Section 80C is the most-used tax deduction in India: invest or spend up to ₹1.5 lakh a year in approved instruments and reduce your taxable income by that amount — but only under the old tax regime. Under the new regime (the default for FY 2025-26), 80C does not apply. If you still use the old regime, this guide is your map.
What counts under Section 80C
- EPF / VPF contributions (employee share).
- PPF deposits (up to ₹1.5L/year).
- ELSS mutual fund investments.
- Life insurance premiums (for self, spouse, children).
- Home loan principal repayment.
- NSC, tax-saving FDs (5-year), Sukanya Samriddhi, tuition fees for kids (limited).
The takeaway
The ₹1.5 lakh limit is shared across all 80C items. Maxing EPF alone can fill most of it for higher salaries — check before buying an ELSS just for tax.
Best 80C options by goal
For guaranteed tax-free growth: PPF. For equity growth with the shortest lock-in (3 years): ELSS. For money already going out: EPF and home loan principal. Avoid buying insurance only for 80C — term insurance is for protection, not tax.
80C vs the new tax regime
If your total deductions (80C + 80D + HRA + home loan interest) are under ~₹3–4 lakh, the new regime often wins. Run both on an income tax calculator before locking money into tax-savers you would not buy otherwise.