Section 80C lets you deduct up to ₹1.5 lakh a year from taxable income for specified investments and expenses — EPF, PPF, ELSS mutual funds, life insurance premiums, tax-saving FDs, NSC, Sukanya Samriddhi, SCSS, home-loan principal, stamp duty on a new home and children's tuition fees. It is available only in the old tax regime. If you opt for the new regime in FY 2026-27, 80C investments do not reduce your tax at all.
80C works only in the old regime
The new regime is the default. It offers lower slab rates, a ₹75,000 standard deduction and the 87A rebate that makes tax nil up to ₹12 lakh of taxable income — but it drops most deductions, including 80C, 80D and 80CCD(1B). So before buying any "tax-saving" product, decide which regime you will choose. For many salaried people up to the mid-teens of lakh, the new regime wins even with a full ₹1.5 lakh of 80C. Check yours with the old vs new regime comparison.
A note on law: the Income-tax Act, 2025 replaces the 1961 Act from 1 April 2026 and renumbers many provisions. The deductions described here broadly carry over, but forms and software may show new section numbers. We use the familiar 80C name because that is still how most people search for it.
Complete list of 80C investments and expenses
Investments
- Employee Provident Fund (EPF) — your own 12% contribution counts automatically; voluntary PF (VPF) counts too. Our EPF calculator projects the balance.
- Public Provident Fund (PPF) — up to ₹1.5 lakh a year, 15-year tenure, tax-free interest (currently 7.1%).
- ELSS mutual funds — equity-linked savings schemes with a 3-year lock-in, the shortest among 80C options. Returns are market-linked and not guaranteed; mutual fund investments are subject to market risk. Gains are taxed as equity LTCG at 12.5% above ₹1.25 lakh a year.
- Tax-saving fixed deposit — 5-year lock-in with a bank; interest is taxable at your slab rate.
- National Savings Certificate (NSC) — 5-year post-office scheme; interest is taxable, though reinvested interest for the first four years itself qualifies for 80C.
- Sukanya Samriddhi Yojana (SSY) — for a girl child under 10; tax-free interest and maturity. See the Sukanya Samriddhi calculator.
- Senior Citizens Savings Scheme (SCSS) — for those 60 and above; deposits qualify, interest is taxable.
- NPS (own contribution) under 80CCD(1) — up to 10% of salary, within the 80C limit. An additional ₹50,000 is available separately under 80CCD(1B).
- Pension plans under 80CCC — premiums for certain annuity plans, within the same overall limit.
- Unit Linked Insurance Plans (ULIPs) — premiums qualify subject to conditions, with a 5-year lock-in.
Expenses and payments
- Life insurance premium — for self, spouse or children. For policies issued after 1 April 2012, the deductible premium is capped at 10% of the sum assured.
- Home-loan principal repayment — for a residential property; selling the house within 5 years of possession reverses the deduction.
- Stamp duty and registration charges — in the year you pay them for buying a residential house.
- Children's tuition fees — for full-time education in India, for up to two children. Only tuition, not development fees, transport or donations.
Sections 80C, 80CCC and 80CCD(1) together share one combined cap of ₹1.5 lakh under Section 80CCE.
Worked example: how much 80C actually saves
Take a salaried person with ₹16 lakh gross salary in the old regime. Employee PF is ₹57,600 a year (12% of a ₹4.8 lakh basic), and they pay ₹30,000 in children's tuition fees. That is ₹87,600 already counted. Adding ₹62,400 to PPF fills the ₹1.5 lakh limit.
Because their taxable income is above ₹10 lakh, that last ₹62,400 saves tax at 30% plus 4% cess — about ₹19,500. The full ₹1.5 lakh of 80C is worth about ₹46,800 in the 30% slab, ₹31,200 in the 20% slab and ₹7,800 in the 5% slab. But these savings matter only if the old regime is cheaper for you overall.
How to choose among 80C options
- Count what you already have. EPF, tuition fees, life insurance and home-loan principal often use up most of the limit. Do not invest more than you need to fill the gap.
- Match the lock-in to your goal. ELSS has 3 years, tax-saving FD and NSC 5 years, PPF 15 years.
- Compare post-tax returns. PPF and SSY are tax-free; FD and NSC interest is taxable; ELSS is market-linked.
- Do not buy insurance to save tax. Traditional endowment plans often combine low cover with low returns. Decide on insurance by need — see the Term Insurance calculator.
- Invest early in the year. Spreading contributions from April avoids a rushed March decision and improves PPF interest.
Deductions beyond 80C in the old regime
- 80CCD(1B): extra ₹50,000 for your own NPS contribution.
- 80D: health insurance, up to ₹25,000 for self and family, plus up to ₹50,000 for senior-citizen parents.
- 24(b): up to ₹2 lakh of home-loan interest on a self-occupied house.
- 80E: education loan interest.
- HRA exemption if you pay rent.
Employer NPS under 80CCD(2) is the one notable deduction that survives in the new regime as well.
See your tax with and without 80C in the Income Tax calculator, or use the tax saver tool to find which deductions help most.