PPF account 80c

Taxation
1

@Quicko

Hey, can you please explain that if I invest 1.5L per year in a PPF account will I be able to deduct that whole 1.5L from my total income under 80c to reduce my taxable income?
Will I’ve to keep depositing 1.5L each year to keep getting the 80c deduction or is it only 1 time? please be detailed, m very new to taxation and stuff!

2

Yes, you will get exemption upto 1.5 lacks under section 80C. It is on a yearly basis and not one off i.e every year based on the tax laws at that time, you can deposit and get exemption. If you dont deposit you dont get exemption for that year.

Another product that I am aware off which gives exemption is NPS. For NPS you get an exemption of 1.5 lacks under section 80c and 50K under 80CCD(1B). Total 2 lacks.

As per website Clear Tax
“They can split their NPS contribution and claim partly in 80C (1.5L) and remaining in 80CCD(1B), making the most of Rs.2 lakhs of tax deduction.”

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3

Thank you for the quick response! Is it possible to deposit 1.5L in PPF n get 1.5L exemption from it and 50 thousand in NPS to get 50k exemption from it to make total 2L exemption?

4

Yes, the total exemption will be 2L if both PPF and NPS contributions are made in a Finanical Year. Refer to these articles to learn more about it -


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5

The following are the popular investments that qualify for deductions under Section 80C:

The total deduction in one or or part of all is limited to 1.5L. (hope this clarifies)

  • Life insurance premium and medical insurance
  • Contribution towards PPF
  • Investments in ULIPs
  • Contribution towards Senior Citizens Saving Scheme
  • Tax saving fixed deposit
  • Investments in Equity Linked Savings Scheme

Disclaimer: This is from my knowledge, please do your own checking as well.

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6

Hi @FalconZex,

If you invest INR 1.5 lakh per year in a PPF account you will get an exemption of INR 1.5 Lakh under section 80C. To claim this exemption every time you need to deposit INR 1.5 lakh every year. Additionally, You can also claim the deduction for self-contribution to NPS u/s 80CCD (1B) up to INR 50,000. So you can invest an additional INR 50,000 and get a deduction for up to INR 2,00,000 in total.

Keep in mind, itemized deductions under Chapter VIA cannot be claimed under the New Tax Regime

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