Section 80C Deduction Calculator

What is the Section 80C Deduction?

Section 80C of the Income Tax Act offers several exemptions on certain expenses and investments from income tax. It allows a taxpayer to claim a deduction on various investments, expenses, as well as contributions to lower their taxable amount up to Rs. 1.5 lakhs. It includes deductions for life insurance premiums, home loan principal repayment, PPF, ELSS mutual funds, and several others. These deductions can significantly lower the taxpayer's total overall taxable income, potentially optimizing tax savings.

What are the Benefits of Using a Section 80C Deduction Calculator?

Using our calculator provides you with numerous advantages, helping individuals and businesses make informed financial decisions and improve their tax liabilities. Below are some of the main benefits of using an online 80C deduction calculator:

• Evaluate Tax Liability: Such calculators allow you to estimate your tax liability depending on your financial inputs, helping you plan and reserve necessary funds to meet your tax obligations. 
• Quick and Easy: These calculators are user-friendly, generating rapid results, which saves your time and efforts as compared to manual calculations. 
• Filing Confidently: Using an online 80C deduction calculator provides reassurance during tax filing. You get to file your tax returns with more confidence, as you can be assured that you have optimized your tax situation and reduced your tax liability. 
• Tax Planning: They facilitate tax planning by showing how different financial decisions can influence your taxes, enabling informed choices throughout the year. 
• Estimate Tax Strategies: They help assess the effectiveness of varying tax-saving strategies, like contributing to retirement accounts, making charitable donations, or timing capital gains and losses. 
• Maximize Deductions: These tools can highlight potential deductions and credits you might have missed, hence maximizing your tax savings. 
• Educational Tool: They also serve as an educational resource to help individuals enhance their understanding of how the tax system works and how different financial decisions affect taxes. 
• Budgeting and Financial Planning: Tax calculators can fit into your overall financial planning process, helping you budget effectively and set financial goals while considering your tax liabilities. 

What are the Deductions Under Section 80C?

If you make specified investments, you can benefit under the Income-tax Act through Section 80C, which allows you to deduct certain investments from your gross total income, thereby reducing your taxable income. However, this deduction under 80C applies only to individuals or Hindu Undivided Families (HUFs), with a maximum permissible deduction limit of Rs. 1,50,000. To calculate the deduction amount, you can follow the following steps with the calculator:

1. Choose the Assessment Year: Select the assessment year (AY) for which you want the tax calculations. (For investment made in 2020-21, your AY would be 2021-22).
2. Select Status: Mention whether you are an individual or an HUF.
3. Provide Premium Amounts: If you choose "individual", enter the premium amount paid by you for life insurance policies for yourself, your spouse, and your child. For an HUF, the premium paid by the HUF for any or all of the HUF members is required to be entered.
4. Provide Investments: Enter any investment amounts in eligible term deposits of not less than five years with any scheduled bank.
5. Additional Investments: If you have made any other investments eligible for deduction under Section 80C, select them from the dropdown list and enter the investment amounts.

By completing these steps, you will determine the deduction under Section 80C, which will lower your taxable income. Below is a list of eligible investments under Section 80C:

1. Premium paid for a life insurance policy, premium paid on insurance policies on self, spouse, or child (minor or major). In case of HUF, the premium is paid for any member, whether it is a life policy or an endowment policy. The deduction limit shall be as follows:

2. Premiums paid for a deferred annuity contract taken out on the life of oneself, a spouse, or any child are eligible, as long as the contract does not include provisions for receiving cash payments instead of annuity payments. It is vital to highlight that a deferred annuity can be entered with any individual, and not necessarily just an insurance company.

3. Additionally, any funds invested in the Sukanya Samriddhi Scheme for your daughter or any girl child for whom you are the legal guardian are also applicable.

4. Contribution to:

• Public Provident Fund
• Recognized Provident Fund
• Unit-linked insurance plan, 1971
• Additional accounts under NPS
• Approved superannuation funds
• Senior Citizens Saving Scheme Rules, 2004
• Unit-linked insurance plan of the LIC mutual fund
• National Housing Bank (Tax Saving) Term Deposit Scheme, 2008
• Pension fund, set up by a mutual fund or by the administrator, or by a specified company
• Approved annuity plan of LIC or any other insurer as specified by the Central Government.

5. Subscription to:

• Notified bonds issued by NABARD
• National Savings Certificate (VIII issue)
• Specified equity shares or debentures, or units of a mutual fund
• Units of any mutual fund or from the administrator or the prescribed company
• Notified deposit scheme of a public sector company providing long-term finance for the construction or purchase of a house in India for residential purposes or any other deposit scheme concerned with housing accommodation or planning, improvement, or development of cities, towns, villages, or both.

6. Investment in a five-year fixed deposit (FD) with a scheduled bank or post office.

7. Repayment of the principal amount of a housing loan (this includes costs such as stamp duty, registration fees, and other related expenses).

8. Tuition fee payments for full-time education at my school, college, university, or other educational institution in India for a maximum of two children, excluding donations, development fees, or coaching fees.

How to Use the Savetaxs 80C Deduction Calculator?

To effectively use our tax-saving calculator, follow the steps mentioned below:

• To effectively use our calculator, follow the steps mentioned below:

• Navigate to the Tool: Visit the Savetaxs website to access our 80C deduction calculator.
• Select your Status: Choose your status accurately, as it is crucial and will influence the following calculations and the deductions you claim. Identify your taxpayer status from the three options: 
  • Indian: Choose this if you are a resident Indian taxpayer. 
  • NRIs: Select this option if you are a non-resident Indian. 
  • HUF: If you are filing as a Hindu Undivided Family, choose this. 
• Claim Deductions for Your Asset Type: Now, you will have to choose the type of asset for which you wish to claim deductions. It can include various investments like life insurance, public provident fund (PPF), National Pension Scheme (NPS), equity-linked savings scheme (ELSS), and more. Each asset type may offer deductions, so choose accordingly based on your investments. 
• Enter the Investment Amount: After selecting the asset type, next, you need to enter the amount you have invested in that particular asset. Ensure to enter the exact amount, as it is crucial in computing your potential tax savings accurately. 
• Calculate Your Tax Savings: Lastly, click on the "Calculate" button to start the calculation process. Our tool will show an estimate of the tax savings quickly, minimizing the risk of errors. 

To Conclude

Tax saving is an important part of financial planning, leading to significant benefits for both individuals and businesses. Understanding the various strategies and deductions available and using tools like the Savetaxs section 80C deduction calculator can help you optimize your tax liabilities, ensuring you retain more of your income. Additionally, knowing specific deductions, particularly under Section 80C, can help you maximize your tax savings and improve your financial health overall. Utilize our online tool easily and know your tax obligations as well as potential savings. Also, contact our tax professionals to ensure you are making the most out of the deductions available to you.