Income Tax Deduction under section 80C
Updated on : Aug. 25, 2022 - 3 p.m. 17 min read.
Income tax deduction under section 80C can save tax on maximum amount of 1.5 lakh p.a. Under this section, individuals can invest in several savings schemes to claim deductions on their taxable income.
Section 80C of the Income Tax Act came into effect on 1 April 2006. It basically allows certain expenditures and investments which are exempted from tax. If you plan your investments well and spread them intelligently across different investments such as PPF, NSC, etc., then you can claim deductions up to Rs.1.5 lakh, thereby lowering your tax liability.
How to claim income tax deductions under section 80C :
Activities under section 80C can be divided into two parts:
- Investment: You park your money in an investment for some time and then get it back.
- Spending: You spend your money on the activities listed under section 80C.
The following chart is showing Investments & other venues available for deductions u/s 80-C.
Fixed income products
How much deduction can be claimed under section80-C ?
The deduction of `50,000/- is available on NPS over and above `150,000/- deduction available U/S 80C, 80CCC & 80CCD (1).
Deductions on investment under section 80- C
Under section 80C- The amount of eligible investment or expenditure as specified is fully allowed for deduction subject to the limit of Rs 1.5 lakh. The limit of Rs 1.5 lakh deduction of Section 80C includes 80CCC (contribution towards pension plan) and 80CCD (1), 80CCD (1b), and 80CCD (2).
80C Income Tax Deduction:
Save the tax up to ₹ 1.5 lakhs by investing under Section 80C. Buy medical insurance and claim a deduction of up to ₹ 25,000/- (₹ 50,000/- for senior citizens) for medical insurance premiums paid under Section 80D. Also, an investment of up to ₹ 50,000/- in NPS could help you with additional tax savings under Section 80CCD (1b).Income tax deduction under section 80C can save tax on maximum amount of 1.5 lakh p.a. Under this section, individuals can invest in several savings schemes to claim deductions on their taxable income.