Best Tax-Saving Investment Plans Under Section 80C

• Eligibility
  Any individual or Hindu undivided family can claim deductions under this section.

• Deductions Allowed
  A deduction of up to ₹1,50,000 is allowed in one financial year from the gross total income.
• Investment Instruments
  To claim deductions under this section, you can invest in different types of investment plans as there is no upper limit on the number of investment instruments.
  Remember that regardless of the number of investment instruments, the combined deduction limit stays the same: ₹1,50,000.

Tax-Efficient Investments under Section 80C of the Income Tax Act

Section 80C of the Income Tax Act is possibly one of the most popular provisions that allow tax efficient impressive tax deductions. Here’s a little guide to introduce you to some of the most popular tax saving investment plans under this section: 1

1. Public Provident Fund
   The PPF is a government-backed savings scheme that offers impressive returns and tax benefits. The lock-in period for PPF is 15 years. PPF typically comes with low risk and steady returns through interest rates.
   
   What do you need to know?
   - The average interest rate under PPF is 7.1% for Q4 of the financial year 2024-25
   - Minimum deposit ₹500 and maximum deposit ₹1,50,000 (annually)
   - After the 7th financial year, withdrawal is permissible.
   
2. Equity-Linked Savings Scheme
   ELSS funds are also called tax-saving mutual funds. These types of mutual funds are focused on equities and typically invest a minimum of 80% in equity funds. With section 80C, you can get tax benefits of up to ₹1,50,000 on an annual basis.
   
   What do you need to know?
   - The scheme comes with a lock-in period of 3 years. Premature withdrawals are not allowed.
   - While the minimum investment amount can vary, there is typically no limit on how much you can invest.
   ELSS are the only tax savings mutual fund.
   
3. National Savings Certificate
   This is also a government-backed savings scheme that is typically considered a reliable option for those who are looking for low-risk and steady returns.
   
   What do you need to know?
   -The interest rate for the period between April 1, 2023, to June 31, 2025, is 7.7%.
   - The lock-in period is five years.
   - The minimum deposit requirement is ₹1000, and for subsequent deposits, any amount in multiples of ₹100 is allowed.
4. Sukanya Samriddhi Yojana
   The SSY scheme is designed specially for girl children below the age of 10 years. Parents or guardians can open an SSY account in the name of the girl child.
   
   What do you need to know?
   -The minimum deposit is ₹250, and the maximum is ₹1.5 lakh in one financial year.
   - A withdrawal is allowed once the girl child turns 21.
   - A partial withdrawal up to 50% of the balance at the credit is allowed when she turns 18 years, for the purpose of her higher education or marriage.
5. National Pension Scheme
   The NPS is a government-backed voluntary scheme that can be explored if you are looking for a post-retirement investment plan. A simple and low-cost scheme, NPS is regulated by the Pension Fund Regulatory and Development Authority.
   
   What do you need to know?
   - NPS can be opted for by any Indian citizen between the ages of 18 to 70 years.
   - NPS has 2 types of accounts: Tier-I and Tier-II. Here, Tier-I is the default pension account, and Tier-II is the voluntary account.
6. Life Insurance Plans
   Life Insurance Plans are extremely popular as they combine the benefits of life coverage and tax benefits. There are multiple plans that you can explore under this category and claim impressive tax deductions. For instance, you can opt for ULIPs that combine the benefit of life cover and investment. A portion of the premium that you pay is invested in market-linked instruments like stocks, mutual funds, etc, while the remaining portion is directed towards life cover.
   
   What do you need to know?
   Premiums paid towards life insurance are eligible for tax deductions under Section 80C.

Note: The premium paid should not exceed 10% of the sum assured if the plan was issued before April 1st, 2012. For plans issued after April 1st, 2012, the premium should not exceed 20% of the sum assured.

Over to You

If you have an income, understanding the benefits under section 80C of the Income Tax Act becomes crucial as it combines the benefit of impressive tax inductions and impressive returns to investments in different types of plans. Depending on your financial goals, appetite for risk, and age you are at, you can choose the best investment plan for yourself.

Remember that before investing, it is crucial that you carefully evaluate and analyse the benefits, risks and returns. This is where Jio Insurance Broking comes into the picture by offering you access to a wide array of plans under the same platform.