With an intention to boost saving rate of the economy, government always announce tax incentives on investments. Many tax payers make investments with an intention to save income tax. Following are some of popular tax saving investments & schemes where investors can claim tax deduction under section 80C.
Certain investments are eligible for income tax exemptions. The amount invested is deductible from Income Tax, which means person has to pay less tax.
Following are the popular tax saving investments & schemes where investors can claim income tax deduction under section 80C of the Income Tax Act.
- Life Insurance – Life insurance premium paid for self, spouse and children
- Provident Funds – Contributions made to public provident fund, statutory provident fund and recognised provident fund for self, spouse and children.
- National Savings Certificates – These are Indian Government saving bonds and are a part of Indian postal savings scheme. The accrued interest is also qualified for deduction for the first 5 years.
- Tax Saving Fixed Deposits – Amount deposited in 5 year fixed deposit with a scheduled bank and amount deposited in 5 year post office time deposit.
- Notified units of Mutual Funds – Subscription towards notified units of Mutual Fund or UTI
- Home Loans – Principal repayment of housing loan with a bank or co-operative society.
- Annuity Plan – Payment for notified annuity plan of LIC
- Notified Pension Scheme – Contribution to notified pension fund set up by Mutual Fund or UTI.
- Equity Saving Scheme – Investment in Equity Linked Savings Scheme (ELSS)
- Tuition fees – Sum paid as tuition fees to any educational institution in India for full time education of the children.
Maximum of Rs. 1,50,000/- amount can be claimed as deduction under Section 80C as per the Finance Act 2014.
Note: To know more about section 80C deductions, please see our guide here.
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