80C allows deduction for investment made in PPF , EPF, LIC premium , Equity linked saving scheme, principal amount payment towards home loan, stamp duty and registration charges for purchase of property, Sukanya smriddhi yojana (SSY) , National saving certificate (NSC) , Senior citizen savings scheme (SCSS), ULIP, tax …

What is 80C in income tax with example?

A tax exemption (such as interest on a tax free bond) cannot be deducted from your gross total income. For example if your gross total income is Rs 7 lakh and you have invested Rs 1.5 lakh in a tax-saving instrument under Section 80C, your taxable income will be become Rs 5.5 lakh.

What is the meaning of Section 80C?

It allows taxpayers to reduce their taxable income by making investments and some expenses and thus save on taxes they pay. Currently, section 80C allows deduction from gross total income (before arriving at taxable income) of up to Rs 1.5 lakh per annum on eligible investments and specified expenses.

How does Section 80C work?

Here is how this section works and helps an individual save tax in a financial year. Through section 80C, an individual or an HUF can reduce up to Rs 1.5 lakh from their gross total income in a financial year thereby reducing their net taxable income and tax payable thereon.

What is 80C in income tax 2020 21?

* Child may be married/unmarried, dependent or not on the Individual. For HUF – A deduction would be allowed on the premium paid by HUF for any of its members of the family.

How is 80C calculated?

Let us understand how to calculate tax savings using Section 80C. For example, your gross taxable income is Rs 9,00,000 per annum. You have the standard deduction of Rs 50,000 per year. You will then have to deduct the eligible expenses and investments under Section 80C.

How can I save my tax after 80C?

Let us take a look at some of such tax-saving options you may consider other than those available under Section 80C:

1. Section 80CCD (1B): Additional deduction for NPS investments.
2. Section 80D: Health insurance premium.
3. Section 10(13A): HRA exemption by paying rent to parents.

What is the deduction under Section 80C of the Income Tax Act?

Equity Linked Savings Schemes, or ELSSs as they are generally called, allow investors to claim tax deductions to the extent of Rs.1.5 lakh under Section 80C of the Income Tax Act.

What is the maximum tax benefit under 80C?

Under section 80C, the maximum tax benefit is upto 1.5 lacs. There are several scheme under this section: ELSS: ELSS is a diversified equity mutual fund. the benefit of ELSS is that you get the market edge and also save tax through section 80C.

What kind of investment schemes are covered by Section 80C?

ELSS is another type of investment scheme covered under Section 80C, in which you enjoy income tax saving benefits on the amount you put into the fund. Such a scheme offers you higher returns as your money gets invested in equity funds, but the point to note is that equity investment is prone to higher market-related risks.

Can You claim stamp duty as a deduction under Section 80C?

Registration charges and stamp duty for a home/property: In case you purchase a home or a property and pay for stamp duty and registration, these amounts can be claimed as tax deductions under Section 80C of the Income Tax Act.