Tax_Section_80C

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Income tax benefits available under Section 80C



Life insurance premium (LIC)
As per current tax laws, premium paid towards subscription or activation of a life insurance policy is eligible for tax benefit under Section 80C. This includes premium paid towards life insurance for self, dependent children and parents under certain conditions. The amount of premium up to 10 per cent of the sum assured (in case of policies issued after April 1, 2012) is eligible for deduction, according to income tax laws.
 


For example 
Mr A is taken LIC for his Family
Self Premium Paid Rs 1,000/- & Sum assured Rs 1,00,000/-
Parents Premium Paid Rs 1,000/- & Sum assured Rs 1,00,000/-
Mr A will allowed Deduction of Rs 2000/- (Maximum up to Rs 20,000/-)

5 Year tax saving FD

Most commercial banks offer a special type of fixed deposit scheme. This scheme, often referred to as a five-year tax-saving FD, comes with a lock-in period of five years - which means premature withdrawals are not allowed. Investment in such FDs is eligible for tax benefit under Section 80C of the Income Tax Act.










Public Provident Fund (PPF)

Contributions made to a PPF account are eligible for tax benefit under Section 80C. Investment in PPF is subject to a lock-in period of 15 years and an upper limit of Rs. 1.5 lakh in a year.


Equity-Linked Saving Scheme (ELSS)
Mutual funds under ELSS come with a lock-in period of three years. Not to be confused with a Systematic Investment Plan (SIP), an ELSS is a type of mutual fund eligible for tax exemption under Section 80C.

Small savings scheme Sukanya Samriddhi

Investment in the Sukanya Samriddhi scheme for up to two girl children is eligible for deduction under Section 80C. A Sukanya Samriddhi account can be opened in the name of a minor child.


Repayment of home loan principal
Section 80C also offers deduction against repayment of home loan under certain conditions. Individuals can claim a deduction against the repayment of the principal amount in a home loan for a house whose construction is complete. Also, the person should not have transferred the property before completion of five years from the date of possession to be able to avail the tax benefit.

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