Section 80 C

Investments that fall under Section 80C:

Provident Fund
Public Provident Fund
Life Insurance Premium
Unit Linked Insurance Plan
Pension Plans
Equity Linked Savings Schemes of Mutual Funds
Infrastructure Bonds
National Savings Certificate
Tuition Fees
5 year deposits in Bank
Senior Citizens Saving Scheme 2004
Post Office Term Deposit Account

Apart from the above, the payment towards principal amount of home loan is also eligible for income deduction.

(Life insurance, contribution to provident fund, schemes for deferred annuities, tuition fees, repayment of principal on housing loans, ELSS and infrastructure bonds.) The investments in the above during the year 2008-2009 can only be taken into account for deduction from the income.

Limit: 1,00,000

Criteria: The limit is irrespective of how much you earn and under which tax bracket you fall. There is no sub-limit on any of the above and taxpayer can invest the full amount in any one category.

Income Tax Slab for Assessment year 2009-2010:

Lower Limit	Upper Limit	Tax Payable
0	Rs.150000	Nil
Rs.150001	Rs.300000	10% of income in excess of Rs.150000
Rs.300001	Rs.500000	Rs.15000+20% of income in excess of Rs.300000
Rs.500001	No upper limit	Rs.55000+30% of income in excess of Rs.500000

In the case of a woman assessee, the exemption will be upto Rs.180,000 from Rs. 145,000 whereas Senior Citizen will now have the exemption limit of Rs. 225,000 from Rs.195,000.

An additional deduction of Rs.15,000 under Section 80D has been allowed to an individual who pays medical insurance premium for his/her parent(s).

Example:

Salary	650000
Home loan Interest Payment	120000
Gross Total Income	530000
Home loan Principal Payment	80000
NSC Investment	40000
Section 80C Investments	120000
Limit for Section 80C	100000
Taxable Income	430000

In the above scenario, concerned individual should have invested only Rs.100000 under Section 80C schemes because the money would be locked for a fixed period if there is tax exemption.

Section 80C advantages:

It gives a bigger tax break.
Section 88 gave only a maximum of 20% rebate on tax saving schemes.
Section 80L allowed interest deduction up to a limit of Rs.12000.
80 C to give tax breaks for all. There is no restriction on taxable income.
Taxable income in 30% bracket to enjoy a savings of 30000 right away.
Under Section 88 only Rs.20000 of home loan principal can be claimed. But, under Section 80C up to Rs.100000 can be claimed.
Investment can be made in ELSS and earn a 30% return up-front in the form of tax break.

Section 80 C

Investments that fall under Section 80C:

Apart from the above, the payment towards principal amount of home loan is also eligible for income deduction.

(Life insurance, contribution to provident fund, schemes for deferred annuities, tuition fees, repayment of principal on housing loans, ELSS and infrastructure bonds.) The investments in the above during the year 2008-2009 can only be taken into account for deduction from the income.

Limit: 1,00,000

Criteria: The limit is irrespective of how much you earn and under which tax bracket you fall. There is no sub-limit on any of the above and taxpayer can invest the full amount in any one category.

Income Tax Slab for Assessment year 2009-2010:

In the case of a woman assessee, the exemption will be upto Rs.180,000 from Rs. 145,000 whereas Senior Citizen will now have the exemption limit of Rs. 225,000 from Rs.195,000.

An additional deduction of Rs.15,000 under Section 80D has been allowed to an individual who pays medical insurance premium for his/her parent(s).

Example:

Section 80C advantages:

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