What is Section 80C?
Reviewed by Ranga & Company
Section 80C: Section 80C lets individuals and HUFs under the old tax regime deduct up to ₹1.5 lakh a year for specified investments and payments, such as EPF, PPF, ELSS, life insurance and home-loan principal.
At a glance
- Limit
- ₹1.5 lakh a year, combined with 80CCC and 80CCD(1)
- Regime
- Old regime only
- Who can claim
- Individuals and HUFs
- Extra NPS deduction
- Up to ₹50,000 more under section 80CCD(1B)
What counts under 80C
| Option | Lock-in | Notes |
|---|---|---|
| Employee PF contribution | Till retirement/exit | Deducted from salary automatically |
| PPF | 15 years | Interest and maturity tax-free |
| ELSS mutual funds | 3 years | Shortest lock-in; market-linked |
| Life insurance premium | Policy term | Premium within limits of sum assured |
| Home-loan principal | — | Plus stamp duty and registration in the year paid |
| Children's tuition fees | — | Up to two children; tuition fees only |
| 5-year tax-saver FD, NSC, SSY | 5 years / varies | Interest is taxable for FD and NSC |
Claiming it
Declare your investments to your employer so less TDS is deducted, and submit proofs by the employer's deadline. Anything you miss can still be claimed in your income tax return if you file under the old regime.
Common mistakes
- Investing in March in a rush without checking whether the old regime actually saves you tax
- Counting the whole EMI as 80C; only the principal part qualifies (interest is separate)
- Counting school development fees or transport fees as tuition fees
Frequently asked questions
Can I claim 80C in the new tax regime?
No. Section 80C deductions are available only under the old regime.
What is the maximum deduction under 80C?
₹1.5 lakh a year in total across all 80C items. NPS gets an additional ₹50,000 under section 80CCD(1B).
Which 80C investment has the shortest lock-in?
ELSS mutual funds, with a 3-year lock-in.
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