<\/p>\n

1.    Under
\nthis section, deduction is available from Gross Total Income.<\/p>\n

2.    Deduction
\nis available on the basis of specified qualifying investments, contributions, deposits,
\npayments (i.e. called as \u201cGross Qualifying Amount\u201d) made by the taxpayer during
\nthe previous year.<\/p>\n

3.    The
\ngross qualifying amount would be allowed as deduction irrespective of the fact
\nwhether (or not) such amount is paid or deposited by the taxpayer out of his
\nincome chargeable to tax.<\/p>\n

 <\/p>\n

Let\u2019s
\nknow the qualifying investments to get deduction u\/s 80C:<\/strong><\/p>\n

 <\/strong><\/p>\n

A.   Provident
\nFund (PF) & Voluntary Provident Fund (VPF):<\/strong> PF
\nis automatically deducted from your salary. Both you and your employer
\ncontribute to it. While employer\u2019s contribution is exempt from tax, your
\ncontribution (i.e., employee\u2019s contribution) is considered for deduction
\nsection 80C investments. You also have an option to contribute additional
\namounts through voluntary contributions (VPF).<\/p>\n

B.   Public
\nProvident Fund (PPF): <\/strong>Contribution towards public provided fund is the
\nqualified deduction under section 80C. PPF is established by the central
\ngovernment. PPF account can open in any nationalized bank. This is long term
\ninvestment as it is matured after 15 years.<\/p>\n

 C.   Life
\nInsurance Premiums<\/a>:<\/strong> Any amount that you pay towards life
\ninsurance premium for yourself, your spouse or your children is deductable under
\nSection 80C. Kindly note that life insurance premium paid by you for your
\nparents or any other relative (other than spouse and Childers) is not eligible
\nfor deduction under section 80C. If you are paying premium for more than one
\ninsurance policy, you can claim deduction of all insurance policies. It is not
\nnecessary to have the insurance policy from Life Insurance Corporation (LIC), even
\ninsurance bought from private companies which are approved by IRDA<\/a> is
\nconsidered for deduction.<\/p>\n

D.   Equity
\nLinked Savings Scheme (ELSS): <\/strong>There are some diversified equity link mutual fund (MF)
\nspecially created for offering you tax savings,. The investments that you make
\nin ELSS are eligible for deduction under Sec 80C. The lock in period for this
\ninvestment is 3 years. Dividend earn on ELSS is exempt from tax.<\/p>\n

E.   Home
\nLoan Principal Repayment:<\/strong> The Equated Monthly
\nInstallment (EMI) that you pay every month to repay your home loan consists
\nof two components i.e. Principal and Interest. The principal component of the
\nEMI qualifies for deduction under Sec 80C. For interest component you can save
\nyour income tax under Section 24 of the Income Tax Act as loss from house
\nproperty.<\/p>\n

F.    Stamp
\nDuty and Registration Charges for a home: <\/strong>The
\namount you pay as stamp duty when you purchase a house property and the amount
\nyou pay for the registration fees of the house can be claimed as deduction
\nunder section 80C in the year of purchase of the house.<\/p>\n

G.   National
\nSavings Certificate (NSC) (VIII Issue): <\/strong>National Savings
\nCertificate (NSC) is a 5-Yr small savings instrument eligible for section 80C
\ntax benefit.<\/p>\n

H.   5-Yr
\nbank fixed deposits (FDs): <\/strong>Tax-saving fixed deposits
\n(FDs) of scheduled banks with tenure of 5 years are also entitled for section 80C<\/strong> deduction. The difference between regular FD
\nand this FD is that you cannot
\nbreak this Fixed Deposit before 5 years tenure. Interest rates for such
\na Fixed Deposit are decided by the respective banks. Tax Saving Fixed
\nDeposit is available only through the banks. Company Fixed Deposits are not
\neligible for tax savings through Section 80C. Loan or overdraft facility
\nin such a Fixed Deposit is not allowed. The interest earned out of such
\na Fixed Deposit is fully taxable on an accrual basis.<\/p>\n

I.      5-Yr
\npost office time deposit (POTD) scheme:<\/strong> POTDs are similar to
\nbank fixed deposits. Although available for varying time duration like one
\nyear, two year, three year and five year, only 5-Yr post-office time deposit
\n(POTD) \u2013 which currently offers 8.40 per cent rate of interest \u2013qualifies for
\ntax saving under section 80C<\/strong>.
\nInterest is compounded quarterly but paid annually. The Interest is entirely
\ntaxable.<\/strong><\/p>\n

J.    NABARD
\nrural bonds:<\/strong>Investment
\nin rural bonds issued by NABARD qualifies for deduction under section 80C.<\/p>\n

