Deductions under section 80C

Deductions under section 80C: Save your tax up to Rs.150000

 Deductions under section 80C

Deductions under section 80C: Save your tax up to Rs.150000

This article discuss about how you can save your tax under section 80C

Basis of Deduction: The deduction under section 80C is available on the basis of specified qualifying investments or contributions or deposits or the payments made by the assessee  during the previous year. Deduction under this section is available on actual payment basis. Only the actual payments made by the assessee during the previous year shall qualify for deduction to save your tax.

Who can claim Deduction u/s 80C: The deduction u/s 80C is available only to the individual assessee and Hindu Undivided Family (HUF).

Amount of Deduction u/s 80C: The maximum amount of deduction u/s 80C is Rs. 1,50,000.

Qualifying Payments to claim deductions u/s 80C: There are many options available for you under this section to save tax. You can choose all or any of them. The payments made by you during the previous year towards various investments, contributions and deposits that will qualify for deduction under section 80C are described as follows:

  • Life Insurance Premium paid during the previous year. Insurance policy must be taken on own life or on the life of the spouse or any child of the assessee. Maximum deduction regarding the payment of life insurance premium w.e.f. 1st April 2012, can be 10% of sum assured.
  • Any sum paid by the employee as contribution towards Statutory Provident Fund or Recognized Provident Fund.
  • Any contribution made by assessee as contribution towards Public Provident Fund or Approved Superannuation Fund
  • Sum paid as subscription of National Saving Certificates (NSC) (VIII issue).
  • Any sum paid as subscription towards notified bonds issues by NABARD.
  • Any sum deposited in five year or more time deposit scheme of Post Office.
  • Amount paid as contribution towards Unit Linked Insurance Plan (ULIP) of UTI , LIC or any other insurers.
  • Sum Paid as subscription towards units of a Mutual Fund or UTI.
  • Amount deposited in 10 or 15 years account of Post Office Savings Bank Account.
  • Tuition fees paid to any school, college, university or other educational institution situated within India.
  • Repayment of house loan. But only principal component of  EMI qualify for deduction u/c 80C.
  • Amount deposited in five year Post Office Time Deposit Account.
  • Terms deposits with certain banks of not less than 5 years duration and as per scheme framed by Central Govt.
  • Amount invested in Equity Linked Savings Schemes (ELSS).
  • Amount invested in Equity Shares of Debentures in an eligible issue.
  • Amount deposited in Sukanya Samriddhi Account, a scheme of Girl Child Prosperity , launched by Prime Minister  Sh. Narender Modi.

There are also some others investment and deposits which qualify for deduction u/c 80C besides the above listed options.

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