Is PF included in Section 80C ?
In this article we am trying to clarify one of the much asked question – Under Section 80C, I am aware that we can invest up to Rs 1,50,000 to avail of a deduction. Is our Provident Fund contribution included in this?
Basic annual salary = Rs 4,80,000
PF contribution = Rs 57,600
Employer PF contribution = Rs 57,600
Super Annuation Fund/Gratuity = Rs 50,000
Since I have made a PF contribution of Rs 57,600, does that mean I am only left with Rs 42,400 to avail of Section 80C?
Also, is my taxable salary based on my basic salary, total gross package or take-home salary?
Let’s start with the investments that fall under Section 80C.
- Provident Fund
- Public Provident Fund
- Life insurance premium
- Pension plans
- Equity Linked Saving Schemes of mutual funds
- Infrastructure bonds
- National Savings Certificate
Besides these investments, the payments towards the principal amount of your home loan are also eligible for an income deduction.
Your PF contribution is covered under the Rs 1,50,000 limit of Section 80C, provided it is made to a recognised provident fund. To better understand Section 80C, Read Deduction on section 80C, 80CCC & 80CCD.
In your case, the taxable salary would mean total basic salary of Rs 4,80,000. The taxability of SAF/ Gratuity would be based on the exemption rules only at the time of retiring/ resigning, which is when you will avail of this amount.
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