All the Investment options to save Tax
- Investments in PPF – Under the PPF scheme, Rs 1,50,000 is allowed to be invested in one financial year. The minimum investment required is Rs 500. Interest earned on PPF account is tax free. The PPF account matures after 15 years. Receipts on Maturity or withdrawals are tax free. Money is allowed to be withdrawn after 5 years. Contribution to PPF for individual can be in the name of the assessee, the spouse or any child. For a HUF, it can be in the name of any member of the family
- Employee’s share of PF Contribution – Amount deducted from your salary as your contribution in Employee’s Provident Fund Scheme or Recognized Provident Fund.
- Purchase of NSCs – National Savings Certificate e.g. NSC VIII issue and IX issue are eligible for deduction in the year of purchase. These can be bought from designated Post Office. Accrued Interest (which is considered reinvested) qualifies for deduction during the term of the NSCs (except the last year).
- Life Insurance Premium Payment – The policy must be in the assessee’s or spouse’s or any child’s name (child may be dependent/independent, minor/major, or married/unmarried). For a HUF, it may be on life of any member of HUF. The 80C deduction is valid on insurance policies purchased after 1st April, 2012 only if the premium is less than 10% of sum assured. Benefits for existing purchased policies continue. The deduction is also allowed on payments made by Government employees to Central Govt Employees Insurance Scheme.
- Children’s Tuition Fee Payment – Tuition fees paid to any school, college, university or other educational institution situated within India for the purpose of full time education of any two children (including payments for play school, pre nursery and nursery).
- Principal Repayments on Loan for purchase of House Property – Payments of installments or part payments or repayment of loan taken for buying or constructing residential house property. Also allowed for stamp duty, registration fees and other expenses for purpose of transfer of such property to the assessee. However, if the property is transferred before the expiry of 5 years from the end of the financial year in which possession of such property is obtained by him, the aggregate amount of deduction of income so allowed for various years shall be liable to tax in that year.
- Investment in Sukanya Samridhi account – A maximum of Rs 1,50,000 can be deposited in the Sukanya Samridhi Account for a girl child. The amount deposited shall earn an interest of 9.1% (for financial year 2014-15). This interest is fully exempt from tax. A minimum of Rs 1,000 must be deposited in a year. Receipts on maturity from the account are tax free.
- ULIPS or Unit Linked Insurance Plan – ULIPS sold with life insurance cover for deduction under section 80C. Includes Contribution to Unit Linked Insurance Plan of LIC Mutual Fund e.g. Dhanraksha 1989 and contribution to Other Unit Linked Insurance Plan of UTI.
- Investment in ELSS – ELSS or Equity Linked Savings Scheme is an Equity Fund. ELSS funds are eligible to be claimed as a deduction under section 80C. These funds have a 3 year lock in period.
- Sum paid for securing Deferred Annuity – Sum paid under non commutable deferred annuity for an individual on the life of the assessee, spouse or any child. Also allowed on sum deducted from salary payable to Govt. Servant for securing deferred annuity for self-spouse or child. Payment limited to 20% of salary.
- Sum deposited in Five Year Deposit Scheme in Post Office.
- Amount deposited under Senior Citizens Saving Scheme.
- Subscription to any notified securities/notified deposits scheme. e.g. NSS
- Contribution to notified Pension Fund set up by Mutual Fund or UTI.
- Sum paid as subscription to Home Loan Account Scheme of the National Housing Bank or contribution to any notified deposit scheme/pension fund set up by National Housing Bank.
- Subscription to deposit scheme of a public sector, company engaged in providing housing finance (public deposit scheme of HUDCO).
- Contribution to notified annuity Plan of LIC (e.g. Jeevan Dhara and Jeevan Akshay) or Units of UTI / notified Mutual Funds.
- Subscription to equity shares/ debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions.
- Subscription to any notified bonds of NABARD (National Bank for Agriculture and Rural Development).
All Investment options to save Tax
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