The different features about income tax deductions under section 80C
But, it is a fact that depending on the type of tax deduction that you are claiming, the rate and amount of deduction varies. There are certain areas and investment schemes on which you can claim tax deductions. In this article we are going to focus on a certain section, known as section 80C and its features for income tax deduction.
The limit of non taxable 80C
The first important factor that has changed under this section is, now the overall limit of income upto which you won’t be charged any tax is 1.5 lakh, which was previously 1 lakh per annum. The section 80C deals with the tax breaks. It cannot be denied that expense for children’s education has been increasing day by day. In this tax exemption section, there is a procedure that makes payment towards education fees for children is absolutely eligible for income deduction. To avail the maximum benefit of this section, it is essential to know that there are certain investment schemes which are also eligible for tax exemption under section 80C. Plan your investments properly and spread it out throughout the various instruments specified within this section.
The different schemes that fall under section 80C tax exemption
The benefit is available to each and every one whose income limitation is below 1.5 lakh. Tax exemptions can be availed on premiums made towards life insurance, the contributions made for provident funds, investments in specific equity or stocks, and annuity received through deferred annuity plans. Beside these investments and expenses, you can also receive tax exemptions on account of your home loan. The benefit can be availed by every individual irrespective of their income levels. A huge number of tax payers look out for effective ways to save tax within section 80C. It is important that you know the section in-depth so that you can make the best use of it. But you need to know that within section 80C there are also certain restrictions depending on the qualifying people and also the time period for which you are taking these loans or investments.
What are the restrictions?
For instance, in case of Life Insurance premiums, it is known to all that if a parent is depositing life insurance premiums for his/her child, then, the parent is liable to demand tax exemptions, but the reverse is not true. The child cannot claim tax benefits considering the life insurance premium that is being paid on the life of parents. You shall have tax exemptions under section 80C for your children’s education, but it comes along with certain conditions. You shall be able to claim this exemption for two children and also you should reside within India. The home loan is not also without any restrictions. The tax exemption shall be claimed if the loan is taken from certain financial institutions only. In case you are looking for tax exemptions on Sukanya Samridhhi account, then, you need to know that only one account can be opened per girl child.
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