What is 80C in Income Tax?

Have you ever wondered what is 80C in income tax? If you're looking for ways to save on your taxes, understanding Section 80C can help. Here, you can learn about this Section of the Income Tax Act of India and explore its nuances. Section 80C offers taxpayers various avenues to reduce their taxable income. It includes investing in specified avenues and expenses like NSC, ULIPs, PPF, and more. Let’s delve into what is 80C and what’s in it for you.

Section 80C in Income Tax

As taxpayers, we look for ways to reduce our tax burden. Section 80C of the ITA helps you shrink that bill and boost your savings at the same time. Let’s look at some ways in which you can avail of tax rebates under Section 80C.

• This Section allows individuals and Hindu Undivided Families (HUFs) to claim a maximum deduction of up to Rs 1.5 lakh annually from their total taxable income. The primary objective is to encourage saving and investing.
• Under this Section of the ITA, taxpayers can avail tax exemptions on a wide range of investments and expenses. Some of the key avenues eligible for deductions include contributions to EPF (Employee Provident Fund), PPF (Public Provident Fund), payments towards life insurance premiums, NSC (National Savings Certificate), NABARD Rural Bonds, and ULIPs (Unit Linked Insurance Plans).
• Paying Stamp Duty and Registration Charges for a property makes taxpayers eligible for a tax rebate under Section 80C. However, you can avail of a tax rebate under this Section only in the year that these were paid.
• Taxpayers can avail of a tax rebate for investments made towards SCSS (Senior Citizens Savings Scheme). The tax deduction is applicable up to Rs 1.5 lakh. Taxpayers who opt for VRS (Voluntary Retirement Scheme) after attaining the age of 55 and senior citizens aged above 60 can invest in SCSS. Do note that investments in this scheme come with a lock-in period of 5 years.
• One can avail of a tax deduction under Section 80C for the Principal repayments made towards EMIs for a home loan. However, this is subject to the fulfilment of certain clauses.

Conclusion

Now you know what is 80C, do your research and understand the options available under this Section before diving in. Choose things that match your financial goals and risk tolerance. As you take steps to secure your financial well-being, investing in health insurance policy will enable you to take care of any healthcare-related expenses. A comprehensive healthcare policy acts as a safety net not only for any medical exigencies but also helps you get tax rebates.

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