What is Section 80C?
Section 80C of the Income Tax Act, 1961 allows individuals and HUFs to reduce their taxable income by making investments or incurring eligible expenses. The maximum deduction allowed under this section is ₹1.5 lakh per financial year.
Popular Tax Saving Instruments under 80C
- Life Insurance Premium (LIC)
- Public Provident Fund (PPF)
- Employees’ Provident Fund (EPF)
- Equity Linked Savings Scheme (ELSS)
- National Savings Certificate (NSC)
- 5-Year Tax Saving Fixed Deposit
- Sukanya Samriddhi Yojana (SSY)
- Tuition Fees for Children
- Principal Repayment on Home Loan
These instruments not only help in tax saving but also encourage long-term savings and investments.
Eligibility Criteria
Only Individuals and Hindu Undivided Families (HUFs) are eligible to claim deductions under Section 80C. Companies, partnership firms, and LLPs cannot claim this deduction.
Things to Remember
- The total deduction limit under Section 80C is ₹1,50,000.
- Investments must be made in the same financial year to claim the benefit.
- Investments under 80C are eligible under the old tax regime only.