What comes under Section 80C and how much can I save?

By the India Law Simplified editorial team · Verified against the bare Acts & official portals · Updated 2026-08-18 · ~8 min read

⚡ Quick answer

Section 80C lets you deduct up to ₹1.5 lakh a year from your taxable income (under the old regime) for specified investments and expenses — EPF, PPF, ELSS mutual funds, life-insurance premiums, NSC, 5-year tax-saving FDs, Sukanya Samriddhi, children's tuition fees and home-loan principal repayment. The ₹1.5 lakh ceiling is shared across Sections 80C, 80CCC and 80CCD(1) combined. Depending on your slab, fully using it can save you up to about ₹46,800 in tax.

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Section 80C is the most popular tax-saving deduction in India — and for good reason. It rewards you for saving and investing by letting you cut up to ₹1.5 lakh from your taxable income. But it covers a confusing mix of investments and expenses, each with different lock-ins and returns. This guide lists everything that qualifies, shows how much tax you can actually save, and helps you choose the right mix in plain language.

1How much 80C saves you

80C reduces your taxable income by up to ₹1.5 lakh. The tax you save depends on your slab: at 30% you save up to ₹46,800 (including cess), at 20% up to ₹31,200, and at 5% up to ₹7,800. It's a deduction from income, not a direct refund — so a higher tax bracket means a bigger saving.

⚠️ Important80C works only under the old tax regime. If you're on the new regime, these investments are still fine financially, but they won't give you an 80C deduction.

2Investments that qualify

These count toward your ₹1.5 lakh limit:

Employee Provident Fund (EPF) — your contribution is auto-deducted from salary
Public Provident Fund (PPF) — 15-year lock-in, guaranteed tax-free returns
ELSS (Equity Linked Savings Scheme) mutual funds — shortest lock-in (3 years), market-linked growth
National Savings Certificate (NSC) — 5-year fixed return
5-year tax-saving fixed deposit
Sukanya Samriddhi Yojana — for a girl child, high guaranteed rate
National Pension System (NPS) and certain ULIPs

3Expenses that also qualify

80C isn't only about investing — some payments you already make count too:

Life-insurance premiums (for self, spouse, children)
Children's tuition fees — for up to two children, full-time courses in India
Home-loan principal repayment
Stamp duty and registration charges in the year you buy a house

💡 ExampleRohit pays ₹40,000 EPF, ₹50,000 PPF, ₹30,000 children's tuition and ₹50,000 home-loan principal in a year = ₹1,70,000. His 80C deduction is capped at ₹1.5 lakh, so the extra ₹20,000 gives no further 80C benefit. At a 30% slab, that ₹1.5 lakh saves him about ₹46,800 in tax.

4Which 80C option to choose

The right mix depends on your goals:

Want growth and short lock-in? ELSS (3-year lock-in, equity returns).
Want safety and guaranteed returns? PPF or NSC.
Saving for a daughter? Sukanya Samriddhi.
Already covered? Your EPF, life insurance and home-loan principal may fill most of the ₹1.5 lakh on their own.

✅ TipAdd up your EPF, insurance premiums and home-loan principal first — many salaried people are already close to ₹1.5 lakh without any new investment, and only need to top up the gap with ELSS or PPF.

5The ₹1.5 lakh is a shared ceiling, not a per-item allowance

The most expensive misunderstanding about 80C is treating it as a limit per investment. It is a single ceiling across everything in the section, and for most salaried people a large part of it is already used before they invest anything.

Your own EPF contribution counts. So does the principal portion of your home loan EMI, and your children's tuition fees. Someone with a home loan and an EPF deduction is frequently at the limit already, which means a fresh ELSS or PPF contribution made specifically to save tax saves nothing at all.

✅ TipAdd up EPF, home-loan principal and tuition fees first. Invest only against the remaining headroom.

6Lock-in periods differ sharply, and that is the real decision

Every 80C option gives the same deduction. What differs is how long your money is trapped and what it earns, and that is where the choice actually lies.

ELSS equity funds — three years, the shortest lock-in of any 80C option, with market-linked returns and LTCG taxable above ₹1.25 lakh
PPF — fifteen years, with partial withdrawal permitted from year seven, and interest and maturity fully exempt
Five-year tax-saving fixed deposit — five years, with interest fully taxable at slab, which makes it the weakest option for most taxpayers
National Savings Certificate — five years, interest taxable but reinvested interest itself qualifies for 80C
Sukanya Samriddhi — for a girl child, long tenure, exempt throughout
Life insurance premium — subject to the premium-to-sum-assured condition, and surrendering early reverses the deduction

7When a deduction you already claimed is reversed

Some 80C claims can be clawed back, and the reversal is taxed as income in the year the condition is broken.

