Before you rush to make any investments under Section 80C, check the outflows that qualify for a deduction in this section.
1) EPF contribution
If you are a salaried employee, calculate the amount that is already exhausted under the EPF. This is a forced contribution from your salary to your provident fund.
2) Education expenses
Now look at the education expenses of your child. To avail of a tax break, the fees are for a maximum of two children and for full-time courses at a recognised institution within India.
3) Home loan repayment
The principal paid towards a home loan, up to Rs 1.50 lakh, can be claimed as a deduction.
4) Life insurance premium
If you are paying any premium towards life insurance policies, then this too will qualify for a deduction under Section 80C.
Only once you have exhausted the above, look at the investments permitted under this section.
EPF: Employees’ Provident Fund
PPF: Public Provident Fund
NSC: National Savings Certificate
ELSS: Equity Linked Savings Scheme
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