Income Tax Deductions under Section 80C

As per the provision of Section 80C of the Income Tax Act, India, an aggregate sum not exceeding Rs. 1,50,000/- (w.e.f. 2014) is allowed by way of deduction from income. Section 80C replaces the Section 88 with more or less same investment mix available in Section 88. This new Section has become effective w.e.f. 1st April, 2006. Even the section 80 CCC on pension scheme contributions was merged with the above section 80C.


Sub Sections of Section 80C

As per Section 80CCD(1B), an additional exemption up to Rs. 50,000/- in National Pension Scheme (NPS) is eligible for income tax deduction over and above the limits of Section 80C. And as per Section 80CCG Rs. 25,000/- is allowed for tax exemption if invested in Rajiv Gandhi Equity Saving Scheme (RGESS).

So Under the sections, 80C, 80CCG, 80CCD(1B) an aggregate amount of Rs. 2,25,000/- is allowed for deductions under Income Tax Act.


End of the financial year almost approaching and in no time we should be running after submitting our proofs of investments against tax deduction. It does gonna be taxing affair unless we start planning on it right away. Under Section 80C, we are all very well aware of some of the tax saving financial instruments say it insurance policies, provident funds mutual funds etc. But we do have many financial instruments ready to lend a hand for tax exception. Best part of these schemes is we not only can save our tax but also end up in directing some money towards savings which would for sure hold us in good stead.

Investments

Investment is better option when you have idle money in your account. Under Section 80C of Income Tax Act, India you can also save taxes by investing in the selected plans allowed by the Income Tax Department. There are insurance plans which allow you to invest in the market to maximize the befits as well as seek deductions on your taxes. Please be careful that investment is an instrument which comes with a warning. As it can maximize, it also can minimize the benefits. →

Insurance

Insurance is a financial instrument where you can minimize or recover costs in case of any eventuality by availing the service in the form of recurring premium paid or one time purchasse. There are numerous tax deductions you can seek by availing various insurance schemes. Section 80C under Income Tax Act, India, you can save taxes by up to 30% of the allowed limit. Under Section 80C of the Income Tax act, you can seek deductions by insuring self, depends. Check Out latest posts under this category. →

Pension Plans

Pension plans are a way to give financial aid during old age after retirement. These are generally availed during young age keeping in mind the post retirement days and to cover misc expenses. There are plans available in the market which helps you to cut down taxes under Section 80C. →

Housing

Owning a house is a dream for many. Its also a very good investment options when chosen carefully. There are very good tax benefits available under Section 80C, Income Tax Act, India. You can seek tax deductions by taking housing loans from financial institutions. Separate deductions are available on principle and interest repayment. For first time home buyers, Government has provided additional tax benefits. As buying a house is an expensive affair, you can take joint home loans thus maximizing savings from your taxes.

Savings

Savings is a no risk option and comes with fixed or variable returns. Govt of India has introduced many savings options for tax payers to save taxes. Under Section 80C, Income Tax Act, you can buy saving certificates, open Fixed Deposits, operate various types of Savings Accounts. There are multiple option available for senior citizens, girl child, post retirement plans for employees, Govt Bonds, Govt Saving certificates etc. Sukanya Samriddhi Scheme, Senior Citizen Savings Scheme etc.

Other Deductions