Section 80C Explained: What You Can Claim Up to ₹1.5 Lakh

What Section 80C does

A deduction lowers the income on which tax is worked out. If your taxable income is ₹12 lakh and you claim ₹1.5 lakh under 80C, you are taxed as if you earned ₹10.5 lakh. The total limit is ₹1,50,000 a year, shared with a couple of related sections (80CCC and 80CCD(1)), so the sum of all of them cannot go above ₹1.5 lakh.

How much tax does ₹1.5 lakh save?

The higher your slab, the more each rupee of deduction is worth. It also explains why 80C matters little if you are in the new regime or if your income is within the rebate limit, because you pay no tax to save in the first place.

Everything that qualifies

• EPF: your own monthly contribution counts automatically. At a ₹30,000 basic salary it is ₹43,200 a year, so it already uses part of the limit.
• PPF: up to ₹1.5 lakh a year, 15-year lock-in. Try the PPF calculator.
• ELSS mutual funds: equity funds with a 3-year lock-in. Returns are not guaranteed.
• Life insurance premiums on your own, spouse’s or children’s policies, subject to the policy conditions.
• Children’s tuition fees for full-time education, for up to two children.
• Home loan principal repayment and, in the year of purchase, stamp duty and registration charges.
• National Savings Certificate (NSC) and 5-year tax-saving fixed deposits.
• Sukanya Samriddhi Yojana for a girl child (see the SSY calculator) and the Senior Citizens’ Savings Scheme.

An extra deduction for NPS contributions has existed outside the ₹1.5 lakh limit under the old Act. Because published guides differ on how it is treated in the new Act, confirm the current provision before relying on it.

Used up your limit without trying?

Most salaried people have less room than they think. A ₹30,000 basic salary puts ₹43,200 into EPF every year, leaving ₹1,06,800 of room. Add a child’s tuition fee and a home loan’s principal, and many people have already crossed ₹1.5 lakh before buying anything. Add up what you already do before you invest more.

The new section numbers

The Income-tax Act, 2025 applies from tax year 2026-27 onwards, replacing the 1961 Act. According to published mapping guides, Section 80C becomes Section 123, with the eligible items listed in a schedule, while the ₹1.5 lakh limit and the list of investments remain the same. Your Form 16 or your ITR utility will show the number to use. For income up to 31 March 2026 (FY 2025-26), the old section numbers still apply.

Is 80C worth it for you?

1. Add up your 80C items for the year, including EPF.
2. Add your other old-regime deductions, such as HRA and health insurance.
3. Put the total in the income tax calculator and compare both regimes. See also our guide on the old vs new tax regime.

Common mistakes

• Buying in March without checking. A rushed purchase can lock your money for years in something that does not suit you.
• Insurance only for tax. A policy with poor returns or cover is not a saving, even if it gives a deduction.
• Ignoring lock-ins. PPF locks money for 15 years, ELSS for 3 and tax-saving FDs for 5.
• Claiming in the new regime. 80C is not available there, so check which regime your employer is using for TDS.