Section 80C Exemptions| With Automated Income Tax Preparation Software In Excel for the All Government and Private Employees for the F.Y.2021-22

 Section 80C Exemptions | To persuade citizens to invest in various ways, the government allows 

exemptions during the calculation of income tax. The most popular ones fall under Section 80C. 

Here is a guide.

 A person's total income is calculated by adding the income he earns from different sources. Excluding names is a specific expense that can be deducted from the total income.

The main purpose of granting tax exemptions is to reduce a person's tax liability. In addition, certain discounts are provided to encourage one to save and invest more. This national exemption is provided under section 80C.

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Section 80C 

Section 80C of the Income-tax Act, 91 includes a wide range of items eligible for exemption. Most of these items relate to what anyone can invest in.

The maximum amount of exemption that can be claimed under section 80C is Rs. 1,50,000.

Exemption under 80C 

Now that we have a brief idea about the sub-categories, let’s look at their details. But let us make it clear that the benefits under this section can only be taken by individuals and Hindu Undivided Families (HUFs). Here are some of them:

 

Life insurance premium

Life insurance is one of the most important tools you are looking for. This section provides for concession in case of any premium paid in the life insurance policy. The policy can be for self, wife, dependents, children, etc.

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Unit Combined Insurance Plan (ULIPs)

Interest rate: 8% -10%

Lock-in period: 5 years.

If you are not already aware, ULIPs are a modified and improved version of the endowment plan. ULIPs initially faced some criticism but are now preferred over term life insurance policies.

 

Tax-saving F.D

Interest rate: 7% -8%

Lock-in period: 5 years.

This is a special project provided by banks and post offices. It is noteworthy that, although the contribution for this project is exempt, the income received attracts tax liability.

 

Save National Savings Certificate (NSC)

Interest rate: 8 6.8%

Lock-in period: 5 years

The Government of India supports it as well as one of the safest ways to invest. The best part about this is that investors receive only a discount of Rs 1,50,000 but the interest earned is not subject to TDS.

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How can you invest? Well, investment in National Savings Certificate (NSC) should be done through post offices. A resident Indian can visit any post office, fill up the required application, buy the certificate and post certain documents.

Bonus - Loans can be taken against their NSC certificate. 

Equity Linked Savings Scheme (ELSS)

 Interest rate: 12% -15%

 Lock-in period: 3 years

As the name implies, it involves some ratio of equity and so the returns of this scheme fluctuate with changes in the market. ELSS is the only type of mutual fund which is covered under Section0 So if you want to invest in a mutual fund but also want to get duty free, ELSS must not be avoided.

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Home loan

If you have a housing loan as part of your balance sheet obligations, this section provides relief for principal repayments. The interest payable is not included, though. Feeling vague? No worries! Section 80C provides clear instructions on the amount eligible for the discount.

 

1. To get this exemption you have to finish the construction of the house.

 

2. The property in question must not be transferred within five years of possession of the property.

 

3. If the property is transferred after five years of the prescribed period, any amount claimed as a tax deduction will attract a tax liability in the year of such national transfer.

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Public Provident Fund (PPF) 

Interest rate: 7.9%

Lock-in period: 15 years

For all Indian citizens in their own name or on behalf of minors, contributions to the PPF are eligible for exemption under Section 80. If one opens two accounts, one in their own name and the other on behalf of the minor, the approved combined discount will be Rs.1,50,000.

 

• Senior Citizens Savings Scheme

Interest rate: 7.40%

Lock-in period: 5 years.

With the help of the government, this senior citizen savings scheme can be availed by a senior citizen with an investment of a minimum of Rs.1000/-

Conclusion-

Exemptions, even in general, make income tax law is quite complicated because it can meet the needs of a huge population. Understanding the complications is good and good. Otherwise, it is advisable to consult with a professional who can help you manage your taxes better.

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Feature of this Excel Utility-

#This Excel utility can prepare at a time your Income Tax Computed Sheet

 

# Individual Salary Sheet

 

# Individual Salary Structure as per the Govt & Non-Govt Employee’s Salary Pattern

 

# Automated House Rent Exemption Calculation U/s 10(13A)

 

# Automated Income Tax Arrears Relief Calculation U/s 89(1) with Form 10 E for F.Y.2021-22

 

 

# Automated Income Tax Form 16 Part A&B and Part B for the F.Y.2021-22]