80C offers various investment options to the taxpayers in India
Income Act Section 80C provides tax deductions on number of investments and expenditures. Both individuals and Undivided Hindu Families are eligible for these deductions.
The maximum amount of deduction that can be claimed under section 80C is Rs 1.5 Lakh for FY2016-17.
Some of the popular investments which are eligible under 80C are Insurance policies, PPF, Tax saving ELSS mutual funds, 5yrs Fixed deposit, Infrastructure bonds, National Savings Certificate, Voluntary Provident Fund, 5 year post office time deposit etc. But this section also provides several other options too, like:
Home Loan Principal Repayment: Home Loan EMI that the taxpayer pays consists of two components, Principal and Repayment. Tax payer can claim the home loan principal amount under Section 80C. Principal can be claimed upto maximum of 1.5 Lakh across all 80C investments. For the Joint home loan, the repayment of principal amount can be claimed individually.
Sukanya Samriddhi Account: Under Sukanya Samriddhi Scheme, anyone can open an account on behalf of their minor daughter. The amount has to be deposited for 15 years, the minimum deposit is 1,000 per year.
Payment of Child Tuition fees: Deduction under Section 80C is available for tuition fees paid on two children’s education. If Tax Payer have more than two children then he/she can claim tuition fees paid of only two children’s. Pre-nursery, play school and nursery class fees is also covered under this section.
National Pension Scheme under Section 80CCD: One can contribute an additional Rs 50,000 to NPS, over and above the combined limit of Section 80C, 80D and 80CCD of Rs 1,50,000. Hence Investors can avail maximum tax benefit of Rs. 2 lakhs.
ULIP: Unit Linked Insurance Plans or ULIPs covers Life insurance, decent returns and also provides tax benefits of equity investments. Tax payer may purchase a ULIP in his/her own name, or for spouse or any child and all these ULIP investments shall qualify for deduction under Section 80C.
NABARD bonds: The NABARD Rural Bonds issued by NABARD are tax-free and also offer decent interest rates. You can choose between tenure of 10 and 15 Years. Annual interest rate of 7.29% for 10 years and 7.64% for 15 years.
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