Section 80C of the Income Tax Act: List of Deductions and What You Must Know

Section 80C is still the most used tax-saving section in India because it covers common, real-life items like PF, PPF, school fees, life insurance premium, ELSS, and home-loan principal.

But Section 80C only “helps” when two things line up:

• You are filing under the Old Tax Regime (OTR)
• You still have unused room within the 80C limit

This guide explains what 80C covers, how the limits actually work, and the deductions people most often get wrong.

What is Section 80C and how the limit really works

Section 80C is a list of eligible investments and expenses

Examples: EPF/VPF, PPF, ELSS, life insurance premium, home loan principal, 5-year tax-saving FD, tuition fees, Sukanya Samriddhi deposit, etc.

The ₹1.5 lakh cap is a combined cap, not “80C only”

Most people say “80C limit is ₹1.5 lakh” and stop there. The more accurate way to understand it is:

Your overall ₹1.5 lakh cap is shared across:

• 80C (PPF, ELSS, LIC, tuition fees, etc.)
• 80CCC (certain pension/annuity plans)
• 80CCD(1) (your own NPS contribution)

So even if you invest in multiple items, the total deduction across these buckets usually cannot exceed ₹1.5 lakh in a year.

NPS can give extra headroom, but only the right part

• 80CCD(1B): extra ₹50,000 deduction for your NPS contribution, over and above ₹1.5 lakh (this works only in OTR).
• 80CCD(2): employer’s NPS contribution is over and above the ₹1.5 lakh cap, and this is one of the few deductions that can still be relevant even if you choose the New Tax Regime, depending on how your salary is structured.

Old vs New Tax Regime: the rule that decides everything

• Old Tax Regime (OTR): Section 80C deductions are allowed
• New Tax Regime (NTR): Section 80C deductions are not allowed

So if you’re planning last-minute 80C investments mainly to save tax, first confirm if OTR even beats NTR for you.

If you want a broader framework to think about deductions and planning, you can also read: Tax planning for salaried employees in India (2025).

FY 2025–26 shortcut: when 80C may not matter at all

In FY 2025–26, under the New Tax Regime:

• the rebate threshold is ₹12 lakh (taxable income), and
• salaried individuals also get a standard deduction of ₹75,000

That’s why many salaried taxpayers effectively see “zero tax” up to around ₹12.75 lakh under NTR in practical terms.

So if your income is around this level and you are anyway better off in NTR, then doing 80C investments “only for tax saving” can become irrelevant.

Proof and documentation: what you must keep ready

To claim 80C, you need proof. Typically:

• PPF/SSY passbook entries or account statements
• ELSS statement from AMC/platform
• Life insurance premium receipts
• FD certificate/statement
• Tuition fee receipts from the school/college
• Home loan certificate from the bank showing principal + interest split

Keep a clean payment trail and receipts. Even if something was paid, it becomes hard to claim if proof is weak.

Before filing your ITR, it’s also smart to cross-check your tax credits and reported income using: AIS vs TIS vs Form 26AS before filing ITR.

The Section 80C deduction list (with rules)

1) EPF / VPF and PPF

EPF (Employee Provident Fund) / VPF

• Your contribution to EPF/VPF qualifies under 80C.
• Employer contribution does not give a separate “80C deduction”.
• Important: EPF interest being tax-free is not unlimited. If your own contribution is unusually high in a year, interest on the excess can become taxable as per applicable limits.

PPF (Public Provident Fund)

• Eligible under 80C.
• Government-backed scheme.
• Interest rates are notified by the government and typically revised quarterly.
• Commonly treated as EEE (contribution eligible, interest tax-free, maturity tax-free), subject to rules.

2) Life insurance premiums (Term, Endowment, ULIP)

• Premiums paid to IRDA-registered insurers can qualify under 80C, subject to conditions.
• Term insurance premiums are commonly eligible.
• Endowment/money-back and ULIPs have product-specific eligibility conditions.
• ULIPs also come with a lock-in (commonly 5 years), so treat them as long-term products.

Simple rule: buy insurance for protection first, tax benefit second.

3) ELSS (Equity Linked Savings Scheme)

• ELSS is an equity mutual fund category eligible under 80C.
• Lock-in is 3 years.
• SIP and lump sum both qualify. Each SIP instalment gets its own 3-year lock-in.

Tax on redemption: Gains are taxed as equity capital gains when you redeem. If it qualifies as long-term, LTCG rules apply, including the annual exemption threshold and applicable rate.

If you want to understand how capital gains taxation works in simple terms, refer: Capital gains tax in India explained.

4) Home loan principal repayment

• Only the principal repayment qualifies under 80C.
• Home-loan interest is not 80C. It is covered under separate rules (commonly Section 24(b)).

Also eligible under 80C (only in the year you pay them):

• Stamp duty and registration charges, within the same ₹1.5 lakh overall cap.

Big rule people miss: If you sell the property before the minimum holding condition is met, the principal deductions you claimed earlier can get reversed and become taxable.

5) 5-year tax-saving fixed deposits (Banks and Post Office)

• 5-year tax-saving FD qualifies under 80C.
• Lock-in is 5 years.
• Interest earned is taxable, it gets added to your income and taxed at your slab rate.

6) Government small savings schemes eligible under 80C

Rates are notified by the government and are typically revised quarterly.

Senior Citizens Savings Scheme (SCSS)

• Eligible under 80C.
• Designed for senior citizens.
• Lock-in applies.
• Interest is taxable.

National Savings Certificate (NSC)

• Eligible under 80C.
• Lock-in applies.
• Interest is taxable.

Sukanya Samriddhi Yojana (SSY)

• Deposits qualify under 80C (within ₹1.5 lakh cap).
• Interest and maturity are commonly treated as tax-exempt subject to scheme rules.
• Important documentation point: the deduction is effectively claimed by the parent/legal guardian who makes the deposit and has the proof, since the account is opened and operated by the guardian until the child reaches the eligible age.

7) Tuition fees for children

• Tuition fees paid for up to two children qualify under 80C.
• This usually applies to tuition fees only, not to development fees, donations, transport, etc.

Summary Table: Section 80C Deduction List

"My 80C is already full" problem (most salaried people)

Many salaried taxpayers unknowingly fill up 80C through EPF alone. In that case:

• adding ELSS/LIC/PPF at the last minute may give zero extra tax benefit
• it can still be a good investment, but it’s no longer a “tax-saving move”

Common mistakes to avoid

• Investing first, checking regimes later
• Assuming “more products = more deduction” even after hitting ₹1.5 lakh
• Picking long lock-in products for short-term cash flow needs
• Forgetting that some 80C options have taxable returns (like tax-saving FD interest)
• Weak documentation, missing receipts, missing deadlines

Final takeaway

Section 80C is useful, but only when used with context:

• 80C works only in the Old Tax Regime
• the ₹1.5 lakh cap is shared across multiple sections
• most salaried taxpayers fill up 80C through EPF, so extra investments may not reduce tax
• NPS can be the real “extra headroom” tool if structured correctly

Use 80C as a tax tool, but choose products based on your goals and time horizon first.

Related Reads:

Tax Planning in India: Definition, Types, Benefits & Common Methods
Tax Planning for Salaried Employees in India (2026 Guide)

Disclaimer: This article is for informational and educational purposes only. It does not constitute tax, legal, or financial advice. Tax rules can change and the right treatment depends on your facts. Consult a qualified tax professional for advice specific to your situation.