Section 80C

There are many options you may not know for investment under 80C and reduce your income by 1.5 lakhs every year.

Investing in PPF – Public Provident Fund.

Min Investment – Rs. 500

Max Investment – Rs. 1.5L

ROI – 7.1% p.a.

Interest earned every year and gains on maturity are TAX FREE

Lock-in period – 15 Years : Low Risk Product with Big Lock In

Employee Provident Fund

Contribution by the employee towards provident fund up to 12% of the salary gets 80C benefit.

You can find PF deducted by the employer from the employee’s portion in your salary slips.

Interest – 8.1% p.a.

National Saving Certificates (NSC)

Investment scheme in which the Indian citizens can invest through the post office.

Maturity – In 5 Years

Interest – 6.8% p.a.

Interest earned is taxable. Negligible Risk Product with Medium Term Lock In

 Tax Saver FD

Lock-in – 5 Years

Interest rate – as per bank rates. Interest earned is taxable.

Low Risk Product with Medium Term Lock In.

Senior Citizen Saving Scheme (SCSS)

Eligibility: Age – 60 and above, 55+ years (in case of voluntary retirement)

Interest rate – 7.4%. Interest is taxable but Deduction for Interest earned upto Rs. 50000 can be claimed by senior citizens under section 80TTB

Equity Linked Saving Scheme (ELSS)

A mutual fund that invests more than 65% in equity or equity-related instruments.

Lock-in – 3 Years

Returns – Marked Linked

Medium to High-Risk Product with Low Lock-In Period.

 Life Insurance Premium

– The premium should be limited to 10% of the sum assured.

– Premium is only for life and can be taken for self, spouse, or children from any company providing life insurance.

Tuition Fees

– Portion of tuition fees paid to the school out of total fees is eligible.

-For the education of a maximum up to 2 children.

-Paid to school/college/university/educational institution.

 Sukanya Samridhi Yojna (SSY)

– Investment can be made for up to 2 girl children.

– Investment between birth to 10 years of age.

-Maturity – when she attains the age of 21 or after 18, for marriage/education/medical purposes.

-Interest – 7.6% p.a. (tax free)

Home Loan Repayment

– Only the “PRINCIPAL” portion is eligible & not Interest.

– Payment for stamp duty is deductible.

– Payment for registration charges is deductible.

Total deduction (maximum) is 1.5 Lakhs under 80C. So, one can distribute their investment under various instruments mentioned above to reach the limit of 1.5 Lakhs.

Products with higher lock-ins are low risked and vice-versa. So, you can choose the best mix for yourself.

Happy Investing!

R♥Vi

This is not an Investment Advise. Interest rates are subject to change. Fund Wallet is a AMFI Registered Distributor of Mutual Funds.