Part 80C is essentially the most broadly used part for claiming Earnings Tax Deductions. This Part which permits a deduction of Rs. 1,50,000 cannot solely be utilized by Salaried People however can be utilized by all classes of Taxpayers no matter the supply from which they’re incomes their earnings.
A Deduction from the overall taxable earnings is allowed for investments in sure specified devices and this deduction might be claimed underneath Part 80C. The most deduction which might be claimed underneath Part 80C is Rs. 1,50,000.
This Deduction of Rs. 1,50,000 might be claimed both for funding in a single instrument or for investments in a number of devices. The whole cumulative deduction that may be allowed could be restricted to Rs. 1,50,000 solely.
There are a number of devices by which an individual can make investments and declare deduction underneath Part 80C. The ten hottest investments which might be claimed as a Deduction underneath Part 80C have been mentioned under.
11 Most Common Investments choices underneath Part 80C
- Fairness Linked Mutual Funds
Deduction underneath Part 80C can also be allowed for investments in Fairness Linked Mutual Funds. It’s pertinent to notice right here that the deduction just isn’t allowed for all Mutual Funds however just for Fairness Linked Mutual Funds also called ELSS Funds. The phrases – Tax Saving are additionally talked about on these funds.
These funds might be held both in Demat Account or in Bodily Format. You’ll be able to even buy these from an agent and point out the Demat Account Quantity by which you want to obtain the Mutual Fund Funding. Some on-line share buying and selling accounts even have the power of buying mutual funds on-line.
There’s a lock-in interval of three years in these Fairness Linked Mutual Funds and you can not promote these mutual funds earlier than 3 years from the date of buy.
- Beneficial Learn: All about Tax Saving Mutual Funds
- Life Insurance coverage Premium
The Life Insurance coverage Premium paid by you for insuring the lifetime of your self, partner and kids can also be allowed to be claimed as a deduction underneath Part 80C.
Nevertheless, it’s pertinent to notice right here that the life insurance coverage premium paid for insuring the life of fogeys just isn’t allowed to be claimed as a deduction.
- Beneficial Learn: Tax Good thing about Life Insurance coverage Premium and Maturity Quantity
- Public Provident Fund (PPF Account)
Any individual whether or not Salaried or not can put money into PPF Account and earn fastened curiosity on the identical. The speed of curiosity on PPF Account retains altering after common intervals and is determined by the Govt. The speed of curiosity on PPF Account is normally barely larger than the rate of interest on Mounted Deposits.
PPF Accounts are opened for a interval of 15 years with a lock-in interval of 5 years. You’ll be able to withdraw a specific amount from PPF Account after the 5th yr with none prepayment penalty.
- Beneficial Learn: Advantages of Investing in PPF Account
- Worker Provident Fund (EPF Account)
Worker Provident Fund is a retirement profit scheme and is obtainable solely to Salaried Workers. On this scheme, each the employer and the worker make investments a sure portion each month and curiosity is paid at common intervals on the quantity within the EPF Account.
- Stamp Responsibility paid on Buy of a Home
The quantity paid as Stamp Responsibility on the acquisition of home and the quantity paid on registration of paperwork can be claimed as a deduction within the yr of buy.
- Compensation of Principal portion of Dwelling Mortgage
Deduction underneath Part 80C can also be allowed for compensation of the principal portion of Dwelling Mortgage. Deduction of Curiosity on Dwelling Mortgage just isn’t allowed underneath this Part as it’s allowed underneath Part 24.
- Beneficial Learn: Tax Deduction of Dwelling Mortgage underneath Part 24 & 80C
- Nationwide Financial savings Certificates (NSC)
Nationwide Financial savings Certificates (popularly known as NSC) are fastened earnings incomes devices issued by the Govt of India. There are 2 forms of NSC i.e. one with a period of 5 years and the opposite with a period of 10 years.
Deduction underneath Part 80C is allowed for funding in any of the above 2 forms of NSC.
- Beneficial Learn: All about Nationwide Financial savings Certificates (NSC)
- 5 Yr Tax Saving Mounted Deposit
Deduction underneath Part 80C can also be allowed for funding in 5 yr fastened deposit. It’s pertinent to notice right here that it’s not allowed for all fastened deposits however just for fastened deposits of a tenure of greater than 5 years.
On the time of constructing the fastened deposit, you’ll have to intimate your banker that you’re making this fastened deposit for the aim of tax saving.
- Beneficial Learn: Deduction for Funding in 5 yr Mounted Deposit
- Senior Citizen Financial savings Scheme
Senior Citizen Financial savings Scheme is a hard and fast earnings incomes instrument on which curiosity is paid often. Senior Citizen Financial savings Account might be opened in any publish workplace throughout India and in chosen branches of Nationalised and Non-public Banks.
- Beneficial Learn: All about Senior Citizen Financial savings Scheme
- Funding in Sukanya Samriddhi Yojana
The quantity invested in Sukanya Samriddhi Yojana for the welfare of a lady youngster is allowed as a deduction underneath Part 80C. The curiosity paid on the Sukanya Samriddhi Yojana could be very profitable and can also be tax-free as no tax is levied on the curiosity earned on this account.
- Beneficial Learn: Sukanya Samriddhi Yojana: Opinion & Evaluation of Specialists
11. Fee of Training Charges of Kids
Deduction underneath Part 80C can also be allowed for fee of College Charges of a most of two Kids. This deduction is allowed within the monetary yr by which the fee is made and is obtainable for the charges paid for full time schooling of kids in India.
Charges paid for part-time course or teaching courses or for schooling exterior India just isn’t allowed to be claimed as a deduction underneath Part 80C.