Section 80C —
Rs 1.5 Lakh, Old Regime Only
The Section 80C deduction limit, the full list of eligible investments and expenses, why it works only under the old tax regime, and exactly how to claim it in your ITR.
Section 80C lets an individual or HUF deduct up to Rs 1,50,000 a year from taxable income for specified investments and expenses — only under the old tax regime. This Rs 1.5 lakh is a combined ceiling with Sections 80CCC and 80CCD(1). At the 30% slab, a full 80C claim saves Rs 46,800 in tax (incl. 4% cess). Popular options: PPF, ELSS, EPF/VPF, life-insurance premium, NSC, 5-year tax-saving FD, home-loan principal, tuition fees and Sukanya Samriddhi.
From AY 2026-27, the Income-tax Act, 2025 has renumbered the old Section 80C of the Income-tax Act, 1961 as Section 123. The Rs 1.5 lakh limit and the list of eligible investments are unchanged — "80C" remains the everyday name used by taxpayers and employers.
Section 80C Eligible Investments & Expenses
Every item below counts towards the single combined Rs 1.5 lakh ceiling. Rates shown are the small-savings rates for Q2 FY 2025-26 (Jul–Sep 2025), reviewed quarterly by the government.
| Investment / Expense | Return | Lock-in | Notes |
|---|---|---|---|
| PPF (Public Provident Fund) | 7.1% | 15 years | Fully exempt (EEE); partial withdrawal after year 7 |
| ELSS mutual funds | Market | 3 years | Shortest lock-in; LTCG above Rs 1.25L taxed at 12.5% |
| EPF / VPF (employee share) | 8.25% | Till retirement | Employer share is separate; VPF also qualifies |
| Life-insurance premium | Policy | Policy term | Premium must be ≤10% of sum assured (policies after 1 Apr 2012) |
| 5-year tax-saving FD | 6.5–7.25% | 5 years | Interest is taxable; no premature withdrawal |
| NSC (National Savings Certificate) | 7.7% | 5 years | Accrued interest reinvested also qualifies |
| Sukanya Samriddhi Yojana (SSY) | 8.2% | Till girl turns 21 | Girl child below 10; max Rs 1.5L/year |
| Senior Citizens Savings Scheme (SCSS) | 8.2% | 5 years | Age 60+; max Rs 30 lakh |
| NPS Tier-1 (80CCD(1)) | Market | Till age 60 | Within the 80C ceiling; extra Rs 50k via 80CCD(1B) |
| Home-loan principal repayment | — | 5 years (no resale) | Stamp duty & registration also eligible in year of purchase |
| Tuition fees (up to 2 children) | — | None | Full-time education in India; no donation/development fees |
Interest rates as of Q2 FY 2025-26; small-savings rates are revised quarterly. ELSS/NPS returns are market-linked and not guaranteed.
80C Works Only Under the Old Regime
The new tax regime is now the default. It offers lower slab rates but disallows almost all Chapter VI-A deductions, including 80C. To claim 80C you must actively opt for the old regime when filing.
Old regime — 80C available
- Full Rs 1.5 lakh 80C deduction
- 80D, 80CCD(1B), 24(b) home-loan interest allowed
- Standard deduction Rs 50,000 (salaried)
- Best when total deductions are high
New regime (default) — no 80C
- Section 80C not available
- Only 80CCD(2) employer NPS & 80JJAA allowed
- Standard deduction Rs 75,000 (salaried)
- Rebate u/s 87A up to Rs 12L taxable income
- Simpler — best with few deductions
Do not lock 80C investments in and then discover the new regime saves you more. If your deductions (80C + 80D + home-loan interest) are modest, the new regime's lower rates and Rs 75k standard deduction can beat the old regime even without 80C. Run the numbers first.
Not sure which regime saves you more?
Compare with an expert →How Much Tax Does 80C Actually Save?
80C is a deduction from income, so the tax you save equals Rs 1.5 lakh multiplied by your marginal slab rate (plus 4% cess). Here is the saving at the top two old-regime slabs on a full Rs 1.5 lakh claim.
30% slab taxpayer
20% slab taxpayer
Add the extra Rs 50,000 NPS deduction under 80CCD(1B) and a 30%-slab taxpayer can deduct Rs 2 lakh in total — a further Rs 15,600 saved. See our income-tax slabs for the exact rate that applies to you.
80C is worth maxing if
- You are on the old regime with income above Rs 5–6 lakh
- You already pay EPF, LIC premium or a home-loan EMI
- You want disciplined, tax-free long-term savings (PPF, SSY)
Reconsider if
- The new regime saves you more overall
- You would lock money in only to save tax
- You need liquidity — most 80C options have long lock-ins
How to Claim Section 80C in Your ITR
- PPF passbook / online statement
- ELSS fund investment statement
- LIC / insurance premium receipts
- EPF & VPF annual statement
- Home-loan principal certificate
- Stamp duty & registration receipts
- Children's tuition fee receipts
- NSC / SSY / SCSS certificates
- Form 12BB submitted to employer
- Old regime selected before filing
For a home loan, only the principal repayment qualifies under 80C; the interest is claimed separately under Section 24(b) (up to Rs 2 lakh for a self-occupied house). Also, the employer's EPF contribution is NOT part of your 80C — only the employee's share counts.
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Get ITR Filing Help →Section 80C — Frequently Asked Questions
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