Q: What is tax exemption under section 80 C of Income tax act, 1961 ?

Ans:  According to section 80C of the income tax act, 1961, a person can get the benefit of a tax exemption on the amount of Rs 1.5 lakhs. The facility can be availed of under the following conditions: 

1. LIC: In a life insurance policy, a person will get a tax exemption of Rs 1.5 lakhs if he pays the premium of Rs 1.5 lakhs on an LIC policy.

2. PPF(Public Providend Fund) : In PPF also, a person can get the deduction of Rs 1.5 lakhs in a year.

3. Mutual Fund ELSS(Equity Linked Savings Scheme): In the equity linked savings scheme of mutual fund, the person can get the tax exemption on the amount of Rs 1.5 lakhs but in this scheme,  the amount gets locked for the period of 3 years.

4. Fixed Deposit: In fixed deposit, a person can get the tax exemption if the amount of fixed deposit is more than 5 years.

5. Home Loan Principal Amount: A person can the benefit of tax exemption on the principal amount of home loan.

6. Tuition fees:  The person will get the benefit of tax exemption on the amount of tuition fees.

The tuition fee is for colleges and universities, and the facility is for two children only.

7. Infrastructure of Mutual Funds: A person will get the benefit of a tax exemption on the amount of infrastructure of mutual funds.

8. There are also some other schemes like the National Savings Scheme, Sukanya Samriddhi Yojna, Senior Citizen Savings Scheme, National Housing Bank(Pension Fund), Post Office Deposit, Voluntary Providend Funds, Registration Charges of House Property, etc in which a person can get the benefit of tax exemption under section 80 C of income tax act, 1961.


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