How can HUF help individual to save income-tax
One important way of saving income-tax is to think of forming a separate tax entity in the name of an Hindu Undivided Family.
Subhash Lakhotia ( more)
Tax & Investment Consultant
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By Subhash Lakhotia
Tax and Investment Consultant
Tax Guru: CNBC Awaaz
Tax and Investment Consultant
Tax Guru: CNBC Awaaz
The fact remains that every individual is interested to save his tax. Tax saving is possible by taking advantage of the various provisions contained in the Income-tax Law. Even if a person were to take full advantage of all the provisions contained in the Income-tax Law specially relating to deductions and exemptions, then surely he will be able to save substantial amount of income-tax for his family. Many tax payers resort to illegal activities to save income-tax but frankly speaking, such illegal activities are not a part of tax planning process but are a part of tax evasion process which I deprecate always. However, one can go ahead with legal ways of saving income-tax and this is possible only when we screen very carefully the provisions contained in the Income-tax Act, 1961 and find out the pointers which are of advantage looking to our facts and circumstances. One such very important way of saving income-tax is to think of forming a separate tax entity in the name of an Hindu Undivided Family. Please note that this is a separate tax entity which is officially recognized and approved under the Income-tax Law. The creation of Hindu Undivided Family helps the tax payers to save their taxes in a legal manner.
It is a well known fact that every individual member of the family specially the adult members of the family would enjoy a tax deduction up to Rs. 1,00,000 in terms of section 80C of the Income-tax Act, 1961. However, most of the prudent individuals are able to take the full advantage of the said section 80C of the Income-tax Act, 1961. For them another vista of saving income-tax lies through the creation of separate tax entity by the name of Hindu a Undivided Family.
Apart from getting tax deduction up to Rs. 1,00,000 for an individual, it is possible that if an HUF is created by that individual, he will be able to claim higher tax deduction and exemptions under the Income-tax Law because the new tax entity in the form of a Hindu Undivided Family will be eligible to claim separate tax deduction under section 80C of the Income-tax Act, 1961. Likewise, the dividend income and the Long-term Capital Gains on listed securities would also be exempted for such Hindu Undivided Family. The income from Short-term Capital Gain by this Hindu Undivided Family will also be eligible to a lower tax rate of 15 per cent tax only.
Various other tax benefits within the framework of the Income-tax Law are available for the Hindu Undivided Family to save tax. Hence, overall we find that a Hindu Undivided Family surely is going to bring tons of tax saving for the individual specially because of the innumerable tax exemptions and deductions which are scattered in the Income-tax Law which provides these exemptions and deductions to be separately availe to the Hindu Undivided Family.
Having known the advantages of a separate tax entity in the form of a Hindu Undivided Family the question which might crop up in the minds of a tax payer is how to start a new HUF file today specially when you find that you do not have an existing HUF Unit in your group may be because till today you are not aware of this important tool of tax planning. Well, the answer is very simple. Even today legally speaking, a new Hindu Undivided Family popularly known as an HUF can be started today. The simple process of starting a new HUF is to receive some gift directly in the name of Hindu Undivided Family from your father or mother or in laws or from friends and relatives. Do remember that better it would be if you avoid contributing your own money to the HUF by way of gift. It may, however, be noted that under the Income-tax Law any gift received by the HUF from its members is not subjected to income-tax as per section 56 of the Income-tax Act, 1961. One should also keep in mind the provisions concerning section 64 of the Income-tax Act, 1961. As per this section if the member of the Hindu Undivided Family were to make a gift to the HUF, in that situation the income arising to the HUF will be clubbed to the income of the person making gift to your own HUF. However, if required as a member of the HUF you can give loan to your HUF. The gift received by HUF from non-relatives is exempt up to Rs. 50,000 in a year.
Once you receive small little gift for your HUF, then it is time now for you to open a Bank Account in the name of a HUF and then start the activities of the HUF. Also do remember that your HUF can carry on business, the said HUF can also become a partner of the partnership firm. Likewise, your HUF can also invest in the stock market, buy Mutual Funds etc. Hence, if you have not yet set up your HUF, it is time now for you to go ahead in planning a new HUF in your family to save your tax. Also please do remember to apply and obtain a separate Permanent Account Number in the name of your HUF. For the purpose of obtaining a PAN please apply in Form No. 49A.
