For most taxpayers in India, the term Section 80C is the stuff of legends. It is what most of them turn towards when it comes to saving their money, investing wisely, and planning their taxes better. If you are preparing to file your taxes for the first time ever or are ever so curious about this topic, then here’s an important titbit to start things off: Section 80C is a section that falls under the Income Tax Act, 1961. And it can be your biggest financial ally!
Yes, there are many reasons why Section 80C is one of the most popular and effective ways to reduce your tax burden without making it needlessly complicated. How? Because it allows you to claim deductions of up to Rs. 1.5 lakh per year from your taxable income by investing in certain eligible instruments. The result? Once you invest under Section 80 C, you can reduce your tax liability and also grow your wealth over time. That’s what we call a win-win situation!
If you are a taxpayer, any HUF (i.e., a part of Hindu Undivided Family), or an individual, then Section 80C is for you. In fact, you can also extend the benefits by acting upon the instruments provided by Sections 80CCD and 80CCC to further reduce a big chunk of your taxable income. This is the most important thing to understand about this tax benefit incentive which is part of the law.
So, who is Section 80C not eligible for? Well, that would include companies, corporates, and partnerships.
Next up, some of the most common investment options under Section 80C are:
These examples provide an overview of some investment options under Section 80C. There are other options available as well, such as the Sukanya Samriddhi Yojana, the Senior Citizens Savings Scheme and Five-Year Fixed Deposits, among others.
Home loan principal repayment represents the portion of your home loan EMI that goes towards reducing the amount of your loan. The good news for all home owners or home buyers who’ve got a home loan: you can claim deductions on home loan principal repayments up to Rs. 1.5 lakh per year under Section 80C.
In fact, with Section 24(b), you can also claim tax exemption on the interest part of your home loan repayment – up to a max of Rs. 2 lakh per year! And for those who want to put their new home on rent, any interest they pay on the home loan is not included in annual income tax calculations! Section 80EEA allows you to claim an additional reduction in your annual tax liability if you are a first-time homeowner.
So, the fundamental question for beginner taxpayers is: ‘Alright, Section 80C sounds great! But how do I plan for it?’
Well, it isn’t as difficult as it sounds. Here’s a quick 3-step method:
Saving up to Rs. 1.5 lakhs every fiscal year can be a massive deal for millions of people in India. It is the kind of financial boost that not only instils good financial habit and practices amongst the citizenry by also helps them eventually save and grow their wealth for bigger goals, such as owning a dream home. If you are unsure about how to proceed with Section 80C and how it can benefit you in the long run, then don’t hesitate to consult a tax-saving expert!
Orchids are amongst the most exotic varieties of plants. Besides enhancing the home’s exquisite beauty, they are known to be stress-busters and purify the air. However, many people believe that growing orchids at home is challenging, forcing them to look for alternatives. On the contrary, orchid cultivation is easy, enjoyable and requires minimal effort. If you want to sow orchids but are not familiar with the process, read on. In this article, we will delve into the process of cultivating orchid plants at home.
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The master bedroom serves as a personal sanctuary, a retreat from the world, and its design elements play a pivotal role in creating a tranquil and functional space. Among these elements, the wardrobe stands out as a crucial component that harmonises style with efficient storage.