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Here are the options where you can invest to save taxes

There are a host of tax deductions under Section 80C of the Income Tax Act which the taxpayer can avail upto Rs 150,000 in taxes

ET Now Digital

Updated May 15, 2022, 10:26 IST

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New Delhi: Section 80C of the Income Tax Act 1961 (IT Act) is one of the most recognized section which allows both individuals and Hindu Undivided Family (HUFs) to claim a cumulative deduction of up to Rs. 150,000 p.a. for certain specified investments made by them during a particular financial year.

Here is the list of investment options available under section 80C of the Income Tax Act

Life Insurance Premium

Concerning an individual, the tax deduction is available regarding policy taken in the name of the taxpayer himself, spouse and children. In the case of a HUF, the deduction is available regarding policy taken in the name of any of the members of the HUF. No deduction is available in respect of premium paid in respect of policy taken in the name of any person other than those mentioned above.

Public Provident Fund (PPF)

PPF is one of the most sought after options for availing tax deduction as it falls under the 'EEE' category, i.e. investment in PPF is available as a tax deduction. In contrast, the interest and the maturity amount are both tax-exempt. Investments in PPF can yield a return of approximately 7% to 7.5% p.a. However, PPF investments are subject to a lock-in period of 15 years.

Equity Linked Savings Scheme (ELSS)

Investment in ELSS is also an option for individuals and HUFs to claim deductions u/s 80C. ELSS has a lock-in period of 3 years and depending on the market conditions, the returns depend on the scheme's performance and can generally range between 11% to 16% p.a.

Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana Account can be opened any time after the birth of the girl child until she turns 10 years old, with a minimum annual deposit of Rs. 250, but the investment cannot exceed Rs. 1,50,000 in a particular financial year. This scheme has a lock-in period of 21 years and stands matured thereafter. Further, the benefit of this scheme can only be availed by a resident individual.

Investments in these schemes are tax-deductible u/s 80C of the IT Act. The present rate of interest is appx. 7.6% p.a.

National Savings Certificate (NSC)

NSC is a savings scheme initiated by the Central Government of India to imbibe savings habits amongst people eligible for deduction u/s 80C. Investment in an NSC can be started with a minimum of Rs. 1,000, whereas there is no limit on the upside investment and has a maturity of 5 years. As notified by the government, the present rate of interest for the financial year 2022-23 is currently 6.8% p.a

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