Section 80C Tax Saving Schemes

by Manshu on January 5, 2011

in Tax

With the tax season fast approaching, I thought I’d do a post with the tax rates for the current year, and the investing options that can avail you tax deductions. These don’t include things like loss from house property, or disability deductions, but are deductions that can be claimed under Section 80C or 80CCF when you invest a certain amount in some tax saving instruments.

First, let’s take a look at the tax slab for the current year:

Income Tax Slab:

Income Tax Rate
Up to 1,60,000
Up to 1,90,000 (for women)
Up to 2,40,000 (senior citizens older than 65)
1,60,000 – 5,00,000 10%
5,00,000 – 8,00,000 20%
More than 8,00,000 30%

Education Cess: 3% of income tax & surcharge if the taxable income is more than 160,000.

The cess is levied on the tax itself, so whatever is your final tax liability – take 3% of that and add to your tax to arrive at the tax due.

Tax Saving Schemes

The table that follows lists out tax saving schemes that entitle you to a reduction on your taxable income.

What this means is that if you have a taxable salary of Rs. 9,00,000 and invest Rs. 1,00,000 in any of these tax saving schemes then your taxable salary gets reduced by 1,00,000, and you pay tax as if you only earned Rs. 8,00,000 in the year.

The maximum investment column in this table indicates that the tax benefit ceases to exist for an amount in excess of what’s indicated there. So, if you invest more than 70,000 in PPF – you will still be entitled to tax benefit on only Rs. 70,000.

Also, note that the combination of these options will give you a maximum tax benefit of Rs. 1,00,000, so if you have already bought insurance worth Rs. 1,00,000 investing another Rs. 1,00,000 for ELSS will not get you additional tax saving.

The only exception to this is the 80CCF Infrastructure Bonds, which reduce your taxable income by Rs. 20,000 over and above the Rs. 1,00,000 saved by the other options.

Regular readers know it all too well, but it’s my duty to remind you that I’m not a tax expert, and in fact hire someone else for my own taxes, so you need to keep that in mind while looking at this list, and consider it nothing more than a starting point.

S.No. Name Maximum Investment Notes
1 Life Insurance Premium Paid 1,00,000 Policy should either be in your name, spouse’s name or children’s name
2 Contribution to Public Provident Fund 70,000 You can’t add the employer’s contribution to PF under this head.
3 Investment in NSC (National Savings Certificate) 1,00,000 Post office scheme with guaranteed returns.
4 Contribution to ULIPs 1,00,000 Do your due diligence before getting into these.
5 Contribution to ELSS Mutual Funds 1,00,000 Link to a post on ELSS here.
6 Contribution made to notified pension funds 1,00,000 UTI Pension fund is one example of this
7 Amount spent on children’s education 1,00,000 For tuition fee only, and  a maximum of 2 children
8 Annual Repayment of Housing Loan 1,00,000 There are a lot of conditions in this that I’m not fully familiar with, so you need to consult an expert before banking on this.
9 Tax Saving Fixed Deposits 1,00,000 Term of 5 years (Full post here)
10 Premium Paid Towards Jeevan Suraksha 1,00,000 Pension plan with annuity for life.
11 Section 80CCF Infrastructure Bonds 20,000 This is over and above the 1,00,000 mentioned above. (Full post here)


After writing this post I also created a detailed graphic that makes these tax saving schemes easy to understand, and also includes the details on home loan and education repayment which are not present here. You can view the 80C tax saving infographic here.

Update: Premium Paid towards Jeevan Suraksha does not come under Section 80C benefits as listed in this post, but is covered under Section 80CCC.

Thanks to R P Sarathy, and Nilesh Gupta for pointing out the error, and my sincere apologies for my mistake.

{ 139 comments… read them below or add one }

Raja Mohamed January 6, 2011 at 11:01 PM

No mention about medical premiums???


Manshu January 7, 2011 at 12:02 PM

Can you elaborate a little please Raja?


Sivaramakrishnan @ Loney January 12, 2011 at 8:00 PM

Hi Raja

Medical premiums fall under a different head (Section 80D) and it can be claimed over and above the Rs.1,00,000 you can claim under sections 80C, 80CCC, 80CCD put together. 80D allows you to claim deduction on the insurance premium paid for you, your spouse and children upto a maximum of Rs.15,000/-. Further, you can claim deduction of Rs.15,000/- (Rs.20,000/- for senior citizens) for health insurance premium towards parents.

So, effectively, the maximum income that can be deducted from your salary is

u/s 80C, 80CCC, 80CCD…………………………Rs.1,00,000
u/s 80CCF…………………………………………….Rs. 20,000
u/s 80D (for yourself, spouse and children)..Rs. 15,000 or Rs.20,000
u/s 80D (for your parents)……………………….Rs. 15,000 or Rs.20,000
u/s 80G (donation)…………………………………Upto 10% of your salary

HRA deduction and Prof Tax payment are also exempt


Manshu January 13, 2011 at 7:06 AM

Thank you Loney – that was very detailed, and useful.


khalid January 9, 2011 at 8:22 PM

Can i claim house rent benefit as well as annual repayment of housing loan simultaneously.


Manshu January 10, 2011 at 5:01 AM

As far as I know – they are different heads and can be claimed together. But it’s been quite some time since I looked up tax laws, so I might be wrong.


