80c for savings | Different investment options under 80C section
This financial year is coming to closure in 2 months. ‘Investment’, ‘tax exemption’ have become the favorite topics for the assesses. They are indulged in searching the alternative ways for tax deductions. For such people Sec 80c is like a wish tree. A maximum of Rs. 1Lakh tax exemption can be availed in different investment options under this section. Let us find out those that come under this important section.

Provident fund (PF)
This is available for employees only. PF is deducted directly from the salary. At the same time, your management will also add some amount to your PF amount. The part of amount deducted from your salary will be granted tax exemption under section 80 c. So employees should not forget to consider PF investment amount before calculating tax exemptions. Presently, an interest of 8.5% is given on PF.

Repaying home loans
The principal amount in the EMI of home loans will be exempted under section 80c. Interest amount can be shown as deduction from the income directly under section 24. So people assessing tax should not forget to consider the principle amount of home loans if any, in calculating the investment plans.

Tuition fees
Exemption of tuition fee of the children will also come under this section. This exemption is granted only for two children. This is applied for the adopted children also. Tuition fee of the children from nursery to university education can be claimed under this section.

Public Provident fund (PPF)
This is suitable for those who wish for stable income without any risk. Time limit for this plan is 15 years. A maximum of Rs. 70,000 from the investment in this plan can be exempted from the tax under this section. PPF account can be started in banks and post offices. Presently, this plan is offering 8% of interest.

Insurance Plans
Everyone recollects life insurance plans in the context of section 80c. These have got such a prominence. You can claim the amount of the insurance premium amount paid for wife and children too. But the premium paid for your parents and nearest relatives will not come under this section. Earlier, there was special section 80ccc for exemptions of pension plans premium amount. They are also clubbed under 80c now. Unit linked policies also come under this section. Along with LIC, any premium paid to all life insurance companies under IRDA will also come under this section. There will be no risk even if traditional insurance policies don’t give guarantee of stable income. But there will be risk for ULIPS. In life insurances, along with the insurance protection, the amount availed after the maturity period is also considered tax free. This is the specialty of this scheme.

Tax Savings Fund (ELSS)
Tax exemption cannot be availed in all mutual fund plans, but can be availed on the plans that are designed for the tax deductions only. They are called Equity linked Savings Plans (ELSS) or Tax savings Plans. These will have 3 years locking period. Dividends and income from these plans don’t attract tax. But the thing is that the income is not guaranteed.  And don’t forget the risk factors.

National Saving Certificate (NSC)
This policy which is available in the post office will offer risk free and tax exempted stable income. This gives 8% interest with a time limit of 6 years. This interest is paid for every six months. This interest should be shown as income for that year. This interest amount can also be deducted from tax when invested in other plans which have 80c exemption

Five year deposits
Fixed deposits can also avail tax exemption when saved in banks and post offices for 5 years or more time period. Post offices are offering 7.5% interest on these deposits and banks are offering 7 to 7.5% interest based on the period selected.

Senior citizens saving scheme-2004 (SCSS)
This is the only plan that offers more interest along with risk less tax benefits to the senior citizens. This has got exemption under 80c. This plan gives an interest of 9% for every 3 months. It is better to take that interest and invest as and when it is released because unlike in other plans, compound interest is not calculated in this plan. If the interest is not taken, it will remain in our account without any interest. In the present plans, this is the best suited for senior citizens.

Stamp duty
Tax exemption can be availed under 80c on the amount paid for stamp duty and registration charges while purchasing a house. But it can be claimed only in the year of buying the house.

Bonds
Infra bonds provided by Central, State governments and other infra companies are also claimed for tax exemption under 80c section. Rural bonds released by NABARD, bhavishya nirmaan bonds also come under this section.