Save Taxes and Secure Future – Tax saving options under section 80C

Every individual and HUF taxpayers are entitled to a deduction of an aggregate amount paid or deposited in the specified items, subject to a maximum limit of Rs 100,000. Some of common tax investment options under section 80C are (i) Life Insurance Premium paid for himself by individual or for spouse, and children, (ii) in case of HUF, the payment of Life insurance premium of any member or members of HUF, (iii) Payment by a person in respect of non-commutable deferred annuity, (iv) Contribution, other than repayment of loan, made by an individual towards statutory provident fund, (v) contribution other than repayment of loan, made by a person towards the 15 year public provident fund, (vi) contribution by an employee to an approved superannuation fund, (vii) contribution to National Saving Scheme, ULIP of UTI, ULIP of LIC, (viii) contribution to equity linked savings scheme, and (ix) amount paid for the purpose of purchase or construction of residential house property, however, any of the payment towards the cost of any addition or alteration to, or renovation or repair of, the house property which is carried out after the issue of the completion certificate in respect of the house property or after the house property or any part thereof has either been occupied by the assessee or any other person on his behalf or been let out or any expenditure in respect of which deduction is allowable under the provisions of section 24, is not allowed as deduction under section 80C. Some of important points to be noted under section 80C are as discussed as below: • The payments or deposits can be made for the purpose of section 80C from any source, even out of borrowings. There is no condition that such payment has to be made out of income chargeable to tax; • The current provision of section 80C, does not prescribe for any restriction for different tax investments within Rs. 100,000. Please note the direct tax code applicable from April 2012 prescribes for restrictions within Rs. 100,000 for LIC and other investments; • The premium paid to keep in force a LIC policy of any child, whether major or minor, will be eligible for claim under section 80C; • As per the provisions of section 80C, if both the parents satisfy the conditions will be eligible for deductions for tuition fees; • Individuals are entitled to claim deduction under section 80C on payment of instalment of loan only. The payment towards interest on housing loan is not eligible for deduction under section 80C. However, such interest can be claimed under the head income from house property under proviso to section 24(b). We at have the expertise in handling individual taxation; do let us know, in case you have any query regarding taxes.

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