Sivaramakrishnan @ Loney January 12, 2011 at 8:01 PM

Hi Khalid

That is not permissible. HRA deduction is permissible only for those who doesn’t own a house


Manshu January 13, 2011 at 7:06 AM

Thanks again Loney – good thing you corrected my error.


K V Subba Rao September 20, 2012 at 4:58 PM

It is permissible under certain circumstances. Visit


pal2ie April 28, 2011 at 7:41 AM

Hi Loney,
Can you share some insight on a scenario where a flat is under construction and EMI has already started before possession.
Another scenario is where single house is owned (and possession taken from builder) but it is in another city from city of residence. In such case if house is not rented out, but accommodation is rented in city of residence, how does it impact tax saving?


kunal January 11, 2011 at 4:45 AM

Hi Manshu,
Indeed a good blog.
I want to invest in infrastructure bonds and do not have demat account.
Question are little dumb but any advice would be good.
Which is good infra bond -(short term)? and good agency to open demat account?
My last date to submit proof is 20Jan.



Manshu January 11, 2011 at 8:52 AM

Thanks Kunal – I read somewhere that there are no dumb questions, only dumb people shy of asking questions, and fully subscribe to that view, even if it means a car salesman giving me a dirty look when I ask what does it mean when you say CNG is on RC 🙂 (happened today), so I appreciate your question, and here is my attempt to answering it.

If you don’t have a demat account, then you will probably not have enough time to submit the IFCI issue which is currently open, and closes tomorrow, so you will have to wait for the next issue.

The next issue is IDFC which will open up on 17th, and they did have a paper option last time, so let’s hope they have it this time as well, and you can apply for that.

As for short term – it will have a minimum lock in of 5 years, which is the least lock in that any of these bonds have had, so there is nothing shorter than that.

As for a good place to open a demat account; here is post I did for that:


kunal January 12, 2011 at 1:37 AM

Hey Manish,
Nice one 🙂 and information was really useful.
I also appreciate the way you respond to each of the comments in all posts.
Keep up the good work.

dev bare karun
(God bless)


Manshu January 12, 2011 at 10:21 AM

Thanks Kunal – you might want to get my name right in the next comment 🙂


kunal January 14, 2011 at 4:12 AM

Yeah sure, my apologies for misspell.
With tax proof around corner, I’m falling short of 18k investment apart from 20k in infra bond which i dont plan to invest in.
Considering the DTC next year, I dont plan to start new ELSS.
I’m thinking of NSC , Fixed Deposit.
What do you think would be wise?


Manshu January 14, 2011 at 9:01 AM

Kunal – So you’re short 18K within your 80C limit of 100k? I ask because you mention Infra bonds that give you deduction over and above that limit. And I am not quite sure about your reasons for ELSS….could you elaborate a little please?


kunal January 14, 2011 at 9:37 AM

Thats right Manshu, 18k short of 100k limit.
My unwillingness to invest in ELSS is because of DTC coming, which I read would rule out tax saving schemes such as ELSS. Correct me if Im wrong. Hence I want to invest the 18k somewhere to save tax.


Manshu January 14, 2011 at 10:02 AM

DTC will take out all of these other schemes as well, but there is still one year for that. It was originally going to come in force on April 2011, but then was delayed by a year.

I’m not saying that you should invest in ELSS, but if you were not going to because you thought DTC will kick in in another 3 months, then that’s not the case.


kunal January 14, 2011 at 10:45 AM

Thanks for that information, I thought it would be from April,11.
Nice to have this interaction.


venkat February 16, 2011 at 3:54 AM

For Tax Saving Mutual Fund Investments advice and processing, please call 9241545354 (for bangalore only)


saju February 18, 2011 at 10:20 AM

hello good evening
i spent nearly 50000 rs for my parents hernia this amount taxable. i dont have any mediclaim policy


Manshu February 18, 2011 at 10:31 AM

Hi Saju – As far as I know there is no provision to get a deduction on this money spent on Hernia operation. There is a provision in 80D for insurance premium deduction and 8DDB in treating some specified ailments, but Hernia doesn’t appear to be one of those diseases.


Ramesh March 3, 2011 at 1:30 AM

in view of coming DIrect Tax Code, most of these savings schemes might become become less useful. however PPF will continue to remain popular as it provides better rates than most Bank FDs even without tax rebates. some of us who had had GPF accounts which got closed on retirement never opened a PPF Account. in view of this, Is it advisable to open new PPF accounts by seniors irrespective of their age say in 60s or even 70s if they have surplus funds. how difficult is it’s redemption in case they get incapacitated or die. I am 68.


Loney March 3, 2011 at 4:17 AM

Its sad that the Direct Tax Code never took the senior citizens into consideration when scrapping most short-term investment schemes. Since the duration of the PPF scheme is 15 years, it is definitely not advisable for Senior Citizens. Withdrawal from a PPF account can be done only after the complete term of 15 years. Even the nominee cannot receive the amount before the completion of the term of 15 years. Even the post-office NSC / Term Deposit or 5-year tax-saving bank term deposit are going to be stripped of the tax-saving feature once the DTC kicks in.

On Analyzing the various tax saving opportunities, you are left with ONLY ONE option.
Immediate Annuity Plans of the Insurance Companies. – (But, I would like further debate on this subjects by other members or on the forum) Sr.Ctzn.s may pay a sum of Rs.1,00,000/- and start receiving pension from the same day. They may also claim tax exemption. But, the yield is low. They may get upto Rs.9000/- p.a. depending in the scheme for the rest of their life.


