Top Investments to Save Tax U/s 80C for F.Y. 2019-20 With Automated Income Tax Form 16 Part B for F.Y. 2018-19

The assessment Year 2019-20 is here the "Best Tax Saving Investments". Sadly there is no straight response to this. The best speculation is diverse for various individuals and is lined up with their arrival desires, chance-taking capacity, individual conditions, and arrangement with their monetary objectives in addition to other things.

Deduction of Section 80C

You can guarantee the greatest reasoning of Rs 1.5 Lakhs u/s 80C (counting Sections 80CCC, 80CCD) by putting resources into qualified instruments. Lamentably speculations and uses permitted u/s 80C is excessively packed and that settles on the decision troublesome for the vast majority.

The following is the rundown of ventures/costs qualified for reasoning u/s 80C:

Download Automated Income Tax Form 16 Part B for F.Y. 2018-19 [ This Excel Utility can prepare at a time 100 Employees Form 16 Part B ]

The post underneath proposes the way to deal with select the speculations for duty arranging.

Uses Eligible for Tax Benefit:

The initial step is to check all uses which are qualified for assessment reasoning. The following is the rundown:

1. Educational cost Fees for up to 2 youngsters

The costs on educational cost expenses for full-time courses for the limit of two kids is qualified for reasoning u/s 80C. Be that as it may, the finding isn't accessible for educational cost expense to training classes or private educational costs. The accompanying costs are not considered as educational cost expenses – Development Fee, Transport charges, in charges, Mess charges, library charges, Late fines, and so forth.

2. Stamp Duty for the enlistment of New Home

Stamp obligation and enlistment energizes to Rs 1.5 Lakh can be guaranteed for conclusion u/s 80C. The installment ought to have been made in the equivalent money related year for which the assessment is being paid. for example, the derivation can't be conveyed forward to one year from now. Additionally, the house ought to be for the sake of assessee guaranteeing to reason.

Additionally Read: How developers utilize excessively developed region to beguile home purchasers?

On the off chance that you have paid stamp obligation for a new home, you most presumably would debilitate your 80C utmost for the year and no further venture may be required.

Mandatory Deductions:

There are some mandatory derivations that are qualified for tax cut u/s 80C. Check in the event that you contribute in any of such derivations:

1. Provident Funds (EPF/VPF)

EPF is a mandatory conclusion for most salaried workers. The finding can be 12% of the essential pay and dearness remittance or Rs 1,800 consistently. Take a gander at your pay articulation to realize what amount have you contributed for the year. Check just your commitment. Business' commitment isn't qualified for duty sparing venture. You can likewise have some sum contributed through Voluntary Provident Fund (VPF), which can be up to 100% of the fundamental compensation and DA.

Download Automated  Income Tax Form 16 Part A&B for the Financial Year 2018-19 [ This Excel Utility can prepare at a time 100 Employees Form 16 Part A&B ]

2. National Pension Scheme (NPS)

NPS (Tier 1) is obligatory for most Government workers who joined after 2004. Take a gander at your compensation slip to check your conclusion. Again just your commitment is a substantial derivation. Boss' commitment isn't qualified. The beneficial thing is you can utilize this commitment to guarantee extra expense conclusion up to Rs 50,000 under the recently presented Section 80CCD(1B).

Repeating Deductions:

There are a few conclusions which happen year on year like home advance reimbursement, protection premium and so on.

1. Home Loan Principal Amount

Is it accurate to say that you are paying home credit? The essential segment paid each year is qualified as assessment reasoning. For this, you can download the duty proclamation from banks' site. In the event that not get it from the advance supplier. This would give you a gauge of foremost and intrigue paid for the budgetary year.

2. Protection Premium

Have you purchased disaster protection items like ULIP, Endowment Plan or Term Insurance where you have to pay the premium for consequent years? On the off chance that you need to keep putting resources into a similar, you can keep on guaranteeing tax cut.

3. PPF (open Provident Fund)

On the off chance that you have PPF account, you ought to contribute least Rs 500 out of a monetary year. On the off chance that you don't do, a fine is demanded.

4. Sukanya Samriddhi Account (SSA)

Least store of Rs 1,000 should be made each year else punishment of Rs 50 is demanded.

