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Many people fear to file our income taxes; one of the main reasons is a lack of adequate knowledge of the varied sections that help us in saving our taxes.While a number of us are conscious of Section 80C of the Income-tax Act, which is a popular one considering it's highlighted the most in various articles, there are more deductions available under other sections which will be immensely helpful in reducing our taxes.Let us go through the present income tax rates and determine the applicable rates as per the annual income.

Income tax rates for individuals below 60 years of age are as follows –

No tax on income up to Rs. 2.5 lakh
5 percent on income between Rs. 250,001 and Rs. 5 lakh
20 percent on income between Rs. 500,001 and Rs. 10 lakh
30 percent on income above Rs. 10 lakh.

Income tax rates for individuals who are senior citizens (aged 60 years but below 80 years of age) follow –

No tax on income up to Rs. 3 lakh
5 percent on income between Rs.300,001 to Rs. 5 lakh
20 percent on income between Rs. 500,001 and Rs. 10 lakh
30 percent on income above Rs. 10 lakh.

Income tax rates for individuals who are super senior citizens (aged 80 years and above) are as follows –

No tax on income up to Rs. 5 lakh
20 percent on income between Rs. 500,001 and Rs. 10 lakh
30 percent on income above Rs. 10 lakh.

Claiming Tax Deductions through Section 80C

Section 80C of the IT Act (Income Tax Act) is one of the most common routes used by individuals to save lots of tax on income. According to this section, HUF/Hindu Undivided Families or individuals can seek a maximum tax deduction of INR 1.5 lakhs from the gross income, for investments or expenditures made in specific areas, and then calculate the whole taxable income for the particular financial year. It's important to notice that the tax write-off is often claimed by a private or HUFs as long as the investment or expense is formed within the financial year that the income tax return is filed.

When the tax deduction is claimed, the total gross income on which taxes need to be paid becomes less as compared to the real income. For instance, if your yearly income is INR 7.5 lakhs and you have invested/spent INR 1.5 lakhs on the specific areas which are allowed for tax deduction as per the laws, then the entire taxable amount after the deduction will be INR 6 lakhs. Thus, you'll get to pay taxes on INR 6 lakhs of income after the deductions rather than INR 7.5 lakhs.

Listed below are some of the options that taxpayers can invest into avail of tax deductions under Section 80C of the IT Act:

• Investments in several sorts of provident funds like VPF, EPF, superannuation funds, or PPF EPF/employees’ provident fund is a component of salary that gets deducted and is eligible for tax deduction claim. But interest of over 9.5% on EPF is taxable. Also, the contribution of over 12% by employer on EPF is taxable. Extra contribution by employee to provident fund is named VPF/voluntary provident fund and is eligible for tax deduction.
• PPF/Public provident fund is a government scheme and eligible for tax deduction under 80C. Interest is assured but not fixed and is about quarterly. Interest is tax-free and the maturity period is 15 years.
• Payment of premiums to ULIP, life insurance, annuity plans Life insurance premium payments for spouse, children, and self are eligible for tax deductions under 80C. Life insurance for in-laws or parents is ineligible.
• ULIPs offer life assurance coverage also as equity investment benefits. Since it offers life cover, the fees levied are above ELSS or PF. ULIP investments are eligible for tax benefits under 80C.
• Contributions to KVP/Kisan Vikas Patrika, NSC/National Saving Certificate, Post Office 5-year Term deposits/POTD, SCSS/Senior Citizen Savings Scheme, and 5-year fixed deposits in bank.
• People who are 60 years old or older can invest in SCSS. People who are between 55 years and 60 years old and have taken retirement under a Special Voluntary Retirement Scheme or a VRS/Voluntary Retirement Scheme are also eligible for SCSS within three months from the date of retirement. Retired defense people can invest in SCSS only till they are 50 years of age. Interest is set and paid every quarter. Unclaimed interest does not earn extra interest and is liable for taxation. Investment in SCSS is eligible for tax deduction under 80C.
• People can invest INR 100 on NSC and there is no maximum limit. NSC investment is eligible for the maximum tax benefits available under 80C. Interest earned is reinvested into NSC till the last year of maturity. Interest is about and paid quarterly.
• Unclaimed interest doesn't earn extra interest and is responsible for taxation. Investment in SCSS is eligible for tax write-off under 80C.
• Fixed deposits in scheduled banks for 5 years are eligible for tax deductions under 80C.
• POTDs are just like fixed deposits in banks. Tax deductions are available for only 5-year POTDs and not for those with lesser maturity periods. Interest is set every quarter, compounded every quarter, and paid every year. The investment is eligible for tax benefits, but the interest earned is taxable.