Section 80 C of Income Tax Act.

Five Heads of Income for Individual:
1. Salary.
2. Income from House Property.
3. Profits & gains from business of profession.
4. Capital Gains.
5. Income from other sources.

What is Section 80C:
 In order to encourage savings, the government gives tax breaks on certain financial products under Section 80C of the Income Tax Act.


Investments made under such schemes are referred to as 80C investments. Under this section, you can invest a maximum of Rs l lakh and if you are in the highest tax bracket of 30%, you save a tax of Rs 30,000. The various investment.

Max limit = Rs.1 lakh.


Options for Investment in Section 80C:
1. Premium paid to Life Insurance.
2. PPF = Max rs. 70000.
3. NSC = 6 years (Interest Taxable).
4. Principal repayment of housing loan.
5. Tution fee for school children (Max 2 children).
6. ELSS.
7. Investment in Infrastructure Fund.
8. Contribution towards EPF.
9. Bank Term deposit for 5 years.
10. Senior citizen savings scheme.
11. Post office deposit for 5 years.
12. Premium paid towards deferred annuity.

Tax free return from 80 C:
1. Life Insurance.
2. Provident Fund.
3. ELSS.

Taxable return from 80C:
1. NSC
2. Post Office.
3. Pension Plan.
4. Bank FD with section 80C benefit.

Expenditure:
1. Children tution fees.
2. Principal repayment on housing loan.

Thanks,
Nimesh.