5. NPS

Do you have an NPS account? A base commitment of Rs 1,000 is required each budgetary year to keep the record dynamic.

For some individuals, the 80C derivation limit is come to at this point. In the event that not, look over the rundown beneath relying upon your hazard profile and speculation objectives:

New Investment for 80C:

1. Term Life Insurance

Do you have wards? Would they endure monetarily on the off chance that something transpires? Do you have enough extra security? In the event that The assessment Year 2019-20 is here the "Best Tax Saving Investments". Sadly there is no straight response to this. The best speculation is diverse for various individuals and is lined up with their arrival desires, chance-taking capacity, individual conditions, and arrangement with their monetary objectives in addition to other things.

You can guarantee the greatest reasoning of Rs 1.5 Lakhs u/s 80C (counting Sections 80CCC, 80CCD) by putting resources into qualified instruments. Lamentably speculations and uses permitted u/s 80C is excessively packed and that settles on the decision troublesome for the vast majority.

The post underneath proposes the way to deal with select the speculations for duty arranging.

The initial step is to check all uses which are qualified for assessment reasoning. The following is the rundown:

The costs on educational cost expenses for full-time courses for a limit of two kids are qualified for reasoning u/s 80C. Be that as it may, the finding isn't accessible for educational cost expense to training classes or private educational costs. The accompanying costs are not considered as educational cost expenses – Development Fee, Transport charges, in charges, Mess charges, library charges, Late fines, and so forth.

Stamp obligation and enlistment energizes to Rs 1.5 Lakh can be guaranteed for conclusion u/s 80C. The installment ought to have been made in the equivalent money related year for which the assessment is being paid. for example, the derivation can't be conveyed forward to one year from now. Additionally, the house ought to be for the sake of assessee guaranteeing to reason.

Additionally Read: How developers utilize excessively developed region to beguile home purchasers?

On the off chance that you have paid stamp obligation for a new home, you most presumably would debilitate your 80C utmost for the year and no further venture may be required.

There are some mandatory derivations that are qualified for tax cut u/s 80C. Check in the event that you contribute in any of such derivations:

EPF is a mandatory conclusion for most salaried workers. The finding can be 12% of the essential pay and dearness remittance or Rs 1,800 consistently. Take a gander at your pay articulation to realize what amount have you contributed for the year. Check just your commitment. Business' commitment isn't qualified for duty sparing venture. You can likewise have some sum contributed through Voluntary Provident Fund (VPF), which can be up to 100% of the fundamental compensation and DA.

NPS (Tier 1) is obligatory for most Government workers who joined after 2004. Take a gander at your compensation slip to check your conclusion. Again just your commitment is a substantial derivation. Boss' commitment isn't qualified. 

There are a few conclusions which happen year on year like home advance reimbursement, protection premium and so on.

Is it accurate to say that you are paying home credit? The essential segment paid each year is qualified as assessment reasoning. For this, you can download the duty proclamation from banks' site. In the event that not get it from the advance supplier. This would give you a gauge of foremost and intrigue paid for the budgetary year.

Have you purchased disaster protection items like ULIP, Endowment Plan or Term Insurance where you have to pay the premium for consequent years? On the off chance that you need to keep putting resources into a similar, you can keep on guaranteeing tax cut.

On the off chance that you have PPF account, you ought to contribute least Rs 500 out of a monetary year. On the off chance that you don't do, a fine is demanded.

Least store of Rs 1,000 should be made each year else punishment of Rs 50 is demanded.

Do you have an NPS account? A base commitment of Rs 1,000 is required each budgetary year to keep the record dynamic.

For some individuals, the 80C derivation limit is come to at this point. In the event that not, look over the rundown beneath relying upon your hazard profile and speculation objectives:

Do you have wards? Would they endure monetarily on the off chance that something transpires? Do you have enough extra security? In the go get term protection

first. It's essential to settle on security first.

no, go get term protection first. It's essential to settle on security first.

Valuable Tips:

         Online term plans are a lot less expensive than disconnected. So it bodes well to go for online plans.

         Do not give false data in the protection structure. The protection guarantee can be rejected for wrong data.

