Last Chance to Maximize Tax Savings Under Section 80C Before March Ends
Last Chance to Maximize Tax Savings Under Section 80C Before March Ends
With March coming to an end, this is the final opportunity to make the most of tax-saving options for the financial year. One of the most common ways to save on taxes is through Section 80C of the Income Tax Act. However, this applies only if you follow the old tax regime. In the new tax regime, this deduction is not available.
How to Claim Section 80C Benefits Without Investing This Year
Most tax-saving options under Section 80C require you to invest or spend money. However, there is one way to claim the deduction without making a fresh investment in the current financial year.
According to Sanjoli Maheshwari, Executive Director at Nangia Andersen India, if you have previously invested in the National Savings Certificate (NSC), you can still claim a tax deduction. This is because the interest earned on NSC for the first four years is considered as a reinvestment and qualifies for Section 80C deduction, up to the annual limit of ₹1.5 lakh.
Important Rule About NSC Interest
- NSC has a five-year tenure. The amount you invest qualifies for Section 80C deduction in the year of investment.
- Interest earned in the first four years is treated as reinvested and is also eligible for a tax deduction under Section 80C.
- However, interest earned in the fifth year is not eligible for a deduction, and it is taxable under “Income from Other Sources.”
If you have an NSC investment, make sure to claim the deduction for interest earned in the first four years before the financial year ends!
Source: The Economic Times
