As the close of the financial year is just around the corner, it is prudent for one to revisit their finances and ensure that they have utilised the tax exemptions or deductions to the full. Of all the exemptions, Section 80C is one of the important Sections that allows a tax exemption of up to Rs 1,50,000.
Here is a look at the major heads under which an individual can claim exemption under Section 80C
A. Deductions up to Rs 1.5 lakh Allowed Under Section 80C
Home loan principal repayment:
Each EMI paid towards home loan contains repayment of both interest and principal. One can seek provisional home loan certificate from the lender and evaluate the total principal payment over the financial year.
Tuition fees of two children:
An individual, who pays the tuition fees for his/her children can add the same for exemption under the Section.
When bought a new house:
Many people are unaware that registration charges and Stamp duty paid towards the acquisition of a residential property are eligible to be added under the Section 80C.
B. Other Heads That Are Covered Under Section 80C
EPF or VPF:
Do not forget to add Employee Provident Fund or Voluntary Provident Fund (VPF) contributions under the Section. Voluntary Employee Provident Fund is an option given to Employees to invest an amount over and above the 12% of basic salary. Only employees with existing EPF account can operate VPF. Contributions towards EPF or VPF are eligible for deduction under Rs 1.5 limit of Section 80C.
Life insurance premium:
Another deduction allowed under the Section is that of the premium payment for a life insurance policy.
Balance in Equity-linked Saving Schemes (ELSS):
If an individual still has some tax obligation and the deductions under the Section do not sum up to Rs 1.5 lakh then the balance of amount can be invested into ELSS as required.
C. Keep in mind
Care should be taken that the sum of all such deductions do not cross the specified limit as anything above such limit will not be considered for exemption.