Section 80C. Complete Guide.
Every investment that qualifies under 80C, how much tax each one saves at your slab, and the single biggest mistake people make that wastes the entire ₹1.5 lakh limit.
₹1.5 Lakh
Annual limit
₹46,800
Max tax saved (30% slab)
₹31,200
Tax saved (20% slab)
15+
Eligible investments
Important: Section 80C is only available under the Old Tax Regime. If you are in the New Tax Regime, this guide does not apply to your tax filing — but it is still relevant for understanding your investments.
What is Section 80C?
Section 80C of the Income Tax Act, 1961 is the most widely used tax deduction in India. It allows individuals and Hindu Undivided Families (HUFs) to deduct up to ₹1,50,000 from their gross taxable income each financial year by investing in or paying for specified instruments.
The deduction reduces your taxable income — not your tax directly. So at the 30% slab, ₹1.5 lakh in 80C investments saves you ₹45,000 in tax plus 4% cess = ₹46,800 total. At the 20% slab, the saving is ₹31,200.
The 80C Formula
Tax Saved = ₹1,50,000 × Your Tax Slab Rate × 1.04
₹7,800
5% slab
₹31,200
20% slab
₹46,800
30% slab
Complete List of 80C Investments
ELSS Mutual Funds
Equity-Linked Savings Schemes are diversified equity mutual funds with a mandatory 3-year lock-in. They offer the highest potential returns among all 80C options and the shortest lock-in period. Gains above ₹1.25L are taxed at 12.5% LTCG. Invest via SIP for rupee cost averaging.
Public Provident Fund (PPF)
PPF offers EEE tax status — investment is exempt, interest is exempt, maturity is exempt. The 7.1% return is government-guaranteed and revised quarterly. Accounts can be extended in 5-year blocks after maturity. Maximum deposit: ₹1.5L per year. Minimum: ₹500.
Employee Provident Fund (EPF)
If you are a salaried employee, your own 12% of basic salary contribution to EPF automatically counts towards 80C. You do not need to invest separately — simply ensure you are claiming it in your tax declaration. Premature withdrawal before 5 years is taxable.
Life Insurance Premium (LIC/Others)
Premiums paid for life insurance policies for self, spouse, or children qualify under 80C. Key rule: the sum assured must be at least 10x the annual premium (for policies issued after April 1, 2012) for the proceeds to be tax-free at maturity. Pure term insurance premiums qualify.
NSC (National Savings Certificate)
NSC is a fixed-income scheme from India Post with a 5-year lock-in. The interest accrued annually (except in the final year) is considered reinvested and also qualifies for 80C deduction. This effectively means you get double 80C benefit on NSC in years 1–4.
Home Loan Principal Repayment
The principal portion of your home loan EMI qualifies for 80C deduction. Get the home loan interest certificate (provisional and final) from your lender — it breaks down your EMI into principal and interest. The interest portion qualifies under Section 24(b) separately (up to ₹2L).
Children's Tuition Fees
Tuition fees (not development fees, not hostel, not donations) paid to any school, college, or university in India for up to 2 children qualify under 80C. This is one of the most overlooked 80C benefits. Collect term-wise fee receipts from the institution.
SCSS (Senior Citizen Savings Scheme)
Available for individuals aged 60 and above, SCSS offers 8.2% quarterly interest payments with government backing. Maximum investment: ₹30 lakh. The interest is taxable, but the principal qualifies for 80C. Best for retirees needing regular income.
The Smart 80C Strategy
Most people make one critical mistake with 80C: they invest in it purely for tax saving and ignore returns. Here is the optimal approach for a salaried individual in 2026.
Step 1: Count what you already have
Check your EPF contribution (from payslip), home loan principal (from lender statement), and children's tuition fees. These are automatic — add them up first before investing anything new.
Step 2: Fill the gap with ELSS
If EPF + other automatic deductions leave a gap below ₹1.5L, invest the remainder in ELSS via SIP. Start a monthly SIP = (₹1.5L − existing 80C) ÷ 12.
Step 3: Only use PPF for stability
Add PPF only if you want guaranteed, long-term, tax-free wealth accumulation — not just tax saving. Don't put ₹1.5L in PPF and also do ELSS. Choose based on your goal.
Step 4: Never buy insurance for 80C
LIC endowment policies give 4–5% returns disguised as tax saving. Always buy pure term insurance for protection, then invest separately. The 80C benefit does not justify a bad investment.
Section 80C FAQ
What is the 80C limit for FY 2025-26? ▾
₹1,50,000 per financial year. This has remained unchanged since FY 2014-15. The limit applies per individual — both spouses can each claim ₹1.5L separately.
Can I claim 80C under the New Tax Regime? ▾
No. Section 80C is completely unavailable under the New Tax Regime. You must choose the Old Tax Regime to claim this deduction.
What is the deadline to invest for 80C in FY 2025-26? ▾
March 31, 2026. Investments made between April 1, 2025 and March 31, 2026 qualify for FY 2025-26. ELSS investments made up to March 31 are eligible even if the units are allotted in April.
Does EPF count towards the ₹1.5L 80C limit? ▾
Yes. Your own (employee) EPF contribution counts towards the ₹1.5L limit. If your EPF contribution is ₹80,000/year, you only have ₹70,000 remaining for other 80C investments.
Is the 80C deduction available for NRIs? ▾
Partially. NRIs can invest in ELSS and pay life insurance premiums. They cannot invest in PPF or NSC. EPF is available if employed in India.
How do I claim 80C in my ITR? ▾
In ITR-1 or ITR-2, go to Schedule VI-A and fill in Section 80C. Enter the total of all qualifying investments. Attach Form 16 from your employer which usually summarises declared investments.
Related Calculators
Put your 80C savings to work
Tax Disclaimer: Based on Finance Act 2025. All calculations are illustrative. Consult a Chartered Accountant before filing your ITR. © 2026 HQCalc.