Ways to Save Tax under Section 80C

As the income of an individual increases the Income Tax paid by him also increases. But the government provides various schemes through which person can not only save tax but also he can invest his income in a useful way.  The Indian government has provided options such as ELSS (Equity linked saving schemes), health insurance and infrastructure bonds. The ELSS is aimed at providing rebate to the tax payers. There are many banks that offer health insurance and individual can invest his or her money. Besides this financial organization such as LIC, SBI and L&T cover infrastructure bonds and one can get the best benefits. All the schemes come under Section-80C.

Now what is Deduction under Section 80C? It is a law which has been introduced by the government. It comes under the Income tax department and allows certain investments and expenditure to be tax-exempted. One needs to plan properly before investing in any of the schemes. First of all the Section 80C offers savings plan such as NSC (National Savings Certificate) and PPF (Public Provident Fund). The NSC is a post office saving scheme, here one is exempted from tax by investing an amount up to 100000 per year. The rate of interest is compounded half yearly at the rate of 8%%, and there's a reinvestment every year from the last year's NCS. Government has provided tax saving plans under Section 80C which is a law under Income Tax department. The scheme provides ways a person can utilize his or her income efficiently.

Public Provident Fund investment plan is appropriate for reducing the taxes under the limit of 1 lakh. The return in this Tax Saving Schemes is compounded annually at the rate of 8.5%. Another popular tax saving under this section is FD (fixed deposits) which is a fixed amount invested for a particular duration but here the minimum duration is 5 years. A life insurance premium for an individual or his child is also included in Section-80C. But borrower should know that the premium for parents and grandparents doesn’t come under this. The latest and a lucrative scheme is Senior Citizens Savings Scheme (SCSS) 2004 where the current rate of interest is 9% per annum payable quarterly.

The Tuition fee called the amount paid towards the education of children is also included in this, but one can get a maximum exemption of 100000. Lastly there are various Health premiums provided by banks. The Section 80c has been provided only for the benefit of people. So everyone must go through the information properly about the relevant schemes before applying and can choose the best.