Income Tax Deductions Under Section 80C for FY 23-24 & FY 24-25

The Last date to Claim Income tax exemption for the financial year 2023-2024 is 31st March 2024. Therefore, one must make their investments before this date.
These tax investments help in tax savings lawfully & also provide returns for future perspective. For any Investments made after 31st March 2024, income tax benefits will be applicable in the next financial year. Therefore, these investments can be made in FY 24-25 so that proper tax planning can be made.

Here are a few of the popular income tax-saving Investment options:-

Equity Linked Savings Scheme (ELSS)

Equity Linked Savings Scheme is one of the most popular investment methods to save tax under section 80C of the Income Tax Act 1961. ELSS allows a deduction from income up to Rs. 1.5 lakh to an individual or HUF. This Scheme has a mandatory lock-in period of three years from the date of unit allotment.

Public Provident Funds (PPF)

The Public Provident Fund (PPF) is considered as one of the best investment options. It is sponsored by the Government of India. The maximum Investment that can be done under PPF in a financial year is Rs. 1.5 Lakh, whereas the minimum investment amount is Rs 500. The deduction will be claimed under sec 80C of the Income Tax Act 1961. The lock-in period in the PPF scheme is 15 years. The interest earned under this scheme is not taxable under the Income Tax Act.

Tax Saver Fixed Deposit (FD)

Tax saver Fixed Deposits are popular investment options among Individuals and HUFs who are reluctant to take risks, as they provide guaranteed returns at a fixed interest rate. The maximum amount of deduction that can be claimed is Rs. 1.5 lakhs. The Lock-in period in this scheme is 5 years. Interest earned in this scheme is taxable under the Income Tax Act 1961.

Premium paid on Life Insurance

Premium paid on a Life Insurance Policy for yourself, your spouse, or your children is eligible for deduction under section 80C. This deduction is available for Individuals and HUF. A maximum deduction of Rs. 1.5 lakh is allowed.

Deduction u/s 80CCD(1): National Pension Scheme (NPS)

The National Pension Scheme is a long-term investment plan that provides financial security to investors on retirement. An individual can claim a deduction of up to Rs. 1.5 Lakh. In the case of salaried Individuals, both employer and employee can contribute to this Scheme. Under section 80CCD (1), employees who contribute to NPS are eligible for tax deductions of up to 10% of their salary Self-employed individuals who contribute to NPs are eligible for tax deductions of up to 20% of gross income.

While there are multiple investment options available for you to save tax, it is advisable to select the option that fits your requirements in the best possible way. Remember to plan your taxes in advance and make optimum use of the tax exemption.

Taxcellent guides in tax planning and filing of Income Tax Returns wherein you can also claim income tax refunds.

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