An individual gets tax deduction on various investments made by him in terms of section 80C of the Income-tax Act, 1961. Similarly, the Hindu Undivided Family also enjoys in its own right tax deduction under section 80C of the Income-tax Act, 1961. To claim this tax deduction under section 80C the HUF can take out Life Insurance Policies in the name of its members and make payment of the premium which will enable the HUF to claim tax deduction as per section 80C of the Income-tax Act, 1961. To avail 80C deduction the HUF can open also contribute to PPF account. But now a days the banks do not permit the opening of separate PPF account in the name of the HUF. But the HUF can contribute to the PPF account of its members and claim tax deduction. However, my recommendation is that the HUF for the purpose of claiming tax deduction under section 80C should invest extensively on taking out Life Insurance Policies for its members or it may invest in Five Year Bank Fixed Deposit.
An HUF is also entitled to claim a separate tax deduction in respect of payment of Health Insurance Premium. This deduction is permissible under section 80D of the Income-tax Act, 1961. The maximum deduction is up to Rs. 15,000 per annum. However, if the HUF takes out Mediclaim Policy etc., for members of the family who are senior citizens then the amount of Rs. 15,000 will be enhanced to Rs. 20,000. Out of this amount up to Rs. 5,000 can also be included for Preventive Health Check UP.
The HUF can further receive a separate tax deduction of Rs. 50,000 on account of maintenance including medical treatment of a dependant member which happens to be a person with disability. However, if there is a severe disability, then the deduction gets enhanced to Rs. 1,00,000. This deduction is available as per section 80DD of the Income-tax Act, 1961.
If the HUF actually makes payment on medical treatment of a specific disease or ailments as mentioned in the Income-tax Act for the benefit of its members, then a deduction up to Rs. 40,000 will be allowed to the HUF as per section 80DDB of the Income-tax Act, 1961. However, if such expenditure is made for a member who happens to be a senior citizen, then the deduction to be allowed will be Rs. 60,000. HUF can also donate to recognised charity trusts and institutions and claim deduction under section 80G of the Income-tax Act, 1961.
The HUF as per section 24 of the Income-tax Act is also entitled to claim deduction for interest on self occupied house property of Rs. 1,50,000 in a year. The income of the HUF from dividend or shares or Mutual Funds is fully exempt from income-tax. Likewise, the Long-term Capital Gains on listed securities received by the HUF is also exempted.
Once you have set up a tax entity in the name of a Hindu Undivided Family, then it is time now for you to think of buying a residential house property in the name of the HUF by taking loan. The maximum deduction of interest on the housing loan as we know very well will be Rs. 1,50,000 which will be allowed as a deduction in the name of the HUF. It is even possible that one single house property may be purchased jointly in the name of the HUF and any member of the HUF in which situation also the HUF will be entitled to deduction on account of interest on housing loan up to Rs. 1,50,000 per annum.
Similarly, the members of the HUF separately will also be entitled to this deduction of Rs. 1,50,000 on account of interest on loan.
If you are a salaried employee and you receive payment on account of house rent and if by chance your HUF is the owner of the house property, then it is possible for an individual to make payment of the rent to the HUF, obtain rent receipt from the HUF and submit the same to the employer and thereafter get a tax deduction on the HRA amount from the employer. Hence, for all those persons who receive HRA i.e. House Rent Allowance from their employer, for them it would be worthwhile to make payment of rent to the HUF and claim a tax deduction from the salary income by submitting the rent receipt to the employer together with copy of PAN Card of the HUF.
In case the HUF gives its property on rent to any person, then from the rental income, the HUF will get deduction in respect of entire interest on loan paid by it in respect of the said house property.
The author is tax & investment consultant at New Delhi for last over 40 years. He is also Director of M/s R.N. Lakhotia & Associates & The Strategy Group.
