An investment in certain schemes (see Table) as specified by the ITA, entitles the individual to tax rebate of 20% of the investment amount. For example, if the investment is Rs. 25,000, the tax payable for that year is reduced by Rs. 5000 (20% of Rs. 25,000). This section allows an overall investment ceiling of Rs. 60,000 p.a. There is also an additional Rs. 10,000 earmarked for investments in the infrastructure, power and telecom sectors (investment can be directly through equity and debenture issues of the companies themselves or indirectly through Mutual Fund schemes).

Schemes eligible for the Tax Rebate
Scheme	Investment Limit
Life Insurance Premiums	No limit
Recognised Provident Fund	No limit
16-yr Public Provident Fund	Rs. 60,000 p.a.
10/15-yr Unit Linked Insurance Plan	Rs. 75,000 target amount
10/15-yr Dhanaraksha	Rs. 75,000 target amount
National Savings Certificate - VIII	No limit
National Housing Bank	No limit
National Savings Scheme-92	No limit
Jeevan Dhara / Jeevan Akshay of LIC	No limit
Equity-Linked Tax-Saving Schemes	Rs. 10,000/-
Retirement Benefit Plan of UTI	No limit
Repayment Installment of Housing Loan	Rs. 10,000/-**
Instruments of Infrastructure Companies	No limit*
Units of MFs Dedicated to Infrastructure	No limit*
Approved Bonds of ICICI, IDBI, etc.	No limit