an undivided Hindu family cannot claim deduction under this section.