         Do not purchase something besides Term Plans from insurance agencies. No cash back, blessing plans!

Download Automated Income Tax Form 16 Part B for F.Y. 2018-19 [ This Excel Utility can prepare at a time 100 Employees Form 16 Part B ]

2. ELSS (Equity Linked Saving Scheme)

Prominently known as Tax sparing Mutual Fund. These are value-based common assets and a standout amongst the best speculation alternatives to make riches over the long haul while sparing expense. On the off chance that you can process the instability of financial exchange, this is the prescribed alternative.

Lock-in Period: 3 Years

The Good:

         Among the duty sparing ventures, ELSS has least lock-in time of 3 years.

         The gains on ELSS Fund is Tax-Free.

         Convenient to purchase and oversee as ELSS can be purchased and recovered on the web.

The Bad:

         There can be extensive instability in returns and you can get negative returns toward the finish of 3 years.

Download Automated Income Tax Form 16 Part B for F.Y. 2018-19 [ This Excel Utility can prepare at a time 50 Employees Form 16 Part B for F.Y. 2018-19 ]

Supportive Tips:

         Invest through SIP (Systematic Investment Plan). This aide in holding over instability to some degree.

         Choose "Development" choice over "Profit Payout" as this makes riches over the long haul.

         Try to contribute straightforwardly to finance as this would give you 0.5% to 1% higher returns when contrasted with when you contribute through a representative

         If doing a singular amount check for financial exchange valuations. On the off chance that you contribute at high valuations, you may see low or negative returns toward the finish of 3 years.

         Avoid "shut finished" ELSS NFOs which are propelled during this time.

3. PPF (Public Provident Fund)

PPF is another famous assessment sparing venture choice for 80C, particularly for individuals with no other provident reserve.

Lock-in Period: 15 Years. Anyway, fractional withdrawal is permitted from the seventh year

The Good:

         The premium earned on PPF is Tax-Free

         After opening the PPF account, venture should be possible online consistently (for certain banks)

         Highest Safety – sponsored by Govt. of India

The Bad:

         The lock-in is for a long time however there is incomplete liquidity from a seventh year onwards.

Download Automated Income Tax Form 16 Part A&B and Part B (One by One Preparation ) Excel Based Software for F.Y. 2018-19

Accommodating Tips:

         Investment done till fifth of the month gains enthusiasm for the month. So store your cash before the fifth of the month

         You can utilize a mix of PPF and ELSS for expense sparing speculations. On the off chance that you discover securities exchange over-esteemed, PPF is a great choice.

4. Senior Citizen's Saving Scheme (SCSS)

SCSS is a great choice for senior residents (over 60 years old) as it gives normal quarterly premium pay straightforwardly in financial balance.

Lock-in: 5 years

The Good

         Highest Safety – supported by Govt. of India

         The loan cost offered is most noteworthy among the little sparing plans

The Bad:

         The intrigue got is assessable.

         TDS would be deducted if the all-out enthusiasm for a year is over Rs 10,000. Be that as it may if qualified Form 15H can be submitted to evade TDS.

Accommodating Tips:

         SCSS record can be shut following 1 Year (with punishment) yet in the event that you have profited Sec 80C advantage, it would be turned around.

         The shared service can be opened just with your life partner. There is no age limit relevant for the shared service holder.

5. Sukanya Samriddhi Account (SSA)

SSA can be opened by guardians of young lady kid subject to specific conditions. SSA can be a decent alternative for fixed pay venture for the tyke. Anyway,y you ought to likewise put resources into ELSS or other value shared assets for objectives identified with the kid.

Lock-in: Deposit to the record to be made for a long time and record develops at 21 years from the date of opening

The Good:

         The premium earned on SSA is Tax Free and furthermore higher than that offered to PPF

         50% withdrawal permitted when a young lady turns 18 for marriage/advanced education

         Highest Safety – sponsored by Govt. of India

The Bad:

         No arrangement of Loan or pre-develop withdrawal not at all like PPF

Supportive Tips:

         Minimum store of Rs 1,000 should be made each year else punishment of Rs 50 is required

         The account can be shut before 21 years if there should arise an occurrence of marriage

6. National Saving Certificate (NSC)

NSC can be purchased at most workplaces to spare duty u/s 80c. It is accessible for a long time (NSC VIII) as it were. The intrigue offered is 7.8%.

