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  • Writer's pictureCA Yashwanth

24 investments and expenditure you can claim in 80C upto 1.5 Lakh while filing your tax return

Most of us are averse to paying taxes and at some point in our lives, we all have fantasized about living in a tax-free world.

Apart from the fact that taxes are viewed as a financial burden, what could further add to the stress could be a lack of knowledge about tax-planning. A majority of taxpayers struggle with fitting the tax-saving piece in the puzzle of their finances.

One of the most common deductions available under the Income-tax Act, 1961 is section 80C which reduces your tax liabilities by allowing deductions from your total taxable income in a financial year. You will find various instruments through which you can avail a cumulative tax saving of a sizeable quantum. The deduction under this section can be claimed only if an individual opts for the old/existing tax regime in a financial year.

With the deductions under Section 80C, you will be able to save up to (₹1,50,000 + ₹50,000) from various schemes. The tax deductions under Section 80C can, however, only be availed by individuals or members of the Hindu Undivided Family. They are not available to companies, partnerships, or any other corporate bodies.

If you can relate to this, then fret not. We have compiled below tax-saving guide to ensure your tax-planning journey is smooth sailing.

1. ELSS: An ELSS is the only kind of mutual fund eligible for tax benefits under Section 80C. Returns 12 to 15% Lock in 3 years

2. NPS: National Pension System (NPS) is a retirement benefit Scheme introduced by the Government of India to facilitate a regular income post retirement to all the subscribers. Returns 8 to 10% Lock in Till age 60.

3. ULIP: ULIP is an insurance plan that offers the dual benefit of investment to fulfil your long-term goals, and a life cover to financially protect your family in case of an unfortunate event. Returns 7 to 8 % Lock in 5 years.

4. Tax saving FD : Many banks offer a five-year FD scheme that is meant for tax saving. One can claim an income tax deduction by investing money in a five-year FD scheme. Returns 5 to 6% Lock in 5 years.

5. PPF : Public Provident Fund (PPF) is a retirement savings scheme with the aim of providing a secure post-retirement life to everyone. The minimum deposit you must make in the account per financial year is Rs. 500 and it can go up to Rs. 1.5 lakh. Returns 7.1 % Lock in 5 years

6. Senior citizen savings scheme : The Senior Citizens' Savings Scheme (SCSS) is a government scheme that helps seniors save money for retirement and receive quarterly interest payments. Returns 7.4% Lock in 5 years.

7. NSC : National savings and investment is a government backed form of savings account, meaning that they offer a secure way to store your money. Returns 6.8% Lock in 5 years.

8. Sukanya Samriddhi Scheme : Your contributions towards the Sukanya Samriddhi Yojana for your daughter's future are eligible for tax deductions. Returns 7.6% Lock in Till girl child reaches 21 years of age.

9. Life Insurance Premium : Premium payments made towards Life insurance policies. Low Returns but Risk Cover

10. EPF : Employees' Provident Fund is a retirement benefit scheme maintained by the Employees' Provident Fund Organization (EPFO). The employee and the employer contribute to the EPF scheme on monthly basis in equal proportions of 12% of the basic salary and dearness allowance.

11. Five-Year Post Office Time Deposit : Income tax benefits are available only for a 5-year post office time deposit account. Returns 6.7% Lock in 5 years.

12. Tuition fees paid for children’s education : For up to 2 children, tuition fees paid in the entire academic year per child are tax-deductible. Paid to any university, college, school or other educational institution situated within India.

13. Repayment of the principal amount of a home loan : An individual is entitled to tax deductions on the amount paid as repayment of the principal component on the housing loan.

14. Stamp Duty and Registration Charges paid for House Property: Stamp duty and registration charges and other expenses which are directly related to the transfer are allowed as a deduction.

15. Deferred annuity : Annuity plan contribution made on on the life of persons, or contract for such annuity plan of the Life Insurance Corporation

16. Superannuation fund : A contribution by an employee to an approved superannuation fund.

17. Pension Fund : Contribution to a pension fund set up by any Mutual Fund.

18. National Housing Bank: Subscription to any such deposit scheme of, or as a contribution to any such pension fund set up by, the National Housing Bank

19.Approved IPO Government : Contribution or subscription to equity shares or debentures forming part of any eligible issue of capital approved by the Government and Notified.

20.Bonds : Bonds issued by the National Bank for Agriculture and Rural Development (NABARD)

21.Pension Scheme for Govt Employee : Employee of the Central Government, as a contribution to a specified account of the pension scheme.

22 .Infrastructure bonds: Infra bonds as they are commonly called, Infrastructure bonds are issued not by the government but by infrastructure companies.

23.NABARD Rural Bonds: NABARD, or the National Bank for Agriculture and Rural Development, offers two kinds of bonds, viz. Bhavishya Nirman Bonds and NABARD Rural Bonds.

24.Any other Funds Approved by Govt and Notified : There are many other Pension Fund / Bonds / Govt Company who can issue scripts which qualify for 80C



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