ITR: Section 80C of the Income Tax Act provides various deductions to tax payers to encourage them to save and invest their money wisely. It consists of four subsections.
The Income Tax Return (ITR) filing deadline is going to end soon. The time for this is till the end of this month. ITR should be filed as soon as possible without any last minute confusion and unnecessary mistakes.
But in this order it is essential to know about the benefits provided by Section 80C of the Income Tax Act. This section suggests ways to reduce taxable income and tax payable. Under Section 80C Rs. 1.5 lakh can get tax exemption.
Section 80C : Section 80C of the Income Tax Act provides various deductions to tax payers to encourage them to save and invest their money wisely. It consists of four subsections. Each subsection offers different investment and payment options.
Individuals under 80C include contributions to provident funds like EPF, PPF, investments in equity-linked saving schemes, life insurance premium, payments towards home loan principal amount, savings scheme Sukanya Samruddhi Yojana (SSY), Senior Citizen Savings Scheme (SCSS), National Savings Scheme. ings certificates Deductions can be claimed on investments made in (NSC) etc.
Details of Subsections
Section 80CCC : Under this subsection deduction can be claimed on payments made to pension plans, certain mutual funds. With this, individuals can secure their retirement while getting tax benefits.
80CCD (1) : Deductions can be claimed under this subsection on payments made to government-backed schemes like National Pension System (NPS), Atal Pension Yojana (APY). Useful for individuals to plan for financial security after retirement.
80CCD (1B) : Under this one can get extra deduction up to Rs.50,000 on investments made in National Pension System (NPS). Encourages selection of long-term saving options.
Section 80CCD (2) : Under this subsection employees can claim deduction on contributions made by their employer to the National Pension System (NPS). An employee can get a deduction of up to 10% of basic salary and dearness allowance.
How to claim Section 80C Deduction? : To claim these deductions, taxpayers have to fill the relevant information in the ITR-1 form. The third tab, under ‘Computation of Income and Tax’, has a column to list deductions applicable under various sections of the Income Tax Act, including Section 80C. While filing ITR online, details of certain deductions are automatically taken from the information given in Form 24Q. It makes the process easier.
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