Under
Section 80C of IT Act, provides individuals the beneficial conditions and funds
for minimizing their taxes. These funds minimize the required tax on the
individual’s monthly income. People can minimize their tax with the IT (Income
Tax) Act under section 80C. This tax planning is yearly process. Individuals
have to make the investment to obtain the tax saving advantages before the
activity of Tax. The individual can maintain their tax by investing in several life insurance
plans, loans and child insurance plan. There are several banks or financial
institutions that offer several different investment plans and the individual
can save tax, get tax advantages and obtain benefits from these plans. Some
conditions or terms include in tax saving planning are as follows:
Equity Linked
Savings Scheme (ELSS) -
Under Section 80C of Income Tax Act, ELSS is a tool for reducing the tax.
Equity Linked Savings Scheme or ELSS is a plan or scheme of mutual fund run by
various Mutual Fund companies. ELSS offers individuals to expend money only in
equity, but not in debt funds. Mutual fund Companies can only sell the ELSS
(Equity Linked Saving Scheme) investment plan. The maximum range of Look-in
period of ELSS is of 3 years.
Public Provident
Fund (PPF) – In
IT Act under Section
80C, Public Provident Fund (PPF) investment plan fits for minimizing
the taxes under the limit of one Lacs. The person does not have to give the
entire amount of tax on the maturity time of the investment. Central Government
activated PPF (Public Provident Fund offers investment and tax saving plan) for
any person citizen of India. The individual does not need to be salaried person
or a government employee. The amount that the person invests and the interest
that the person earns both are free from tax, and hence the person can get tax
benefits in PPF (Public Provident Fund) investment.
There
are various other tax savings investments which assist individuals in saving
their taxes under Section 80C. Tuition fees of children, Life Insurance premium
payment, Consumer’s Contribution to Employees Provident Fund, National Savings
Certificates including accrued interest, Unit Linked Insurance Plan, Equity
Linked Savings Scheme and Senior Citizen Savings Schemes is the various
alternatives or option that aid in saving the tax. National Pension Scheme,
five years FD (Fixed Deposit) with
the Bank or Post Office and the repayment of Housing Loan are also some of the
option of saving taxes under Section 80C.
