Know what is Section 80C and how you can save income tax under it

Saving income tax is one of the biggest objectives of all earners. That is possible only if certain investments are made and for that government has provided a number of options. Needless to say, the amount to be saved is large and therefore, taxpayers should pay attention to every aspect involved in this task. Today we will talk about tax savings options related to Section 80C and we have with us Optima Money Managing Director Pankaj Mathpal.

What is Section 80C?
80C is a section of the Income Tax Act which offers tax exemptions up to the investment of Rs 1.5 lakh in various options listed below:

PPF
EPF/VPF
NPS
NSC
ELSS
SSY
SCSS
लाइफ इंश्योरेंस

PPF
PPF - Public Provident Fund is offering 7.9% interest for Jan-Mar 2020. PPF is a small savings scheme which you can open for yourself, your wife and children. It has a lockin period of 15 years. Triple tax benefit on investment. Tax rebait on premium, interest and amount after maturity of scheme. Investment up to Rs 1 lakh per year allowed. Inestment of at least Rs 500 per year.

EPF/VPF
EPF- Employee Provident Fund
VPF- Voluntary Provident Fund
If you are salaried employee then you will have investment in EPF
A fixed amount from salary is deposited in the EPF account
The company also contributes towards your EPF
Tax exemption to you towards contribution in EPF; no exemption for company
You can increase contribution in your EPF
EPF में अपने योगदान को बढ़ा सकते हैं
This contribution is towards VPF

NPS
NPS- National Pension Scheme
Change in taxation rules has made it attractive
Withdrawl up to 60% on retirement is tax free
Atleast 40% investment in annuity is compulsary
Investment in NPS falls under Section 80C
Extra rebait of Rs 50,000 under 80CCD(1B)
10% rebait on deposited amount under 80CCD(2)
return on investment at 9.33% in the last five years

NSC
NSC- national Savings Certificate
Income on interest earned is taxed
Investment is tx free under 80C
Interest rate at 7.9% for Jan-Mar 2020 quarter
Scheme offers assured returns

ELSS
ELSS - Equity linked Savings Scheme
Popular investment option
Under 80C investment up to Rs 1.5 lakh is tax free
3 years lock-in period
Gains up to Rs 1 lakh is tax free
SIP is a good way to invest
Return on Invetment at 13.18% over three years

ELSS fund and performance
Fund                                          1 year        3 year          5 year

Mirae Asset Tax Saver               16.19        19.82                -
Axis Long Term Equity              15.71        18.63            12.48
JM Tax Gain                               15.56        17.07            11.71
Tata India Tax Savings                15.27        16.48            13.14
LIC MF Tax                                 13.05       16.25            9.57

SSY
SSY - Sukanya Samriddhi Yojana

Daughter should not be older than 10 years
Interest rate for Jan-Mar 2020 quarter at 8.4%
The account gets matured at 21 years of your daughter's age
You can withdraw money for girl child's marriage and education
EEE category investment instrument
Tax exemption on investment, interest and maturity

SCSS
SCSS- Senior Citizens Savings Scheme
Interest rate at 8.6% or the Jan-Mar 2020 quarter
Scheme for people with 60 year or above age
Investment up to Rs 1.50 tax free under 80C
Penalty on premature withdrawl
Investment between Rs 1000-Rs 15 lakh allowed

Life Insurance
No tax on invstment premium under 80C
Income tax free under 10(10D)
Return of 4-4.5% on 20-year plans