What are the Tax Exemptions under 80C

The Income Tax Act of 1961 provides several tax deductions for residents of the country. Section 80C of the Act allows individuals and Hindu Undivided Families (HUFs) to claim a deduction of an amount up to INR 1.5 lakh from the total gross income.


Deductions under Section 80C

The following deductions are available under the section of Income Tax.

Any premium paid towards the term insurance policy will be eligible for tax benefits. This deduction can be claimed for the premium paid for the policy of self, spouse, children, and any member of the HUF.

  • Public Provident Fund (PPF)

A traditional investment option, PPF contributions are eligible for tax deductions under Section 80C. The money remains locked in for 15 years, and you can earn interest on it.

  • Sukanya Samriddhi Yojana

Any investment in this tax-saving scheme for a girl child will make you eligible for a tax deduction. However, the girl child should be below 10, and the account can be opened for a maximum of two girl children. A parent of a legal guardian of the girl child can open this account.

  • Equity Linked Saving Scheme

An investment made in ELSS will qualify for tax deduction under Section 80C. The scheme has a mandatory lock-in period of three years from the date of the data acquisition.

Most banks offer tax-saving fixed deposits that allow you to claim a deduction under Section 80C. The fixed deposit will have a lock-in period of five years, and premature withdrawal is not permitted.

When you buy a property, the largest expense will be the cost of stamp duty and registration charges. This amount is eligible as a deduction under section 80C, and it can only be claimed when you legally possess the property.

  • National Savings Certificate

Any National Savings Certificate scheme investment is eligible for a deduction under Section 80C. The interest rate on the investment is similar to that of PPF and tax-saving fixed deposits. However, the interest is liable to tax.

This tax-saving investment product is ideal for senior citizens, and it has a tenure of five years. An individual should be above the age of 60 years to participate in the scheme.

Any amount that goes into the repayment of the principal amount of the home loan is eligible for a deduction. The amount claimed as a benefit in the past will be taxable now. However, to claim the use, the property’s construction should be complete, and if the property is transferred in less than five years from the date of purchase, no tax benefits will be awarded.

Keep these investment options in mind to make the most of the exemptions available under Section 80C of the Income Tax Act.

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