Lock-in: 5 Years

The Good:

         The premium is higher than most duty sparing bank fixed stores.

         Certificates can be kept as insurance security to get advance from banks

         No Tax derivation at a source 

Read More

Download Automated TDS on Salary All in One for Govt & Non-Govt Employees for F.Y.2018-19 including Save Tax u/s 80C For F.Y. 2018-19 Investments for Section 80C

You can claim a maximum deduction of Rs 1.5 Lakhs u/s 80C (including Sections 80CCC, 80CCD) by investing in eligible instruments. Unfortunately, investments and expenditures allowed u/s 80C is too crowded and that makes the choice difficult for most people.

Below is the list of investments/expenses eligible for deduction u/s 80C:

1.                 Provident Fund (EPF/ VPF)

2.                 Public Provident Fund (PPF)

3.                 Sukanya Samriddhi Account (SSA)

4.                 National Saving Certificate (NSC)

5.                 Senior Citizen’s Saving Scheme (SCSS)

6.                 Tax Saving Fixed Deposits (for 5 Years)

7.                 Life Insurance Premium

8.                 Pension Plans from Mutual Funds

9.                 Pension Plans from Insurance Companies

10.            New Pension Scheme (NPS)

11.            Tax Saving Mutual Funds (ELSS)

12.            Central Govt. Employees Pension Scheme

13.            Principal Payment on Home Loan

14.            Tuition Fees for up to 2 children

15.            Stamp Duty for registration of Home

Download: Free e-book for Income Tax Planning for FY 2018-19

The post below suggests the approach to select the investments for tax planning.

Expenditures Eligible for Tax Benefit:

The first step is to check all expenditures which are eligible for tax deduction. Below is the list:

1. Tuition Fees for up to 2 children

The expenses on tuition fees for full-time courses for a maximum of two children is eligible for deduction u/s 80C. However, the deduction is not available for tuition fee to coaching classes or private tuitions. The following expenses are not considered as tuition fees – Development Fee, Transport charges, hostel charges, Mess charges, library fees, Late fines, etc.

2. Stamp Duty for registration of New Home

Stamp duty and registration charges up to Rs 1.5 Lakh can be claimed for deduction u/s 80C. The payment should have been made in the same financial year for which the tax is being paid. i.e. the deduction cannot be carried forward to next year. Also, the house should be in the name of assessee claiming the deduction.

In case you have paid stamp duty for a new home, you most probably would exhaust your 80C limit for the year and no further investment might be required.

Compulsory Deductions:

There are some compulsory deductions that are eligible for tax benefit u/s 80C. Check if you contribute in any of such deductions:

1. Provident Funds (EPF/VPF)

EPF is a compulsory deduction for most salaried employees. The deduction can be 12% of the basic salary & dearness allowance or Rs 1,800 every month. Look at your salary statement to know how much have you contributed for the year. Count only your contribution. Employer’s contribution is not eligible for tax saving investment. You can also have some amount contributed through Voluntary Provident Fund (VPF), which can be up to 100% of the basic salary & DA.

2. National Pension Scheme (NPS)

NPS (Tier 1) is compulsory for most Government employees who joined after 2004. Look at your salary slip to check your deduction. Again only your contribution is a valid deduction. Employer’s contribution is not eligible. The good thing is you can use this contribution to claim an additional tax deduction up to Rs 50,000 under the newly introduced Section 80CCD(1B). We have explained this in the last paragraph of the post.

Recurring Deductions:

There are some deductions which happen year on year like home loan repayment, insurance premium etc.

1. Home Loan Principal Amount

Are you paying the home loan? The principal component paid every year is eligible as a tax deduction. For this, you can download the tax statement from the banks’ website. In case not get it from the loan provider. This would give you an estimate of principal and interest paid for the financial year.

2. Insurance Premium

Have you bought life insurance products like ULIP, Endowment Plan or Term Insurance where you need to pay the premium for subsequent years? If you want to continue investing in the same you can continue to claim tax benefit.

