Section 80C of the Income Tax Act – Complete 80C Deduction List

Section 80C allows taxpayers to claim deductions of up to ₹1.5 lakh in a financial year for specified investments and eligible expenses. These include contributions towards life insurance premiums, Public Provident Fund (PPF), home loan principal repayment, ELSS mutual funds, Sukanya Samriddhi Yojana, and several other approved instruments.

Key Highlights

Taxpayers can diversify their investments across various eligible instruments to save taxes while also maximizing returns.
Deductions under Section 80C are available only under the Old Tax Regime.
By utilizing the combined limits under Section 80CCE (₹1.5 lakh) and Section 80CCD(1B) (₹50,000), individuals can save up to ₹2 lakh in a financial year.

What is Section 80C?

Section 80C of the Income Tax Act, 1961 remains one of the most popular provisions under the Old Tax Regime for tax-saving. The section allows taxpayers to reduce their gross total income by way of investing in or spending on such specified instruments and, therefore, consequently reducing their taxable income and overall tax liability for the financial year.

Why is Section 80C so popular?

·        Diverse investment avenues comprise life insurance premiums, provident fund contributions, tax-saving fixed deposits, and Government of India schemes like the National Savings Certificate.

·        Reasonable investment tenure: Many of the Section 80C-eligible investments have a 5-year lock-in period, which is much lesser compared to the long-term pension funds.

·        Tax planning: These options will help the taxpayers plan finances effectively while simultaneously saving taxes.

·        Inflation protection: A number of qualified investments offer returns that mostly outperform inflation trends, thereby enabling individuals to preserve and grow their real wealth.

Overall, Section 80C deductions will immensely reduce taxable income, hence yielding considerable tax savings for the eligible taxpayer.

80C Deduction List (FY 2025–26)

Section 80C of the Income Tax Act offers various tax-saving options that help reduce a taxpayer’s overall taxable income. Eligible deductions under Section 80C include:

• Life insurance premium payments
• Public Provident Fund (PPF) contributions
• National Savings Certificate (NSC) investments
• Equity-Linked Savings Scheme (ELSS) mutual funds
• Sukanya Samriddhi Yojana (SSY) deposits
• Tuition fees for children
• Repayment of home loan principal

SECTION 80C DEDUCTION LIST

Who is eligible to claim deductions under Section 80C?

Deductions under Sec 80C are available only to individuals and HUFs. Companies, Firms, LLPs, and Partnerships are not eligible to claim benefits under this section.

Current Limitations

The limit of ₹1.5 lakh, introduced in 2014, has been unchanged for well over a decade. According to many taxpayers and professionals, such a ceiling has already become outdated; just a few basic investment options will exhaust the limit. Increasing the 80C ceiling would give more avenues for taxpayers to have larger leeway and enable them to plan their tax-saving options better and improve returns overall.

Is Section 80C Allowed Under the New Regime?

No. Deductions under Section 80C are not allowed if one opts for the new income tax regime. There are benefits only under the old tax regime.

How to Claim Section 80C Deductions?

1.     The taxpayer has to ensure the following for claiming deductions under Section 80C:

2.     Invest in eligible instruments before 31st March of the relevant financial year.

3.     Maintaining sufficient evidence through deposit receipts, insurance premium statements, ELSS investment proofs, and other similar records.

4.     Submit your investment declarations to your employer, who will then correctly compute and adjust the TDS.

5.     While filing your Income Tax Return, report all eligible investments under “Deductions under Chapter VI-A.”

What is Section 80CCE?

Section 80CCE provides that the total deduction claimed under Sec 80C (eligible investments), 80CCC (pension scheme contributions), and 80CCD1 (employee’s contribution to NPS or APY) cannot exceed ₹1.5 lakh in a financial year.

In other words, the aggregate ceiling of ₹1.5 lakh associated with Section 80C actually stems from Section 80CCE.

Here is a clear, concise, and professional rewritten version of your section:

How to Save Tax Under Section 80C?

Section 80C is one of the most popular tax-saving provisions under the old tax regime. It allows taxpayers to reduce their taxable income by investing in eligible instruments such as PPF, ELSS, life insurance premium, tuition fees, etc.

