Posted on

Avail 80c tax deduction without missing it

An interesting tax code in Indian income tax is section 80C. This year shri Modi’s government has increased the limit of tax deduction in 80C from 1 lakh to 1.5 lakh. As a responsible person choose to save taxes availing the following options that are considered deduction under 80C

1) ELSS – Equity Linked Savings Scheme is a mutual fund that offers tax advantage with a lock-in period of  3 years. Though mutual funds are risky and subject to market risk, ELSS are managed by Asset Management Companies with professional fund managers. Usually the stocks picked as part of ELSS are large cap stocks that offer less risk, stable returns. Still this is not 100% safe

2) Sukanya Samridhi Yojana – This is a new scheme from shri modi that offers 9.1% stable returns on fixed deposits with banks, post office. This is safe as the amount is invested in fixed deposit

3) Public Provident Fund – Popularly called PPF is a tax advantaged saving that can act as a safe bet during retirement.This savings yields 8.7% return per year. The interest rates are subject to change based on government of India. Indian residents are mandated to invest Rs.500 minimum per annum upto maximum of 1.5 lakhs/ PPF account can be opened with banks in India. Amount can be withdrawn from PPF account subject to certian rules. This cna be starting 7th year after opening PPF account. about 50% of amount can be withdrawn from PPF account. This amount can be used for emergency purpose, higher education. Also, loan can be availed against PPF account

4) Tax saving fixed deposits – These are normal fixed deposits opened with banks that can be deducted towards 80C

5) Senior Citizen Savings Scheme – This offers assured returns of 9.2% per annum. SCSS are backed by government of India

6) Rajiv Gandhi Equity Savings Scheme – RGESSis a tax advantaged instrument if annual income is below 10 lakhs