The Section 80C of Income Tax Act is the most popular act in India. It is the most popular to the all salaried Individuals. So today let us understand the Section 80C of Income tax act in very detail. So that it can be helpful to you for your Financial planning and Tax Deduction at the end of the financial year.

Deduction U/s  80C :-

Qualified Investments for Section 80C Tax Deduction Rs. 1.5 Lakh excluding the 50 thousand U/s 80CCD(1B), As New NPS Scheme 2016.

There are several financial products available in the market which is approved for the Section 80C. Here is a List

1) Provident Fund (PF) & Voluntary Provident Fund -

Provident Fund is deducted directly from your salary by your employer. The deducted amount goes into a retirement account along with your employer’s contribution. 
While employer’s contribution is exempt from tax, your contribution (i.e., employee’s contribution) is counted towards section 80C investments. You can also contribute additional amount through voluntary contributions (VPF). The current rate of interest is 8.5% per annum and interest earned is tax-free .

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2) Public Provident Fund (PPF) -

The PPF is the most favorite instrument of Indians. You can Invest Maximum of Rs.1.5 Lakh. This Rs.1.5 Lakh invested in PPF is Tax deductible. because PPF comes under Section 80C.

3) National Savings Certificate (NSC) -

NSC is also eligible for Section 80C tax deduction. These are the 6 year lock-in period instruments which give you 8% annual return.

4) Equity Linked Saving Schemes (ELSS) -

Now, these are my favorite. ELSS also known as Equity linked Savings schemes are basically the Equity mutual funds having a 3-year lock in period. You can invest in it and enjoy the benefits of investing in equity as well as the tax deduction under 80C. There are many ELSS available in the market from every fund house.

5) Life Insurance Premiums -

Any amount that you pay towards life insurance premium for yourself, your spouse or your children can be included in section 80C deduction. 
If you are paying the premium for more than one insurance policy, all the premiums can be included.

6) Home Loan Principal Repayment -

Your EMI consists of two components, namely principal and interest. The principal component of the EMI qualifies for deduction under Section 80C.

7) Stamp Duty and Registration Charges for Home -

The amount you pay as stamp duty when you buy a house and the amount you pay for the registration of the documents of the house can be claimed as a deduction under section 80C. 
However, this can be done only in the year in the year of purchase of the house.

8) Five Year Bank Fixed Deposits -

Tax-saving fixed deposits (FDs) of scheduled banks with a tenure of five years are also entitled to section 80C deduction.

9) Child’s Education Expenses -

Well, yes your children’s education expenses are also tax deductible under 80C.

10) Insurance Products -

Almost every kind of Insurance Product is Tax Deductible under 80C such as Health Insurance, Accidental Insurance, ULIPs, Child Insurance and Future Plans, Pension Plans, Retirement Plans and every other thing related to the Insurance.

11) Section 80CCC -

This section – Sec 80CCC – stipulates that an investment in pension funds is eligible for deduction from your income. Section 80CCC investment limit is clubbed with the limit of Section 80C - it means that the total deduction available for 80CCC and 80C is Rs. 1.5 Lakh.

This also means that your investment in pension funds up to Rs. 1 Lakh can be claimed as deduction u/s 80CCC. However, as mentioned earlier, the total deduction u/s 80C and 80CCC can not exceed Rs. 1 Lakh.

12) Section 80CCD(IB)- You can get maximum Rs. 50,000/- benefits by this section as new National Pension Scheme 2016 ,additional deduction U/s 80C1.5 Lakh.

13) Post Office Time Deposit Account -

This is the fixed / term deposits offered by the Department of Posts (Government of India) through the post offices in India.

If the time deposit is opened for a duration of 5 years or more, the amount invested is qualified for deduction under section 80C.

On September 18, 2016 by www.taxexcel.net

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Section	Deduction on	FY 2016-16
Section 80C	Investment in PPF Employee's share of PF contribution NSCs Life Insurance Premium payment Children's Tuition Fee Principal Repayment of home loan Investment in Sukanya Samridhi Account ULIPS ELSS Sum paid to purchase deferred annuity Five-year deposit scheme Senior Citizens savings scheme Subscription to notified securities/notified deposits scheme Contribution to notified Pension Fund set up by Mutual Fund or UTI. Subscription to Home Loan Account Scheme of the National Housing Bank Subscription to deposit scheme of a public sector or company engaged in providing housing finance Contribution to notified annuity Plan of LIC Subscription to equity shares/ debentures of an approved eligible issue Subscription to notified bonds of NABARD	Rs. 1,50,000
80CCD(2)	Employer's contribution to NPS account	Maximum up to 10% of salary
80CCD(1B)	Additional contribution to NPS	Rs. 50,000
80TTA(1)	Interest Income from Savings account	Maximum up to 10,000
80GG	For rent paid when HRA is not received from employer	Least of rent paid minus 10% of total income, Rs. 2000/- per month , 25% of total income
80E	Interest on education loan	Interest paid for a period of 8 years
80CCG	Rajiv Gandhi Equity Scheme for investments in Equities	Lower of - 50% of amount invested in equity shares or Rs 25,000
80D	Medical Insurance - Self, spouse, children Medical Insurance - Parents more than 60 years old or (from FY 2015-16) uninsured parents more than 80 years old	Rs. 25,000 Rs. 30,000
80DD	Medical treatment for handicapped dependent or payment to specified scheme for maintenance of handicapped dependent Disability is 40% or more but less than 80% Disability is 80% or more	Rs. 75,000 Rs. 1,25,000
80DDB	Medical Expenditure on Self or Dependent Relative for diseases specified in Rule 11DD For less than 60 years old For more than 60 years old For more than 80 years old	Lower of Rs 40,000 or the amount actually paid Lower of Rs 60,000 or the amount actually paid Lower of Rs 80,000 or the amount actually paid
80U	Self suffering from disability: An individual suffering from a physical disability (including blindness) or mental retardation. Individual suffering from severe disability	Rs. 75,000 Rs. 1,25,000
80GGB	Contribution by companies to political parties	Amount contributed (not allowed in cash)
80GGC	Contribution by individuals to political parties	Amount contributed (not allowed in cash)

On September 10, 2016 by www.taxexcel.net

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