Take a look at other items eligible for tax deduction before considering tax saving investments.
Well, it is that time of the year again. A mail or a call asking you for the details of your tax saving plans from your company’s finance section often triggers offa flurry of activity. This is especially true in case you haven’t made the investments for claiming annual tax deductions of upto 1.5 lakh under Section 80C. Before you take the tax saving investment leap, take a good look around.
Maybe you need not make the leap and even if you need to do so, maybe you need not leap so hard. The reason: there are items other than tax saving investments that qualify for tax deductions under Section 80C. The nature of three of them is such that they are most likely to be part of your life and you can easily claim the tax deductions. Let’s take a brief look.
Employees’ Provident Fund (EPF)
EPF deductions happen to your pay before the money comes in to your bank savings account. While planning your claim for tax deduction under Section 80C, find out the likely EPF deduction for the financial year. Apart from being a mandatory retirement saving eligible for Section 80C tax deduction, you also benefit from its interest and maturity amount being tax free.
Unless you are not covered by EPF, the tax deduction for EPF by default exhausts a substantial portion of your entitlement under Section 80C. Of course, there are two other items that can exhaust the limit some more.
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November 26, 2018