Loney March 3, 2011 at 4:19 AM

CAUTION : I would ask you to do your math well before proceeding into anything.


Manshu March 3, 2011 at 8:05 AM

When I looked at these in the past Loney they seemed to be giving lower yields than bank FDs and I think at present there are banks that give 10.5% to seniors, and that option then allows them to break the FD if needed, or if the interest rate creeps up then use the redemption money to use it elsewhere.

PO gives a slightly lower rate, and I think at that age it’s best not to look at other options which are more risky.

As always – your comments and suggestions are much appreciated.


Loney March 3, 2011 at 8:12 AM

And to add to this, the principal is lost. With Bank FDs, you get the principal as well as interest.
So, to conclude, Senior Citizens have no opportunity to save tax. (Probably, that the reason why the govt has a different slab for senior citizens. – Working people need to save for their retirement and hence the exemption of Rs.1 lakhs for investments in retirement funds like GPF, PF, PPF, etc. Once they are retired, they neednot further save for any financial goal and probably this is the rationale with which they have drafted the DTC and instead, they are given a higher initial bracket.)


Ramamurthy November 25, 2011 at 10:15 PM

Jeevan akshay policy of LIC is one such immediate Annuity scheme. There are several options under this Policy under which a senior citizen can get retuns exceeding 9%.But,the options may not appeal to many Senior Citizens.A senior citizen who may not want the principal sum to be returned to his nominees after his death may consider buying this policy as the returns as long as he lives are quite attractive.So it all depends on the mental make up of the person and the family circumstances.


Ramesh March 3, 2011 at 7:09 AM

Thanks Loney. Atleast PPF is no more an option keeping the above points in mind.



Loney March 3, 2011 at 8:19 AM

You may use the Tax Saver Fixed Deposits as an option till March 2012. But, once the DTC kicks in, you will not have any investment opportunity.

There is still time left and there may be changes to the draft even at a later date. I think its too early to predict anything. Even the implementation may be delayed.

Remember : The main idea of DTC was to do away so many complicated exemptions and sections. Any income should be taxed: though at a lower rate. But when the final draft came, it was no longer a break through of sorts. It was only a leaner and meaner modified version of the already existing income tax act, 1961.


Srikanth March 5, 2011 at 7:40 AM

Hi ,
I wanted to invest in Tax Saving Fixed deposit scheme , i have some doubts in this ,
suppose i invest 10k in fd for 5 years , what amount is exempted under section 80c ? ( i know interest is taxable) , assuming i invest in april 2011 , for this april-march2012 will 10k the amount invested be fully exempted ? or its only a percentage of it based on slabs ?
Please give me some details on this .


Manshu March 5, 2011 at 10:38 AM

Srikanth – if you invest 10K in this FD then that 10K will be reduced from your taxable salary while calculating tax, and give you tax benefit to that extent.

Remember that this is subject to a limit of 1 lac under 80C where there are other options available for deductions as well (as written in the post).


Srikanth March 5, 2011 at 9:25 PM

ok thanks manshu, that cleared my doubts


Manshu March 6, 2011 at 1:09 PM

okay good – appreciate your response.


Mihir March 11, 2011 at 3:58 AM

My question is that would it be advisible to invest in ELSS schemes in the current year. As from april 2012 investing in ELSS will not give any tax benefits. There are chances that people may not invest much going forward. Also from next year customers will start redeeming from these funds and with lesser and lesser cash day by day the fund may not be able to perform. Investing at this stage may lead to negative returns after completing of login.

Kindly advise


Loney March 11, 2011 at 6:05 AM

Just like the fact that performance is not dependent on NAV, performance of any fund is also not dependent on Corpus of the fund. Infact, smaller funds can be efficiently managed.(Canara Robeco and Quantum are two fund houses that have small funds that are very efficiently managed) They pose very little liquidity risk. To illustrate : Consider a large fund like the HDFC Top 200 Fund. Since the corpus is too big, the fund necessarily has to invest a major part in large caps where there is adequate liquidity. Also the number of stocks should be large. (more than the optimal value of about 30) Else, under adverse market conditions, if the redemption is also huge, the fund would not be able to off-load in adequate time frames. Your apprehensions are misplaced. You should certainly take the last opportunity to invest in these ELSS schemes in 2011-12 also.


Mihir March 12, 2011 at 1:15 AM

Thanks for the opinion provided.


subhash chander wadhwa March 23, 2011 at 2:13 AM

wheter repayment of principal/ interest on Loan rased for the higher education of child is exempted for income tax purpose


Manshu March 23, 2011 at 3:51 PM

yes, that can be deducted up to 1 lac – only for tuition fee and limited to two children.


Srikanth VM April 5, 2011 at 3:15 AM

Hi , could you please clarify me on these questions that i have

What is the difference between variable investment and fixed investment in a PPF account ? If variable investment is opted then is the interest rates dropped ?

Suppose I am not in a position to pay xxxxx after few years then can this account be closed ?

Is it better to choose for variable so that if in one financial year i cannot pay xxxxx then i will invest minimum 500Rs so that the account need not be closed ?


Mihir May 15, 2011 at 11:49 PM

Dear Srikanth,

As per my experience with PPF accounts. There is nothing fixed or variable.
It depends from bank to bank on their criteria for your account to be active.
In my case I have a PPF account with BoB. I sometimes have made only 1 payment per year.
Ideally PPF accounts are told to be operated once every 6 months to be active.