3. PPF (Public Provident Fund)

If you have PPF account you should contribute minimum Rs 500 in a financial year. In case you don’t do, a fine is levied.

4. Sukanya Samriddhi Account (SSA)

Minimum deposit of Rs 1,000 needs to be made every year else penalty of Rs 50 is levied.

5. NPS

Do you have NPS account? A minimum contribution of Rs 1,000 is required every financial year to keep the account active.

For many people, the 80C deduction limit is reached by this time. In case not, choose from the list below depending on your risk profile and investment goals:

New Investment for 80C:

1. Term Life Insurance

Do you have dependents? Would they survive financially in case something happens to you? Do you have enough life insurance? If no go get a term insurance first. It’s important to opt for protection first.

Useful Tips:

§                    Online term plans are much cheaper than offline. So it makes sense to go for online plans.

§                    Do not provide false information in the insurance form. The insurance claim can be rejected for wrong information.

§                    Do not buy anything other than Term Plans from insurance companies. No money back, endowment plans!

2. ELSS (Equity Linked Saving Scheme)

Popularly known as Tax saving Mutual Fund. These are equity-based mutual funds and one of the best investment options to create wealth in the long run while saving tax. In case you can digest the volatility of the stock market, this is the recommended option.

Lock-in Period: 3 Years

The Good:

§                    Among the tax saving investments, ELSS has least lock-in period of 3 years.

§                    The gains on ELSS Fund is Tax-Free.

§                    Convenient to buy and manage as ELSS can be bought and redeemed online.

The Bad:

§                    There can be considerable volatility in returns and you can get negative returns at the end of 3 years.

Helpful Tips:

§                    Invest through SIP (Systematic Investment Plan). This helps in tiding over volatility to some extent.

§                    Choose “Growth” option over “Dividend Payout” as this creates wealth in the long run.

§                    Try to invest directly to fund as this would give you 0.5% to 1% higher returns as compared to when you invest through a broker If doing lump-sum check for stock market valuations. If you invest at high valuations, you might see very low or negative returns at the end of 3 years.

§                    Avoid “closed-ended” ELSS NFOs which are launched at this time of the year.

 Download: Excel-based Income Tax Calculator for Govt & Non-Govt Employees All in One TDS on Salary for FY 2018-10 [AY 2010-20 [ This Excel utility can prepare at a time your Income Tax Computed Sheet + Individual Salary Sheet + Individual Salary Structure + Automatic H.R.A. Calculation + Automated Arrears Relief Calculator U/s 89(1) with Form 10E from F.Y.2000-01 to F.Y. 2018-19 + Automated Income Tax Form 16 Part A&B and Form 16 Part B for F.Y. 2018-19 ]

3. PPF (Public Provident Fund)

PPF is another popular tax saving investment option for 80C, especially for people without any other provident fund.

Lock-in Period: 15 Years. However partial withdrawal is allowed from 7th year

The Good:

§                    The interest earned on PPF is Tax-Free

§                    After opening the PPF account, investment can be done online every Year (for some banks)

§                    Highest Safety – backed by Govt. of India

The Bad:

§                    The lock-in is for 15 years but there is partial liquidity from 7th year onwards.

Helpful Tips:

§                    Investment done till 5th of the month earns interest for the month. So deposit your money before 5th of a month

§                    You can use a combination of PPF and ELSS for tax saving investments. In case you find stock market over-valued, PPF is a good option.

4. Senior Citizen’s Saving Scheme (SCSS)

SCSS is a good option for senior citizens (above 60 years of age) as it gives regular quarterly interest income directly in a bank account.

Lock-in: 5 years

§                    Highest Safety – backed by Govt. of India

§                    The interest rate offered is highest among the small saving schemes

The Bad:

§                    The interest received is taxable.

§                    TDS would be deducted if the total interest in a year is over Rs 10,000. However, if eligible Form 15H can be submitted to avoid TDS.

Helpful Tips:

§                    SCSS account can be closed after 1 Year (with penalty) but in case you have availed Sec 80C benefit, it would be reversed.

§                    The joint account can be opened only with your spouse. There is no age limit applicable for the joint account holder.