K.   Unit
\nlinked Insurance Plan:<\/strong> Unit linked Saving Schemes. ULIPs cover
\nLife insurance with benefits of equity investments. They have attracted the
\nattention of investors and tax-savers not only because they save the tax but
\nthey also perform well to gives good returns in the long-term.<\/p>\n

L.   
\n<\/strong>Tuition \/ school fees paid
\nfor education of children:<\/strong><\/p>\n

\u00a7  Who
\nis Eligible<\/strong>: Deduction for tuition fees u\/s. 80C of the
\nIncome Tax Act 1961 is available to Individual Assessee and is not available to
\nHUF.<\/strong><\/p>\n

\u00a7  Deduction
\nunder this section is available on payment basis. Fees may be related to any
\nperiod. For example feed paid for April 2015 if Paid in March 2015 will be
\neligible for deduction u\/s. 80C in A.Y. 2015-16.<\/p>\n

\u00a7  The
\ndeduction is available for Full Time courses only.   No deduction is
\navailable for part time or distance learning courses.<\/p>\n

\u00a7  The
\nfees should be paid to university, college, school or other educational
\ninstitution. No deduction available for fees paid for private tuition\u2019s, coaching
\ncourses for admission in professional courses or any other type of courses are
\nnot covered as that fee is not paid for FULL time education.<\/p>\n

\u00a7  University,
\ncollege, school or other educational institution must be situated in India
\nthough it can be affiliated to any foreign institutes.<\/p>\n

\u00a7  Pre-nursery,
\nplay school and nursery class fees is also covered under section 80C.<\/p>\n

  <\/p>\n

Must know:<\/strong><\/p>\n

 <\/strong>Not allowable Expenses:-<\/strong><\/p>\n

1.  Development fees
\nor donation not eligible.<\/strong><\/p>\n

2.
\nTransport charges, hostel charges, Mess charges, library fees incurred
\nfor education are not allowed.<\/p>\n

3.
\nLate fees are not eligible for
\ndeduction.<\/p>\n

4.
\n No deduction for part time or distance
\nlearning courses.<\/p>\n

6.
\nNo deduction for private tuition fees.<\/p>\n

7.
\nBuilding fund or any donation etc. not allowed for deduction.<\/p>\n

<\/p>\n

\n
•          For how many children, the deduction
  \nis available?<\/strong><\/li>\n<\/ul>\n

  <\/p>\n

  \u00d8 
  \nDeduction
  \nunder this section is available for tuition fees paid on two children\u2019s
  \neducation. If Assessee has more than two children then he can claim tuition
  \nfees paid of only two children\u2019s. The Deduction is available for any two
  \nchildren.<\/p>\n

  \u00d8 
  \nHere
  \nwe would like to mention that husband and wife both have a separate limit of
  \ntwo children each, so practically, they can claim deduction for 2 children
  \neach, thereby covering a maximum of four children in a family.<\/p>\n

  Important Note:<\/strong><\/p>\n

  The
  \ndeduction is based on payment, so it is available to the parent who has made
  \nthe payment.<\/p>\n

  <\/p>\n

  \n
  • Whether expenses paid
    \nfor self-education or education of spouse is allowed as deduction u\/s 80C?<\/strong><\/li>\n<\/ul>\n

    <\/p>\n

    No.
    \nTaxpayer cannot claim tax benefit for educational expenditure incurred for self
    \nor spouse. <\/p>\n

    <\/p>\n

    \n
    •          What is the maximum limit for
      \ndeduction u\/s 80C?<\/strong><\/li>\n<\/ul>\n

      <\/p>\n

      The maximum amount deductible
      \nis Rs. 150,000 from the assessment year 2015-16. (Earlier it was Rs.1, 00,000) <\/p>\n

      <\/p>\n

      \n
      •          How much is the possible maximum tax saving under section
        \n80C?<\/strong><\/li>\n<\/ul>\n

        <\/p>\n

        \u00d8 
        \nSec
        \n80C of the Income Tax Act states that qualifying investments, up to a maximum
        \nof Rs. 1.50 Lakh, which are deductible from your income. This means that your income
        \ngets reduced by this investment amount (up to Rs. 1.50 Lakh).<\/p>\n

        \u00d8 
        \nThis
        \nbenefit is available to everyone, irrespective of their income levels. Thus, if
        \nyou are in the highest tax slab <\/a>of 30%, and you invest the full Rs. 1.50
        \nLakh, you save tax of Rs. 45,000.<\/p>\n","protected":false},"excerpt":{"rendered":"

                 What is deduction? The deduction is specified amount which the taxpayer can deduct from his Gross Total Income. The deduction under section 80C not only encourages savings, but also assists the taxpayers in meeting their essential expenditures.          Let\u2019s know the background of section 80C:  Most of the Income … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[4],"tags":[43],"class_list":["post-81","post","type-post","status-publish","format-standard","hentry","category-income-tax","tag-80c"],"yoast_head":"\n