Coming to the question of Rate of Interest, as per my knowledge the rate for PPF is fixed 8.5%. Unlike the EPF where in it is 9 or 9.5%(not clear about this).

It is better that you check with the Bank where you would want to get a PPF account.



lalit April 6, 2011 at 4:31 AM

i had invested 35k in tax saving FD in 2009 with ICICI. As you would be aware, interest rates during that period were too low. is there any provision of going for pre maturity of the deposit and invest it again at the higher rate?


Mihir May 15, 2011 at 11:51 PM

No Lalit,

These FDs come with a Lock-in of 5 yrs and you cannot withdraw them like other FDs.
Wait till 2014.


sachin May 15, 2011 at 6:47 AM

Good morning Sir,I am sachin from ludhiana.I invested 94,500 into 5 years fd in the bank under deductions of 80 c in the last financial year.I want to ask can I invest maximum of 100000(80c fd)in every financial year?Will all my financial year fd amount will be safe and legal?More over Can I save maximum 10 lakhs in 80 c fd in 10 years?
pls reply.


Mihir May 15, 2011 at 11:56 PM

Dear Sachin,

As per your questions, you can Invest 1lac this FY.
These FDs are completely legal and safe, I hope you are making these deposits at reputed banks. Also the certificates of these deposits clearly need to mention about deduction u/s 80C.

However from next FY, these products may/will not be available for Tax deductions u/s 80c. So we will never know about saving 10 lacs in next 10 yrs.



sachin May 16, 2011 at 5:04 AM

Thanks alot . I had invested 94,500 last year and I can do 100000 in this year,and may be from next year it will be closed.pls reply yes if i am correct.


Mihir May 16, 2011 at 5:11 AM



sachin May 16, 2011 at 8:04 AM



Manshu May 17, 2011 at 12:09 PM

Thanks for responding to that Mihir!


suryamani May 21, 2011 at 12:29 PM

I thank you for this well explained article.I found it very useful for me 🙂


Manshu May 21, 2011 at 12:38 PM

Thank you very much for your comment – I’m glad you found it useful.


om prakash mishra June 10, 2011 at 9:31 PM

i wanted to file my tax for the year 2010-11 and have purchased rs 10,000 infrastructure boind which some under 80ccf but while efiling the tax the form itr 1 available on income tax website doen not have any column related to 80ccf….kindly advice in which section the infrastructre bond will be filled for filing tax for 2010-11


Loney June 10, 2011 at 10:02 PM

If you want to file IT return for last year, you will have to file using ITR-1 (SAHAJ) for A.Y.2011-12 and not 2010-11. There was no provision for deduction during 2010-11 u/s 80CCF. It was a new section that came into existence only from A.Y.2011-12.


Kapil June 17, 2011 at 10:23 PM

detail of current year tax saving schemes for FY 2011-12 available at


juanita July 10, 2011 at 11:43 PM

I thought Post Office Sr. Citizens Scheme which fetches 9% interest p.a., and has a tenure of 5 years, is also eligible for deduction under 80C. Correct me if I am wrong


Loney July 11, 2011 at 6:46 AM

The scheme is eligible for deduction u/s 80C of IT Act. See Link Below


juanita September 6, 2011 at 1:22 PM

In the proposed DTC the Sr. Citizens Scheme (P.O) has not been included under Sec.80 C.
Does this mean that 5-year bank deposits in a PSU Bank only qualifies for deduction upto 1 lac under this Secn. Also the enhanced limit from 20K to 50K is this meant only for investments against infrastructure bonds? Thanks Manshu . You are doing an incredibly good job.


Manshu September 7, 2011 at 5:40 AM

Proposed DTC does away completely with 80C and any exemptions that come with it, so things like ELSS, PO savings etc. will not quality for these from next year. Not this year, next year. This year things remain the same.

I’m not sure I don’t understand the rest of the question…..there might be some context I’m missing – sorry!!!


Ana Dennis July 13, 2011 at 8:25 PM

I had a PPF account ,which I did not pay for 2 years, can I revive the same.


Mihir July 20, 2011 at 2:04 PM

yes Ana, you can revive the same. you need to go to the bank where you have the PPF account and speak with the concerned person to revive the account. Some penalty amount may be charged depending on the bank policy.


SHRIKANT July 21, 2011 at 3:13 PM

If i sell my old gold or my father gives u 50000 rs as gift ,i make 50000 as fd in bank in a particular financial year, then do i have to pay tax and include those 50000 in our taxable income, do we have to include its intrest to taxable income, do any proof regarding that we need to keep, if there is no tax we need to pay?


K KUMAR July 30, 2011 at 10:16 PM



Seema August 2, 2011 at 12:50 PM

Lets say I invested Rs. 1 lakh in Feb 2010 in a company FD at 13% for 3 years, with the principal plus accumulated interest being paid out on maturity. I am supposed to declare this as part of my income only when I actually receive the amount on maturity, right? Am I liable to include the interest accumulated annually, as part of my taxable income in every FY from 2010-2013? I thought I would need to put this in my ITR only at the end of 3 years but I was confused since the company where I made the FD deducts TDS at the end of every year and the same reflects in my Form 26AS.


Paresh August 2, 2011 at 4:52 PM

If you do not have interest payment flow statement or if you are not able to calculate it manually,demand interest paid certificate from company.I think,you needs to show income each year as done in bank fixed deposits.


