tax saving guide u/s 80/c 2015-16

TAX Saving Guide U/S 80-C2015-16

Mehul Bheda (B.Com,RFC,CFP)

Certified Financial Planner

Most of the Income Tax payee try to save tax by saving under Section 80/C of the Income Tax Act. However, it is important to know the Section in to so that one can make best use of the options available for exemption under income tax Act.

One important point to note here is that one can not only save tax by

undertaking the specified investments, but some expenditure which you normally incur can also give you the tax exemptions. Here are some tips for you:

Maximum Limit to Save U/s 80-C

For Financial Year 2015-16 is Rs 1,50,000/-



1) HOUSING LOAN –Principal Amount / Stamp Duty

There is a provision that the payment made for repayment of

the principal amount (not interest payment) of the Home Loan

is eligible for a deduction under Section 80C if you have taken

a home loan and you fulfill certain conditions.

( The Deduction OF Interest Component can be claimed U/s 24

Of Income Tax Act.)

“The Amount paid as Stamp Duty & Registration Fee is

also allowed as tax deduction under Section 80C even if the

Assessee has not taken Loan."



2) Education Fees / Tution Fees

If you are incurring expenditure on education fees is also

eligible for a deduction under Income Tax Act, You can

claim a deduction of payment made for tuition fee to any

university, college, school or any other educational

institution.

It can only be claimed in respect of two dependent children

and for fees to an educational institution within India and,

for tuition fee only.

Payment as donation or development fee to an

educational institution does not qualify



3) Life Insurance Premium

Life Insurance Premium (By LIC Or Any Private Insurer) Paid for Self , Spouse & Children are Eligible For deduction U/s 80-C.

From 1st April 2013 Only Premium Equal to 10% Of Sum assured will be allowed.



4) Provident Fund / EPF

For Salaried Employees, PF (Provident Fund) is Default Investment Which Qualify For Deduction U/s 80-C.

Your contribution (i.e., employee’s contribution) is counted towards section 80C investments. You also have the option to contribute additional amounts through voluntary contributions (VPF).



5) Public Provident Fund (PPF)

Among all the assured returns small saving schemes, Public Provident Fund (PPF) is one of the best.

Current rate of interest is 8.7%.

Maturity period is 15 Years



6) Unit Linked Insurance Plan

All ULIPs qualify as life insurance policy and the

premiums are exempted from income tax benefit. ULIPS

area Combination Of Insurance & Invetments.

Our Suggestion :There are Other Investment Option

Which can Yield better Return at Lower Cost. SO

AVOID INVESTMENT IN ULIPS



7 ) Five Year Bank Fixed Deposit

There are Special 5 years Bank Fixed Deposit Which are

eligible For Deduction U/s 80-C.

Interest are Taxable so avoid



8) Five Years Postal Time Deposit (POTD)

POTDs are similar to bank fixed deposits. Deposits in 5

year time deposit qualify for deduction under section 80-

C of Income Tax Ac.

Current Ineterest rate is 8.50%

The Interest is entirely taxable.



9) National Savings Certificate (NSC):

NSC is a saving bond, primarily used for small saving and income tax saving investment in India.You can purchase same through Post office. Current Rate of Interest is 8.5% ( 5 Years NSC) ,8.80% ( 10 Years NSC).

Ineterst Accrued Every year is liable to Tax, But Interest is deemed to be Reinvested and thus eligible For Section 80-C.



10) Senior Citizen Savings Scheme 2004 (SCSS)

An individual who has attained the age of 60 years or

above on the date of opening of a/c or an individual who

attained the age of 55 years or more and who has retired

under VRS/SPL.

VRS, can open an account individually or jointly with

spouse.

Current rate of interest is 9.30% per annum payable

quarterly.

Term- 5 Year Interest income is chargeable to tax.

W.E.F 1st April 97 This Scheme Qualify For Tax Benifite



11) ELSS ( Equity Linked Saving Scheme)

There are Specific ELSS Schemes (Not all MF Schemes)

under Mutual Fund , Eligible For Tax Saving U/s 80-C

Of Income Tax Act.

ELSS Schemes have Lock In period Of Only 3 Years.

If You Continue to Invest in ELSS Scheme For Long

term Than ELSS has Potential to generate Wealth For

You.



12) Sukanya Samridhi Account

A guardian can open only one account in the name of one Girl child

and maximum two accounts in the name of two different Girl

children. Account can be opened up to age of 10 years only from

the date of birth

Account can be closed after completion of 21 years. Of Child

Interest Rate 9.20% (From 1st April2015)

Minimum Investment- Rs 1000 Max -1.50 Lakh in a

Financial Year





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