Friends,
The various budgets that have come by in the past have opened choices of various kinds of investment alternatives. When we invest in these we could save tax. The significant question would be what should be the field of investment that is to be chosen. It could be residential house property, medical insurance policy etc. If the house is ready for occupation then from that year itself investment in residential house property which is for self-occupation can get you tax deduction in according to section 80C which allows the deduction of Rs.1 lakh even if you are repaying housing loan to bank, financial institution or employer etc. Invest in pension plan which can enable you to be entitled for a combined deduction under section 80C and also section 80CCC for up to Rs.1 lakh only.
Various other popular areas of investment that could be opted by tax payers to avail deductions under the section 80C of Income Tax Act, 1961 are premium payment of life insurance, payment to public provident fund, payment of tuition fee for the purpose of child’s education, investment in NSC bonds, investment in National Saving Scheme (NSS) bonds, investment in ELSS and also housing loan repayment. Therefore you could choose from all these options of investment along with pension plan investment and achieve the target of total investment summing up to Rs.1 lakh. This is the maximum amount that you could try to contribute by the investment option to obtain tax benefit.
Making investments even in bank fixed deposits belonging to any scheduled bank with a maturity period of at least 5 years is eligible to entitle your investment to be claimed for deduction u/s 80C. The chance to avail deduction under section 80C by paying tuition fee for the educational purposes of children is limited only to the payment for two children. This deduction is applicable to any two children of the tax payer. It is to be noticed that when both husband and wife are earning members of the family then they are entitled for a separate limit of two children each. This would mean that they would be capable to be entitled for deduction of tax by paying for tuition fees of 2 children each.
This deduction is not applicable when the child is attending a part time or distance education course. It is intended for only full time courses. Even fees for private tuition or coaching classes are not eligible for deduction u/s 80C. The educational institution in which the children attend their full time course should be located only in India though it could be affiliated to a foreign institution. Pre-nursery, play school and nursery class fees are interesting eligible for deduction u/s 80C but donations paid or late fees, term fees, transport charges etc are not eligible. There is no necessity that the child be a legal child. Even an unmarried person can claim deduction u/s 80C if he has children. Adopted children are also eligible to claim deduction u/s 80C as there is also no necessity to be biological parent of the child.