Section 80C of Income Tax Act - 80C Deduction List
Section 80C is one of the most popular tax-saving deductions in India. Under the old regime, there is a variety of deductions available against certain investments and expenditures. Popular options are insurance premiums, PPF, home loan principal repayment, ELSS mutual funds and Sukanya Samriddhi Yojana.
Key Highlights
- Up to Rs. 1.5 lakhs of deduction can be claimed under section 80C.
- Section 80C deduction is are not available under the new regime.
- It is important to make the tax saving investments early in the financial year for lesser TDS and more disposable income.
What is Section 80C?
Section 80C of the Income Tax Act 1961 is a key provision that offers tax deduction benefits to taxpayers by reducing their gross total income, effectively lowering their taxable income and their overall tax liability for the financial year. Section 80C continues to be one of the most popular options in the old tax regime for the following reasons.
- Variety of investment options: Like life insurance, provident fund, fixed deposit, government backed investments like national savings certificate, etc.
- Span of investment: For many 80C investments, the investment horizon is 5 years, which is comparatively less than pension funds.
- Promotes tax savings and financial planning: These specified investments assists in smart financial planning and saving taxes at the same time.
- Protection against inflation: These investments often have returns more than the inflation trend of the economy. This helps the taxpayers to beat the inflation while saving.
These deductions can significantly reduce taxpayers' taxable income, resulting in substantial tax savings.
Deduction Limits under Section 80C, 80CCC, 80CCD(1), 80CCD(1B), 80CCE
Sections 80CCC and 80CCD provide deductions for investments in pension schemes. The combined maximum deduction allowed under Sections 80C, 80CCC, and 80CCD(1) is ₹1.5 lakh. However, you can claim an additional deduction of ₹50,000 under Section 80CCD(1B) for contributions made to the National Pension Scheme (NPS).
Therefore, the total maximum deduction available under Sections 80C, 80CCC, 80CCD(1), and 80CCD(1B) is ₹2 lakh.
| Sections | Eligible investments for tax deductions | Maximum Deduction |
| 80C | Investment made in Equity Linked Saving Schemes (ELSS), PPF/SPF/RPF, payments made towards Life Insurance Premiums, principal sum of a home loan, SSY, NSC, SCSS, etc. | Rs 1,50,000 |
| 80CCC | Payment made towards pension funds | Rs 1,50,000 |
| 80CCD(1B) | Payments made towards Atal Pension Yojana or other pension schemes notified by government | Employed: 10% of basic salary + DA Self-employed: 20% of gross total income |
| 80CCE | Overall combined limit of ₹1,50,000 for 80C + 80CCC + 80CCD(1) | Rs 1,50,000 |
List of Investments Eligible Under Section 80C (FY 2025–26)
Section 80C of the Income Tax Act allows several benefits to lower the overall taxable income of the taxpayer. Section 80C deductions include:
- Life Insurance Premiums
- Public Provident Fund (PPF)
- National Savings Certificates (NSC)
- Equity-Linked Savings Scheme (ELSS)
- Sukhanya Samriddhi Yojana (SSY)
- Tuition fees
- Home loan principal repayment
Best Tax-Saving Investment Options Under 80C
The following table compares the various features of section 80C deduction options, easy for taxpayers to choose the most suitable option for them.
| Investment options | Average Interest | Lock-in period | Risk factor |
| ELSS funds | 12% – 15% | 3 years | High |
| NPS Scheme | 8% – 10% | Till 60 years of age | High |
| ULIP | 8% – 10% | 5 years | Medium |
| Tax saving FD | Up to 8.40% | 5 years | Low |
| PPF | 7.90% | 15 years | Low |
| Senior citizen savings scheme | 8.60% | 5 years (can be extended for other 3 years) | Low |
| National Savings Certificate | 7.90% | 5 years | Low |
| Sukanya Samriddhi Yojana | 8.50% | Till girl child reaches 21 years of age (partial withdrawal allowed when she reached 18 years) | Low |
The maximum section 80C deduction limit is Rs. 1.5 lakh per Financial Year for all the above deductions combined.
Who Can Claim Section 80C Deductions?
Only individuals and HUFs are eligible to claim Section 80C deductions. Companies, Firms, LLPs, etc. are not allowed to claim the Section 80C deductions.
Current Limitations
The ceiling limit of Rs. 1.5 lakh was fixed in the year 2014, more than 10 years now. More often than not, taxpayers and professionals alike opine that the aforesaid limit is quite outdated. Investments in very few options easily exhausts the maximum limit. Therefore, a relaxation of limits will help taxpayers to optimize tax deductions and maximize their returns.
Is 80C Allowed under the New Regime?
No, deductions under section 80C is not allowed under the new regime.
How to Claim Section 80C Deductions?
It is important to understand and comply with the following points to claim Section 80C deductions:
- Invest in eligible instruments before 31st March of the financial year.
- Collect proofs such as deposit slips, insurance premium receipts, ELSS statements, etc.
- Declare investments to your employer to adjust TDS.
- File ITR and report investments under “Deductions under Chapter VI-A”.
You can use ClearTax tax filing tool to help you claim deductions and ensure easy tax filing and compliance. Our tax experts can make your tax filing simpler.
How to Save Tax Under Section 80C?
Let us understand how section 80C helps in reducing tax implications using an example.
Mr. A has a salary income of Rs. 10 lakhs and other income of Rs. 1 lakh. He has invested Rs. 1.5 lakh in PPF.
The difference in tax implications when 80C deductions are claimed and not claimed is explained below:
| Particulars | Section 80C Deduction claimed | Section 80C Deduction not claimed |
| Salary Income | 10,00,000 | 10,00,000 |
| Less - Standard Deduction | (50,000) | (50,000) |
| 9,50,000 | 9,50,000 | |
| Other Income | 1,00,000 | 1,00,000 |
| Gross Total Income | 10,50,000 | 10,50,000 |
| Less - Section 80C deduction | (1,50,000) | - |
| Taxable Income | 9,00,000 | 10,50,000 |
| Total Tax payable (including cess) | 96,200 | 1,32,600 |
Therefore, by claiming a deduction of Rs. 1.5 lakh under Section 80C, Mr. A has saved Rs. 36,400 in taxes under the old tax regime.
Use ClearTax's free Income Tax Calculator to optimize tax savings and determine taxes.
Frequently Asked Questions
Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.
Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.
CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.
Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.
Office Address - Defmacro Software Private Limited, C 245A, Ground floor, Room No 1, Vikas Puri, West Delhi, New Delhi, Delhi 110018, India
Cleartax is a product by Defmacro Software Pvt. Ltd.
ISO 27001
Data Center
SSL Certified Site
128-bit encryption