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80C Deduction List: The time has come to file income tax returns. But you can still save tax on your tax return. The government also provides this facility to the taxpayers. Under Section 80C of the Income Tax Act, taxpayers have several options through which they can avail tax benefits. After non-taxable income and standard deduction, the first tax exemption that comes up is Section 80C. There are many financial instruments covered under this section, in which you can save tax by investing. ELSS, Tax Saving FD, NSC, Home Loan, Sukanya Samriddhi Yojana, PPF, EPF, Infrastructure Bond, SCSS, NPS and ULIP are included under Section 80C of the Income Tax Act.
ELSS: It is a tax saving scheme and has a minimum lock-in period of 3 years. That means you cannot withdraw money from this scheme before 3 years. ELSS is the only mutual fund category that comes under 80C. If we talk about average returns, it gives annual returns of 12-15 percent.
Tax-saving FD: This is a kind of special FD scheme, which is provided by banks and post offices. Under this scheme, one can get an estimated return of 7-8 percent and its lock-in period is 5 years. However, the returns received on it are taxable.
National Savings Schemes (NSC): National Savings Scheme is a post office scheme. By investing in this you can get tax exemption up to Rs 1.5 lakh.
Sukanya Samriddhi Yojana (SSY): This scheme has been brought especially for girls and has no specific lock-in period. This scheme becomes mature when the girl turns 21 years of age. Apart from this, partial withdrawal can be made in this scheme when the girl turns 18 years of age. Investors get a return of 8.2 percent on this scheme.
PPF: You can invest in this scheme yourself or on behalf of a minor. Its lock-in period is 15 years and investors get a return of 7.1 percent on it. By investing in this scheme you can avail tax exemption under 80C.
Senior Citizen Savings Scheme: This scheme is run for senior citizens. Under this, senior citizens can start with a minimum investment of Rs 1000. Investors get a return of 8.2 percent on this and its lockin period is 5 years.
ULIP: ULIP is a combination of investment and insurance. Under this scheme, the investor gets the benefit of tax exemption on the premium paid by the investor. The lock-in period of this scheme is 5 years and returns can be up to 7-9 percent.
National Pension Scheme: This scheme has been started by the government and investing in it can be a personal decision of your investor. Under this scheme the investor has the opportunity to plan for retirement pension. Here investors get returns of up to 9-10 percent and they can invest in this scheme till the age of 60 years.
