What is Section 80C? Where you can save tax up to Rs 1.5 lakh, let’s find out 

If you are a tax payer then there is good news for you. The financial year 2024-25 is wrapping up soon, and the new financial year 2025-26 kicks off on April 1, 2025. If you haven’t sorted out your tax savings yet, you’ve got until March 31, 2025, to get it done.

A lot of taxpayers still prefer the old tax regime for filing their taxes. With this system, you can claim a tax deduction of up to Rs 1.5 lakh under section 80C. In contrast, the new tax regime offers only a limited number of deductions.

Section 80C is a favorite among taxpayers looking to save on taxes. Many individuals take advantage of this section when filing their returns.

Here’s what you can benefit from under section 80C:

In the old income tax regime, taxpayers can claim deductions up to Rs 1.5 lakh. This applies to individual taxpayers and Hindu Undivided Families. You can utilize various savings schemes to claim this deduction under Section 80C, including life insurance premiums, ELSS, certain post office schemes, PPF, the Sukanya Samriddhi Scheme, and the Senior Citizen Savings Scheme, among others.

So, what exactly is Section 80C?

Section 80CCC: This section allows you to claim tax deductions through pension plans from LIC or any other insurance provider. Just remember, the plan must be one that pays out a pension to qualify for the deduction.

Section 80CCD (1): This section allows you to claim a tax deduction for contributions made to the Central Government’s pension scheme. If you allocate 10 percent of your salary towards your pension, you can take advantage of this tax deduction. You can claim a maximum deduction of up to Rs 1.5 lakh under this provision.

Section 80CCD(1B): This section offers an additional tax deduction benefit of up to Rs 50,000 for investments made in your NPS account. Furthermore, you can receive a lump sum of up to 60 percent of the maturity amount from the NPS tax-free. However, keep in mind that any monthly annuity payments are subject to income tax. By utilizing these sections, you can effectively reduce your tax liability.