Under Section 80C, you can invest a maximum of Rs 1 lakh and if you are in the highest tax bracket of 30%, you save a tax of Rs 30,000. The various investment options under this section include:
|Nature Of Investment||Remarks|
|Life Insurance Premium||For individual, policy must be in the name of self or spouse or any child’s name.
For HUF, it may be on life of any member of HUF.
Policy Can be taken from LIC as well as any other insurance company.
|Sum paid under contract for deferred annuity||For individual, on life of self, spouse or any child of such individual.|
|Sum deducted from salary payable to Govt. Servant for securing deferred annuity for self, spouse or child||Payment limited to 20% of salary.|
|Equity Linked Savings Scheme (ELSS)|
|Contribution made under Employee’s Provident Fund Scheme||–|
|Contribution to PPF||For individual, can be in the name of self/spouse, any child & for HUF, it can be in the name of any member of the family.
Minimum amount of contribution is Rs 500 and maximum is Rs 70,000.
Maturity Period is 15 years
|Contribution by employee to a Recognized Provident Fund.||–|
|Subscription to any notified securities/notified deposits scheme.||–|
|Subscription to any notified savings certificates.||National Savings Certificate (NSC) is a 6-Yr small savings instrument, for e.g. NSC VIII issue.|
|Contribution to Unit Linked Insurance Plan of LIC Mutual Fund||ULIPs cover Life insurance with benefits of equity investments for e.g. Dhanrakhsa 1989|
|Contribution to notified deposit scheme/Pension fund set up by the National Housing Bank.||–|
|Certain payment made by way of installment or part payment of loan taken for purchase/ construction of residential house property.||Only Repayment of Principal Amount of Loan is eligible for deduction u/s80C. Interest will be eligible for deduction u/s 24.
Condition has been laid that in case the property is transferred before the expiry of 5 years from the end of the financial year in which possession of such property is obtained by him, the aggregate amount of deduction of income so allowed for various years shall be liable to tax in that year.
|Subscription to units of a Mutual Fund notified u/s 10(23D)||–|
|Subscription to deposit scheme of a public sector company engaged in providing housing finance.||–|
|Subscription to equity shares/ debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions.||–
|Infrastructure Bonds||Commonly known as Infra Bonds.
Issued by Infrastructure Companies not Government
|Tuition fees paid at the time of admission or otherwise to any school, college, university or other educational institution situated within India for the purpose of full time education.||Available in respect of any two children.|
|Any term deposit for a fixed period of not less than five years with the scheduled bank.||This has been included in Section 80C by the Finance Act 2006.
Time period should be of 5 years or more.
|Subscription to notified bonds issued by NABARD||NABARD stands for National Bank for Agriculture and Rural Development.
This has been included in Section 80C by the Finance Act 2007 and has come into effect from 1.4.2008.
Bhavishya Nirman Bonds (BNB) is not a qualified investment u/s 80C.
|Payment made into an account under the Senior Citizens Savings Scheme Rules, 2004||This has been introduced by Finance Act, 2008 and shall come into effect from 1.4.2009.
This is available only to Senior Citizens
Interest is payable quarterly instead of compounded quarterly
|Payment made 5 years time deposit in an account under the Post Office Time Deposit Rules, 1981
|This has been introduced by Finance Act, 2008 and shall come into effect from 1.4.2009.
It is similar to Bank Fixed Deposit.
Only 5 years POTD qualifies for deduction not 1 year, 3 years or of any other time period.
|Voluntary Provident Fund||You also have the option to contribute additional amounts through voluntary contributions (VPF).|
Please note that the aggregate amount of deductions under sections 80C, 80CCC and 80CCD are subject to an overall ceiling of Rs.1 lakh.