1. Benefits of Tax u/s. 80C in Assessment Year
2013-14 as per Income Tax Act.
By
Shankar Bose
Inspector of Income-tax
MSTU, Puri

2. Benefits of Tax u/s. 80C in Assessment Year
2013-14 as per Income Tax Act.
Earlier Central Government has to view collection of Tax any way
from Taxpayee and thus the Taxpayee always search how to save
large tax without or with minimum savings. Thus, in order to
encourage savings, the government gives tax breaks on certain
financial products under Section 80C of the Income Tax Act.
Investments made under such schemes are referred to as 80C
investments. Under this section, you can invest a maximum of Rs. l
lakh and if you are in the highest tax bracket of 30%, you save a tax
of Rs. 30,000. The various investment options under this section
include :
Provident Fund & Voluntary Provident Fund :
Provident Fund is deducted directly from your salary by your
employer. The deducted amount goes into a retirement account
along with your employer’s contribution. While employer’s
contribution is exempt from tax, your contribution (i.e., employee’s
contribution) is counted towards section 80C investments. You can
also contribute additional amount through voluntary contributions
(VPF). The current rate of interest is 8.5% per annum and interest
earned is tax-free.
Public Provident Fund :
An account can be opened with a nationalized bank or Post office.
The current rate of interest is 8%, which is tax-free and the
maturity period is 15 years. The minimum amount of contribution is
Rs 500 and the maximum is Rs 70,000.
National Savings Certificate :
These are 6-year small-savings instrument, where the rate of
interest is 8% and is compounded half-yearly. The interest accrued
every year is liable to tax but the interest is also deemed to be
reinvested and thus eligible for section 80C deduction.

3. Equity-Linked Savings Scheme :
Mutual funds offer you specially-created tax saving funds called
ELSS. These schemes invest your money in equities and hence,
return is not guaranteed. Money invested here is locked for a period
of three years.
Life Insurance Premiums :
Any amount that you pay towards life insurance premium for
yourself, your spouse or your children can be included in section
80C deduction. If you are paying premium for more than one
insurance policy, all the premiums can be included. Besides this,
investments in unit-linked insurance plans (ULIPs) that offer life
insurance with benefits of equity investments are also eligible for
deduction under Section 80C.
Home Loan Principal Repayment :
Your EMI consists of two components, namely principal and
interest. The principal component of the EMI qualifies for
deduction under Section 80C.
Stamp Duty and Registration Charges For Home :
The amount you pay as stamp duty when you buy a house, and the
amount you pay for the registration of the documents of the house
can be claimed as deduction under section 80C. However, this can
be done only in the year in the year of purchase of the house.
Five-Year Bank fixed deposits :
Tax-saving fixed deposits (FDs) of scheduled banks with a tenure of
five years are also entitled for section 80C deduction.
Others:
Apart from the above, things like children’s education expenses that
can be claimed as deductions under Section 80C. However, you need
receipts to claim the same.
Thanks