Things To Remember While Making Investments For Deduction Under Section 80C

DEDUCTION IS ALLOWED UNDER SECTION 80C IF INVESTMENT IS MADE IN THE PREVIOUS YEAR. THIS MEANS ACTUAL AMOUNT MUST BE PAID IN THE PREVIOUS YEAR.

POINTS TO REMEMBER WHILE DOING A INVESTMENT TO CLAIM DEDUCTION UNDER SECTION 80C :

1) If you have Long Term Capital Gain or Short Term Capital Gain. No Deduction will be allowed in respect of those incomes.

2) If you made an investment in ULIP plans then you cannot stop paying the participation or premium till 5 years. If ULIP terminates in the 5 years period, all deduction allowed in the PREVIOUS YEARS WILL BE TREATED AS INCOME OF THIS YEAR (WHEN ULIP TERMINATES).

3) If LIFE INSURANCE PREMIUM is not paid for 2 YEARS then all deduction allowed will be TREATED AS INCOME WHEN POLICY TERMINATES.

4) If deductions were claimed under 80C on repayment of loan on RESIDENTIAL HOUSE PROPERTY, then If the PROPERTY IS TRANSFERRED IN 5 YEARS OF POSSESSION THEN ENTIRE DEDUCTION WILL BE TREATED AS INCOME.

5) If deduction is taken in respect of EQUITY SHARES AND DEBENTURES Under 80C, If Sells THEM IN 3 YEARS FROM DATE OF PURCHASE. ENTIRE DEDUCTION IS TAXABLE.

6) If deduction was claimed on account of INVESTMENT IN SENIOR CITIZEN SAVINGS SCHEME OR INVESTMENT IN POST OFFICE DEPOSITS. ANY WITHDRAWAL INCLUDING INTEREST BEFORE 5 YEARS SHALL BE DEEMED TO BE INCOME OF THE YEAR IN WHICH WITHDRAWAL TOOK PLACE.

Nature of Investments/Deposits	Minimum Holding Period
ULIP of UTI or LIC	5 Years
Life insurance policy	2 Years
Senior Citizens Saving Scheme and Post Office Time Deposit	5 Years