K KUMAR August 2, 2011 at 9:46 PM

Interest on schemes other than PPF is taxable or not


Mihir August 15, 2011 at 10:48 PM

I am not sure about the Senior citizen schemes, but for most other interest based tax savings schemes there is tax on interest earned.



juanita August 16, 2011 at 4:00 AM

Tax on interest earned on P.O. Sr. Citizen Scheme is also taxable its only the investment made during the year under the scheme which is deductible from your gross income.


vijayakumar kj August 3, 2011 at 12:46 PM


Under 80D can i get tax exemption for me (Rs. 15000/-) and for my parents (Rs. 15000/-) separately ?



narayana August 12, 2011 at 3:07 PM

thanks for the valuable information. till to date, i dont know about the banks also have offering fd’s for tax saving. no, i have one question. I have nearly 15 lacks of fd’s in various banks. i am getting salary of 1.5 lack p.a as salary. but, i am not filing any returns form. please sujjest me to get higher returns and portfolio . except the fd’s i have no investment and nodebts. be pleased to consider my request


Mihir August 15, 2011 at 10:43 PM

Dear Narayana,

Since your salary is 1.5 lacs p.a., you dont need to pay tax, but if you have a PAN card, it would be better to file your returns to avoid any hassles in the future.

Since you have invested only in FDs, you can invest in NCDs or debt funds to get relatively higher returns and protect your capital. If you want much higher returns you can buy Mutual funds but they also carry risks. If you have knowledge of stock trading you can put your money in sound stocks for long term investment, but the risk factor is much higher there. You can read more articles on Onemint, moneycontrol, , or other such knowledge sharing sites, or consult a financial adviser.



narayana August 18, 2011 at 5:15 PM

thaks mihir, my mother gave me that money(she is getting reular income from govt. as pension and other benefits) on certain occassions. i have only few recipts for trnsferring money from my mother’s account to mine.Is there any problem for me. what is the mode of transfer of money and what care should i have take while accepting money from my mother in future. I got PAN card last year. but, i have not filed returns so far. what should i do. mihir, one more doubt. how to invest in NCDs. please provide information if any. i am filng form 15-g every towards TDS in one bank as i have invested nearly 5 lack in that bank as FD. remaining, i ahve invested in various banks(below one lack).
be greatful to you


Mihir August 18, 2011 at 10:37 PM


To keep the record clean, always accept the money from your mother in cheque form if possible.
For most of your concerns regarding the same I will suggest you consult a tax consultant, I am not one, Infact I am just a common person like most others on this forum sharing and advising my learnings.

If there is anybody on the forum who can extend help to narayana kindly come forward.

FOr the Question of NCDs, you need to open a Demat account, you can open this account with most of the Banks like SBI, HDFC, Kotak, ICICC, AXIS or through a brokerage house like Kotak securities, Edelweiss etc. Once you have an Demat account and an online trading account, you can transfer money online form you bank to the trading account and invest in NCDs.

For best approach, consult a financial advisor, pay him the fees to suggest good investment and tax efficient strategy. Periodically Monitor your investments and MOST IMPORTANTLY continuously gain knowledge for Financial freedom.



Manshu August 21, 2011 at 10:41 PM

Mihir – your comments have been fantastic, and I wanted to thank you for them! Awesome – thanks!


Mihir August 22, 2011 at 1:00 AM


Its a nice platform put up forward by you guys, it is through such forums we all can extend our knowledge as well extend the advice to others, its always mutual 🙂


Malar August 13, 2011 at 5:56 PM


I am a housewife and my husband lives abroad. This year he had sent me some money for family and other expenses, of which I have deposited some 1 lac in an FD.

Now, will there be tax on the interest rate? I do not have any earnings. Answer would be much appreciated. Thanks


Mihir August 15, 2011 at 10:46 PM

Dear Malar,

Incase the bank deducts tax at source, get a TDS certificate from the bank and you can claim refund of the same amount while filing your return.

You can also get more information form the bank teller or Manager.



Ramesh August 16, 2011 at 12:32 AM

Senior citizen scheme deposits are subject to payment of income tax on interest and TDS as usual, but with the added advantage of 88c benefits upto 1 lakh subscription in a particular year (alongwith other 88c investments).


M. Nissarul Haque August 18, 2011 at 2:23 PM

I have Fixed Deposits with banks, the TDS in F.Y was approx. 25,000/-
I have no other taxable income other than dividend income of shares which is tax free
Please let me know the way of tax rebate to get this 25,000/- TDS back,

will 5 year Fixed Tax Saving Deposit be the best way to claim refund of TDS ? ?

Can I also claim tax refund by investing 25,000/- in INFRA BONDS ? ?


Mihir August 18, 2011 at 10:27 PM

Dear Nissarul,

The Tax rebate can be obtained by filing the return and claiming the rebate on the TDS done as applicable in your case.

A 5 yr Tax Saving FD will provide you deduction under sec. 80C and not provide you any Rebate of TDS. There are also other means to save tax u/s 80C like interest payment of a Home Loan, HRA, ELSS, NPS, PPF investments, etc apart from Tax saving FDs.

Infra Bonds are used to get a tax deduction on total taxable income, not to Claim refund. The Limit of Investing in Infra bonds for tax savings is 20000. Beyond that you can invest but will not get tax savings.

Kindly read the topics on this thread as well as on this forum as well as Valuresearch online, moneycontrol or to name a few.
In my opinion, take a one time consultation of a tax consultant to resolve your queries and guide you through the process of claiming rebate and filing returns. Ideally the fees for this should be less than Rs. 1000.



