Section 80C- If you want to avail tax exemption under section 80C, then you have to invest before the end of the financial year.
In the last few months of every financial year, there is a lot of discussion about Section 80C of Income Tax. But, what is section 80C? Why is there so much discussion? How do you deal with this? Today, we will try to know the answers to these questions only. First of all understand
1. What is section 80C?
Section 80C of Income Tax saves your tax. This is the most discussed section of income tax. You get deduction up to Rs 1.50 lakh. Deduction means that you invest Rs 1.50 lakh and deduct 1.50 lakh from your taxable income. That is, if your annual income is 10 lakh rupees, then only eight and a half lakhs will have to pay tax.
2. How to get 80C discount?
Some Investments and Spend tax rebates can be exempted under Section 80C. Investments such as EPF, PPF, National Saving certififcate, SSY, Post office time deposit and expenses such as life insurance premium, children’s school tuition fees, ELSS, Principal payment of home loan, Contribution of NPS. Up to Rs 1.5 lakh can be invested in 80C to save tax in a financial year.
3. How will 80C reduce tax?
If your income is 10 lakh rupees annually, then you will have to pay income tax on eight and a half lakhs. If you reduce the standard deduction of 50,000 also, then tax on 8 lakh income is made 72,500 plus 4% cess 2900 and add i.e. the total tax is 75400 rupees. Now if you take only standard deduction and the income of 10 lakh is 9.50 lakh, then tax is made on it, 1,06,600 on which the cess will be added to Rs 1,10,864.
Understand this – how will 80C reduce tax?
| Description | Tax (according to old slab) |
| Basic + DA | Rs 3,88,600 |
| Taxable allowance | 6, 11,400 rupees |
| Total salary | 10,00,000 Rupees |
| Standard deduction | 50,000 rupees |
| Taxable income | 9,50,000 rupees |
| Section 80C Exemption | Rs 1,50,000 |
| Taxable income | Rs 8,00,000 |
| Income Tax | 72,500 rupees |
| Cess (4%) | 2900 rupees |
| Total tax liability | 75400 rupees |
80C without tax?
| Description | Tax (according to old slab) |
| Basic + DA | Rs 3,88,600 |
| Taxable allowance | 6, 11,400 rupees |
| Total salary | 10,00,000 Rupees |
| Standard deduction | 50,000 rupees |
| Taxable income | 9,50,000 rupees |
| Income Tax | 1,06,600 rupees |
| Cess (4%) | 4264 rupees |
| Total tax liability | 1,10,864 rupees |
4. Investment required till March 31 for tax exemption
If you want to avail the tax exemption under section 80C (section 80C), then you have to invest before the end of the financial year. If you work in a private company, then it will be good if you do this work by the first week of January. Companies are asked to submit investment proofs by the first and second week of January every year. The reason for this is that the remaining three months of the financial year keep the option of cutting TDS open.
5. Will the proof of investment be submitted?
Of course, in the month of January, you have to give your investment proof to your employer. No paper is required to be filled while filing income tax return.
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