The correct answer is D. 80C.
Section 80C of the Income Tax Act, 1961 allows an individual to claim a deduction of up to Rs. 1.5 lakh in a financial year from his/her gross total income for investments made in certain specified financial instruments, including ULIPs.
ULIPs, or Unit-Linked Insurance Plans, are a type of life insurance policy that also offers investment options. The premiums paid for ULIPs are invested in a mix of equity, debt, and other assets, and the policyholder earns returns on these investments. In addition, ULIPs provide life cover, which is the amount that will be paid out to the policyholder’s nominee in the event of the policyholder’s death.
The tax benefits offered under Section 80C make ULIPs a popular investment option for individuals looking to save for retirement, education, or other goals.
Here is a brief explanation of each option:
- Option A: Section 58C of the Income Tax Act, 1961 allows an individual to claim a deduction of up to Rs. 2 lakh in a financial year from his/her gross total income for investments made in a residential house.
- Option B: Section 65B of the Income Tax Act, 1961 allows an individual to claim a deduction of up to Rs. 1.5 lakh in a financial year from his/her gross total income for investments made in a National Pension Scheme (NPS).
- Option C: Section 78A of the Income Tax Act, 1961 allows an individual to claim a deduction of up to Rs. 50,000 in a financial year from his/her gross total income for investments made in a tuition fee for his/her child’s education.
- Option D: Section 80C of the Income Tax Act, 1961 allows an individual to claim a deduction of up to Rs. 1.5 lakh in a financial year from his/her gross total income for investments made in certain specified financial instruments, including ULIPs.