Manish September 6, 2011 at 4:12 PM

Hi Manshu,
I have following 2 questions:
1.)I have 3 LIC policies as follows:
In My name : Premium 29000/- ( Jeevan Shree)
My Wife’s name :Premium 39000/- (Jeevan Shree)
My wife name : Premium 28000/-
My Daughter’s name :Premium 7000/-

Pls advice if I need to invest any more for tax deduction under u/s 80C, 80CCC, 80CCD.

2.) Can I Claim my Parent’s ( Father retired and on pension, mother homemaker) medical bills for deductions under 80D.



Manshu September 7, 2011 at 5:33 AM

Since the premiums exceed a lakh I don’t think you can do anything under these other sections. You can invest 20K under Infra bonds that are covered in 80CCF. I don’t know about the 80D question I’m afraid.


Umesh September 7, 2011 at 2:25 PM

Hi Manish

Your question about Section 80D is not clear.

In section 80D investments made for the payment of health insurance premiums (premium paid for mediclaim type policies), qualify for tax deduction and not medical bills. Further medical bills are of many types like bills of medicine purchased in normal course, hospital treatment (of in-patient, in nature) bills, medicines purchase bills and diagnostic bills during hospital treatment (of in-patient nature), bills of diagnostic centers like testing of blood, urine etc, X-ray bill in normal course etc.

Further what is the nature of your job like salaried, professional, self employed, business etc. If salaried, do you have medical reimbursement facility from your employer.

Do you contribute to health insurance. If your question is related to health insurance premium (section 80D), then do you pay premiums for your parents from your taxable income. Do write the age of you parents.



Manish September 7, 2011 at 9:54 AM

Dear Manshu,

My question was whether the LIC premium paid is fully taken for 80C tax deductions. Secondly , whether all the LIC policies’ premiums are taken for these calculations or only some particuler policies,


Manshu September 11, 2011 at 5:34 AM

I apologize I’m not sure I still understand the question – by saying that LIC premium paid is fully taken for 80C deductions – do you mean to ask if there is a kind of a sub – limit within the 80C limit where they say that only up to 50K investment in LIC will be allowed for exemption….something like that?

If so, then no, I don’t think there is a limit like that.

And I do believe Jeevan Shree comes under 80C, and so does any other life insurance policy from LIC.


Manish September 12, 2011 at 12:01 PM

Thanks Manshu!!

The sublimits in LIC premium was my actual question. Sorry for not putting the same in proper words due to lack of my commerce knowledge.

Now I understand that in order to get “maximum” benefit/tax shied under 80C , i do not need to make anymore investments. Correct me if I am wrong.

Again thanks for your time and patience



Manshu September 18, 2011 at 11:04 PM

Thanks for your response, and yes that’s correct.


Kirti September 22, 2011 at 4:01 PM

Please design a tax saving portfolio for me. My monthly income is 50K.


Mihir September 22, 2011 at 9:48 PM

Dear Kirti,

It is difficult to give u a portfolio structure without understanding your expenses, liabilities, monthly saving capacity and age….
From the information given by you invest 8334 pm in various tax saving schemes to avail benefit of 1 lac for sec 80 C.
Rest can be advised only if there is proper data provided.


Manshu September 25, 2011 at 9:52 PM

Kirti – this can’t be done in the comments section of a blog. You need to either hire someone or get up to speed on some of the investment options and concepts and do it yourself.


Jaiwardhan October 14, 2011 at 1:39 PM

During the budgetary speech of 11-12, it was announced by the H’ble Finance Minister that NSC,ELSS and ULIPS will not be applicable towards saving of the income tax under IT section 80C. Now I want to know that whether these announcements have been implemented or not.


Manshu October 14, 2011 at 8:05 PM

You can still take advantage of 80C this year Jaiwardhan. They will cease to be useful when Direct Tax Code (DTC) is implemented, which is expected next year, but let’s see if it actually happens next year or not.


Indher Sarvade November 28, 2011 at 6:20 PM


I have one doubt, If suppose I am earning 10k from share market(i.e in Stocks Or Derivatives) on monthly basis, for that I need to pay tax? (consider this is my side Income)
If I needs to pay tax it will come under which section?

Kindly clarify the same.

Thanks In Advance


Manshu November 29, 2011 at 10:02 PM

They will be charged as short term capital gains.


Indher Sarvade November 30, 2011 at 1:20 PM

Actually I didn’t get you. This short term capital gains will come under which section(80c,80ccf,etc..)?


saving-ideas November 30, 2011 at 2:09 PM

tax payable on income as short term capital gain with rate of 15%.
If I buy shares worth 1 Lakh and sold at value of Rs. 1,30,000 within 1yr then tax payable is 15% of net profit i.e. 0.15*30,000 = Rs.4500.i.e. short term capital gain.
One can offset short term capital gain against short term capital loss,but not with long term capital loss.


Mahantesh November 30, 2011 at 8:48 PM

Hi there,

I have invested 10K in MANAPPURAM FINANCE LIMITED – NCD this year, does this come under tax deduction.

I am working in a private company and recently started NPS (New Pension Scheme) through does investment done in NPS comes under tax deduction.

Thanks in advance.



