Understanding Section 80C Section 80C of the Income Tax Act allows you to reduce your taxable income by up to ₹1.5 lakh by making certain investments and expenses. This can significantly lower your tax liability.

Popular Investment Options under 80C * **Public Provident Fund (PPF):** A long-term, government-backed savings scheme. It offers a tax-free return and has a lock-in period of 15 years. * **Equity Linked Savings Scheme (ELSS):** These are tax-saving mutual funds that primarily invest in the stock market. They have the shortest lock-in period of just 3 years and have the potential for high returns. * **National Savings Certificate (NSC):** A fixed-income investment scheme you can purchase from a post office. It has a 5-year lock-in period. * **Tax-Saving Fixed Deposits (FDs):** These are special FDs offered by banks with a 5-year lock-in period. The interest earned is taxable. * **Employees' Provident Fund (EPF):** For salaried individuals, your contribution to EPF is eligible for deduction under 80C. * **Life Insurance Premiums:** The premium you pay for a life insurance policy (for self, spouse, or children) qualifies for a deduction. * **Home Loan Principal Repayment:** The principal portion of your home loan EMI is eligible for deduction under Section 80C. * **Tuition Fees:** You can claim a deduction for tuition fees paid for up to two children for full-time education in India.

Key Takeaway Don't wait until the end of the financial year to plan your taxes. Start investing in 80C options early through methods like SIPs in ELSS funds to get the dual benefit of tax saving and wealth creation.