Section 80C has been the most popular tax saving instruments for taxpayers and assessees are always encouraged to make the most of it. The Income Tax Act provides Non Resident Individuals (NRI) to secure their income by making investments on certain instruments covered under Section 80C.

How to avail benefits of section 80C?

Tax saving can be done in either of the two ways, that is, either avail the concession / deduction available to you for certain expenditures incurred by you such as tuition fees and home loan principal repayment or make investments on instruments such as EPF (Employee’s provident fund), VPF (Voluntary provident fund), PPF (Public Provident Fund), NSC (National Savings Certificates), ULIPs (Unit-linked insurance plans) etc. However the overall deduction of Rs.100000 under Section 80C is applicable on NRIs as well.

Deductions available:

The provisions of Section 80C in the context of NRIs are explained below:

• NRIs can avail deduction in respect of tuition fees incurred on the education of two children inIndia.
• Deduction can be claimed for repayment of principal sum of home Loans.
• Stamp duty, registration fees, and other expenses incurred for the purpose of purchase of house property are also entitled for section 80C deduction.
• NRIs can make investment on the following instruments such as EPF (Employee’s provident fund), VPF (Voluntary provident fund), ULIPs (Unit-linked insurance plans), ELSS (Equity linked savings scheme), 5-year tax-saving fixed deposits (FDs) of banks, Mutual funds pension plans , NABARAD (National Bank for Agriculture and Rural Development) Rural Bonds and life insurance premium.

Deductions not available:

However the following investments are not allowed:

• They are not allowed to open a PPF account. But an existing PPF account can be continued till maturity.
• Any investment in National Saving Certificates (NSC), Senior Citizens Savings Scheme (SCSS) and Post Office Time Deposits (POTD) is not permitted.  But those that were purchased before becoming an NRI can be continued till maturity.

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