Section 80C investment options to save Income Tax
Section 80C investment options to save Income Tax: Only six days are left before the end of Financial Year 2018-19.
Section 80C investment options to save Income Tax: Only six days are left before the end of Financial Year 2018-19. If you are a salaried person with a taxable income, you may have already made sufficient investments that qualify for tax deduction under Section 80C of the Income Tax Act. However, if you have been sitting idle till now, there are still six days left for doing the same. As per the Income Tax rules, the deduction under section 80C is available to an Individual or a Hindu Undivided Family (HUF). The maximum deduction limit is Rs 1,50,000 in a financial year. The Income Tax Department says, "Taxpayer is eligible for deduction if contribution/deposits/investments/payment made during the previous year. Taxpayer should make investments/deposits out of his taxable income or otherwise."
Here are six options available to you for claiming deductions under Section 80 C on your hard-earned money this financial year:
1. Section 80C investment options to save Income Tax: Tax-saving fixed deposits
You can make tax-saving fixed deposits in most of the scheduled commercial banks. These deposits have a lock-in period of five years and there is a maximum investment limit of 1.5 lakh in a financial year.
2. Section 80C investment options to save Income Tax: Senior citizen savings schemes
Senior Citizens Savings Scheme (SCSS) is open only to retirees aged 60 or above. If you are a senior citizen, you can benefit from the scheme. The deposits in SCSS can be made in the multiples of Rs 1000 but it shouldn't exceed Rs 15 lakh. However, only Rs 1.5 lakh of the invested amount will be eligible for 80C benefits.
3. Section 80C investment options to save Income Tax: Public Provident Fund (PPF)
PPF account is not just a tax saving scheme but also a sound investment option if you want to see your investment grow over a long-term period. You can deposit any amount between Rs 500 (minimum) and Rs 1,50,000 in a financial year in the financial year.
4. Section 80C investment options to save Income Tax: Equity-linked savings schemes (ELSS)
ELSS is offered by mutual fund companies. Your initial investments in ELSS will qualify for 80C benefits. You make a minimum investment of Rs 500 in ELSS. But there is no upper investment limit. Contributions up to Rs 1.5 lakh are tax-exempt under Section 80C.
5. Section 80C investment options to save Income Tax: National Savings Certificate
You can also buy a National Savings Certificate from the post office at a minimum price of Rs 100. There is no upper investment in NSC. As per the NSC rules, deposits and the interest accruing annually but "deemed to have been reinvested" qualify for deduction under Section 80C.
6. Section 80C investment options to save Income Tax: National Pension System (NPS)
If you haven't yet started saving for retirement, NPS is one of the best options available to you. Investment up to Rs 1.5 lakh in NPS qualified for section 80C in a financial year.
When the taxes are finalised
The Income Tax department's official website says, " The taxes on income can be finalized only on the completion of the previous year."
However, there is also a provision for "Pay as you earn" that allows advance tax payment during the year of earning. The official website says, "However, to enable a regular flow of funds and for easing the process of collection of taxes, Income-tax Act has provisions for payment of taxes in advance during the year of earning itself or before completion of previous year. It is also known as Pay as your earn concept."
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The Income Tax Department collects taxes in at least three ways: a) Voluntary payment by taxpayers into various designated Banks. These are in the form of Advance tax, Self-Assessment tax, etc. b) Taxes deducted at source. c) Taxes collected at source.