What are the Tax Saving Investments?

TAX SAVING INVESTMENTS : There are certain schemes introduced for the purpose of
tax saving. These schemes provide income tax benefits to the investors who invest in
these schemes. Under Section 80C of the Income Tax Act, 1961, the following schemes
are eligible for tax saving. The Finance Act, 2010 provides tax exemption ` 1,00,000 for
the investments in the following schemes :
(1) Life Insurance Premium : Life insurance premiums paid by a person on his life or
on the. life of spouse or on life of any child of that person is entitled for deduction
under this section. Maximum premium of 20% of the policy amount can be allowed
for deduction. Public
(2) Provident Fund : Investment made by an individual towards the 15 year Public
Provident Fund set up by the 12 Investment Analysis and Portfolio Management
(BMS) government under the Public Provident Fund Scheme, 1968 is qualified for
deduction upto a maximum of ` 70,000 in a year.
(3) Post Office Savings Deposits : Any sum deposited in a 10 year or 15 year account
under the Post Office Savings Bank Rules 1959 by an individual is entitled for
deduction upto a limit of ` 1,00,000.
(4) National Savings Certificate (NSC) : Amount invested by an individual in National
Savings Certificate issued by post office is entitled for deduction.
(5) Unit Linked Insurance Plan (ULIP) : Investments made by an individual for
participating in the Unit Linked Insurance Plan of Unit Trust of India are entitled for
deduction upto an amount of ` 1,00,000 in a year.
(6) Deposits in National Housing Bank : Any sum invested in home loan account
scheme of the National Housing Bank is entitled for deduction upto an overall limit of
` 60,000 in a year.
(7) Repayment of Housing Loan : Payment not exceeding ` 1,00,000 in respect of loan
instalment or repayment of housing loan taken for the purpose of a residential house
is entitled for deduction.
(8) Fixed Deposit : FD in a bank for more than 5 years maturity period is allowed as
deduction upto ` 1,00,000.
(9) Mutual Fund : Investment upto ` 1,00,000 in units of a mutual fund referred to in
Section 10(23D); popularly known as Equity Linked Savings Scheme (ELSS) and
approved by the board are eligible for deduction under this act.
(10) LIC’s Pension Plan : The premium paid for LIC’s New Jeevan Suraksha policy
qualifies for deduction upto a limit of ` 1,00,000 in a year.
In addition deduction of ` 20,000 is available u/s 80CCF of the Income Tax Act, 1961
towards the amount invested in the Infrastructure Bonds which will be of Long Term in
nature.