- See more at: How can HUF help individual to save income-tax
Section 80C – Eligible Investments & Expenses
CA Sandeep Kanoi
Section 80C – Eligible Investments and Expenses for Individual AssesseeDeduction Under section 80C for Financial Year 2014-15 and 2015-16 / Assessment Year 2015-16 and 2016-17 in respect of Life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc.
Section 80C, entitles an Individual Assessee to deductions for the whole of amounts paid or deposited in the current financial year in the following schemes, subject to a limit of Rs. 1,50,000/-:
(1) Payment of insurance premium to effect or to keep in force an insurance on the life of the individual, the spouse or any child of the individual.
(2) Any payment made to effect or to keep in force a contract for a deferred annuity, not being an annuity plans is referred to in item (7) herein below on the lifeof the individual, the spouse or any child of the individual, provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity;
(3) Any sum deducted from the salary payable by, or, on behalf of the Government to any individual, being a sum deducted in accordance with the conditions of his service for the purpose of securing to him a deferred annuity or making provision for his spouse or children, in so far as the sum deducted does not exceed 1/5th of the salary;
(4) Any contribution made:
(a) by an individual to any Provident Fund to which the Provident Fund Act, 1925 applies;
(b) to any provident fund set up by the Central Government, and notified by it in this behalf in the Official Gazette, where such contribution is to an account standing in the name of an individual, or spouse or children;
[The Central Government has since notified Public Provident Fund vide Notification S.O. No. 1559(E) dated 3.11.05]
(c) by an employee to a Recognized Provident Fund;
(d) by an employee to an approved superannuation fund;
It may be noted that "contribution" to any Fund shall not include any sums in repayment of loan or advance;
(5) Any subscription:-
(a) to any such security of the Central Government or any such deposit scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf;(b) to any such saving certificates as defined under section 2(c) of the Government Saving Certificate Act, 1959 as the Government may, by notification in the Official Gazette, specify in this behalf.
[The Central Government has since notified National Saving Certificate (VIIIth Issue) vide Notification S.O. No. 1560(E) dated 3.11.05and National Saving Certificate (IXth Issue) vide Notification . G.S.R. 848 (E), dated the 29thNovember, 2011, publishing the National Savings Certificates (IX-Issue) Rules, 2011 G.S.R. 868 (E), dated the 7th December, 2011, specifying the National Savings Certificates IX Issue as the class of Savings Certificates F No1-13/2011-NS-II r/w amendment Notification No.GSR 319(E), dated 25-4-2012]
(6) Any sum paid as contribution in the case of an individual, for himself, spouse or any child,
a.for participation in the Unit Linked Insurance Plan, 1971 of the Unit Trust of India;
b. for participation in any unit-linked insurance plan of the LIC Mutual Fund referred to section 10 (23D) and as notified by the Central Government.
[The Central Government has since notified Unit Linked Insurance Plan (formerly known as Dhanraksha, 1989) of LIC Mutual Fund vide Notification S.O. No. 1561(E) dated
3.11.05.]
3.11.05.]
(7) Any subscription made to effect or keep in force a contract for such annuity plan of the Life Insurance Corporation or any other insurer as the Central Government may, by notification in the Official Gazette, specify;
[The Central Government has since notified New Jeevan Dhara, New Jeevan Dhara-I, New Jeevan Akshay, New Jeevan Akshay-I and New Jeevan Akshay-II vide Notification S.O. No. 1562(E) dated 3.11.05 and Jeevan Akshay-III vide Notification S.O. No. 847(E) dated 1.6.2006 ]
(8) Any subscription made to any units of any Mutual Fund, of section 10(23D), or from the Administrator or the specified company referred to in Unit Trust of India (Transfer of Undertaking & Repeal) Act, 2002 under any plan formulated in accordance with any scheme as the Central Government, may, by notification in the Official Gazette, specify in this behalf;
[The Central Government has since notified the Equity Linked Saving Scheme, 2005 for this purpose vide Notification S.O. No. 1563(E) dated 3.11.2005]
The investments made after 1.4.2006 in plans formulated in accordance with Equity Linked Saving Scheme, 1992 or Equity Linked Saving Scheme, 1998 shall also qualify for deduction under section 80C.