Umesh December 1, 2011 at 12:42 PM

Hi Mahantesh

NCD – No. Even interest earned is taxable

NPS (New Pension Scheme) Yes


Suresh December 5, 2011 at 2:07 PM

Hi ,

what are the proof need to be submitted for 80C- Deposit in Post Office Savings Scheme ??


krishna December 5, 2011 at 3:30 PM

Hi Manshu,

My salary comes under the tax bracket of 10%.
I started investing in shares since this April and made losses(Including options and intraday).
Can I avail a tax exemption in this case.
If so, how can i avail that.
Please guide me in this.



Manshu December 5, 2011 at 7:30 PM

No, as Juanita explained, you can’t.


sanjeev December 5, 2011 at 4:18 PM

Hi Manshu,
I want to know how much amount is allowed on tution fees and in which section


Manshu December 5, 2011 at 7:30 PM

1 lakh under 80C Sanjeev.


juanita December 5, 2011 at 6:45 PM

Short-term capital loss/intraday loss can only be set-off against short-term capital gains during a financial year. In other words income from capital gains gets reduced to the extent of short term capital loss thus resulting in a lower gross total income.


Shailendra December 10, 2011 at 3:48 PM

hi manshu and others !!!
i have recently started my professional career. it was august,2011 since when i started my earnings. i need to submit my tax savings documents to my company by 20th of dec for the FY2011-2012.i first thought of investing in ULIPs and that these are being exempted from the DTC which probably comes into action for next FY , im in a state of doubts and confusion.whether to go with these for FY 2011-2012.moreover these two schemes have a lock in of a min of 5 yrs.having many other investments to do other than the tax savings, i need to keep myself in adequate with liquid cash( for after an year or two). suggest me for the present year’s tax savings to be applied ( keeping in mind that i earn around 40k per month and mostly looking for monthly investment schemes with PPF already under consideration).

hell lot of doubts thrown out being a fresher…hope that will not trouble u a lot as i see the way u respond to people is absolutely amazing…:P thanks in advance and my best wishes for your further journey through this forum into your future …regards


Manshu December 11, 2011 at 5:12 AM

So, you fall under the 10% tax slab right?

Personally, if I fell under that tax slab and felt that I would need cash shortly then I would much rather pay tax than invest in any instrument to save it. You can invest in other instruments that don’t have a lock in and avoid the lock in since you feel you will need cash.


Shailendra December 12, 2011 at 9:12 PM

thanku soo much manshu .after a hell lot of discussion with my friends even i was in a same mood. but was waiting for some pro assistance.thats it for now then.this seems to be the final thing i should do…that don’t go for locked in policies :P.thanks once again..will keep following this forum.a very good ‘ financial planning GYAN’ center…:)


Manshu December 13, 2011 at 2:02 AM

I’m no pro but based on what you said, paying a bit in taxes and keeping money free seem to make sense. I’m happy to hear that you found this forum useful – thanks!


Rehan December 11, 2011 at 7:03 PM


I am an MBA student and will be joining an MNC in Jun 2012. I have the following questions –

1)Can I do advance investment declaration in Jun so that less tax is deducted(because normally we always do a declaration in March) when I start receiving the salary
2)In case, I would not be allowed to do advance investment declaration, will HRA, Conveyance etc be automatically deducted from my gross salary to arrive at the taxable income during TDS.

Please reply.


Manshu December 13, 2011 at 2:19 AM

1. Most companies I know of ask their employees about what their tax planning is at the beginning of the year and based on that they deduct the TDS and credit their salary. So, if your employer does this then you should state that at the time of declaration and then get tax deducted accordingly.
2. I guess that’s not applicable since you should be able to declare tax investments before hand.


Ankur Sinha December 26, 2011 at 6:51 PM

I have another Q, I was surfing through the internet and came across Time Deposit of Post office, the time duration for the deposit are 1yr, 2yr, 3yr, 4yr and 5yr. but I am not sure weather we can claim tax benefit for 1,2,3 and 4 yrs deposit under 80c.
Any idea?


Manshu December 27, 2011 at 3:04 AM

I’m not aware of this option.


juanita December 29, 2011 at 9:22 AM

Yes, you can claim deduction on the investment under Section 80C. You may log on to to clarify your doubts.


Rajesh January 2, 2012 at 7:13 PM

why cant i claim 80c for my parents lic..?


Shallu Narula January 3, 2012 at 4:39 PM

I am little confused in Saving calculation. My query is

How much in total a women can save?? Its only One lac irrespective of PPF & LIC’s or can save upto One Lac in LIC + upon 70000 in PPF & the availed benifit would be One lac seventy thousand

*** If my salary is 400000.00 p/a then how much i can save & how much tax I need to pay??


Jegadeesh January 4, 2012 at 4:18 PM


I have put 5-year Fixed Deposit [2011-2016] of Rs-100000 /- in nationalized bank for my tax exemption during the year 2011-2012.

Do I use the same 5-year FD for my tax exemption in the following year 2012-2013 and continuously up to year 2016?

Please reply



bhanu kiran January 9, 2012 at 12:08 PM

hi every one i want to invest for 30000 and i need to choose tax saving plans

Question 1: which one would be better if iam looking to invest for short period

Question2: which one would be better if iam looking to invest for long period

Note: Iam not intrested in Insurance plans.
given the highest returns iam ready to invest in higher amounts and variable period of time .
and the intrest earned should be tax free

Thanks for your suggestions.


Manshu January 9, 2012 at 9:02 PM

Only the income from PPF is tax free, rest of them are all taxable, so that’s your only option (given your conditions).


Musica January 10, 2012 at 6:30 PM

Hi everyone

I am a new comer in Corporate industry.and have a very blurred idea about tax savings & money instruments.

