PPF / EPF – Public Provident Fund or Employee Provident fund scheme under section 80C provides an eligibility and limit of 1 Lakh rupees with a guaranteed return at 8.6% to save income tax. Investor can invest minimum of Rs 500 per year, with a lock in period of 15 years.
ULIPs – Investment in Unit Linked Policies provides options for income tax saving with a life insurance policy attached. Thus this provides double benefit with an option of tax saving with life insurance cover attached.
Mutual Funds – Investment in Mutual Funds or Equity Linked Saving Schemes is a very good option and useful in tax saving for those who have not utilized other option of tax savings. Investment in ELSS comes with a locking period 3 years and returns depend upon market conditions.
Fix Deposit – Best option to save tax and get a guaranteed return of 9% at least. Deposit of funds for a term of 5 years in any bank is eligible for 80C tax deductions.
NSC - National Savings Certificates or NSC is yet another saving scheme for Tax Saving on Income in India. NSCs will offer you 8.4% this year and the income, like 5 year bank FDs will be taxable after getting added to your income.
Home Loan – You can save income tax through home loan under 2 sections:
Indian Income Tax Act 1961 – Section 24 (B)
The max amount deductible under this act is Rs 1,50,000 per financial year. Interest on borrowed capital or loan taken for purchasing a Home, constructing a house or renovating an existing property can be claimed for income tax savings.
Indian Income Tax Act 1961 – Section 80 (C)
It allows a tax deduction of up to Rs 1,00,000 on principal amount of home loan or borrowed capital repaid in a financial year.
Education Loan – Education loan provides you an opportunity to study and afford higher education with income tax saving benefits. Government of India has extended the benefit under 80E from the year 2010-2011 for all streams providing vocational or regular courses. Educational loan can be claimed only on full time courses.
Great post. I was looking the ways to save tax yearly finally i got from this post. Thanks for sharing good information about different ways comes under Section 80c.
ReplyDelete