NEWS & ADVICE : FIXED DEPOSITS
Investment options to Save Tax under Section 80C
By Neelima Shankar
Print    Email    RSS   

No one likes paying tax and it prompts everyone to look for options that may reduce their tax liability. There are many provisions to do this and one of the most common options is the tax deductions under Section 80 C of the Income Tax Act. There are various investing options under 80 C that enable you to reduce your taxable income up to a maximum limit of Rs 1 lakh.

The eligible deductions that everyone might be aware of are contributions to Employee Provident Fund, Payment of tuition fee or repayment on home loan. In addition there are investment avenues that are eligible for tax deduction about which you might have little knowledge.

Investing in Government Securities

For those who seek absolute protection of their capital, Investing in Postal Saving schemes such as NSC or putting money in PPF (Public provident fund) is an option.

Public Provident Fund (PPF)

PPF offers interest income in the range of 8% with annual compounding. However, the maximum amount that can be invested in PPF is Rs.70,000 and money cannot be withdrawn before the completion of 6 years. Those who look at PPF in terms of their retirement corpus and feel that their current PF deduction is not sufficient, may consider this option.

National Savings Certificate

Another popular avenue investing - NSC also offers a return of 8% on half yearly compounding basis. Another feature is that interest accrued on NSC is also eligible for Section 80 C benefit. The interest on NSC investment, except in the sixth year, is not paid but credited to the investor's account. So, the interest that accumulates is treated as invested in NSC and the accumulated interest thereby qualifies for tax deduction. The duration of NSC is for 6 years with an option of premature encashment after 3 years. However, that would reduce the net yield from NSC.


Page  | 123 |  
(Comments Posted : 1) Post Your Comments
1. good article. I feel there are enourmous number of investment options available for individuals...
Best investment options @ myinvestmentideas.com (Posted: Nov 16, 2012)
Show All Comments
COMPARE QUICKLY
 Select a product:
 

CALCULATE QUICKLY
 Select a product:
 

EDITORS' PICKS
Financial ratios as an aid to financial...
Calculate your tax
Fetch higher interest rate on your savings...
Tax saver fixed deposits in India earn you...
Carnival of Indian Personal Finance Blogs #1


Чорна магія {(+91-8107993900)} blACk...
MAKWASSIE ,LEEUDORINGSTAD,HARBEESFONTEIN, NORTH WEST...
WOLMARANSSTAD,POTCHESTROOM,ORKNEY, NORTH WEST SOUTH...
ҠOreĞaon Park 08554976404 Ξ 08554950024 Pune CALL...
BOOM__((Ó9975955052))__((Ó8623027366))__Swargate...
BALAJI NAGAR Esc0rts {}- 09766585868 •/•...

NEWS THIS WEEK
Federal Bank launched V connect for its customers Feb 12, 2015
Andhra Bank on expansion mode Feb 11, 2015
Dena Bank earned a profit of 13%. Feb 9, 2015
Banks expected to cut down the rates Feb 5, 2015
RBI kept the rates unchanged Feb 4, 2015
News Archive