(9)Any contribution made by an individual to any pension fund set up by any Mutual Fund referred to in section 10(23D), or, by the Administrator or the specified company defined in Unit Trust of India (Transfer of Undertaking & Repeal) Act, 2002, as the Central Government may, by notification in the Official Gazette, specify in this behalf;
[The Central Government has since notified the Equity Linked Saving Scheme, 2005 for this purpose vide Notification S.O. No. 1563(E) dated 3.11.2005]
(10) Any subscription made to any such deposit scheme of, or, any contribution made to any such pension fund set up by, the National Housing Bank, as the Central Government may, by notification in the Official Gazette, specify in this behalf;
(11) Any subscription made to any such deposit scheme, as the Central Government may, by notification in the Official Gazette, specify for the purpose of being floated by (a) public sector companies engaged in providing long-term finance for construction or purchase of houses in India for residential purposes, or, (b) any authority constituted in India by,or, under any law, enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning,development or improvement of cities, towns and villages, or for both.
[The Central Government has since notified the Public Deposit Scheme of HUDCO vide Notification S.O.No.37(E),dated11.01.2007,for the purposes of Section 80C(2)(xvi)(a)].
(12) Any sums paid by an assessee for the purpose of purchase or construction of a residential house property, the income from which is chargeable to tax under thehead "Income from house property" (or which would, if it has not been used for assessee's own residence, have been chargeable to tax under that head) where such payments are made towards or by way of any instalment or part payment of the amount due under any self- financing or other scheme of any Development Authority, Housing Board etc.
The deduction will also be allowable in respect of re-payment of loans borrowed by an assessee from the Government, or any bank or Life Insurance Corporation, or National Housing Bank, or certain other categories of institutions engaged in the business of providing long term finance for construction or purchase of houses in India. Any repayment of loan borrowed from the employer will also be covered, if the employer happens to be a public company, or a public sector company, or a university established by law, or a college affiliated to such university, or a local authority, or a cooperative society, or an authority, or a board, or a corporation, or any other body established under a Central or State Act.
The stamp duty, registration fee and other expenses incurred for the purpose of transfer shall also be covered.Payment towards the cost of house property, however, will not include, admission fee or cost of share or initial deposit or the cost of any addition or alteration to, or, renovation or repair of the house property which is carried out after the issue of the completion certificate by competent authority, or after the occupation of the house by the assessee or after it has been let out. Payments towards any expenditure in respect of which the deduction is allowable under the provisions of section 24 of the Act will also not be included in payments towards the cost of purchase or construction of a house property.
Where the house property in respect of which deduction has been allowed under these provisions is transferred by the tax-payer at any time before the expiry of five years from the end of the financial year in which possession of such property is obtained by him or he receives back, by way of refund or otherwise, any sum specified in section 80C(2)(xviii), no deduction under these provisions shall be allowed in respect of such sums paid in such previous year in which the transfer is made and the aggregate amount of deductions of income so allowed in the earlier years shall be added to the total income of the assessee of such previous year and shall be liable to tax accordingly.
(13) Tuition fees, whether at the time of admission or thereafter, paid to any university, college, school or other educational institution situated in India, for the purpose of full-time education of any two children of the employee.
Full-time education includes any educational course offered by any university, college, school or other educational institution to a student who is enrolled full-time for the said course. It is also clarified that full-time education includes play-school activities, pre- nursery and nursery classes.
It is clarified that the amount allowable as tuition fees shall include any payment of fee to any university, college, school or other educational institution in India except the amount representing payment in the nature of development fees or donation or capitation fees or payment of similar nature.
(14) Subscription to equity shares or debentures forming part of any eligible issue of capital made by a public company, which is approved by the Board or by any public finance institution.
(15) Subscription to any units of any mutual fund referred to in clause (23D) of Section 10 and approved by the Board, if the amount of subscription to such units is subscribed only in eligible issue of capital of any company.
