Top 5 Deductions under Sector 80C
The Income-Tax Act 1961 has provided Section 80C Deductions for different investments. A maximum amount of INR 1.5 Lakh can be claimed under 80C. As said investment(s) in the financial segment is increasing different tax-centric investment schemes, thus, creating high tax-benefits & returns for investors. Given below is the list of 80c deduction. A read:
- Equity Linked Saving Schemes (ELSS): ELSS stands for Equity Linked Saving Schemes. It is basically a highly diversified scheme which offers tax benefits under the Income tax act of 80C. A major portion of the capital is invested in equity funds. These are good saving schemes that can grow your money faster than the fixed deposit and PFs. Equity linked saving scheme is low threshold schemes which can be started with just a small token of Rs. 500. Not to miss, ELSS comes with a lock-in-period of 3 years.
- National Saving Certificates (NSC): The NSC is the India Government based investment scheme that you can easily open with the post office. Basically, it is a savings bond that encourages investors – mainly small-mid income to invest whilst saving on income tax. A fixed-income instrument like Post Office FDs and Public Provident Fund, this scheme is a low-risk product and secure too. You can buy it from your nearby post office in your name, for a minor or with another major as a joint-account. NSC comes with two maturity periods which are fixed – 5 and 10 years.
- Public Provident Fund (PPF): Public Provident Fund or PPF is a long-term investment option which offers better returns and interest rate on the amount invested. The returns and interest rate are not taxable under the income tax. The person must open a PPF account and the amount deposited yearly will be claimed under 80C.
- Life Insurance Premiums: Life insurance premium is very much included under Section 80C of the Income Tax Act. Even a HUF is included as a deduction under Section 80C.
- Employees Provident Fund (EPF): Some portion of an individual’s salary is contributed to the EPF by the employer on a monthly basis. Also, an individual can claim the contribution to EPF as a deduction under Section 80C.
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