FY24 is drawing to a close on March 31. Here’s a quick summary of your 80C options to reduce your taxable income.
If you have opted for the old tax regime (not the new one), you can reduce your taxable income by up to Rs 1.5 lakh, thanks to Section 80C of the Income Tax Act.
Let’s walk you through each option for saving your taxes under the old tax regime.
Your contribution to EPF – and not the employer’s contribution – falls under Section 80C. Mention this amount to lower your tax liability.
Buying life insurance can reduce your tax outgo. Do note to opt for term insurance. While they lack survival benefits, they provide hefty coverage at a reasonable cost.
While EPF is primarily a retirement solution and life insurance is not an investment, let’s look at the wealth-building options under Section 80C.
They are the best option, as they offer transparency and promise long-term returns. They also boast the shortest lock-in period among all other tax-saving investment options.
Investing in it can reduce your taxable income by an additional Rs 50,000. No other investment option has this feature.
The PPF (Public Provident Fund) offers a return of 7.1 per cent but has a length lock-in period of 15 years.
For those looking for something like FDs but with a shorter maturity, there is the National Savings Certificate. Five-year bank and post-office deposits are good options too.
By the way, health insurance is not an investment avenue but do get it. They can help you during health emergencies.
Section 80D allows a deduction of up to Rs 25,000 (Rs 50,000 if one of the policyholders is a senior) on premiums paid for self, spouse and kids.
One can claim an additional deduction of Rs 50,000 for the premium paid towards the health insurance policy of their parents.