Investments or expenses that qualify under section 80C

Investments or expenses that qualify under section 80C

There are several options are available to claim the 80C deduction. Individual can do all of Rs 1,00,000 in one of them or allocate to many. Since there are no sub limits for claim the 80C deduction. Individuals can also end up investing more than Rs 1,00,000 in these, and their deduction in total will be limited into Rs 1,00,000.

The investments or expenses that qualify under section 80C

Employee Provident Fund: The amount cut out from your salary or Provident fund deductions means employee’s contribution forms part of 80C. Any Voluntary Provident Fund that you are contributing additionally also include in this.

Public Provident Fund: Each year the money deposited by in your provident fund account can be added to form part of your 80C deduction. Each year a maximum of Rs 1,00,000 can be deposited.

Tuition Fees: The tuition fees that you paid for your children’s full time education also be claimed as a part of section 80C deduction. This deduction is available for maximum of 2 children. School, college and university fees comes under tuition fees. The deduction available only after this expense has actually been paid. The tuition fees for your own education or spouse education then this deduction is not available.

Repayments principal: Section 80C deduction is also available for repayment of principal amounts done by you towards a housing loan. The individual need to make sure this property is not sold by you within 5 years from the end of the financial year in which you took possession of this property. If you sell then deduction claimed by you under section 80C will be added back to the taxable income of the year in which you sell the property.

National Saving Certificates: Deduction under section 80C available for Investments in NSC or National Saving Certificates. Indian Postal Service or Post Office allows these investments. The issued time period for these are 5 years or 10 years and you will be able to find out about them from your local post office.

Equity Linked Savings Schemes: These are kinds of mutual funds. These saving funds are sold with a lock in period of 3 years. Individual can choose a growth or a dividend option when you purchase these ELSS. Returns from this ELSS scheme are tax free.

Life Insurance Premium: Section 80C allows a deduction for life insurance premium paid by you. This premium must have been actually paid in the year in which deduction is being claimed.

Fixed Deposit: Fixed deposits of 5 years or more with a scheduled bank are also eligible for deduction under section 80C.

Unit Linked Insurance Plans: Section 80C deduction is available for investments in ULIPs of UTI and of LIC Mutual Fund and other such ULIPs which are specifically sold as 80C savings instruments.


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