Section 80C Investments – Interesting Facts

Section 80C is the most important provision to save tax by accommodating a long list of expenditures or investments. Here we will see some interesting facts around Section 80C Investments.

Provident Fund & Public Provident Fund

• Maximum limit for PF is ₹1,50,000 and the contributions can be made throughout the year but are restricted to 12 times.
• EPF is mandatory for people earning less than Rs. 15,000 basic salary per month
• EPF is voluntary and you can waive it off but once you join it you cannot leave it
• EPF & PPF fall under EEE – Exempt from tax while investing, exempt from tax on the income generated on investment & exempt from tax on maturity
• Only resident Indians can open PPF Account, though NRI’s can contribute to the account if they opened it while they were in India.

Other Section 80C Investments

• Employer’s NPS contribution can be claimed as a deduction over and above 80CCD Contribution but should be less than 10% of the salary.
• In case of tax saving NPS, you can withdraw up to 60% on maturity while the remaining 40% has to be reinvested to get monthly pension.
• Interest earned in Tax Saving FDs is taxable
• ELSS is subject to 10% Long Term Capital Gain Tax(LTCG)
• Tax Saving FDs & NSC falls under ETE – Exempt from tax while investing, Gains are taxable & Exempt during maturity
• Health Plans, Educational Loan, Interest paid on Home Loan are not a part of the Section 80C Deductions
• Section 80C helps an individual to save taxes up to ₹60,000
• At the end of Financial Year, you have to submit all the Section 80C investment proofs to your employer for him to deduct the exact TDS based on your exemptions.

To get the perfect combination of stability, liquidity & ROI, you need to diversify your 80C investments. Managing documents of multiple investments can get difficult and here comes the role of Sorted AI. Sorted AI automatically organized your documents and stores them at highly secure servers so that they are safe and readily accessible for you.