Section 80C Deductions: Full List & ₹1.5 Lakh Limit
- Section 80C lets you reduce your taxable income by up to ₹1,50,000 per year through specific investments and expenses under the old tax regime.
- EPF, PPF, ELSS, life insurance premiums, home loan principal, and school tuition fees all count toward the same ₹1.5 lakh ceiling.
- Section 80C deductions are available only if you opt for the old tax regime — they do not apply under the new default regime.
- What Is the ₹1.5 Lakh Limit and How Does It Work?
- Complete List of Section 80C Eligible Investments (FY 2026-27)
- Worked Example: ₹12,00,000 Salary
- Section 80C vs. 80CCC vs. 80CCD — What Is the Actual Combined Limit?
- New Tax Regime Warning: 80C Does Not Apply
- Common Mistakes People Make with Section 80C
- How to Claim 80C Deductions While Filing Your ITR
Section 80C of the Income Tax Act is the single most powerful tax-saving tool available to salaried employees and small-business owners in India. For FY 2026-27, you can reduce your taxable income by up to ₹1,50,000 by investing in or spending on a specific list of instruments — but only if you stay on the old tax regime. Every rupee saved here translates to real cash: a person in the 30% slab saves ₹46,800 (including 4% cess) on a full ₹1.5 lakh claim.
What Is the ₹1.5 Lakh Limit and How Does It Work?
The ₹1,50,000 ceiling under Section 80C is a combined limit. It covers investments and payments across all eligible instruments added together — not per instrument. So if you invest ₹1,00,000 in PPF and pay ₹80,000 as life insurance premium, only ₹1,50,000 is deductible, not ₹1,80,000. The remaining ₹30,000 gives you no additional benefit.
The deduction is claimed in the year in which the investment or payment is actually made, not when it matures. Keep all receipts and statements before filing your ITR.
Complete List of Section 80C Eligible Investments (FY 2026-27)
| Instrument | Who Can Invest | Lock-in Period | Key Note |
|---|---|---|---|
| Employee Provident Fund (EPF) — employee contribution | Salaried employees | Until retirement / 5 years for full tax exemption | Employer contribution does NOT count toward 80C |
| Public Provident Fund (PPF) | Individuals (not HUF for new accounts) | 15 years | Interest is fully tax-free at maturity |
| Equity Linked Savings Scheme (ELSS) | Individuals & HUF | 3 years (shortest among 80C options) | Returns are market-linked; LTCG above ₹1.25 lakh taxed at 12.5% |
| 5-Year Tax-Saving Fixed Deposit | Individuals & HUF | 5 years | Interest is taxable every year |
| National Savings Certificate (NSC) | Individuals | 5 years | Accrued interest each year is also deductible under 80C (except final year) |
| Sukanya Samriddhi Yojana (SSY) | Parents / guardians of girl child (up to age 10) | Until girl turns 21 | Interest and maturity are fully tax-free |
| Senior Citizens Savings Scheme (SCSS) | Age 60+ (or 55+ on retirement) | 5 years | Interest is taxable; TDS applies above threshold |
| Life Insurance Premium | Self, spouse, children | Policy-dependent | Premium must not exceed 10% of sum assured (for policies issued after 1 Apr 2012) |
| Unit Linked Insurance Plans (ULIPs) | Self, spouse, children | 5 years | Same 10% of sum assured rule applies |
| Home Loan Principal Repayment | Individual borrowers | Must hold property for 5 years | Stamp duty & registration fees also eligible in year of purchase |
| Children's Tuition Fees | Parents (up to 2 children) | N/A | Only full-time education at recognised Indian schools/colleges; no donations or development fees |
| National Pension System (NPS) — Tier I, 80CCD(1) | Individuals | Until age 60 | Counts within the ₹1.5 lakh 80C ceiling; extra ₹50,000 available under 80CCD(1B) |
Worked Example: ₹12,00,000 Salary
Let us walk through a real scenario. Priya is a salaried professional with a gross salary of ₹12,00,000 for FY 2026-27. She opts for the old tax regime.
- EPF (employee share, 12% of basic ₹6,00,000): ₹72,000
- PPF contribution: ₹50,000
- Life insurance premium: ₹15,000
- Children's school tuition fees (one child): ₹20,000
- Total of above: ₹1,57,000
Because the ceiling is ₹1,50,000, her deduction is capped at ₹1,50,000. Taxable income after standard deduction of ₹50,000 and 80C: ₹12,00,000 − ₹50,000 − ₹1,50,000 = ₹10,00,000.