(16) Investment as a term deposit for a fixed period of not less than five years with a scheduled bank, which is in accordance with a scheme framed and notified by the Central Government, in the Official Gazette for these purposes.
[The Central Government has since notified the Bank Term Deposit Scheme, 2006 for this purpose vide Notification S.O. No. 1220(E) dated 28.7.2006]
(17) Subscription to such bonds issued by the National Bank for Agriculture and Rural Development, as the Central Government may, by such notification in the Official Gazette, specify in this behalf.
(18) Any investment in an account under the Senior Citizens Savings Scheme Rules, 2004.
(19) Any investment as five year time deposit in an account under the Post Office Time Deposit Rules, 1981.
B. Section 80C(3) & 80C(3A) states that in case of Insurance Policy other than contract for a deferred annuity the amount of any premium or other payment made is restricted to:
| Policy issued before 1st April 2012 | 20% of the actual capital sum assured |
| Policy issued on or after 1st April 2012 | 10% of the actual capital sum assured |
| Policy issued on or after 1st April 2013 * – In cases of persons with disability or person with severe disability as per Sec 80 U or suffering from disease or ailment as specified in Sec 80DDB | 15% of the actual capital sum assured |
*Introduced by Finance Act 2013
Actual capital sum assured in relation to a life insurance policy means the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account –
i. the value of any premium agreed to be returned, orii. any benefit by way of bonus or otherwise over and above the sum actually assured which may be received under the policy by any person.
20. Sukanya Samriddhi Account- Sukanya Samriddhi Account Scheme is been notified by Ministry of Finance vide Notification No. G.S.R.863(E) Dated 02.12.2014. Shceme become operational by notification of rules namely 'Sukanya Samriddhi Account Rules, 2014'. Sukanya Samriddhi Account Scheme is a small deposit scheme for girl child, as part of 'Beti Bachao Beti Padhao' campaign, which would fetch yearly interest rate of 9.1 per cent and provide income tax deduction Under section 80C of the Income Tax Act,1961.
(Article republished with amendments )
- See more at: http://taxguru.in/income-tax/income-tax-deductions-section-80c-eligible-investments-expenses.html#sthash.fOs9S5cB.dpuf
Investments which qualifies for deduction u/s. 80C
CA Sandeep Kanoi
Under this section, you can invest a maximum of Rs 1.50 lakh (1 Lakh upto AY 2014-15) and if you are in the highest tax bracket of 30%, you save a tax of Rs 45000. The various investment options under this section include:Public Provident Fund (PPF): Interest earned is fully exempt from tax without any limit. Annual contributions qualify for tax rebate under Section 80C of income tax. Contributions to PPF accounts of the spouse and children are also eligible for tax deduction. Balance in PPF account is not subject to attachment under any order or decree of court. But, Income Tax authorities can attach the account for recovering tax dues. The highest amount that can be deposited is 1,50,000. Tax bracket for PPF is EEE (i.e. Exempt,Exempt,Exempt). So contribution is exempted under 80C, Interest earned is tax exempted and withdrawal is also tax exempted.
One can withdraw the investment made in 1st year only in 7th year. However, loan against investment is available from 3rd financial year. If liquidity is not an issue, you should invest as much as you can in this scheme before looking for other fixed income investment options.
Life Insurance Premiums: Any amount that you pay towards life insurance premium for yourself, your spouse or your children can also be included in Section 80C deduction. Please note that life insurance premium paid by you for your parents (father / mother / both) or your in-laws is not eligible for deduction under section 80C. If you are paying premium for more than one insurance policy, all the premiums can be included. It is not necessary to have the insurance policy from Life Insurance Corporation (LIC) – even insurance bought from private players can be considered here.
Life Insurance Premiums: Any amount that you pay towards life insurance premium for yourself, your spouse or your children can also be included in Section 80C deduction. Please note that life insurance premium paid by you for your parents (father / mother / both) or your in-laws is not eligible for deduction under section 80C. If you are paying premium for more than one insurance policy, all the premiums can be included. It is not necessary to have the insurance policy from Life Insurance Corporation (LIC) – even insurance bought from private players can be considered here.
