Income Tax News: As the tax filing deadline approaches, individuals seek various avenues to save taxes, and one prominent section that garners attention is Section 80C of the Income Tax Act, 1961. With the deadline of March 31st looming, salaried professionals particularly intensify their efforts to explore tax-saving options. Section 80C serves as a popular choice for tax deductions, offering benefits for specific investments and payments, effectively reducing taxable income and, consequently, lowering tax liabilities.
Insight into Section 80C of the Income Tax Act
Section 80C operates as a vital tool for tax planning, allowing taxpayers to claim deductions up to Rs 1.5 lakh by investing in specified avenues. Notably, the tax benefit is applicable exclusively to those adhering to the old tax system. Those opting for the new system do not enjoy the tax benefits under Section 80C. This section covers various investment options, such as EPF, PPF, SSY, NSC, ELSS, Tax-Saving FD, NPS, SCSS, life insurance premiums, ULIP, and more. However, it’s essential to note that many of these options come with lock-in periods.
Exploring Income Tax Section 80CCC
In addition to Section 80C, taxpayers can leverage Section 80CCC for deductions. This section allows a deduction for the purchase of specific annuity plans or pension funds offered by public insurance companies. Eligibility for such funds is crucial, aligning with the criteria specified in section 10 (23AAB). While both resident and non-resident Indians can claim deductions under Section 80CCC, undivided Hindu families are ineligible. It’s important to recognize that policies falling under this section do not provide exemptions for income components like bonuses and interest, making them taxable. Understanding these sections provides individuals with strategic insights into optimizing their tax-saving efforts.
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