How to Reach Rs 1,50,000 under Section 80C with No Investments?

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08 min read

How would you reach Rs 1,50,000 under Section 80C with no investments? Let’s examine that in detail here.

Lately not a day passes without someone mentioning Section 80C and Rs.1,50,000, does it? You sit down with coworkers for lunch and someone tells you that they just invested money in an ELSS in a last-minute attempt to save taxes. You get calls at least once a week from mutual fund agents telling you to make the most of the increased limit.

But before you get convinced that you must make investments to take advantage of the extended limit under Sec 80C, just pause.

We’ll show you how to reach the Rs.1,50,000 limit without making any investments. Section 80C not only encourages investments in savings schemes but also offers tax relief on some of your expenses.

How to reach the Rs.1,50,000 limit without investments?

Step 1: Check your PF balance. Your provident fund contribution accumulated over the current financial year itself might add up to a sizeable amount. This is covered under the Rs.1,50,000 limit.

Step 2: Did you buy a house? Expenses related to stamp duty and registration charges can be deducted under Section 80C.

Step 3: Are you paying off a home loan? Check your home loan interest certificate for EMI payment details. Your principal repayment for this year can be claimed as a deduction.

Step 4: Do you have children who go to school or college? Get their tuition fee receipts and add it. (This also includes playschool, preschool)

Step 5: Are you making life insurance premium payments? Claim the premium payments too. The only condition is the premium must be less than 10% of the sum assured.

Step 6: Add it all up and reduce it from Rs.1.5 lakh, i.e.

Rs.1,50,000 – (Step 1 + Step 2 + Step 3 + Step 4 + Step 5) = Amount remaining under Section 80C

Step 7: You might find yourself with very little of the overall limit left, say Rs.15,000.

Step 8: You can think about investing your money in products that suit your risk profile.

What are the investments eligible for deduction under 80C?

PPF, NSC, NPS, Tax saver FDs, Post Office Term Deposit, ELSS, ULIP, Senior Citizens Savings Scheme, Sukanya Samridhi Account.

Here is a complete guide to all the deductions allowed under Section 80C.

Frequently Asked Questions

What do you mean by 80C deduction under chapter VI A?

Income tax department allows reducing of the taxable income of the taxpayer in case the taxpayer makes certain investments or eligible expenditures allowed under Chapter VI A. 80C allows deduction for investment made in below

  • Public Provident Fund ,
  • Employees Provident Fund ,
  • LIC premium
  • Equity linked saving scheme
  • Principal amount payment towards home loan,
  • Stamp duty and registration charges for purchase of property,
  • Sukanya smriddhi yojana (SSY) ,
  • National saving certificate (NSC) ,
  • Senior citizen savings scheme (SCSS),
  • ULIP,
  • Tax saving FD for 5 years,
  • Infrastructure bonds etc.
ULIP & NSC, which is more beneficial for deduction u/s 80c?

ULIP offers a combination of life insurance and investments benefits. Some portion of the ULIP premium goes towards insurance and the remaining goes towards equity. Hence the return is not fixed and depends on the market. Whereas NSC is a fixed income saving allowed by the government for tax deduction. Both ULIP and NSC serve different purposes, for example if you are looking for a more secure low risk investment then NSC is a better option whereas if you are looking for higher return with moderately higher risk than ULIP would be a better investment.

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