If your salary (basic plus dearness allowance and retaining allowance, if any) crosses Rs8.34 lakh, you needn’t worry about that last-minute scramble to exhaust your section 80C limit that allows deduction from income up to Rs1 lakh.
Here is why
According to rules, 12% of your basic pay goes towards the Employees Provident Fund, which is one of the most popular investment vehicles under section 80C.
If you don’t tell your HR how much you wish to contribute in this rock solid investment haven, your HR will usually deduct 12% of your salary (basic plus dearness allowance). This 12% qualifies for a deduction under section 80C up to Rs1 lakh. Once you cross the basic annual income threshold of Rs8.3 lakh, your EPF contribution would automatically become Rs1 lakh every year. Since your 80C is taken care of, you could look at other tax-savings products such as a health insurance policy that comes under section 80D.