Under the existing provisions
of section 80C of the Act, an individual or a Hindu undivided family, is
allowed a deduction from income of an amount not exceeding one lakh
rupees with respect to sums paid or deposited in the previous year, in certain specified
instruments. The investments eligible for deduction, specified under
sub-section (2) of section 80C, include life insurance premia,
contributions to provident fund, schemes for deferred annuities etc.
The assessee is free to invest in any one or more of the eligible instruments
within the overall ceiling of Rs. 1 lakh.