All Investment Option Benefit Under Section 80C

The most popular section for seeking income tax deductions is Section 80C. This section, which permits a deduction of Rs. 1,50,000, is available to all tax payer groups, regardless of the source of their income. It is not just for salaried individuals.

Investments in certain specified instruments are eligible for a deduction under Section 80C from the total amount of taxable income. Section 80C allows for a maximum deduction of Rs. 1,50,00,000.

This 1,50,000 rupee deduction is available for both investments in a single instrument and investments in a variety of instruments. The maximum cumulative deduction that would be permitted is just Rs. 1,50,000.

A person may invest in a variety of instruments and qualify for a Sec 80C deduction. Following is a discussion of the top ten investments that can be deducted under Sec 80C.

Most Popular Section 80C Investments

Mutual funds that are equity-linked

Investments in equity linked mutual funds are also eligible for a Sec 80C deduction. It is important to remember that only equity linked mutual funds, sometimes referred to as ELSS funds, are eligible for the deduction. On these funds, the phrase “Tax Saving” is also included.

These monies may be kept physically or in a demat account. You may even buy them from a salesperson if you provide them know the Demat Account Number where you want the Mutual Fund Investment to be sent. Online mutual fund purchases are a feature of several online share trading accounts.

These Equity Linked Mutual Funds have a 3-year lock-in period, and you cannot sell them until that time has passed from the purchase date.

Life Insurance Premium

Section 80C permits you to deduct the life insurance premium you paid to cover your own, your spouse’s, and your children’s lives.

It is important to remember that the life insurance premiums paid to cover the lives of parents cannot be deducted from income.

Public Provident Fund (PPF Account):

PPF Accounts allow anybody, salaried or not, to make investments and earn fixed interest. The government determines the rate of interest on PPF accounts, and it changes on a regular basis. PPF Account interest rates are often a little higher than fixed deposit interest rates.

PPF Accounts have a 15-year opening window and a 5-year lock-in term. After the fifth year, you can take a specific amount from your PPF account without incurring any early-payment penalties.

Employee Pension Plan (EPF Account)

Only salaried employees are eligible for the retirement benefit programme known as Employee Provident Fund. In this programme, monthly contributions from both the employer and the employee are made, and interest is periodically paid on the funds in the EPF Account.

House was purchased with paid stamp duty.

It is also possible to deduct the cost of stamp duty on home purchases and the cost of document registration in the year of purchase.

Repayment of the principal balance of the mortgage

Home loan principal payments is also eligible for a deduction under Sec 80C. The deduction of home loan interest is permitted under Section 24, but not under this Section.

National Savings Certificate (NSC)

The government of India has issued National Savings Certificates, often known as NSCs, which are fixed income yielding securities. There are 2 different forms of NSC, one lasting 5 years and the other lasting 10 years.

Investment in either of the aforementioned two categories of NSC is eligible for a deduction under Sec 80C.

five-year tax savings Investment in a five-year fixed deposit is also eligible for a fixed deposit deduction under Section 80C. It is important to remember that only fixed deposits with a duration of more than five years are eligible for this. It is not authorised for all fixed deposits.

You must inform your banker that you are making the fixed deposit in order to save money on taxes at the time you make it.

Senior Citizen Savings Program

The Senior Citizen Savings Scheme is a fixed-income investment vehicle that pays interest on a regular basis. In all post offices in India as well as in a few branches of Nationalized and Private Banks, Senior Citizen Savings Accounts can be opened.

Sukanya Samriddhi Yojana investment

The Sukanya Samriddhi Yojana investment for a female child’s welfare is eligible for a deduction under Section 80C. Since there is no tax on the income generated on this account, the interest paid on the Sukanya Samriddhi Yojana is particularly profitable and tax-free.

Payment of Children’s Education Fees

The payment of up to two children’s school fees is also eligible for a deduction under Section 80C. This deduction is available for tuition fees paid for children’s full-time education in India and is permitted in the fiscal year in which the payment is made.