Image courtesy of David Castillo Dominici at FreeDigitalPhotos.net
Equity Linked Savings Scheme (ELSS): There are some mutual fund (MF) schemes specially created for offering you tax savings, and these are called Equity Linked Savings Scheme, or ELSS. The investments that you make in ELSS are eligible for deduction under Sec 80C. Equity Linked Saving Schemes (ELSS) of mutual funds are diversified equity funds that have a lock-in period of three years and provide tax benefit. Since a major portion of the corpus is invested in equities / equity stock markets , the earning potential is higher (though at a higher risk) as compared to other tax saving investments. Investors can invest up to 1,50,000 in an ELSS fund and deduct the investment from their taxable income u/s 80C of Income Tax Act, thereby effectively reducing their tax liability. Long-term capital gains and dividends received on these investments are tax-free in the hands of the investor as per the current tax laws.
Provident Fund (PF) & Voluntary Provident Fund (VPF) : PF is automatically deducted from your salary. Both you and your employer contribute to it. While employer's contribution is exempt from tax, your contribution (i.e., employee's contribution) is counted towards section 80C investments. You also have the option to contribute additional amounts through voluntary contributions (VPF).
Home Loan Principal Repayment: The Equated Monthly Installment (EMI) that you pay every month to repay your home loan consists of two components – Principal and Interest.The principal component of the EMI qualifies for deduction under Sec 80C. Even the interest component can save you significant income tax – but that would be under Section 24 of theIncome Tax Act. Please read "Income Tax (IT) Benefits of a Home Loan / Housing Loan / Mortgage", which presents a full analysis of how you can save income tax through a home loan.
Stamp Duty and Registration Charges for a home: The amount you pay as stamp duty when you buy a house, and the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C in the year of purchase of the house.
National Savings Certificate (NSC): National Savings Certificates popularly known as NSC is a saving bond , primarily used for small saving and income tax saving investment in India, part of the Postal savings system of Indian Postal Service (India Post). These can be purchased from a post office by an adult in his own name or in the name of a minor, a minor, a trust, two adults jointly.These are issued for five and ten year maturity and can be pledged to banks for availing loans. The interest accrued every year is liable to tax (i.e., to be included in your taxable income) but the interest is also deemed to be reinvested and thus eligible for section 80C deduction.
Infrastructure Bonds: These are also popularly called Infra Bonds. These are issued by infrastructure companies, and not the government. The amount that you invest in these bonds can also be included in Sec 80C deductions.
Pension Funds – Section 80CCC: This section – Sec 80CCC – stipulates that an investment in pension funds is eligible for deduction from your income. Section 80CCC investment limit is clubbed with the limit of Section 80C – it means that the total deduction available for 80CCC and 80C is Rs. 1.50 Lakh.This also means that your investment in pension funds upto Rs. 1.50 Lakh can be claimed as deduction u/s 80CCC. However, as mentioned earlier, the total deduction u/s 80C and 80CCC can not exceed Rs. 1.50 Lakh.
5-Yr bank fixed deposits (FDs): Tax-saving fixed deposits (FDs) of scheduled banks with tenure of 5 years are also entitled for section 80C deduction.
Senior Citizen Savings Scheme 2004 (SCSS): A recent addition to section 80C list, Senior Citizen Savings Scheme (SCSS) is the most lucrative scheme among all the small savings schemes but is meant only for senior citizens. An individual who has attained the age of 60 years or above on the date of opening of a/c or an individual who attained the age of 55 years or more and who has retired under VRS/SPL. VRS, can open an account individually or jointly with spouse. A retired personnel of Defence Services (excluding Civil Defence Employees) can subscribe to the scheme irrespective of the age limit subject to fulfilment of specificed conditions. Account can be closed after expiry of 5 years from the date of opening of account and account can be extended for next 3 years. Premature closure is permissible after one year subject to certain conditions. Deposits qualify for deduction u/s 80-C of Income Tax Act on the deposits made in new accounts opened on or after 8th December 2007.
Please note that the interest is payable quarterly instead of compounded quarterly. Thus, unclaimed interest on these deposits won't earn any further interest. Interest income is chargeable to tax.