Without the 80C deduction her taxable income after standard deduction alone would have been ₹11,50,000. The 80C claim saves her approximately ₹46,800 in tax (₹1,50,000 × 30% slab + 4% cess). That is real money she keeps. Use KyaTax's Tax Calculator to run the same maths for your own salary in minutes.
Section 80C vs. 80CCC vs. 80CCD — What Is the Actual Combined Limit?
Many people confuse these three sections. Here is the practical picture:
- 80C covers the instruments in the table above — maximum ₹1,50,000.
- 80CCC covers premiums paid to certain pension plans of LIC or other approved insurers. This also falls within the same ₹1,50,000 combined ceiling.
- 80CCD(1) covers your own NPS Tier I contributions — also within the ₹1,50,000 ceiling.
- 80CCD(1B) allows an additional deduction of up to ₹50,000 for NPS contributions, over and above the ₹1,50,000 limit. This is a genuine extra benefit.
- 80CCD(2) covers the employer's NPS contribution — no upper cap in rupees (subject to 10% of salary), and available even under the new regime.
So the maximum possible deduction combining 80C + 80CCD(1B) is ₹2,00,000, before considering 80CCD(2).
New Tax Regime Warning: 80C Does Not Apply
From FY 2023-24 onwards, the new tax regime is the default. If you do not explicitly opt for the old regime when filing your ITR (or via Form 10-IEA for business income), you automatically lose all Section 80C deductions. Make this choice consciously — especially if your 80C investments already exceed ₹1 lakh, the old regime often wins at higher income slabs.
Common Mistakes People Make with Section 80C
- Claiming employer EPF contribution. Only the employee's share of EPF (typically 12% of basic pay) qualifies under 80C. The employer's matching contribution does not — ever. Many salaried individuals read their Form 16 wrong and double-count this.
- Buying insurance just to fill the 80C limit. A ₹1,50,000 insurance premium on a policy with a ₹10,00,000 sum assured will fail the 10%-of-sum-assured test, and the excess premium is disallowed. Always check the ratio before buying.
- Selling or surrendering ELSS before 3 years. If you redeem ELSS units within the 3-year lock-in, the deduction previously claimed becomes taxable as income in the year of redemption. This reversal catches many investors off-guard.
- Including hostel/mess fees in tuition fees. Only the tuition fee component paid to a recognised educational institution qualifies. Development fees, capitation fees, donations, and hostel charges are explicitly excluded. Claiming the full school fee receipt is a common audit trigger.
- Missing the deadline for PPF or NSC in the same financial year. A PPF deposit made on or after 1 April 2027 counts for FY 2027-28, not FY 2026-27. Last-minute investors sometimes miss the March 31 cut-off and lose the deduction for the year.
How to Claim 80C Deductions While Filing Your ITR
Claiming 80C is straightforward if you are prepared:
- Salaried individuals declare investments to their employer by the deadline given (usually January–February) so TDS is adjusted. Declare again in your ITR if you missed informing the employer.
- Report all 80C investments in Schedule VI-A of the ITR form.
- Keep proofs — EPF passbook, PPF passbook, ELSS consolidated account statement, insurance premium receipts, tuition fee receipts — for at least 6 years in case of scrutiny.
- Cross-check Form 26AS and the Annual Information Statement (AIS) to make sure interest income from NSC is correctly reported.
Do it yourself in minutes — free to try, no login needed.
Open Tax Calculator →Frequently asked questions
Can I claim Section 80C deductions under the new tax regime in FY 2026-27?
No. Section 80C deductions are not available if you opt for the new tax regime. They apply exclusively under the old tax regime. Since the new regime is now the default, you must actively opt for the old regime to use 80C benefits.
Is the ₹1.5 lakh limit per person or per family?
It is per individual taxpayer. A husband and wife each get their own ₹1,50,000 limit. However, when claiming tuition fees, each parent can claim fees for a maximum of two children — so if fees are split between spouses, effectively four children's fees can be covered in one household.
Does home loan principal repayment under 80C affect my Section 24 interest deduction?
No, they are separate. The principal repayment goes under Section 80C (up to the ₹1.5 lakh combined ceiling), while the interest on a home loan is deductible under Section 24(b) — up to ₹2,00,000 for a self-occupied property. You can claim both simultaneously under the old regime.
What happens if I invest more than ₹1.5 lakh in PPF in a year?
PPF itself has an annual deposit ceiling (currently ₹1,50,000 per account per year set by the scheme rules). Even if the limit were higher, only ₹1,50,000 would be deductible under Section 80C across all instruments combined. Excess deposits earn interest but yield no additional tax deduction.
General information for FY 2026-27, not professional advice for your specific case. Rules change — verify against the latest notification or ask a KyaTax expert.
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