A life insurance policy surrendered or lapsed before two years of premiums have been paid
A ULIP surrendered within five years
A house on which you claimed principal repayment, if it is sold within five years of possession — the entire principal deduction allowed in earlier years becomes taxable in the year of sale

⚠️ ImportantThe house-sale rule catches people who buy, claim the deduction for three or four years, and sell. It is not a penalty, but it is a tax bill nobody budgets for.

880CCD(1B): the extra ₹50,000 that sits outside the limit

One deduction related to 80C is genuinely additional rather than shared. Section 80CCD(1B) allows a further ₹50,000 for your own contribution to the National Pension System, over and above the ₹1.5 lakh ceiling.

It is the only way to push total Chapter VI-A investment-linked deduction beyond ₹1.5 lakh in the old regime, which is why it is worth knowing even for someone already at the 80C limit.

⚠️ ImportantDo not confuse it with 80CCD(2), the employer's NPS contribution — that is a separate deduction, is not capped at ₹50,000, and unlike the rest of these it survives in the new regime.

Popular 80C options compared
Option	Lock-in	Returns
ELSS mutual fund	3 years	Market-linked (equity)
PPF	15 years	Guaranteed, tax-free
NSC	5 years	Fixed, taxable interest
5-year tax-saving FD	5 years	Fixed, taxable interest
Sukanya Samriddhi	Till girl turns 21	Guaranteed, high, tax-free
EPF	Till retirement/exit	Guaranteed, tax-free (after 5 yrs)

Key takeaways

80C lets you deduct up to ₹1.5 lakh from taxable income (old regime only).
The ₹1.5 lakh limit is shared across 80C, 80CCC and 80CCD(1).
It covers EPF, PPF, ELSS, NSC, tax-saving FD, Sukanya Samriddhi, insurance, tuition fees and home-loan principal.
At a 30% slab, fully using 80C saves about ₹46,800 in tax.
ELSS has the shortest lock-in (3 years); PPF and NSC are the safe, guaranteed options.

Frequently asked questions

Is 80C available in the new tax regime?

No — Section 80C is allowed only under the old regime. If you choose the new regime, the main deductions are the ₹75,000 standard deduction and employer NPS under 80CCD(2).

Can I claim more than ₹1.5 lakh under 80C?

No — ₹1.5 lakh is the combined ceiling for 80C, 80CCC and 80CCD(1). But you can claim an additional ₹50,000 separately for NPS under Section 80CCD(1B), taking your total retirement-linked deduction to ₹2 lakh.

Does my EPF count toward 80C?

Yes — your own EPF contribution (deducted from salary) qualifies under 80C. For many salaried people, EPF alone fills a large part of the ₹1.5 lakh limit.

Which is the best 80C investment?

It depends on your goal. ELSS gives the shortest lock-in and equity growth; PPF gives safe, tax-free, guaranteed returns; Sukanya Samriddhi is ideal for a girl child. Most people use a mix, after counting EPF and insurance they already pay.

Does my EPF contribution use up my 80C limit?

Yes. Your own contribution to EPF counts within the same ₹1.5 lakh ceiling, as does the principal portion of a home loan EMI and children's tuition fees. Many salaried people are at or near the limit before making any tax-saving investment at all.

Which 80C option has the shortest lock-in?

ELSS equity funds, at three years. PPF runs fifteen years with partial withdrawal from year seven, and tax-saving fixed deposits and NSC both run five years. Since every option gives the same deduction, lock-in and expected return are the real basis for choosing.

Can an 80C deduction I already claimed be taken back?

Yes, in specific cases. Surrendering a life policy before two years of premiums, or a ULIP within five years, reverses the deduction. Selling a house within five years of possession makes the entire principal repayment deduction allowed in earlier years taxable in the year of sale.

Is 80C worth anything under the new regime?

No. Section 80C sits in Chapter VI-A and is unavailable under the new regime. If you are in the new regime, an investment made purely to save tax under 80C saves nothing — judge it on its own merits instead.

Does the ₹1.5 lakh limit include 80CCC and 80CCD(1)?

Yes. Section 80CCE caps the aggregate of section 80C, section 80CCC (contributions to pension funds) and section 80CCD(1) (your own NPS contribution) at ₹1.5 lakh combined. They do not each get their own ceiling. Only 80CCD(1B), the additional ₹50,000 for NPS, sits outside that aggregate limit.

Do I need to submit proof of my 80C investments?

Not with the return itself, since the ITR is annexure-less. Your employer will ask for proof before finalising Form 16, and the department can call for it later, so retain receipts and statements for at least the period during which the return can be reopened.