22 December 2009
Section 80C: This section has been introduced by the Finance Act 2005. Broadly speaking, this section provides deduction from total income in respect of various investments/ expenditures/payments in respect of which tax rebate u/s 88 was earlier available. The total deduction under this section (alongwith section 80CCC and 80CCD) is limited to Rs. 1 lakh only. The following investment/payments are eligible for deduction u/s 80C. Insurance Premium For individual, policy must be in self or spouse’s or any child’s name. For HUF, it may be on Life of any member of HUF. Sum paid under contract for deferred annuity For individual, on life of self, spouse or any child . Sum deducted from salary payable to Govt. Servant for securing deferred annuity for self-spouse or child Payment limited to 20% of salary. Contribution made under Employee’s Provident Fund Scheme. Contribution to PPF For individual, can be in the name of self/spouse, any child & for HUF, it can be in the name of any member of the family. Contribution by employee to a Recognised Provident Fund. Sum deposited in 10 year/15 year account of Post Office Saving Bank Subscription to any notified securities/notified deposits scheme. e.g. NSS Subscription to any notified savings certificate, Unit Linked Savings certificates. e.g. NSC VIII issue. Contribution to Unit Linked Insurance Plan of LIC Mutual Fund e.g. Dhanrakhsa 1989 Contribution to notified deposit scheme/Pension fund set up by the National Housing Scheme. Certain payment made by way of instalment or part payment of loan taken for purchase/construction of residential house property. Condition has been laid that in case the property is transferred before the expiry of 5 years from the end of the financial year in which possession of such property is obtained by him, the aggregate amount of deduction of income so allowed for various years shall be liable to tax in that year. Contribution to notified annuity Plan of LIC(e.g. Jeevan Dhara) or Units of UTI/notified Mutual Fund. If in respect of such contribution, deduction u/s 80CCC has been availed of rebate u/s 88 would not be allowable. Subscription to units of a Mutual Fund notified u/s 10(23D). Subscription to deposit scheme of a public sector, company engaged in providing housing finance. Subscription to equity shares/ debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions. Tuition fees paid at the time of admission or otherwise to any school, college, university or other educational institution situated within India for the purpose of full time education of any two children. Available in respect of any two children Section 80CCC: Deduction in respect of Premium Paid for Annuity Plan of LIC or Other Insurer Payment of premium for annuity plan of LIC or any other insurer Deduction is available upto a maximum of Rs. 100,000/-. (This limit has been increased from Rs. 10,000/- w.e.f. 01.04.2007). The premium must be deposited to keep in force a contract for an annuity plan of the LIC or any other insurer for receiving pension from the fund. Section 80CCD: Deduction in respect of Contribution to Pension Account Deposit made by a Central government servant in his pension account to the extent of 10% of his salary. Where the Central Government makes any contribution to the pension account, deduction of such contribution to the extent of 10% of salary shall be allowed. Further, in any year where any amount is received from the pension account such amount shall be charged to tax as income of that previous year. Note: The limit for maximum deduction available under Sections 80C, 80CCC and 80CCD (combined together) is Rs. 1,00,000/- (Rs. one lac only).
23 December 2009
Take a housing loan, you can get interest deduction under house property and principle repayment deduction under 80C. Another option in all respects is invest in mutual fund for a long period that is for 4 years and more. If it is for short term it is risky due to stock market fluctuation
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