Paying taxes on time only makes you a responsible citizen. Is that true? The answer is no, it does something more than that. Filing your taxes, especially as an insurance policyholder, helps you save on your taxable income. From Section 80C to 80U, there are a plethora of ways to obtain tax deductions under the Income Tax Act 1961.
For instance, 80C, a popular section, offers a chance to save upto ₹1,50,000 out of your taxable income. While saving on taxes simultaneously, it brings financial stability to your future. Continue reading further to learn more about deduction under 80C and find out about its benefits.
Tips to Maximise Returns on Your 80C Investments
80C deductions are easy to file, but following the below-mentioned tips can help you maximise your savings:
- Invest early in the financial year. As soon as you begin investing, the more time your plan will get to grow and generate tax-free returns.
- Choose relevant investments that offer tax benefits that are eligible for a deduction under 80C.
- Ensure that you claim all of the deductions that you are eligible for. Whether it’s under 80C, 80CCC, 80CCD, or any other section between 80C and 80U, you wouldn’t want to leave your earnings on the table.
Ways of Availing Deductions Under Section 80C
80C is a boon for taxpayers, providing several options to choose from. Based on your insurance investments and expenses from your taxable income, you can opt for exemptions. As a result, it can help you reduce tax liability and save money.
Here are a few insurance investments that make you eligible for deduction under 80C:
- Investment in Equity-Linked Savings Schemes (ELSS)
ELSS funds help secure high returns and make you eligible for tax deductions. These mutual funds have a lock-in period of three years with a predominant investment in equity.
- Public Provident Fund (PPF)
PPF is a long-term and popular investment option with a 15-year tenure. Contributions made to PPF accounts are eligible for deductions, making them a favourite among risk-free investors.
- Employee Provident Fund (EPF)
Both employers and employees must contribute to EPF accounts, which are eligible for a deduction under 80C. Moreover, EPF offers stable returns and serves as a reliable retirement savings tool.
- National Savings Certificate (NSC)
NSC is a government-backed savings instrument with a fixed tenure of five or ten years, which falls under 80C deductions eligibility.
- Sukanya Samriddhi Yojana (SSY)
SSY is specifically designed to cater to the financial needs of the girl child. Investments made towards SSY accounts are eligible for a deduction under the Income Tax Act’s 80C Section.
- Tax-saving Fixed Deposits (FDs)
Banks offer special FD schemes with a five-year lock-in period that qualify for a deduction under 80C. However, the interest earned on these FDs is taxable.
- Life Insurance Premiums
Premiums paid towards insurance policies, including term plans, endowment plans, and ULIPs, are eligible for deductions. It’s an effective way to secure your family’s financial future while saving on taxes.
- Tuition Fees
Payments made towards tuition fees for children’s education are eligible for deductions under the Income Tax Act’s 80C Section. This includes fees paid for full-time education in any school, college, or educational institution within India.
Avail Your Deduction Under 80C Today!
Incorporating investments that offer deductions under 80C into your financial plan encourages disciplined saving and investment. You can explore various options available under this provision and align your tax-saving goals accordingly.
In addition to this, considering the right insurance company is equally important, and Canara HSBC Life Insurance can be that insurance provider. All of their offerings are eligible for tax deductions under 80C. You can opt for ELSS, PPF, SSY, term insurance, endowment plans, etc., everything is an investment in your future.
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