5-Yr post office time deposit (POTD) scheme: POTDs are similar to bank fixed deposits. Deposits in 5 year time deposit qualify for deduction under section 80-C of Income Tax Act on the deposits made in new accounts opened on or after 8th December 2007. The Interest is entirely taxable.
NABARD rural bonds: The Finance Act, 2007 inserted clause (xxii) in sub-section (2) of section 80C of the Income-tax Act to provide that deposits made in bonds issued by the National Bank for Agriculture and Rural Development, as the Central Government may, by notification in the Official Gazette, specify in this behalf, shall be eligible for deduction under the said section. There are two types of Bonds issued by NABARD (National Bank for Agriculture and Rural Development): NABARD Rural Bonds and Bhavishya Nirman Bonds (BNB). Out of these two, only NABARD Rural Bonds qualify under section 80C.
Unit linked Insurance Plan: ULIP stands for Unit linked Saving Schemes. ULIPs cover Life insurance with benefits of equity investments. They have attracted the attention of investors and tax-savers not only because they help us save tax but they also perform well to give decent returns in the long-term.
- Contribution for participating in the unit-linked insurance plan (ULIP) of LIC Mutual Fund (i.e. Dhanraksha plan of LIC Mutual Fund)
- Payment for notified annuity plan of LIC (i.e. Jeevan Dhara, Jeevan Akshay New Jeevan Dhara ,etc ) or any other insurer.
- Contribution for participating in the Unit-Linked Insurance Plan (ULIP) of Unit Trust of India.
Tuition Fees :- Any sum paid as tuition fees to any university/college/educational institution in India for full time education. Nowadays most of income tax payee have to incur quite high payments towards the education fees of their children. The expenditure incurred on education fees is eligible for a deduction under Income Tax Act, So, if you are incurring expenditure towards education fee of your children, please check whether these are eligible for deduction under the IT Act.
Sukanya Samriddhi Account – Sukanya Samriddhi Account Scheme is a small deposit scheme for girl child, as part of 'Beti Bachao Beti Padhao' campaign, which would currently fetch yearly interest rate of 9.1 per cent and provide income tax deduction Under section 80C of the Income Tax Act,1961. Interest on such account is taxable as Income from Other Sources. –Sukanya Samriddhi Account – Tax & Other benefits
(Republished with amendments)
Read our Earlier post for detailed Analysis of Section 80C
- See more at: http://taxguru.in/income-tax/investment-covered-under-section-80c-of-income-tax-act-1961.html#sthash.VJzwn4cp.dpuf
On Wednesday, 24 June 2015 4:36 AM, "'Partha Narayan, M. A Narasimhan & Co., CA' mancoca@gmail.com [ICAI_CIRC_MEERUT_CA]" <ICAI_CIRC_MEERUT_CA@yahoogroups.com> wrote:
Recently the small savings department has stopped opening of PPF accounts in HUF name and further all old accounts are being asked to close. I feel only Tax Saving FD is the option for HUF to claim benefit of 80COn 24 June 2015 at 12:08, goenka vinay goenka_vinay@yahoo.com [ICAI_CIRC_MEERUT_CA] <ICAI_CIRC_MEERUT_CA@yahoogroups.com> wrote:Sir,I have a query of Income Tax.Can a HUF claim benefit of Section 80C for deposit in PPF in the name of member of the HUF and also can it claim Section 80C deduction for Tution Fees of Child of Karta and for investment in Sukanya Samridhi Yojna.Because for the above query, different books have different opinions and I am really confused.ThanksVinay GoenkaChartered AccountantRanchi--Thanks & Regards
Partha Narayan
M.A. Narasimhan & Co.
Chartered Accountants+919980919080/+918904088990Reply to manco@mancoca.comDisclaimer: The contents of this document are solely intended for usage of the addressee only.. Reader shall check contents with original government publication and notification. Neither M.A. Narasimhan & Co accepts any liabilities for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any actions taken in reliance thereon.
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Posted by: Dipak Shah <djshah1944@yahoo.com>
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