How 80C schemes can help you in building long term wealth.

Podcast Duration: 05:15

Hi friends… Angel One ke is podcast mein aapka swagat hai.

Doston good tax planning can be a crucial move in your journey to building wealth in the long run. On the other hand, agar aap apne earning aur taxes par dhyan nahi de rahe hain, toh they can be a major hurdle in building a corpus of wealth in the long run.

But there are a number of provisions in the indian income tax act, that can help you save your hard earned money from being taxed at hefty rates. But before we explore these strategies, check out Shivam’s story - Shivam earns a modest amount of money from trading in the stock market, lekin his money didn’t last - and more importantly, fiscal year ke end mein he ends up paying a good chunk of his earnings in the form of taxes. Actually, Shivam loves to spend money - he buys a lot of gadgets, and because he lives away from his home, he likes to either dine out, or order food online. Because of these reasons, he is struggling to build a good financial plan. He manages to save money in his bank account, but tax payments ki cycles mein all his savings are impacted. Toh Shivam is very fed up of paying so much money to taxes, when he manages to save only enough to be able to file his tax returns every year.

Sounds troublesome, but the reality is ki India mein, many young investors are unable to see the problem because of the absence of a solid tax plan. The truth is that financial planning and tax planning are so closely related, because they are almost two sides of the same coin. And more importantly, tax planning, saving aur wealth building can go hand in hand. Kya aap jaanna chahte ho, ki how you can save your hard-earned money from getting taxed? Then let’s dive in right away.

Waise toh indian income tax act of 1961 has a number of provisions that determine how your money will get taxed under various circumstances, section 80C must be explored by young people who are embarking on their tax planning journey.

Indian income tax act ke section 80C mein, you can find a number of elegant and efficient ways to save your earnings from taxes. Here are 5 ways in which section 80c can help you save taxes, and ultimately build wealth in the long run.

Number 1 - Invest in ELSS.

Doston ELSS, ya fir equity linked savings schemes are one of the smartest ways to not only save taxes, but they also serve as great investment vehicles. Equity linked saving schemes mein lock in period kewal 3 saal ka hota hai. As the name suggests, these schemes are linked to equity-based instruments, because of which the returns on these are relatively higher than what you get on FDs.

Although inpar earned interest is partially taxable, ELSS can help you save 1.5 lakhs of your invested money from getting taxed under section 80C.

Number 2 - Invest in PPF

PPF stands for public provident fund. PPFs are one of the most popular ways to save money under section 80C of the indian income tax act. PPFs par the interest rate averages around 8% currently, which is higher than what you get with most FDs. PPF account koi bhi salaried ya non-salaried individuals start kar sakte hain, lekin inka minimum lock in period is around 15 years - aap is tenure ko extend kar sakte ho by a period of 7 years.

The good news is the PPF accounts par aap jo interest earn karte ho, that is tax free too - and you can make partial withdrawals 7 years after the start date. Cool, right?

Toh chaliye dekhte hain

Number 3 - Investments in NPS

NPS stands for the national pension system. Under section 80C, investments of upto 1.5 lakhs towards NPS are eligible for tax deduction under section 80C of the income tax act. NPS par the interest rates vary between 12 and 14% - cool, right? But the only catch is that you can start making partial withdrawals under this scheme only after 15 years, and woh bhi under special circumstances. Anyone between the age of 18 and 60 can start making investments under the NPS scheme. The good thing is, investments made towards the NPS scheme have no upper limit - you can invest as much as you want, but only upto 1.5 lakhs can be claimed for deductions.

Doston these are just a few ways in which you can save taxes under section 80C of the income tax act. But section 80C has other provisions too. For starters, even if you invest upto 1.5 lakhs a year in an FD with a minimum lock-in of 5 years, you can claim those funds for deduction. Same goes for ULIPs, repayment of loans on residential property, and even payments made towards your children’s tuition fees.

Doston iss podcast mein aap ek baat zaroor samajh gaye honge - tax saving and financial planning actually are two sides of the same coin.

So which scheme sounds the most appealing to you out of all the provisions under section 80C?

If you are looking to know more about tax saving and investment options, you can find a wealth of material on

Toh doston, aaj ke podcast mein itna hi. Milte hain, in the next one. Until then, goodbye from angel broking, and happy investing!