Tax saving Instruments

As per the Indian Income Tax Law in computing the total income of an assessee being an individual or HUF benefit of deduction to the aggregate of Rs. One lakh rupees is given.  The deduction is available provided the amount is invested /deposited or paid by the assessee in any of the items listed in section 80C of the Act. The most common type of investments/payments for which deduction is available are:

  1.  
    1. Payment of Life Insurance Premium for himself, spouse and children and in case of an HUF payment of Life insurance Premium for any of member thereof.
    2. Contribution to Public Provident Fund. (max. upto Rs. 70,000/-)
    3. Contribution by employee to Recognised Provident Fund.
    4. Contribution by employee to Appproved Superannuation Fund.
    5. Any security specified by Central Government for this purpose.
    6. Contribution to Unit Linked Insurance Plan.
    7. Payment of tution fees for children for full time education in India (available for two children only)
    8. Repayment of Housing Loan taken from Central Govt, State Govt or Bank and other specified institutions.
    9. Term Deposit for not less than 5 yrs from scheduled bank and which is in accordance of scheme.
    10. Five year deposit in Post Office Time Deposit Scheme.
    11. Subscription of Units of Mutual Fund Specified for this purpose.
    12. Subscription for National Saving Certificate VIII issue.

 

 

Full Text of this section on available on the below mentioned link.

http://law.incometaxindia.gov.in/TaxmannDit/Displaypage/dpage1.aspx?md=2&typ=cn&yr=2008&chp=194

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5 Responses to “Tax saving Instruments”

  1. Sushil Girdher Says:

    When you want to invest your hard earned money for a longer period of time and get a regular income, Fixed Deposit Scheme is ideal. It is SAFE, LIQUID and FETCHES HIGH RETURNS.
    Loan / Overdraft facility is available against bank fixed deposits. Now many banks don’t charges for premature withdrawal.

  2. Ranjit Says:

    Is interest derived on deposits or debentures with Non banking finance Companies (N.B.F.Cs) engaged in loan givin g operations, registered under R.B.I act covered under 80C of the Act ?

    • Vivek Says:

      Interest received from any source (other than interest accured and reinvested on NCS VIII issue) is taxable under the Act.
      But interest received from certain exempted securities are exempted u/s 10(15) of the ACT that too does not include interest derived on deposits or debentures with Non banking finance Companies (N.B.F.Cs) engaged in loan giving operations. Only interest on notified debentures of public sector companies are exempt under the ACT.

  3. Arvind Says:

    As I am filling tax returns from last three year through the my employer . I would like to know what is details and status on my PAN on the Income Tax department o India

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