Deduction under section 80c

Published : 10 Jan 2023

An employee and his/her employer both contribute towards PF. While the contribution made by the employer is exempt from tax, the contribution made by the employee is eligible for deductions under Section 80C of the Income Tax Act.

Public Provident Fund offers assured returns at 7.1% interest rate and. the maturity period of the scheme is 15 years. The least that you can contribute towards PPF is Rs.500 and the maximum contribution allowed is Rs.1.5 lakh.

The premiums paid towards the life insurance are eligible for deductions under Section 80C of the Income Tax Act. In case one has multiple life insurance policies from different insurance providers, they can club all the premiums and claim deductions up to Rs.1.5 lakh p.a.

Certain mutual fund schemes have been designed especially for the purpose of tax savings. Equity Linked Savings Schemes, or ELSSs as they are generally called, allow investors to claim tax deductions to the extent of Rs.1.5 lakh under Section 80C of the Income Tax Act.

National Savings Certificate or NSC as it is known has a maturity period of the scheme is five years and 10 years and offers an interest rate of 6.8%.The minimum amount of money that you can invest in this certificate is Rs.100 and there is no maximum limit on the amount of investment. The amount you invest in National Savings Certificate is eligible for tax deductions under Section 80C of the Income Tax Act, subject to a maximum of Rs.1.5 lakh per financial year

These insurance plans offer coverage to the policyholder and provide substantial returns in the long term. One of the main reasons why these plans have become so popular in recent times is the fact that they not only help in saving money, but also provide tax benefits under Section 80C of the Income Tax Act.

The EMI amount that goes towards the repayment of the principal amount on your home loan is also eligible for tax deductions under Section 80C of the Income Tax Act. 

In case you purchase a home or a property and pay for stamp duty and registration, these amounts can be claimed as tax deductions under Section 80C of the Income Tax Act.

NABARD, or the National Bank for Agriculture and Rural Development, offers two kinds of bonds, viz. Bhavishya Nirman Bonds and NABARD Rural Bonds. However, only the latter qualifies for tax deductions under Section 80C of the Income Tax Act, and the maximum amount that you can claim as deductions is Rs.1.5 lakh.