It is the time of the financial year when salaried people have to submit proof of all their investments qualifying for income tax rebate to their employers for accurate calculation of the tax which has to be deducted at source. Not to worry,even if you have missed the deadline set by your employer, you still have time till 31st March to decide and invest and claim an income tax refund while filing returns in case excess tax has been deducted.
Here is a ready reckoner of all the avenues available for investment for income tax rebate under the popular section 80 C. This section allows a maximum of Rs 1,00,000/- of investments to be deducted from a person’s gross total income before calculation of the tax liability. Hence, for a person in the highest tax bracket of 30 %, a maximum sum of Rs 30,900/- ( including surcharge) can be saved in taxes.
EPF/VPF-This includes the employee’s annual contribution to employee provident fund.The current interest rate paid is 8.6 % p.a. The employee can also opt for additional contribution to his EPF, called voluntary provident fund (VPF) which is also eligible for tax rebate.
PPF or Public Provident Fund- Most popular.The following post on this gives all the details-
Insurance premiums– This includes annual premiums paid on traditional and ULIP policies.
Annual contribution to pension funds/pension plans of Insurance companies.
ELSS or Equity Linked Savings Schemes – These are diversified equity mutual funds with a lock-in of 3 years. Some of the popular ones are HDFC Long term Advantage Fund, ICICI Prudential tax plan, L&T tax advantage fund etc. There a lot of online sites like www.bajajcapital.com , www.mutualfundsindia.com which offer a detailed comparison between various ELSS schemes based on their returns and research rankings.
5 year fixed deposits offered by banks and financial institutions- While banks are the popular choice , some sound financial institutions like National Housing Bank( 9.25 % pa) and HUDCO (9.00% pa) also offer attractive interest rates.
Principal part of the EMI deduction of a housing loan, and any amount paid as stamp duty and registration of a new house.
Annual tution fees of upto two children.
Other popular instruments to invest are National Savings Certificate ( NSC), 5 year post office time deposits, the senior citizen savings scheme(SCSS).