5. Sukanya Samriddhi Account (SSA)

SSA can be opened by parents of girl child subject to certain conditions. SSA can be a good option for fixed income investment for the child. However, you should also invest in ELSS or other equity mutual funds for goals related to the child.

Lock-in: Deposit to the account to be made for 14 years and account matures at 21 years from the date of opening

The Good:

§                    The interest earned on SSA is Tax-Free and also higher than that offered to PPF

§                    50% withdrawal allowed when a girl turns 18 for marriage/higher education

§                    Highest Safety – backed by Govt. of India

The Bad:

§                    No provision of Loan or pre-mature withdrawal unlike PPF

Helpful Tips:

§                    Minimum deposit of Rs 1,000 needs to be made every year else penalty of Rs 50 is levied

§                    Account can be closed before 21 years in case of marriage

6. National Saving Certificate (NSC)

NSC can be bought at post offices to save tax u/s 80c. It is available for 5 years (NSC VIII) only. The interest offered is 7.8%.

Lock-in: 5 Years

The Good:

§                    The interest is higher than most tax saving bank fixed deposits.

§                    Certificates can be kept as collateral security to get a loan from banks

§                    No Tax deduction at source

§                    The interest accrued for NSC qualifies for Sec 80C deduction in subsequent years

§                    Highest Safety – backed by Govt. of India

The Bad:

§                    The interest earned is taxable

§                    You need to visit the Post office for buying and redeeming NSC units. This can be a hassle for people who shift addresses frequently.

Also Read: Calculate Tax on Arrears in 7 Easy Steps

Helpful Tips:

§                    You can buy NSC in denominations of Rs 100, 500, 1000, 5000 and 10000

§                    NSC is better to tax saving option than banks Tax Saving FD (offering similar interest) as interest accrued for NSC qualifies for Sec 80C deduction in subsequent years

7. Tax Saving Bank Fixed Deposits

India loves fixed deposits and FD which saves tax is obviously very popular.

Also Read: Highest Tax Saving Bank Fixed Deposit Rates U/S 80C across 44 banks

Lock-in: 5 years

The Good:

§                    Convenient to invest. Many banks offer online facility for Tax Saving FD

§                    High Safety – FD up to Rs 1 Lakh is insured by RBI

The Bad:

§                    The interest received is taxable. (Tax treatment of Fixed Deposits)

§                    Cannot be withdrawn prematurely

§                    Cannot be pledged to secure a loan or as security

Helpful Tips:

§                    The minimum tenure is of 5 Years. Some banks offer special schemes for longer tenures with slightly higher interest rates

§                    Don’t be mislead by banks advertisements about their yield on Tax Saving FDs. Those are manipulative calculations. [SBI Tax Saving Deposit Scheme – Interest & Annual Yield]

§                    Be cautious of small co-operative banks as they have a higher risk than bigger private and public sector banks.

8. Pension Plans from Mutual Funds

There are Pension plans from mutual funds which offer tax benefit u/s 80C:

1.                 Templeton India Pension Plan

2.                 UTI Retirement Benefit Pension Fund

3.                 Reliance Mutual Fund Pension Plan

The above funds are hybrid or balanced mutual funds – the first two funds are debt oriented mutual fund while the one from Reliance has two funds – one debt oriented and other equity-oriented.

Lock-in: 5 years

Helpful Tips:

§                    Reliance Mutual Fund Pension Plan is a better option among the three funds as you use Wealth option (which is equity oriented fund) to create the corpus and then switch to Income option (which is debt oriented fund) for regular income after retirement.

§                    All 3 funds levy exit load to discourage people from exiting early

Download: Excel-based Income Tax Calculator for Non-Govt Employees All in One TDS on Salary for FY 2018-19[AY 2019-20 [ This Excel utility can prepare at a time your Income Tax Computed Sheet + Individual Salary Sheet + Individual Salary Structure + Automatic H.R.A. Calculation + Automated Income Tax Form 16 Part A&B and Form 16 Part B for F.Y. 2018-19 ]

9. NPS (National Pension Scheme)

Some of you might have to contribute compulsorily to NPS. In this case, you can take a deduction up to Rs 50,000 under the newly introduced Section 80CCD(1B). And then you can choose a more efficient investment in 80C.

Read More