Dalelorenzo's GDI Blog
15Mar/210

How section 80C of the Income-tax Act works

One of the most frequent inferences accessible under the Income-tax Act, 1961 is section 80 C. The thinking under this section can be claimed only if an individual opts for the age-old/ existing charge government in a financial year. On the other hand, if an individual opts for the brand-new concessional charge regiman, then the individual will not be able to claim deduction under this section.Here is how this section directs and promotions an individual save levy in a financial year. 1. Through section 80 C, an individual or an HUF can reduce up to Rs 1.5 lakh from their gross total income in a financial year thereby reducing their net taxable income and tax payable thereon. Full utilisation of this rebate can save up to Rs 46,800( inclusive of cess at 4 %) for those in the highest tariff bracket of thirty %. 2. To claim this thinking, a taxpayer is required to invest the amount in eligible investment instruments or waste the money on certain specified deductible in the same financial year. The taxation payer can claim tax benefit under this section by investing/ expend up to Rs 1.5 lakh in certain specified streets under this section. 3. Eligible investment instruments include Employees' Provident Fund( EPF ), Public Provident Fund( PPF ), Equity-linked savings planned( ELSS) mutual funds, Sukanya Samriddhi Savings Scheme, National Savings Certificate( NSC ), five-year tax-saving tied lodges with a bank and/ or local post office, National Pension System( NPS ), and Senior citizen Savings Scheme( SCSS ). 4. Do keep in mind that each of the eligible investment has its own asset limit , pace of return, liquidity, and tax management on its returns. 5. Specified expenditures that are allowed under this section include expenditure on the life insurance premium, repayment of dean of a home loan, children's school fees.Also Read: All about levy savings for FY 2020 -2 1

Read more: economictimes.indiatimes.com

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