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Important Deductions Under Section 80C That A Taxpayer Can Claim

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Most salaried people wait till the last moment to do their tax planning and end up paying higher income tax or frantically investing in tax saving instruments that may not be appropriate for them.

By planning and spending time in researching various tax saving options, they can make better investment decisions and also save on income tax. Section 80c of income tax act specifies the investments that can help you save tax. The amount that you invest in these tax-saving instruments can be deducted from your taxable income at the time of calculating your tax amount for the year. The maximum deduction allowed under this Section is Rs.1.5 lakh per year.

section 80c of income tax act

It is important to know the various investments that fall under Section 80C in order to take informed decisions at the time of tax planning:

1) Provident Fund and Voluntary Provident Fund

The amount that is deducted from your salary as your contribution towards PF is eligible as deduction at the time of calculating your income tax. You have the option of enhancing the contribution that you make to your Provident Fund. This is called Voluntary Provident Fund and is eligible for income tax deduction under section 80C. Interest earned up to 9.5% is tax-free.

2) Public Provident Fund

This is a scheme offered by the government. You can invest any amount from Rs.500 to R.1,50,000 in a year, under this scheme. Your contribution to the Public Provident Fund is eligible for income tax deduction. The current interest rate in PPF is 9.5% and the interest is tax free as well.

3) Life Insurance Premiums

Any life insurance premium that you pay towards policies in your name, your spouse’s name or your children’s name are eligible for income tax exemptions under 80C. Premiums paid towards unit-linked policies are also eligible for tax deduction.

4) Equity Linked Savings Schemes

These are specially created mutual fund schemes that are meant for tax saving and gives you market-related returns. Any amount that you invest in ELSS funds is eligible for tax deduction.

5) Home Loan Principal Repayment

The EMI that you pay consists of two parts – the interest and the capital repayment. The amount that goes towards principal repayment qualifies for income tax deduction under sec 80C.

6) National Savings Scheme

This is a tax saving scheme with tenor of 5 years. Any contribution to NSC qualifies for sec 80C. The interest from NSC is compounded half-yearly and is taxable.

7) Infrastructure Bonds

Infrastructure bonds issued by infrastructure companies are eligible for income tax deduction.

8) Five-Year Bank FD

Any amount deposited as FD in a scheduled bank, for a period of at least 5 years is eligible for section 80C of income tax.

9) Term Deposits with Post Office

Term deposits with Post Office with tenor of 5 years is eligible for tax deduction.

10) NABARD Rural Bonds

Investing in NABARD rural bonds gives you tax relief under Section 80C.

11) Tuition Fee

The amount that you pay as tuition fee for your children, for a maximum of 2 children, is eligible for income tax deduction.

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Health

February is American Heart Month – Celebrate With Medical Alert IDs

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Making healthy choices and keeping track of your health conditions can significantly reduce your chances of having a heart disease. But, the ones who are already affected need a lot more than this advice – they need care, vigilance, and, sometimes, little attention. February is American Heart Month, and it’s a great chance for us to show concern for heart patients and raise awareness about heart diseases and their prevention.

More importantly, it’s time for us to take heart problems and sufferers seriously. Shockingly, about 48% of adults (which is almost half of the adult American population) suffer from some sort of blood vessel or heart disease. According to the CDC, heart diseases are the number-one cause of adult deaths in the United States.

If people with heart conditions were identifiable, chances of getting requisite medical help on time would significantly increase, lowering the number of deaths. Medical ID tags and jewelry can come in handy for the identification of heart patients, seeking help in an emergency.

Which Heart Disease Patients Must Opt for a Medical ID?

Although all sorts of heart conditions and diseases can be (and should be) engraved on medical IDs, getting one is highly recommended for patients of the below-mentioned conditions.

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Business

How To Get Rid Of Debts With The Best Debt Management Program

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Sometimes you have so much money that you think, how you can swim in money like Scrooge McDuck. Sometimes you have to take the extreme of bankruptcy. Hardly anyone can say that he is immune to financial ruin. Lack of job opportunities, increasing cost of living and other factors can bring financial difficulties in your everyday life. If you are buried deep under debt, you want to get rid of them as quickly as possible.

A debt management plan is one of the ways you can beat financial challenges due to debt. You will sit with a credit counselor and he will create the best debt management program after evaluating your financial situation. It is a plan you can easily afford. The counselor will negotiate with all of your lenders. This program will allow you to make lower payments possible. You will be able to get rid of your debt in three to five years.

Instead of sending money to different lenders, you will make one monthly payment to the debt management company. Now, it is their job to make monthly payments to your lenders and creditors. The company can get more favorable terms for you such as longer repayment periods and lower interest rates. So, having the best debt management program makes your life simpler as you are paying less money and making only one monthly payment.

Though it will hurt your credit score, it is not as damaging as a bankruptcy. As your loan balances start to decrease, your credit score starts increasing.

One thing you should keep in mind is that not all loans are included in this program. A debt management plan does not include secured debts. Student loans and some other unsecured loans are also not included.

