#8 - SAVE INCOME TAX Using SECTION 80C Investment Options | FinCalC [VIDEO]

Section 80 C is one of the Investment options which includes:

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Provident Fund
If you are working as an employee in an organization, a fraction of your salary is deducted and saved in Provident Fund every month. This amount can be claimed at the end of Financial year under Section 80 C in order to save Income Tax. Usually, 12% of employee's basic salary is deducted every month and saved in Employee Provident Fund. This is usually seen as a retirement fund, which is touched only after the retirement of an Employee.

Public Provident Fund
This is a Government backed Saving Scheme with a lock-in period of 15 years. You can claim maximum investment of rupees 1 Lac 50,000 in a Financial Year under Section 80 C via investments in Public Provident Fund. Currently, the rate of Interest provided by Public Provident Fund is 7.9%, in the second quarter of Financial Year 2019-20. After the end of 15 years, you either have the option of closing your Public Provident Fund Account after withdrawing the accumulated balance, or you can extend the duration of your Account by 5 years. Some people treat Public Provident Fund Account as their retirement fund, by extending the time period by 5 years until retirement.

Equity Linked Savings Scheme
This type of mutual Funds invests in equity funds and the returns are based on market performance. This option have a lock-in period of 3 years and the amount invested in such funds are applicable for Tax deduction under section 80 C. You can claim a maximum of rupees 1 Lac 50,000 in a Financial Year under Section 80 C via investing in Equity Linked Savings Scheme. We have a selected range of mutual funds that comes under this category of equity linked savings scheme, so not all mutual funds are Equity Linked savings scheme. These are special funds that help us in saving our Income Tax.

Life Insurance Premiums
If you have a Life Insurance, the premium amount of that life Insurance can be claimed under Section 80 C to save your Income Tax. It is very important to have Life Insurance if you are the sole bread-winner of the family. Again, the maximum amount that can be claimed under Section 80 C via Life Insurance premiums is rupees 1 Lac 50,000, as that is the limit of Section 80 C to save Income Tax.

5 Year Fixed Deposits
This is the special type of  Fixed deposits which are locked-in for 5 years. The amount you save in a Financial year can be claimed under Section 80 C. Since the lock-in period is of 5 years, you won't be able to withdraw any amount before the end of 5 years, thus making it eligible for claiming deduction under Section 80 C.

National Savings Certificate
This is the certificate that is issued by Post Office. Similar to Fixed Deposits, National Savings certificate are safe investment options and allows you to claim deduction under Section 80 C. They come with 2 lock-in periods, 5 and 10 years. Again, a maximum of rupees 1 Lac 50,000 can be claimed under Section 80 C via investing in National Savings Certificates. The current rate of Interest provided by National Savings Certificate is 7.9%, in the second quarter of Financial Year 2019-20.

Senior Citizens Savings Scheme
This is the scheme designed for the senior citizens to park their corpus amount, and claim deduction under Section 80 C. People of age above 60 years are eligible to save in Senior Citizens Savings Scheme. It has a lock-in period of 5 years and the current rate of Interest is 8.7%.

So these are some of the Investment options that fall under Section 80 C. You can invest in any of these schemes and save Income Tax. We will see details of each option in upcoming videos.
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