Q1. Where all can I invest my monthly salary of 30,000 for good returns keeping in mind the short term and long term requirements as well?

Q2.Amongst these,which all can help in my tax savings for the current years and the next year as well ?
Or do i need to invest in some long term instrument apart from the above ones in order to save my tax ?


Kumar January 11, 2012 at 10:20 AM

Please tell me the procedure of making gold gift to my spouse to reduce tax. is there any limit for glod gifts? whether jewel to be purchased under my name or my spouse name? i have invested Rs 72,000 in LIC. what are the other ways to reduce my tax. my annual income is 9 lakhs.


Manshu January 12, 2012 at 2:51 AM

No idea about that I’m afraid.


Gaurav January 11, 2012 at 6:11 PM


I have done some maths for investing in a LIC scheme against a tax saver FD and found that tax saver FD gives better returns if both are considered under investment. Banks are offering interest rates upto 9.5% towards FD while LIC is giving a mere 8% overall return and that too over a minimum period of 15 years. Please suggest which is a better option to invest looking at my maths.

The maths done by me-
I took a case where if I apply for a 15 year money back policy (106-Jeevan Surabhi) sum assured 4lac, I need to pay somewhere around 42k as annual premium for 12 years and I will get 30%, 30% and 40% cash back at the end of 4, 8 and 12 years resp. Accrued bonus will be paid at the end of 15 years equal to 2,04,000 (based on last year bonus which was 3.4% of sum assured for entire term) totaling my return to 6,04,000. Now, if the same annual premium amount if invested in FD each year @ 9.5% gives me a return of around 7.5lac at the end of 16 years (12 FDs each @ 9.5% and amount equal to the annual premium of LIC).


Manshu January 12, 2012 at 2:32 AM

In general, it is a good idea to keep investment and insurance separate and I have compared a few insurance plans here as well and doesn’t look like they are very attractive as far as returns are concerned.


arun January 24, 2012 at 10:50 AM

@ Gaurav

I would like to tweak your maths on Jeevan Surabhi .The 30% which you get at the end of 4 years (around 1 lac) if put for a 10 years FD will fetch you 2.55 lacs on maturity.So at the end of 14 years (4 years+ 10 years FD) you would get 3.55 lacs.You still have two more years for Jeevan Surabhi to mature.So this 3.55 lacs if put in FD for two years will yield to 4 lac 30 thousand.So at the end of 16 years you will get 6,04,000 from your LIC maturity + 4,30,000 from your FD=10,34,000 . The 30 % and 40 % which you get at the end of 8th and 12th year may also be invested wisely to fetch you good returns.


Ganesh February 11, 2012 at 7:53 PM

Thank u!


Varun February 22, 2012 at 9:12 PM

Let us suppose I invested 70,000 in my current year (2011-12) but did not claim tax rebate for this investment in this year. Can I claim this amount and show it as investment in my next year(2012-2013) under PPF Investments ?


Andy March 2, 2012 at 2:25 PM

Thank you so much for kindly sharing knowledge. A Good heart is hard to find – Quote from a song.


Gaurav March 2, 2012 at 5:24 PM

Dude, agreed with your point. But I have not considered the reinvestment for FDs as well. Just considered the 5 yr maturity amount of each FD without reinvesting.

Considering the reinvestment part, at the end of 16 years, all LIC premium investments will give u a consolidated return of 11.2 lac after deducting applicable taxes on interest whereas same investments in FD will give you 14.5 lac.

I don’t comprehend LIC completely as it also gives you a good life cover along with returns. But if somebody wants to invest for the purpose of returns, FD is always a better choice 🙂


Joginder March 3, 2012 at 3:31 PM

I receveived a cheque of amount Rs. 12,750 as survival benefit of the LIC policy. Please let me know whether this amount is counted towards income for the tax pupose or not?


K V Subba Rao September 20, 2012 at 4:52 PM

Not taxable


shyamala March 22, 2012 at 2:18 PM

thank you so much for our sharing information.


satish March 22, 2012 at 4:41 PM

Hi Sir,
Please let me know
Is Gold ETF’s come under tax saving funds or not ?


Manshu March 24, 2012 at 11:38 PM

No, it does not.


Jalapati Rajesh July 23, 2012 at 1:08 PM

Is There Any TAx Liability On the Matured Amount On Recurring deposit And Fixed deposit Received


Manshu July 29, 2012 at 2:08 AM

Yeah RD maturity amount includes interest amount as well so tax is applicable on that part if you haven’t already paid it.


Jalapati Rajesh July 23, 2012 at 1:10 PM

What Is the Meaning Of”
Closing Of SN” In Bank Terminology


Joginder September 21, 2012 at 11:04 AM

I think a maximum limit on the PPF deposit P/a is now Rs. 1,00,000.


khajamynuddin January 19, 2013 at 8:52 PM

I have paid lic on my mothers name for amount 1 lakh… can i show this amount under 80c deductions


h rajesh June 20, 2014 at 8:27 PM

Very good combo investment plan. After getting this investment plan no one need to go for any life insurance forever and can make a huge amount in comming years with systemetic transfer plan and traditional plan. Those who can save monthly minimum 4000 and more contact to get for finential analysis and investment at 08253020181 .only in bhopal.


Md. Roficul Hoque February 2, 2016 at 8:48 AM

How to deposit Income Tax and where individually ? I am a High School Teacher joined newly


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