Last chance to invest under Section 80C for tax savings

With the end of the financial year approaching on March 31, individuals looking to reduce their tax liability can take advantage of Section 80C. This section of the Income Tax Act allows taxpayers to claim deductions of up to Rs 1.5 lakh for eligible investments. Several options are available for investment under Section 80C. Popular choices include contributions to provident funds, life insurance premiums, equity-linked savings schemes (ELSS), and tax-saving fixed deposits. These investments not only reduce taxable income but also encourage financial discipline. Tax expert Shefali Mundra highlights that Section 80C provides many options for individuals and Hindu Undivided Families (HUFs) to save on taxes. The combined limit for claiming deductions is Rs 1.5 lakh. Some notable investments eligible under this section include: - **Provident Fund and Superannuation Fund**: Contributions to recognized provident funds are common, with benefits like partial withdrawals and loans available. - **Pension Plans**: Investments in government-notified pension schemes with a minimum lock-in period of three years can be claimed. - **Equity Linked Savings Scheme (ELSS)**: Investments in ELSS mutual funds qualify but come with a three-year lock-in and carry market risks. - **National Savings Certificate (NSC)**: Contributions to NSC are also eligible for deductions. - **Tax Saver Fixed Deposit**: Deposits in designated banks for a minimum term of five years qualify for deduction. - **Senior Citizens Saving Scheme (SCSS)**: This scheme and the Sukanya Samriddhi Yojana are both eligible. - **Life Insurance Premium**: Premiums paid for self, spouse, or children's policies are deductible. In addition, premiums for Unit-Linked Insurance Plans (ULIPs) can be deducted, provided certain conditions are met. For those with disabilities, higher limits for deductions may apply. Taxpayers can also claim deductions for certain expenses. For instance, tuition fees for children at Indian educational institutions can be deducted for up to two children. Moreover, the principal repayment of home loans, as well as expenses towards stamp duty and registration for new properties, are also deductible. As the deadline approaches, it is essential for individuals to consider these options to optimize their tax savings before the financial year ends.