Tax Saving Ideas: The financial year 2024-25 is near to end and taxpayers will have to pay taxes soon. Taxpayers have time until March 31, 2025, to make tax-saving investments. A huge crowd of taxpayers in India still prefer the Old Tax Regime. Which under Section 80C, offers substantial tax deductions up to Rs 1.5 lakh. Here’s a complete guide for you to know about utilizing this popular tax-saving provision. (Tax Saving Ideas)
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Tax Savings Under Section 80C
Under the Old Tax Regime (Section 80C), taxpayers can claim deductions up to Rs 1.5 lakh through various investment schemes. This benefit is available to individual taxpayers and Hindu Undivided Families (HUFs).
There are a several savings schemes qualify for Section 80C deductions. Some of them are Life insurance premiums, Equity-Linked Savings Schemes (ELSS), Select post office schemes, Public Provident Fund (PPF), Sukanya Samriddhi Yojana, Senior (Older) Citizen Savings Scheme, etc.
There are other related provisions too. It is important to know about related provisions to fully understand Section 80C benefits :
- Section 80CCC: This allows tax deductions on pension plans from LIC or other insurance companies. The plan must specifically provide pension benefits to qualify.
- Section 80CCD(1): This section permits tax deductions under the central government’s pension scheme. If you invest 10% of your salary in pension contributions, you can claim tax deductions up to Rs 1.5 lakh.
- Section 80CCD(1B): By investing in an National Pension System (NPS) account, you can claim additional tax deductions up to Rs 50,000. Furthermore, 60% of the maturity amount received as a lump sum under NPS is tax-free, though monthly annuity income is taxable.
By utilizing these sections effectively, taxpayers can significantly reduce their tax liability before the March 31 deadline.
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