Section 80C Deductions: The Complete ₹1.5 Lakh List

Updated for FY 2025-26 (AY 2026-27) · Old regime only

Section 80C of the Income Tax Act lets you deduct up to ₹1,50,000 from your taxable income every financial year — it is the single most popular tax-saver in India. The catch most people miss: 80C applies in the old tax regime only. From FY 2025-26 the new regime is the default, and it does not allow 80C at all. So before you rush to invest, the first question is always: which regime is cheaper for me?

This guide covers every investment and expense that counts towards the ₹1.5 lakh limit, the extra deductions that sit on top of it (80CCD(1B) for NPS and 80D for health insurance), and — most importantly — exactly how much tax each rupee of 80C saves at your slab.

Quick summary

• Limit: ₹1,50,000 combined across all 80C instruments.
• Plus NPS: an extra ₹50,000 under 80CCD(1B) → up to ₹2 lakh total.
• Plus health cover: ₹25,000–₹1,00,000 under 80D (separate again).
• Regime: old regime only — the new regime ignores all of these.
• Max tax saved: up to ₹46,800 from 80C alone in the 30% slab.

Investments that qualify for 80C

The following are the most common instruments that count towards your ₹1.5 lakh. Each behaves very differently on lock-in, risk and returns, so the right mix depends on your goals — not just on saving tax.

A few notes that trip people up:

• EPF — only your contribution counts; the employer's matching share does not fall under 80C.
• Life insurance — premium qualifies for self, spouse and children. To get the full deduction the annual premium should not exceed 10% of the sum assured (for policies issued after April 2012).
• ELSS — has the shortest lock-in (3 years) and the highest growth potential, but returns are not guaranteed.

Expenses that qualify for 80C

It is not only investments — several everyday expenses count too, and many taxpayers forget to claim them:

• Home loan principal repayment (the interest is claimed separately under Section 24).
• Children's tuition fees — full-time education in India, for up to two children. Tuition only; not donations, transport or hostel fees.
• Stamp duty & registration charges on buying a house (in the year of purchase).

How much tax does 80C actually save?

A deduction reduces your taxable income, so the rupees you save depend on your marginal slab in the old regime. The table below shows the tax saved on a full ₹1.5 lakh 80C claim (including 4% health & education cess):

Add the ₹50,000 NPS deduction in the 30% slab and you save a further ₹15,600 — so the full ₹2 lakh of 80C + 80CCD(1B) is worth up to ₹62,400 a year.

Worked example

Riya earns a basic salary that puts her in the 30% old-regime slab. During the year she contributes:

• EPF (her share): ₹60,000
• Term life insurance premium: ₹15,000
• Children's school tuition fees: ₹40,000
• ELSS investment: ₹35,000

Total = ₹1,50,000 — exactly the 80C cap. Her taxable income drops by ₹1.5 lakh, saving her ₹46,800 in tax. She then puts ₹50,000 into NPS under 80CCD(1B), saving another ₹15,600. Total tax saved: ₹62,400. Note how much of her limit was already filled by EPF and insurance she was paying anyway — a common reason not to over-invest just for 80C.

Beyond 80C: two deductions worth knowing

80CCD(1B) — extra ₹50,000 for NPS

On top of the ₹1.5 lakh 80C limit, you can claim an additional ₹50,000 for NPS Tier-I contributions. This makes the combined tax-saving headroom ₹2 lakh. NPS locks in until age 60, so treat it as a retirement product, not a short-term saver.

80D — health insurance

Premiums for health insurance are deducted separately under Section 80D — up to ₹25,000 for self and family, or ₹50,000 if you (or the insured parents) are senior citizens. Cover for both yourself and senior-citizen parents can take the 80D deduction up to ₹1,00,000.

Old vs new regime: should you even use 80C?

This is the decision that matters most. The new regime gives lower slab rates and a larger rebate but disallows 80C, 80D and HRA. The old regime keeps those deductions but taxes at higher rates. As a rough rule of thumb: if your total deductions (80C + 80D + HRA + home-loan interest) are large — typically above ₹3.5–4 lakh — the old regime often wins. If they are small, the new regime is usually cheaper. Don't guess — compare both regimes side by side or run your exact numbers through our calculator.

Smart tips

• Check your existing EPF and insurance premiums first — they may already fill most of the ₹1.5 lakh.
• Match the instrument to your goal: ELSS for growth, PPF/SSY for safe long-term, FD/NSC for capital protection.
• Invest through the year, not in a last-minute March rush.
• Remember 80C only helps in the old regime — confirm your regime choice before investing purely to save tax.

Frequently asked questions