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Section 80C of Income Tax Act - Deductions u/s 80C, 80CCC & 80CCD

By CA Mohammed S Chokhawala

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Updated on: Jul 10th, 2025

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3 min read

Section 80C deductions allow individuals and HUFs to reduce their taxable income by up to ₹1.5 lakh per year through investments like ELSS, PPF, life insurance premiums, tax-saving FDs, home loan principal repayment, and more. Understanding deductions under Section 80C helps in effective tax planning, and this guide covers everything you need to know about 80C deductions and who can claim them. 

It is important to note that the deductions under Section 80C are only available under the Old Tax Regime and are disallowed under the New Tax Regime.

80c deductions

Eligible Investment Under Section 80C and Risk Comparison

The following table compares the various features of section 80C deduction options, easy for taxpayers to choose the most suitable option for them.

Investment optionsAverage InterestLock-in period forRisk factor
ELSS funds12% – 15%3 yearsHigh
NPS Scheme8% – 10%Till 60 years of ageHigh
ULIP8% – 10%5 yearsMedium
Tax saving FDUp to 8.40%5 yearsLow
PPF7.90%15 yearsLow
Senior citizen savings scheme8.60%5 years (can be extended for other 3 years)Low
National Savings Certificate7.90%5 yearsLow
Sukanya Samriddhi Yojana8.50%Till girl child reaches 21 years of age (partial withdrawal allowed when she reached 18 years)Low

Expenses related to home loan principal repayment and tuition fees of children's education can also be claimed as deductions under Section 80C.

Deduction Limits under Section 80C, 80CCC, 80CCD(1), 80CCE, 80CCD(1B)

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.

SectionsEligible investments for tax deductionsMaximum Deduction
80CInvestment 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
80CCCPayment made towards pension fundsRs 1,50,000
80CCD(1)Payments made towards Atal Pension Yojana or other pension schemes notified by governmentEmployed: 10% of basic salary + DA    
Self-employed: 20% of gross total income
80CCEOverall combined limit of ₹1,50,000 for 80C + 80CCC + 80CCD(1)Rs 1,50,000
80CCD(1B)Investments in NPS (outside Rs 1,50,000 limit under Section 80CCE)Rs 50,000
80CCD(2)Employer’s contribution towards NPS (outside Rs 1,50,000 limit under Section 80CCE)Central government employer: 14% of basic salary +DA    
Others: 10% of basic salary +DA

Section 80C - An Illustration

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: 

ParticularsSection 80C Deduction claimedSection 80C Deduction not claimed
Salary Income10,00,00010,00,000
Less - Standard Deduction(50,000)(50,000)
 9,50,0009,50,000
Other Income1,00,0001,00,000
Gross Total Income10,50,00010,50,000
Less - Section 80C deduction(1,50,000)-
Taxable Income9,00,00010,50,000
Total Tax payable (including cess)96,2001,32,600

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 optimise tax savings and determine taxes. 

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.

How to Claim Section 80C Deductions?

It is important to understand and comply with the following points to claim Section 80C deductions:

  1. Invest in eligible instruments before 31st March of the financial year.
  2. Collect proofs such as deposit slips, insurance premium receipts, ELSS statements, etc.
  3. Declare investments to your employer to adjust TDS.
  4.  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

Final Word

While there are several tax-saving deductions under Chapter VI-A, taxpayers should carefully select the options that best align with their financial goals, ensuring both tax efficiency and long-term benefits. 

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Frequently Asked Questions

Can I claim the 80C deductions at the time of filing the return in case I have not submitted proof to my employer?

Yes. You can still claim those investments when you file your income tax return if not submitted to your employer. Just make sure the investments were made before the end of the financial year, i.e 31st March 2025

I have made an 80C investment on 30 April 2025. For which year can I claim this investment as a deduction?

You can claim deduction for the investments made in the ITR of that financial year. So, let's say you made an investment on April 30, 2025, you can claim it as a deduction when filing your taxes for the FY 2025-2026.

Can a company or a firm take benefit of Section 80C?

The provisions of Section 80C apply only to individuals or a Hindu Undivided Family (HUF). Hence, a company or a firm cannot take benefit of Section 80C.

I have been paying life insurance premiums to a private insurance company. Can I claim an 80C deduction for the premium paid?

You can get a deduction under Section 80C when you pay life insurance premiums to any insurance company approved by the Insurance Regulatory and Development Authority of India, whether they are public or private. So, the premiums you pay to private insurance companies can also help you claim an 80C deduction.

In which year can I claim a deduction of the stamp duty paid for the purchase of a house property?

You can go ahead claiming the stamp duty for the purchase of a house in the year in which the payment is made towards stamp duty under Section 80C.

What do you mean by 80C deduction under chapter VI A?

Investments made in specified modes are eligible for deduction under section 80C. Popular investments eligible for this deduction are investment in Public Provident Fund (PPF), National saving certificate (NSC), Sukanya Samriddhi Yojana (SSY), etc., 

What is section 80CCD(1)?

Section 80CCD (1) is a deduction for making contributions to the National Pension scheme. An employee can claim deduction under 80CCD(1) at a maximum of 10% of basic salary plus dearness allowance. For self employed, the limit for deduction is 20% of their income subject to Rs 1.5 lakh maximum limit of section 80C.

What is section 80CCD(2)?

Section 80CCD deals with tax deductions available to employers with respect to contributions made to the pension scheme for its employees. i.e. if your employer contributes to its employees pension account, deduction, maximum up to 14% (under new regime) and 10% (under old regime) of total income can be availed.

Can I claim both 80C and 80D?

Yes. You can claim deductions under both sections 80C and 80D of the Income Tax Act, 1961. 

What is the maximum limit for Section 80C?

You can claim up to Rs. 1,50,000 per financial year.

Can NRIs claim Section 80C?

Yes, NRIs can claim Section 80C deductions for eligible instruments like Life Insurance, ELSS.

Can I invest more than Rs. 1.5 lakh?

Yes, but deduction will be limited to Rs. 1.5 lakh.

About the Author
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CA Mohammed S Chokhawala

Content Writer
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I'm a chartered accountant, well-versed in the ins and outs of income tax, GST, and keeping the books balanced. Numbers are my thing, I can sift through financial statements and tax codes with the best of them. But there's another side to me – a side that thrives on words, not figures. Read more

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