Investment Plans: Section 80C of the Income Tax Act allows you to reduce your tax liability every year. Let us tell you that you can benefit from 80C only if you opt for the old tax system. Know today what are the various investment options under Section 80C. Read what is the complete news.
We often look for investment options that save tax at the time of returns. According to the Income Tax Act, every Indian is legally bound to pay his/her fair share of tax.
However, this does not mean that you have to pay the full amount. Under Section 80C of the Income Tax Act, you can reduce your tax liability every year.
What is important to note here is that you will get the benefit of 80C only if you have opted for the old tax system. Today we are going to tell you about various investment options by investing in which you can save your tax under Section 80C.
National Pension System (NPS)
National Pension System (NPS) is a pension scheme launched by the Central Government that allows citizens to avail pension after retirement.
Anyone between the age of 18 to 70 years can open an NPS account. Under this scheme, you are eligible for tax deduction up to Rs 1.5 lakh under Section 80C of the Income Tax Act.
Apart from this, you can also avail additional tax benefit of Rs 50,000 under section 80CCD(1B).
Equity Linked Savings Scheme (ELSS)
ELSS funds are known as tax saving mutual funds. You can avail tax deduction of up to Rs 1.5 lakh on this fund under Section 80C of the Income Tax Act. ELSS funds come with a lock-in period of only three years.
Unit Linked Insurance Plan (ULIP)
Unit Linked Insurance Plan (ULIP) is a financial product that offers both insurance and investment to customers in a single package.
Under Section 80C of the Income Tax Act, the premium you pay for your ULIP is eligible for tax deduction. You can avail tax deduction of up to Rs 1.5 lakh every year.
Apart from this, the returns you get on ULIP are exempt from income tax under Section 10(10D) of Income Tax.
Public Provident Fund (PPF)
Public Provident Fund (or PPF) is a famous investment scheme used to save tax. Since this scheme is supported by the government, it is considered a safe investment medium.
You can claim tax exemption of Rs 1.5 lakh annually under Section 80C of the Income Tax Act.
Sukanya Samriddhi Yojana (SSY)
Sukanya Samriddhi Yojana is a government savings scheme that aims to advance the development of the ‘girl child’.
Under this scheme, you can avail tax exemption of up to Rs 1.5 lakh annually under Section 80C of the Income Tax Act. Apart from this, you can also avail tax exemption on interest and can claim tax exemption on the total amount at the time of maturity.
National Savings Certificate (NSC)
National Savings Certificate is a small savings scheme supported by the Government of India. You can claim tax exemption of up to Rs 1.5 lakh annually under Section 80C of the Income Tax Act in this scheme.
Tax saving FD
You can avail tax benefits of up to Rs 1.5 lakh on tax-saving FD under Section 80C of the Income Tax Act. The lock-in period of these FDs is 5 years.
Employees Provident Fund (EPF)
Employees’ Provident Fund (EPF) is a retirement savings scheme supported by the Government of India and available to all salaried employees. In this also, you can avail tax exemption of Rs 1.5 lakh every year under Section 80C.
Here, let us tell you that if you withdraw your funds after five years of continuous job, your EPF balance (including the interest earned by you) is tax-free.
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