Let’s understand how Section 80C reduces tax liability with a new example:

Example:

Ms. R has:

• Salary income: ₹12,00,000
• Other income (interest): ₹80,000
• She invests ₹1,50,000 in ELSS (Equity Linked Savings Scheme), which qualifies under Section 80C.

The tax comparison with and without claiming 80C deduction is shown below:

Explanation

Because Ms. R claimed a deduction of ₹1,50,000 under Section 80C:

• Her taxable income reduced from ₹12,30,000 to ₹10,80,000
• Her tax liability decreased by ₹37,440

This shows how investing under Section 80C directly reduces your taxes under the old regime.

Frequently Asked Questions (FAQs) on Section 80C

1. What is Section 80C of the Income Tax Act?

Section 80C allows individual taxpayers and HUFs to claim deductions up to ₹1.5 lakh in a financial year for specific investments and eligible expenses such as PPF, ELSS, life insurance premiums, and home loan principal repayment.

2. Who can claim deductions under Section 80C?

Only Individuals and Hindu Undivided Families (HUFs) are eligible.
Businesses, companies, LLPs, and partnership firms cannot claim Section 80C deductions.

3. What is the maximum deduction available under Section 80C?

The maximum deduction allowed is ₹1.5 lakh per financial year, as specified under Section 80CCE.

4. What types of investments are eligible under Section 80C?

Some major eligible investments and payments include:

• PPF
• EPF
• ELSS mutual funds
• Life insurance premiums
• NSC
• Sukanya Samriddhi Yojana
• 5-year tax-saving FD
• Home loan principal
• Children’s tuition fees

5. Is Section 80C available under the new tax regime?

No. Deductions under Section 80C are available only if you opt for the Old Tax Regime.

6. What is Section 80CCE?

Section 80CCE specifies that the total deduction claimed under 80C + 80CCC + 80CCD(1) cannot exceed ₹1.5 lakh.
This combined limit essentially defines the cap for Section 80C benefits.

7. Can I claim more than ₹1.5 lakh in tax deductions through NPS?

Yes.
You can claim an additional ₹50,000 under Section 80CCD(1B) for NPS contributions, over and above the ₹1.5 lakh limit.

8. What is the difference between Sections 80C, 80CCC, and 80CCD?

1. 80C – Investments like PPF, ELSS, SSY, LIC, etc.
2. 80CCC – Contributions to pension funds
3. 80CCD(1) – Employee’s contribution to NPS/APY
4. 80CCD(1B) – Additional NPS deduction (₹50,000)
5. 80CCE – Combined cap for 80C + 80CCC + 80CCD(1)

9. How do I claim deductions under Section 80C?

You must:

1.     Invest in eligible instruments before 31st March of the FY.

2.     Maintain proof (PPF passbook, LIC premium receipts, ELSS statements, etc.).

3.     Submit investment declarations to your employer for correct TDS.

4.     At the time of filing your ITR, report all investments under “Deductions under Chapter VI-A.”

10. What does “Report under Deductions under Chapter VI-A” mean?

It means that while filing your ITR, you must enter your eligible 80C investments in the appropriate schedule of the return, so they reduce your taxable income officially and correctly.

11. Why is Section 80C so popular among taxpayers?

Because it offers:

• A wide range of investment options
• Moderate lock-in periods
• Tax savings + wealth-building
• Government-backed secure schemes
• Inflation-beating returns on some instruments

12. Why is the ₹1.5 lakh limit considered outdated?

The 80C limit was last revised in 2014.
Since then, education costs, investment needs, and savings patterns have changed significantly.
Many experts argue that the limit should be increased to better reflect current financial realities.

13. How does Section 80C help in reducing tax liability?

By lowering your taxable income.
Example: If your income is ₹12,30,000 and you invest ₹1,50,000 in 80C, your taxable income reduces to ₹10,80,000, resulting in significant tax savings.

14. Can NRIs claim deductions under Section 80C?

Yes, NRIs can claim many (not all) 80C deductions such as:

• ELSS
• Life insurance premiums
• Home loan principal
• Tuition fees
  Some schemes like PPF may not be available for fresh investment.

15. Is there any lock-in period for 80C investments?

Yes, depending on the instrument:

• • ELSS: 3 years
  • 5-Year FD: 5 years
  • NSC: 5 years
  • PPF: 15 years
  • SSY: Till age 21 of the girl child
  • Life Insurance: 2–5 years minimum