Income Tax Deduction under Section 80C for tax saving

Income Tax Deduction under Section 80C

There are many sections in income tax deduction under which individuals can save taxes by investing in the various tax saving options. Section 80C, Section 80D and other section 80 deductions come under the income tax deductions which allowed to claim the maximum deduction of up to Rs. 1.5 lakh from total income.

Life Insurance Premium, ELSS, Provident Fund, Sukanya Samriddhi Yojana and PPF are some of the best tax saving investment options under section 80C.  Section 80C Deductions can be claimed by any individual or HUF for tax planning or tax saving purpose.

Section 80C Deductions


Equity Linked Savings Scheme (ELSS) is one of the best tax saving options which allows the maximum tax deductions of 1.5 lakh under Section 80C of the Income Tax Act. An individual can invest in ELSS with minimum lock-in period of 3 years. The returns of ELSS depends on the various market factors and risk-taking ability of investor.

Life Insurance Premium:

Life Insurance Premium provides the tax benefits and any individual can claim maximum deduction of 1.5 lakh under section 80C. The minimum lock-in period of life Insurance policy is 2 years.

EPF (Employee Provident Fund):

Any salaried employee can get tax deduction under section 80C by contributing to EPF which is a retirement benefit scheme. An employee can not withdraw the funds from the EPF if he/she is employed in company except some emergency conditions. The rate of interest is 8.65%.

PPF (Public Provident Fund):

PPF is one of the best Section 80C deductions for a long-term investment. Any salaried employee or non-salaried can choose to invest in PPF (Public Provident Fund). The maximum lock-in period of PPF is 15 years.

ULIP (Unit Linked Insurance Plan):

Any individual can claim tax deduction benefits by investing in ULIPs. An investor can invest in life insurance and stock market through ULIPs. The rate of interest in ULIPs depends on the market factors.

Sukanya Samriddhi Scheme:

Sukanya Samriddhi Scheme is the tax saving option that allows the maximum deduction of up to Rs. 1.5 lakh. The maturity period of Sukanya Samriddhi Scheme is 21 Years and Rate of interest is 8.4%.

Senior Citizens Savings Scheme:

Any individual who is over 60 years old is eligible for this tax saving option. The maturity period of Senior Citizens Savings Scheme is 5 years and rate of interest is 8.6%. A maximum of 1.5 lakh can be claimed for tax deduction under Section 80C by investing in this scheme.


NSC (National Savings Certificate):

An investment of up to Rs. 1.5 lakh is allowed for tax deduction under Section 80C in NSC which is postal department scheme. The maturity period of NSC is 5 years and the rate of interest is 7.9% compounded annually.

You can start plan your investment before March and decide the best tax saving options suitable for you. You can contact us here for any expert advice: Best tax saving investment option.

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