What are the Income Tax Deductions Under Section 80C in India?

Under Section 80C of the Income Tax Act in India, salaried individuals can claim deductions from their taxable income by investing in or spending on certain specified instruments. The maximum deduction allowed under Section 80C is ₹1.5 lakh per financial year. Here are some common avenues through which salaried individuals can claim deductions:

1. Life Insurance Premiums

Premiums paid for life insurance policies for yourself, your spouse, or your children are eligible for deduction.

2. Employee Provident Fund (EPF)

Contributions made by an employee towards EPF are eligible for deduction under 80C. The employer’s contribution is not eligible.

3. Public Provident Fund (PPF)

Contributions made to a PPF account are eligible for deduction under 80C.

4. National Savings Certificate (NSC)

Investments in NSC can also be claimed under 80C.

5. Tax-Saving Fixed Deposits

Fixed deposits with a lock-in period of 5 years in scheduled banks qualify for deduction.

6. Equity-Linked Savings Scheme (ELSS)

Investments in ELSS mutual funds are eligible for deductions under 80C. ELSS comes with a 3-year lock-in period.

7. Home Loan Principal Repayment

The principal portion of home loan repayments qualifies for deduction under 80C.

8. Tuition Fees

Tuition fees paid for the education of up to two children can be claimed under 80C.

9. Sukanya Samriddhi Yojana (SSY)

Contributions made towards SSY for the benefit of a girl child can be claimed under 80C.

10. Senior Citizens Savings Scheme (SCSS)

Investments in SCSS are eligible for deduction under 80C.

11. National Pension Scheme (NPS)

Contributions made to NPS can be claimed under Section 80C. Additionally, a further deduction of ₹50,000 can be claimed under Section 80CCD(1B).

12. Unit Linked Insurance Plan (ULIP)

Premiums paid towards ULIP are also eligible for deductions under 80C.

13. Infrastructure Bonds

Investments in infrastructure bonds, though not very common now, are eligible for deductions under 80C.

Important Points:

The total deduction under 80C cannot exceed ₹1.5 lakh in a financial year.

These deductions can significantly reduce your taxable income, thereby lowering your overall tax liability.