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Section 80C of the Income-Tax Act, 1961, is a highly popular choice opted by taxpayers in the country to save money on taxes. This includes investments and savings like LIC and PPF contributions.
What is Section 80C?
The citizens of India are legally obliged to pay their share of taxes to the government based on their incomes. At the same time, there are several options through which people look forward to reducing their tax liability.
One of the options here is Section 80C of the Income Tax Act, which allows individuals to claim deductions of up to ₹1,50,000 every year from their total taxable income.
These deductions are claimed against different investments and expenditures exempted from Income Tax. The section applies only to individual taxpayers and Hindu Undivided Families, and it does not include corporate bodies, partnership firms or other businesses.
How does the Section 80C limit help in saving taxes?
Deductions under Section 80C of the I-T Act from the gross taxable income can help people save up to ₹46,800 (inclusive cess at 4%) in taxes in those cases where the income is taxable at 30%.
The amount of money an individual can save through this depends on the tax rate to which the income is subject.
You can claim a deduction of up to ₹1.5 lakh under this section in a financial year only if you have opted for the old tax regime. The new tax regime offers no such exemption.
To claim a deduction under Section 80C, you must invest this amount in eligible investment options or spend this money on a specified deductible during the same financial year.
Among the eligible investment instruments here are the Employees' Provident Fund (EPF), Public Provident Fund (PPF), Equity-Linked Savings Scheme (ELSS), Sukanya Samriddhi Yojana (SSY), National Savings Certificate (NSC), National Pension System (NPS), and Senior Citizen Savings Scheme (SCSS) among others.
How to claim it
Deductions under Section 80C can be claimed by an individual under the 'Total Deductions' option while filing the ITR form. Claiming the same, mention the amount of deduction you are willing to claim or ₹1.5 lakh -- whichever is lower.
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What is Section 80C?
The citizens of India are legally obliged to pay their share of taxes to the government based on their incomes. At the same time, there are several options through which people look forward to reducing their tax liability.
One of the options here is Section 80C of the Income Tax Act, which allows individuals to claim deductions of up to ₹1,50,000 every year from their total taxable income.
These deductions are claimed against different investments and expenditures exempted from Income Tax. The section applies only to individual taxpayers and Hindu Undivided Families, and it does not include corporate bodies, partnership firms or other businesses.
How does the Section 80C limit help in saving taxes?
Deductions under Section 80C of the I-T Act from the gross taxable income can help people save up to ₹46,800 (inclusive cess at 4%) in taxes in those cases where the income is taxable at 30%.
The amount of money an individual can save through this depends on the tax rate to which the income is subject.
You can claim a deduction of up to ₹1.5 lakh under this section in a financial year only if you have opted for the old tax regime. The new tax regime offers no such exemption.
To claim a deduction under Section 80C, you must invest this amount in eligible investment options or spend this money on a specified deductible during the same financial year.
Among the eligible investment instruments here are the Employees' Provident Fund (EPF), Public Provident Fund (PPF), Equity-Linked Savings Scheme (ELSS), Sukanya Samriddhi Yojana (SSY), National Savings Certificate (NSC), National Pension System (NPS), and Senior Citizen Savings Scheme (SCSS) among others.
How to claim it
Deductions under Section 80C can be claimed by an individual under the 'Total Deductions' option while filing the ITR form. Claiming the same, mention the amount of deduction you are willing to claim or ₹1.5 lakh -- whichever is lower.
(Edited by : Sudarsanan Mani)
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