Income Tax deduction under 80C

The Income Tax (IT) department has laid out a number of deductions from the taxable income under chapter VI A in an effort to promote saving and investing among taxpayers. The Income Tax Act of India contains a provision known as Section 80C, which lists a number of investments and expenses that are excluded from paying income tax. It permits any individual investor to deduct up toRs.1.5 lakh annually from their total taxable income. Individuals are allowed to invest in a variety of savings plans under this provision in order to deduct them from their taxable income.

Investments permitted under section 80C of the Income Tax Act

• Life insurance premiums -

According to the 80C limit, tax advantages can be obtained on premiums paid for life insurance policies. These exemptions are available for plans owned by the policyholder, their spouse, their dependent children, etc. You will not be qualified for this benefit if you are paying the premium for your parents or parents-in-law. According to Income Tax Act (section 80C), you may claim tax advantages on each insurance you own up to a total ofRs.1.5 lakh.

• Public provident fund (PPF) -

Section 80C allows for the income tax deduction of any Public Provident Fund (PPF) contribution. It is a government program that enables investments betweenRs.500 andRs.1.5 lakh in a specific fiscal year. Additionally, the PPF interest you earn on such a fund is tax-free, giving you a comprehensive financial benefit under Section 80C.

• Employees' provident fund (EPF) -

According to Section 80C of the Income Tax Act of 1961, the return received from Employee Provident Funds (EPF), including the interest, is free from taxation. Only employees with a minimum of five years of continuous employment are eligible.

• Unit linked insurance plans (ULIPs) -

When compared to traditional insurance policies, Unit Linked Insurance plans provide better long-term returns. Section 80C allows for an income tax credit of up toRs.1.5 lakh on the amount invested. Tax benefits are available up to 10% of the insured amount or the yearly premiums, whichever is less.

• National saving certificate -

One of the most popular tax-saving tools for risk-averse people is the NSC or National Savings Certificate. The NSC's maximum maturity time is from 5 to 10 years, and interest is compounded every two years. You may deduct up toRs.1.5 lakh from your taxable income.

• Sukanya samriddhi yojana -

Sukanya Samriddhi Yojana is a savings program created specially to cover the costs of a girl's education and marriage. Under Section 80C of the Income Tax Act, this account may only be formed for a maximum of two girl children who are under the age of 10.

• Senior citizens savings scheme -

After turning 55, senior citizens who have chosen the Voluntary Retirement Scheme (VRS) may do so. The maximum limit of income tax deduction under 80C remains atRs.1.5 lakh for any investments made under this plan.

It is to be noted that individual taxpayers and Hindu Undivided Families are subject to the income tax provisions of Section 80C. The tax exemptions provided by Section 80C are not available to corporations, partnership companies, or other enterprises. Get your investment done today in any of the plans and save some money. For more information visit Kotak General Insurance for buying car insurance policy online

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