You must pay income tax on the entire amount of money you earn during a fiscal year from all sources, as the law requires. However, you can always lower your taxable income by using certain tax-saving items.

Along with the guidelines for calculating your tax liability, the Indian Income Tax Act of 1961 also contains several income tax deductions and exclusions that you may utilise to lower your taxable income.

People will have the opportunity to lower their tax obligations thanks to tax deductions. People may reduce their tax responsibilities by using several techniques accessible in the country. When it comes to tax-saving options in India, however, many individuals choose the income tax deduction granted by Section 80C of the Income Tax Act, 1961.

Eligible tax deductions lower your tax obligations, allowing you to avoid paying a significant portion of the tax that would otherwise be based on your income bracket. To take advantage of the advantages outlined in the Income Tax Act of 1961, you must submit tax deduction claims with the necessary documentation to back up your claims.

To encourage residents to engage in such activities actively, the Indian government provides deductions on costs related to the common good. Investing in appropriate programs such as insurance plans, national savings schemes, retirement savings schemes, etc., entitles you to tax deductions and exemptions in addition to your charitable donations, medical expenses, and tuition payments.

Let's examine the tax breaks available to individuals for investments under Sections 80C and 80U of the Income Tax Act of 1961.

According to this Section, individuals and Hindu Undivided Families are qualified to deduct up to INR 1.5 lakh per year from certain payments. In combination, this specific sum may be deducted by Sections 80C, 80CCC, and 80CCD.

Investments in the following categories are eligible for deductions:

• Contribution to the Provident Fund or Superannuation
• The purchase of life insurance for oneself, one's spouse, or one's children.
• Payment for the education of up to two children's tuition expenses
• Payment for a fixed deposit with a five-year minimum term
• Payment for a residential property's development or acquisition
• Additional deductions for mutual fund investments, NABARD bond purchases, Senior Citizen’s Savings Programs, etc.

The following schemes are on the list of qualified investments for tax deductions under Section 80C:

• ELSS (Equity Linked Savings Plans)
• Plans with Unit-Linked Insurance (ULIP)
• Rural NABARD Bonds
• Scheme for Sukanya Samriddhi
• Certificate of National Savings (NSC)
• Older Citizens Savings Programme
• Employee Provident Fund (EPF)
• Public Provident Fund (PPF)
• Voluntary Provident Funds (VPF)
• 5-Year Post Office Time Deposit
• 5-Year Tax Saving Bank Fix Deposit

The purpose of this clause is to provide physically challenged people tax deductions. Tax deductions of up to INR 75,000 are available to those with physical disabilities who are also blind or mentally retarded, up from INR 50,000 in FY 2015–16. From FY 2015 to FY2016, the maximum amount for a severe disability deduction increased from INR 1,00,000 to INR 1,25,000. Autism, cerebral palsy, and other physical disorders are profound disabilities.

If you are fully aware of all the tax deductions available to taxpayers under the Income Tax Act, it will be much easier to lower your taxable income. The objective is to plan and start investing as soon as feasible. Using the list above, you can rapidly determine how your money is spent, calculate the amount, and file deductions for everything that fits into the following categories.