The tax payers should remember that Section 80C to the Income-tax Act 1961 a deduction would be permissible to all individuals and Hindu-undivided families in respect of investment made by them, or expenses incurred by them, as mentioned in the said Section 80C of the Income-tax Act, 1961.
The maximum amount that can be invested/spent for claiming the tax deduction is ` 1,50,000. The best part of the new provision is that the tax payer can invest the entire sum of ` 1.5 Lakh without worrying about any sub-limits used to be the case earlier. Thus, if an individual, say is interested to make payment of ` 1.5 Lakh only for Life Insurance Premium then he can do so and enjoy full deduction to the extent of ` 1.5 lakh. Similarly if a person wishes no other investment to avail tax deduction then he can do and avail deduction on housing loan repayment to the full extent of `1.5 Lakh. Similarly, one another person, say is interested to spend the entire ` 1.5 lakh on the education of his children, he can also do so and enjoy full tax benefit of deduction under the new Section 80C of the Income-tax Act, 1961.
The following is the list of items which are eligible for aggregate tax deduction of ` 1,50,000 as per Section 80C:-
1. Payment for Life Insurance Premium
2. Payment for Deferred Annuity Plan
3. Deferred Annuity payable by Government
4. Contribution to Public Provident Fund
5. Contribution to Provident Fund set up by Central Government
6. Contribution to Recognised Provident Fund
7. Contribution to recognized superannuation fund
8. Subscription to any security or deposit notified by Government
9. Subscription to Saving Certificates
10. Subscription for Unit Linked Insurance Plan 1971
11. Contribution for Unit Linked Insurance Plan of LIC Mutual Fund
12. Payment for annuity plan of LIC or any other insurer
13. Subscription to units of notified mutual funds
14. Contribution to Notified pension fund of mutual fund
15. Pension fund set up by National Housing Bank
16. Subscription to a deposit scheme of public sector company engaged in providing long term finance for housing.
17. Tuition fees of two children in India.
18. Payment of installment for self-financing of a residential property for repayment of loan.
19. Subscription to equity shares or debentures as approved for infrastructure.
20. Subscription to any units of mutual fund as approved by the Central Board of Direct Taxes.
21. Term-deposit for a fixed period of not less than five years with a scheduled bank.
22. Rural Bonds of NABARD would also qualify for tax deduction under Section 80C.
23. 5-year deposit in an account under the P.O. Time Deposit Rules 1981.
24. Deposit in an account under the Senior Citizens Savings Scheme.
Note: Total amount allowed as deduction is limited to ` 1.5 Lakh inclusive of deduction as per Section 80C, 8OCCC, 8OCCD and Section 8OCCE.