Priyanka Sambhav
Section 80C of the Income Tax Act is the most popular Section for saving tax. This deduction is part of Chapter VIA deductions that helps taxpayer in reducing his income liability. You can straightaway reduce Rs 1,50,000 from your income if you make the permitted investments. In simple words, in one financial year Section, 80 C gives a deduction of Rs 1.5 lakh on your total income, and it is available for individual taxpayers as well as to HUF. Under Section 80C of the Income Tax Act 1961, taxpayers are eligible for deduction benefit on payments, contributions, or investments in a way specified by the Income Tax law.
If your taxable income is Rs 12 lakh, and you have made all the eligible investment under section 80C then you can deduct Rs 1.5 lakh from your income and you have to pay tax on Rs 10.5 lakh only.
Let’s have a look at Investment & Payment that will make you eligible for claiming 80C deduction.
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Investment |
Payment |
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Contribution to Employee Provident Fund(EPF) |
Children Tuition Fee |
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Opening a Public Provident Fund Account(PPF) |
Payment of Insurance premium |
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National Saving certificate |
Unit linked Insurance Plan(ULIP) payment |
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Sukanya Samridhi Scheme |
Equity Linked Saving Scheme(ELSS) |
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Fixed Deposit |
Repayment of Principal of Home loan |
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Post Office Time Deposit |
Payment towards NPS |
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Senior Citizen Saving Scheme |
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Infrastructure Bonds |
Section 80CCC- this allows deduction towards the contribution to annuity plans. But it can’t go beyond the ceiling of Rs 1.5 lakh of Section 80 C.
Section 80 CCD(1) – If you deposit in a pension scheme of Central Government- 10% of salary (in case of the employee) and 20% of total gross income in case of self-employed. Can’t cross the overall limit of Rs 1.5 lakh of 80C.
Section 80CCD (1B)– This is an additional deduction of Rs 50,000 for contribution to NPS account. Contribution o Atal Pension Yojna will also fetch you this deduction. Additional to overall limit of Rs 50,000.
Section 80CCD(2) – If your employer also contributes to your pension account, which can’t be more than 10% of your salary. If you are a government employee, then a 14% contribution is considered.
Hope you have got a better understanding of Section 80C of the Income Tax Act and will make use of this investment to lower your tax liability.
