Which are the best option for investment for rebate under section of IT act 80C?

Preamble: - Many options available under the act to invest and get reduced taxable income. IT act also have other sections which are provides income tax rebate, if someone invest according them. Here, we are trying to analyzing the options available under the Section 80C of Income Tax Act. Every person is getting money through their hard work and basic motto of them to enjoy with their money. If government charge taxes on their income they not feel good. Government encouraging people to invest long term invest options so that government can enjoy with their money and economy growth will maintain by government reasonably.

Sec 80C of the Income Tax Act: - Section 80C of Income Tax Act provides the rebate of Rs. 1.5 lacs, if someone invests money according to the act. Many options are available for investment under the act and below the brief details of each option and we will try to find out which one is best for investment. The tax benefits of Rs. 1.5 lacs are available to everyone, irrespective of their income level. It means that the income gets reduced by this investment and you will pay tax on remaining amount if applicable.

Options available under the Section:-Many options are available to claim the rebate under 80C. Since there are no sub limits for these options, you can do all of Rs 1.5 lacs in one of them or allocate too many. You may also end up investing more than Rs 1.5 lacs in these schemes. However your deduction in total will be limited to Rs 1.5 lacs only. Following options available under the section for investment:-

1 – Tuition Fees: - If you are paying tuition fees of your Child / s you can claim rebate under this section. You can claim maximum two Child tuition fees. Under this u will find nothing interest in expend amount, you can ensure good future of your child only.  

2- Employee Provident Fund (EPF):- every employer deduction this amount from your salary and they also contributing in this scheme according to government norms. Contribution made by you is qualified under this section. Voluntary provident fund contribution made by you is also eligible for rebate. Under this investment you will able to get approximately in between 8 to 10 % compounding interest per year.

3- Public Provident Fund (PPF):- You may open this account in the name of yourself, your wife or your son name. In the account you can invest minimum ` 500/- in a year and maximum ` 1.5/- lacs in a year. This scheme also provide approximately between 8-10% compounding interests annually.

4- Re-payments of Principles: - If you have taken home loan, principle amounts paid by you to bank are also consider for tax rebate under section 80C. However, you make sure that you will not sale the property up to five years from the date of taking possession, otherwise deduction claimed by you will be added back under chargeable income in the year. From this investment you will able to get a home and their value will increase year to year.

5- National saving Certificates (NSC):- This scheme run by Post office of India. Investment made under this scheme also is eligible for tax rebate. You will able to receive annually interest 8.6% if you invested for five year and 8.9% if you invested for 10 years annually.

6-Equity Linked Saving Schemes (ELSS):- This scheme runs through mutual fund companies under the regulations of Security Exchange Board of India. Three years locking period under all these type of schemes. Return under the scheme related to increase/decrease of share market. If you invest long term in the form of SIP you can get better return under the scheme.

7- Fixed Deposits: - fixed deposit for five years or more in scheduled banks are eligible for rebate under the section. Return under fixed deposit is 8% - 9.5% annually.

8- Senior Citizen Saving Scheme: - investment under senior citizen scheme by senior citizen or government notified bonds are also eligible for deduction under the section 80C. Return under the scheme depends on type of bonds and duration of investment.

9-Unit Linked Insurance Plan: - investment made under the ULIP scheme is also eligible for tax rebate under the section 80C. Return under this scheme is also depending on activity of share market. An ULIP policy provides advantage of risk coverage and saving both.

10 – Life Insurance Premium: - Premium paid for Life Insurance policies are also eligible for tax rebate under section. If risk coverage will not 10 times of premium paid it will not eligible for tax rebate. Anyone can claim premium paid for their life, for their spouse and for their child. Maximum deduction able amount is ` 1.5 Lacs.

Conclusion: - Every scheme has their advantages and disadvantages. One scheme can be useful for one but not be useful for others. If we look the above available scheme for guaranteed return PPF and EPF is important Scheme. If we see future of child tuition fees is important. If someone taken home loan their need fulfills and they will be happy owner of their home. Someone can trust post office scheme. LIC provides risk coverage and saving both the advantages. Mutual fund return can attract you. Fixed deposit scheme also is good options. Before, saying any scheme is best scheme, you need to decide your goals of your life for nest 10 years and invest according them. You can consult your financial advisers for better information or you can mail your details on the mail ID – drajaykrmishra@gmail.com, we will provide you best solution for investment after looking your goals and future requirements.