Creating Your Debt Management Plan (DMP)

Finding A Credit Counseling Agency

Don’t work with any random credit counseling agency that has called you yesterday. Make sure that it is a member of the NFCC (National Foundation for Credit Counseling). It should be a reputed credit counseling agency having an excellent track record. Your lenders and credit issuers should be able to trust the agency.

The first credit counseling session is often free. Always ask about the fee of subsequent sessions and documents you have to bring.

What To Expect During Counseling

When you are meeting your counselor for the first time, you need to bring bills for each lender, your recent pay stubs and banking statements. It is good to have a copy of your credit report. Telephone meetings and web meetings are also very common. So, you might not have to see your counselor in person. In this forty-five minutes to an hour-long initial session, the counselor will assess your debts, incomes, and expenses. The counselor also pays attention to the interest rate you are paying. After doing all these assessments, the counselor develops an action plan according to your financial goals. Your lenders are not involved in this session.

Making A Choice And Getting Started

The counselor will tell you about the pros and cons of all the available options. You can take your time to make the final decision. In case the credit counselor is pushing you to make an immediate decision, you are working with the wrong company. Carefully consider the debt solution you are choosing. Does your budget allow you to stick to the DMP?

What if the plan fails?

You will be in a worse position. So, act wisely.

Putting Together the DMP

If you choose to go for a debt management program, the counselor will ask for more detailed information to set up the best debt management program for you. You need to tell about the lenders you are including, bank account statements, medical bills, and credit card bills. You cannot miss any of your expenses. Make sure that you are comfortable with the due date.

Start Making Payments

Though you have to make only one monthly payment, it should be made on time. So, get used to following your new budget. Your credit counseling agency will negotiate and reach agreements with your lenders. Keep in mind that not all lenders will accept your plan. Once the lenders agree, start making payments.

Don’t ignore the fact that the debt management program is not the only solution for you. If it is right for you, go for it.

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Business

How to Get a Personal Loan with Low Credit Score

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Personal loans are extremely popular financial solutions, as you need not pledge any assets to avail them. However, as lenders do not have any collateral to fall back on in case you default on the loan, they approve loan applications after gauging your repayment ability. One of the important ways in which they do this is by checking your credit score.

 

Your credit score is a number between 300 and 900 that reflects your creditworthiness. In other words, it indicates your debt handling capabilities by considering your ongoing debts and your repayment behaviour on loans and credit card dues. If you have a score below 750, lenders may hesitate to offer you the loan amount that you seek and they may also charge you a higher interest rate. So, it is very important for borrowers to check credit scores before applying for a loan.

 

If you have a poor credit score, consider these points before applying for a personal loan.

 

Look for a guarantor or opt for a joint loan

When you apply for a loan with a co-applicant or a guarantor, you improve your chances of getting a personal loan on pocket-friendly terms. When selecting the guarantor or co-applicant, remember to select someone with a high income and a good credit score. This way, the lender will be assured of timely repayment.

 

Prove your repayment capacity

While lenders check credit scores of all personal loan applicants, they also check your employment details and salary slips to ascertain your repayment capacity. This is because a steady job and a higher salary directly impacts your ability to repay personal loan EMIs on time. So, when you have a low credit score, you can strengthen your loan application by showing a reliable source of income via your job as well as other sources. If you manage to prove that your income has increased in the recent past or you have other sources of income using which you can successfully repay the personal loan, then despite a poor credit score, you can enjoy approval.

 

Request for a lower loan amount

Lenders do not favour the combination of a large loan amount and a poor credit score. Keeping this in mind, ask for a lower loan amount when you have a low credit score and you may find it easier to get your application approved. To decide on the amount, plan your requirements in advance. Then use an online personal loan calculator to determine the loan structure that works in your favour.

 

Appeal for an NA or NH consideration

Your credit score is based on your credit history, which is how you have handled debt in the past. A lack of any activity in this regard for the last 3 years will leave an NA or NH mark on your credit report. In such a case, your CIBIL report may lack a credit score altogether. You can speak to your lender regarding this status and request them to reconsider your application.

 

Apply after improving your score

One of the best ways to proceed is to work on boosting your credit score before applying for personal loans. Try paying your EMIs and credit card bills on time, avoid defaulting on your debts, and abstain from applying for multiple loans all at once. Keep in mind that several ongoing loans on your name can lower your score. Moreover, your credit report may contain errors or may not have the updated information on loans you have paid off, which impacts your credit score. Therefore, keep an eye on your credit report and rectify mistakes to see your score improve.

 

If you’re facing a medical emergency and do not have enough time to improve your credit score, you can consider applying for a loan from NBFCs who have simpler eligibility criteria. Apart from offering instant funding, NBFCs provide an array of attractive features. For instance, Bajaj Finserv offers personal loans of up to Rs.25 lakh at nominal interest rates and tenors ranging up to 60 months.

 

With easy-to-meet personal loan eligibility criteria and minimal documentation, you can apply for a loan quickly and easily here and even enjoy the features of a flexi personal loan. This allows you to withdraw funds from your total loan in parts, multiple times. Interest is incurred only on the amount you withdraw, and you can choose to pay interest-only EMIs, thus reducing your EMIs by 45%. To make the most of instant loan approval, check your pre-approved offer. This customised deal ensures you get the financing you need without any hiccups.

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