NewsBytes
    Hindi Tamil Telugu
    More
    In the news
    Mukesh Ambani
    WhatsApp
    Reliance Jio
    OPPO
    Vivo
    Sensex
    Bitcoin
    NewsBytes
    Hindi Tamil Telugu
    NewsBytes
    User Placeholder

    Hi,

    Logout


    India Business World Politics Sports Technology Entertainment Auto Lifestyle Inspirational Career Bengaluru Delhi Mumbai Visual Stories Find Cricket Statistics Phones Reviews Fitness Bands Reviews Speakers Reviews

    Download Android App

    Follow us on
    • Facebook
    • Twitter
    • Linkedin
     
    Home / News / Business News / Save the maximum tax under Income-Tax Sections 80C, 80CCD, 80D
    Business

    Save the maximum tax under Income-Tax Sections 80C, 80CCD, 80D

    Save the maximum tax under Income-Tax Sections 80C, 80CCD, 80D
    Written by NewsBytes Desk
    Edited by Shikha Chaudhry
    Dec 12, 2017, 05:07 pm 3 min read
    Save the maximum tax under Income-Tax Sections 80C, 80CCD, 80D

    December is here, and taxpayers are in a rush to utilize tax deductions to the fullest, invest in various tax-saving instruments, and submit these proofs to employers. There are various tax-saving solutions to claim benefits of Rs. 1.5lakh under Income Tax Act Section-80C, Rs. 50,000 under 80CCD, and Rs. 25,000 (Rs. 30,000 if parents are senior-citizens) under 80D. Read on to choose the best!

    Tax exemptions under Sections 80C, 80CCD

    Under Section 80C, one can get tax exemption on investments of up to Rs. 1.5lakh in Employees' Provident Fund, Public Provident Fund, National Savings Certificate, Life Insurance Premium, five-year tax-saving bank fixed-deposits, post-office schemes, Specified Government Bonds, ELSS (equity-linked savings schemes). To encourage investments in National Pension Scheme, an additional tax deduction of Rs. 50,000 is allowed under 80CCD; it's above 80C's Rs. 1.5lakh-limit.

    Tax deduction benefits under Section 80D

    Under 80D, taxpayers can take health insurance for self/spouse/dependent children for an exemption of up to Rs. 25,000. If the taxpayer's parents are senior citizens, then the maximum tax benefit is Rs. 30,000. Deduction of Rs. 5,000 on preventive health checkups is also available. Also, Section 24 allows tax benefit of up to Rs. 2lakh on interest for home loans (self-occupied houses).

    ELSS and National Pension Scheme

    While there are many tax-saving options, experts advise taxpayers to invest in instruments that give higher returns in the long term like the equity-based financial instruments like ELSS (equity-linked savings scheme) of mutual funds and the National Pension System.

    ELSS investment offers tax benefit of Rs. 46,350

    Considering the return on investment (ROI), ELSS of mutual funds is an excellent option as stock markets reach record highs; people are increasingly investing in this. In the last five years, ELSS data showed an annualized return of 18%. If taxpayers invest Rs. 1.5lakh in ELSS yearly, they can save Rs. 46,350 in taxes. The three-year lock-in period is lower than most options.

    ELSS investors should remain patient during market ups, downs

    H&R Block India's Head of Tax Research Chetan Chandak says, "Investment in ELSS is linked to the performance of share-market." If taxpayers want to take a risk for good ROI, they can choose ELSS. Tata India Tax Savings Fund's Rupesh Patel said instead of lump-sum ELSS investments, SIP (Systematic Investment Plan) is better; it "gets reflected in increasing proportion of SIPs in ELSS funds."

    About the National Pension System

    NPS is a good option for tax-saving and retirement planning, too. It is designed to give the investor a lump-sum amount and a regular income post-retirement. 50% of the non-government workers' contribution can be invested in equities and the remaining between corporate and government debt paper. There are two methods to save more on taxes through NPS: self-contributions and employer contributions to NPS.

    Employer can contribute to employee's NPS account

    Under NPS, employer's contributions to the taxpaying employee's NPS account also gives tax benefits to the employee. It is allowed under Section 80CCD(2). Though there's no monetary restriction on tax deduction (if the employer contributes), it shouldn't exceed 10% of the employee's salary.

    NPS: Tax on 20% of the withdrawal

    Under NPS, post-retirement, investors can get up to 60% of the corpus including returns; they must invest a minimum of 40% for compulsory annuity. Investors need to pay tax on 20% of the amount withdrawn. But PPF and EPF schemes are tax-exempt in investment, accumulation, and withdrawal. For NPS Tier-1 accountholders, withdrawals are tax-free up to 25% of contributions (10 years after subscription).

    Share this timeline
    Facebook
    Whatsapp
    Twitter
    Linkedin
    Latest
    India
    National Pension Scheme (NPS)
    Income Tax Department of India
    Employees Provident Fund Organization (EPFO)

    Latest

    UN aware of RaGa's jail sentence in 2019 defamation case United Nations (UN)
    Space dust may unlock the mystery of alien life: Study Space News
    Maharashtra: Couple, 3-month-old son mowed down by train in Palghar Palghar
    Akshay Kumar's 5 action movies you can't miss  Bollywood

    India

    World Bank president nominee Ajay Banga tests positive for COVID-19 World Bank
    This Indian researcher earned Rs. 4.6L for detecting Uber's bug Uber
    Have you seen Bhagat Singh's original letter to jail authorities Lahore
    Bharat 6G Vision: How soon India will get 6G  5G Technology

    National Pension Scheme (NPS)

    Drawing family pension from different sources possible: Government clarifies Civil Services
    Railway ticketing, Aadhaar, GST, more: Major policy changes in 2019 India
    Important changes in 2019 every Indian should be aware of India
    #FinancialBytes: All you need to know about National Pension System India

    Income Tax Department of India

    MHA suspends think-tank CPR's FCRA license amid I-T probe  Central Government
    Jaishankar replies to UK counterpart's BBC I-T 'survey' query 'firmly' United Kingdom
    Report fearlessly: BBC director-general to India staff after tax 'survey' BBC
    I-T Department surveys BBC using 'black money', 'benami' keywords BBC

    Employees Provident Fund Organization (EPFO)

    EPFO extends deadline for higher pension: How to apply Supreme Court Of India
    Amid pandemic, Rs. 21cr fraudulently withdrawn from Mumbai PF office Mumbai
    EPF-Aadhaar card linking now mandatory. How to do it? Aadhaar Card
    EPFO members allowed second advance withdrawal citing COVID-19 Coronavirus

    Love Business News?

    Subscribe to stay updated.

    Business Thumbnail
    Indian Premier League (IPL) Celebrity Hollywood Bollywood UEFA Champions League Tennis Football Smartphones Cryptocurrency Upcoming Movies Premier League Cricket News Latest automobiles Latest Cars Upcoming Cars Latest Bikes Upcoming Tablets
    About Us Privacy Policy Terms & Conditions Contact Us Ethical Conduct Grievance Redressal News News Archive Topics Archive Download DevBytes Find Cricket Statistics
    Follow us on
    Facebook Twitter Linkedin
    All rights reserved © NewsBytes 2023