Income tax returns filing: How to make the best use of Section 80C
Income tax returns filing: Section 80C of the Income Tax Act is one of the most popular methods to save income tax. It offers an outer limit of Rs 150,000 as a deduction from total taxable income if such amount is invested in specified assets. Let us look at three possible scenarios of making judicious use of the section:
Income tax returns filing: How to make the best use of Section 80C
ITR filing for young professionals: People who have just started their career can use their EPF contributions if any for claiming deductions under Sec 80C. However, if the amount is not sufficient, ELSS could be opted for claiming residual tax benefits.
Income tax returns filing: How to make the best use of Section 80C
ITR filing for those 15 years into their career: Section 80C takes on a different meaning for people who are homeowners, with a family. Higher EPF contributions, tuition fees for kids and home loan principal now qualifies for Section 80. These people must remember that any Section 80C decision that they take at this stage must fit into overall financial plan.
Income tax returns filing: How to make the best use of Section 80C
ITR filing for people above 55 years age: For people moving towards a peaceful retirement, home loan and tuition fees for kids cease to exist in Section 80C calculation. Their EPF contribution gets large enough to take care of their tax saving needs. At this stage, they should focus on converting their matured PPF and FDs into less risky debt funds.