Section 80C — Deduction Limit, Eligible Investments & How to Claim
Updated: 3 June 2026 | Income-tax Act, 2025 | Old Tax Regime Only
What is Section 80C? Section 80C of the Income-tax Act allows a deduction of up to ₹1,50,000 (₹1.5 lakh) per year from your taxable income for specified investments and expenses — available only under the old tax regime. Eligible investments include: PPF (Public Provident Fund), ELSS mutual funds, EPF/VPF employee contribution, NSC (National Savings Certificate), life insurance premiums, 5-year tax-saving FDs, home loan principal repayment, tuition fees for 2 children, and Sukanya Samriddhi Yojana. The deduction reduces your taxable income directly — at a 30% slab rate, ₹1.5 lakh of 80C saves ₹46,800 in tax (including 4% cess).
₹1.5L
Annual 80C deduction limit — old tax regime only. Saves up to ₹46,800 in tax at 30% slab.
Not available in the new tax regime. Combine with NPS (80CCD(1B)) for ₹50,000 additional deduction.
Not available in the new tax regime. Combine with NPS (80CCD(1B)) for ₹50,000 additional deduction.
Complete List of Section 80C Eligible Investments
All investments and expenses below count towards the combined ₹1.5 lakh Section 80C ceiling.
| Investment / Expense | Current Rate / Returns | Lock-in Period | Risk Level | Notes |
|---|---|---|---|---|
| PPF (Public Provident Fund) | 7.1% p.a. (tax-free) | 15 years | Very Low | Fully exempt (EEE); partial withdrawal after year 7 |
| ELSS Mutual Funds | Market-linked (12–15% hist.) | 3 years | Medium–High | Shortest lock-in; LTCG above ₹1.25L taxable at 12.5% |
| EPF / VPF Contribution | 8.25% p.a. (FY 2024-25) | Till retirement | Very Low | Employee contribution qualifies; employer share is separate |
| Life Insurance Premium | Varies (policy-dependent) | Policy term | Very Low | Premium must be ≤10% of sum assured; term plans included |
| 5-Year Tax-Saving FD | 6.5–7.25% p.a. | 5 years | Very Low | Interest is taxable; no premature withdrawal |
| NSC (National Savings Certificate) | 7.7% p.a. (compounded annually) | 5 years | Very Low | Accrued interest reinvested; also qualifies for 80C |
| Sukanya Samriddhi Yojana (SSY) | 8.2% p.a. (tax-free) | Till girl turns 21 | Very Low | Only for girl child below 10 years; max ₹1.5L/year |
| Home Loan Principal Repayment | N/A (liability payment) | 5 years (no resale) | Very Low | Stamp duty + registration also eligible in year of purchase |
| Tuition Fees (2 children) | N/A (expenditure) | None | Very Low | Full-time education in India; school/college fees only — no donations or development fees |
| NPS — Tier 1 Employee (80CCD(1)) | Market-linked (10–12% hist.) | Till age 60 | Low–Med | Employee NPS within 80C ceiling; additional ₹50K via 80CCD(1B) |
| Senior Citizens Savings Scheme (SCSS) | 8.2% p.a. | 5 years | Very Low | For persons 60+ years only; max investment ₹30L |
Note: Interest rates as of Q1 FY 2025-26. Small savings rates are reviewed quarterly by the government and may change. ELSS returns are indicative based on category historical averages — mutual fund investments are subject to market risk.
How to Claim Section 80C Deduction
To claim the 80C deduction when filing your ITR:
1. Choose the old tax regime when filing ITR (80C is not available in the new regime).
2. Collect proof of investments: PPF passbook, ELSS fund statement, LIC premium receipt, EPF statement, home loan certificate showing principal repaid, school fee receipts, etc.
3. Declare in ITR: In ITR-1 or ITR-2, go to the "Deductions" schedule (Schedule VI-A). Enter the total 80C amount (capped at ₹1,50,000).
4. Submit to employer (for TDS adjustment): At the start of the financial year, submit a declaration of planned 80C investments to your employer so they reduce TDS on salary accordingly. Provide actual proof by December–January.
Frequently Asked Questions
What is the Section 80C deduction limit?
The maximum deduction allowed under Section 80C is ₹1,50,000 (₹1.5 lakh) per financial year. This limit is a combined ceiling for all eligible investments and payments under Section 80C, 80CCC (pension fund), and 80CCD(1) (NPS employee contribution) together. So if you invest ₹1 lakh in PPF and ₹75,000 in ELSS, only ₹1.5 lakh is deductible — not ₹1.75 lakh. The limit has not been increased since FY 2014-15.
Which are the best 80C investment options?
The "best" 80C option depends on your goals: For highest potential returns — ELSS mutual funds (market-linked, 3-year lock-in, typically 12–15% CAGR historically). For guaranteed returns — PPF (7.1% p.a., 15-year tenure, fully exempt) or Sukanya Samriddhi Yojana (8.2% p.a., for girl child). For lowest lock-in — ELSS at 3 years vs PPF at 15 years. For insurance cover combined with investment — LIC endowment/ULIP policies (though pure term insurance + separate investment is usually better). For those with home loans — home loan principal repayment is auto-counted under 80C.
Is 80C available in the new tax regime?
No. Section 80C deduction is NOT available under the new tax regime. If you opt for the new tax regime (which has lower slab rates), you cannot claim any 80C deductions. The new regime is beneficial for taxpayers who have minimal deductions or prefer simplicity. The old tax regime continues to allow 80C and other deductions. You can choose your regime each financial year (if you have no business income).
Can I claim 80C for home loan principal repayment?
Yes. The principal component of your home loan EMI is eligible for deduction under Section 80C up to the overall limit of ₹1.5 lakh. This is available only for a self-occupied or let-out residential property purchased or constructed with the loan. Note that stamp duty and registration charges paid for the property also qualify for 80C in the year of payment. The interest component of the home loan is separately deductible under Section 24(b) — up to ₹2 lakh for self-occupied property.
Is EPF contribution eligible for 80C?
Yes. The employee's contribution to Employees' Provident Fund (EPF) is eligible for deduction under Section 80C. This is automatically deducted from your salary by your employer and deposited into your EPF account. The employer's contribution to EPF is NOT eligible for 80C (it is exempt from tax separately). If you make Voluntary Provident Fund (VPF) contributions over and above mandatory EPF, those additional contributions also qualify for 80C up to the overall ₹1.5 lakh limit.
Related Pages & Calculators
Section 80CCD (NPS)
Section 80D
PPF Calculator
ELSS Mutual Fund
New Tax Regime
Income Tax Calculator
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