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From securing your future with investments in EPF, PPF, or ELSS, to safeguarding your loved ones with life insurance premiums, 80C offers a treasure trove of opportunities. One can dream of building a house or send his child for higher education to a renowned institution and can even get tax benefits under 80C by opting housing loans and education loan exemptions u/s 80C of Income Tax Act, 1961. Deduction benefits u/s 80C is a way to financial freedom along with tax saving.

Let us know understand various options via which we can claim benefit under 80C: –

1. Employee Provident Fund (EPF): Contributions made towards EPF are eligible for tax deductions under Section 80C.

2. Public Provident Fund (PPF): Investments made in PPF accounts are eligible for tax deductions under Section 80C. Also, the interest earned and the maturity amount are also free from tax which is a win-win situation for a taxpayer.

3. Equity Linked Savings Schemes (ELSS): Investments in ELSS mutual funds are eligible for tax deductions under Section 80C. ELSS funds invests in both equity as well as debt markets therefore, by investing in ELSS one can enjoy exposure of stock markets too.

4. Life Insurance Premiums: One of the most secures and famous investment option is opting an insurance policy for self, spouse and children. By doing so the taxpayer not only enjoys tax benefit of insurance premium paid but also the maturity amount is exempted from tax. There are various products and investment schemes offered by insurance companies therefore, it is always advised to consult with a financial advisors or tax planners before opting for any such scheme.

5. Sukanya Samriddhi Yojana (SSY): Investments made in SSY accounts for the girl child are eligible for tax deductions under Section 80C.

6. 5-Year Fixed Deposits (FDs): Investments made in 5-year tax-saving fixed deposits with banks are eligible for tax deductions under Section 80C.

7. Tuition Fees: Even the tuition fees paid for the education of up to two children are eligible for tax deductions under Section 80C.

8. Principal Repayment of Housing Loan: The principal repayment component of the home loan EMI is eligible for tax deductions under Section 80C

Note – It is important to note that the tax deductions allowed are section 80C cannot exceed Rs. 1,50,000 in a financial year. It’s advisable to consult a tax advisor or financial planner to understand how you can optimize your tax-saving investments based on your financial goals and risk appetite.

Also, the above information provided by CA Akshat Parakh (Financial Advisor) is for educational purpose only.

Author Bio

Akshat Parakh is qualified chartered accountant working in areas of Business Consulting, Financial and Tax Planning Advisory. He also provide services relating to auditing, ITR Filing and GST consulting. He has experience of serving clients on PAN india level and has served industries like food and View Full Profile

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April 2024