Income Tax Planning

[Deepak]

Hi,
I am filing return for the first time and I have to give proofs of
investment to my company before 31st Dec. So, please suggest me some
good investments for tax savings under 80C (upto Rs.100000).

[manoj kumar]

As for my concern if u should go with section 80c deductions may
follow these:

You can invest a maximum of Rs 1 lakh in all these instruments put
together and the entire amount of Rs 1 lakh will be deducted from your
taxable income.


You can get a deduction for the following investments you make:

1. A life insurance policy or a unit-linked insurance plan (ULIP). The
lock-in period for ULIPs is between 3 to 5 years and the returns vary
depending on the performance of your fund.

However, if your annual premium exceeds 20 per cent of the sum assured
on your policy, you will not get the tax benefit.

2. A retirement benefit plan offered by mutual funds. Examples are the
UTI Retirement Benefit Plan and Templeton India Pension Plan.

3. A Provident Fund, provided that the fund is covered under the
Provident Fund Act. This would mean investments made by you through
salary deduction in the Employees Provident Fund (EPF) account as also
investments that you make directly in the Public Provident Fund (PPF).
You can invest up to Rs 70,000 in the PPF. The current rate of return
on EPF is 8.5 per cent while that on PPF is 8 per cent.

4. An approved superannuation fund. Usually your employer, on behalf
of you, does this by deducting the investment amount from your salary.

5. National Savings Certificates (NSCs).

6. Equity Linked Savings Scheme (ELSS) offered by mutual funds.

7. Pension policies offered by insurance companies where benefits were
earlier available under section 80CCC. Earlier, there was a limit of
Rs 10,000 on such investments; however that ceiling has now been
removed.

8. Bank fixed deposits that provide the Section 80C tax benefit. They
come in with a lock-in of 5 years.

Apart from the investments mentioned above, you can also get a
deduction on certain expenses that you incur. Mainly, these include
the principal repayment on your home loan and the tuition fees you pay
on your children’s education.