How to Save Tax Under Income Tax Section 80C (Save UptoRs. 1.50 lakhs) in 2024

Looking to save on income tax? Utilize Section 80C and save up to Rs. 1.5 lakhs. Want to know how? Check out tax-saving schemes…

It is known that during the 2023 budget, the central government has provided a significant tax relief to wage earners. As per the new tax regime, individuals earning up to Rs. 7.5 lakhs annually are exempt from paying taxes.

This means that the income tax exemption limit has been increased from Rs. 5 lakhs to Rs. 7 lakhs in the 2023 budget. Additionally, a standard deduction of Rs. 50,000 will be applicable. While those earning up to 7.5 lakhs are not required to pay tax, they can still decrease their tax liability through tax-saving investments. Let’s explore the ways to do so.

Save Tax Under Income Tax Section 80C
Save Tax Under Income Tax Section 80C

The Income Tax Act has a special provision known as Section 80C. This provision allows for a maximum tax benefit of Rs. 1.50 lakh. It is one of the most popular provisions, but it only applies to the old tax system.

Unfortunately, this benefit is not available in the new tax regime. However, there are some investment schemes that can offer tax exemption benefits. You can take advantage of these schemes to receive tax exemption benefits by making investments in them.

If you invest in life insurance or term insurance policies, you can get a tax deduction on the premiums paid in that financial year.

Tax benefits under Section 80C can be availed through the National Pension System (NPS) where savings benefits are available post-retirement.

Investing in small savings schemes can provide tax benefits. These include contributions to the Public Provident Fund, Senior Citizens Savings Scheme, National Savings Certificate Investments, and Post Office Time Deposits with a five-year limit. Additionally, investments up to Rs. 1.50 lakhs in the Sukanya Samriddhi Yojana can also be considered for tax reduction.

There are tax-saving fixed deposits with a tenure of five years. Investing in Equity Linked Savings Schemes (ELSS) and EPF contributions also provide tax benefits.

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