80C Rules: Whenever it comes to saving tax, the 80C rule of the Income Tax Act 1961 is discussed the most. Under this rule, any person can take a discount of up to Rs 1.5 lakh. Only those who choose the old tax system will get the benefit of this rule. Taxpayers adopting the new tax regime cannot claim tax exemption under this rule.
Here is how you can get exemption under 80C Rules.
1- Under Section 80C of Income Tax Act 1961, any person or organized Hindu family can claim exemption up to Rs 1.5 lakh in tax. Under this rule, people falling in the 30% tax bracket can save a maximum of Rs 46,800 (by adding a cess charge of 4% percent).
2- Through this rule, if you invest in the planned schemes or spend within the scope of the rules, then taxpayers will get a rebate of up to Rs 1.5 lakh.
3- Under this Act, you will get tax exemption by investing in EPF, PPF, Equity Linked Saving Scheme, Mutual Fund, Sukanya Samriddhi Yojana, National Savings Certificate, Fixed Deposit Scheme for 5 years, National Pension System, Senior Citizen Saving Scheme .
4- We have to keep in mind that each investment has its own limit, rate of return, and separate tax exemption.
5- Under this rule, you can claim tax exemption even on expenses like school fees, home loans, insurance premiums.