What investments qualify for Section 80C deduction and what is the limit?
Section 80C of the Income Tax Act allows individuals and HUFs to claim a deduction of up to ā¹1,50,000 per financial year on specified investments and expenses. This is one of the most popular tax-saving sections in India.
Note: Section 80C deductions are only available under the old tax regime. If you opt for the new regime, you cannot claim 80C.
Eligible investments and expenses:
| Investment | Lock-in Period | Returns (approximate) |
|---|---|---|
| PPF (Public Provident Fund) | 15 years | 7.1% (tax-free) |
| ELSS (Equity Linked Savings Scheme) | 3 years | Market-linked |
| EPF (Employee Provident Fund) | Till retirement | 8.25% |
| NSC (National Savings Certificate) | 5 years | 7.7% |
| 5-year Tax Saver FD | 5 years | 7-7.5% |
| SCSS (Senior Citizens Savings Scheme) | 5 years | 8.2% |
| Sukanya Samriddhi Account | Till girl turns 21 | 8.2% |
| Life Insurance Premium | Policy term | Varies |
| NPS (additional ā¹50K under 80CCD(1B)) | Till 60 | Market-linked |
Other expenses that count under 80C:
- Tuition fees for up to 2 children (school/college, not private tuitions)
- Home loan principal repayment
- Stamp duty and registration charges on property purchase
Related sections that stack on top of 80C:
- Section 80CCD(1B): Additional ā¹50,000 deduction for NPS contributions (over and above the ā¹1.5L limit)
- Section 80CCD(2): Employer's NPS contribution, up to 14% of salary (available in both old and new regimes)
Strategy tip: ELSS has the shortest lock-in (3 years) among 80C options and offers equity market returns. PPF is the safest with guaranteed tax-free returns. Most tax planners recommend a mix: max out EPF (automatic), invest in ELSS for growth, and use PPF for safe, long-term compounding.
No spam. Just this answer, straight to your inbox.