The ₹1.5 lakh headline
Section 80C lets you subtract up to ₹1,50,000 a year from your taxable income for a defined set of investments and expenses. If you're in the 30% slab, using the full limit is worth up to ₹45,000 in tax saved. It's the single most popular deduction in the country — but for FY 2025-26 it works only under the old tax regime. The new regime ignores 80C entirely in exchange for lower slab rates.
Loading up on 80C only pays off if the old regime is cheaper for you overall. Enter your 80C figure in the tax calculator and toggle old vs new — sometimes the new regime still wins even after a full ₹1.5 lakh deduction. The old vs new comparison explains when.
What qualifies under Section 80C
All of the following share the same combined ₹1.5 lakh ceiling — you don't get the limit separately for each:
| Investment / expense | Notes |
|---|---|
| PPF (Public Provident Fund) | Safe, tax-free interest, 15-year lock-in |
| EPF (your own contribution) | Auto-deducted from salary |
| ELSS mutual funds | Equity funds, shortest lock-in at 3 years |
| Life insurance premium | For self, spouse or children |
| 5-year tax-saving fixed deposit | With a scheduled bank |
| NSC (National Savings Certificate) | Fixed-return, government-backed |
| Sukanya Samriddhi Yojana | For a girl child, high interest |
| Home loan principal repayment | Principal only; interest is separate under 24(b) |
| Children's tuition fees | Full-time education, up to two children |
How to think about it
- Don't invest just to save tax. Choose instruments you'd hold anyway — EPF and PPF for safety, ELSS for growth — then let the deduction follow.
- You may already be near the limit. EPF contributions, a home loan principal and school fees often fill much of the ₹1.5 lakh before you invest a rupee more.
- Section 80C is separate from other deductions. Health insurance sits under Section 80D, and an extra ₹50,000 of NPS sits under 80CCD(1B) — neither eats into your 80C limit.
Section 80C and the regime choice
Because 80C vanishes under the new regime, the decision is really "is my total old-regime deduction stack big enough to beat the new regime's lower rates?" A person maxing 80C, paying HRA and home loan interest can be far better off on the old regime. Someone with only EPF may not be. The honest test is your own figures — the calculator shows both in rupees the moment you type.
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Frequently asked questions
What is the maximum deduction under Section 80C?
The maximum deduction under Section 80C is ₹1,50,000 per financial year, covering all eligible investments and expenses combined.
Is Section 80C available in the new tax regime?
No. Section 80C is not allowed under the new tax regime for FY 2025-26. It can only be claimed if you file under the old regime.
Which investments qualify for Section 80C?
PPF, EPF, ELSS mutual funds, life insurance premiums, five-year tax-saving fixed deposits, NSC, Sukanya Samriddhi, home loan principal repayment, and children's tuition fees, among others.
Does the home loan principal count under Section 80C?
Yes. Repayment of the principal portion of a home loan qualifies under Section 80C, within the overall ₹1.5 lakh limit. The interest is claimed separately under Section 24(b).