Section 80C still offers up to ₹1,50,000 of deduction — but only if you choose the old regime. Under the default new regime, every item on this list is worth zero.
Quick snapshot
- The ceiling is ₹1,50,000, and it is a combined cap under Section 80CCE across 80C, 80CCC and 80CCD(1).
- 80C is a deduction on amounts paid or deposited — not a rebate and not a refund.
- EPF, PPF, ELSS, life insurance premium, NSC, 5-year tax-saver FD, Sukanya Samriddhi, home loan principal, stamp duty and school tuition fees all qualify.
- Section 80CCD(1B) gives an extra ₹50,000 for NPS, outside the ₹1.5 lakh ceiling.
- Under the new regime of Section 115BAC, the only Chapter VI-A deductions allowed are 80CCD(2) and 80CCH.
- Lock-in periods differ sharply — 3 years for ELSS, 5 years for tax-saver FD and NSC, 15 years for PPF.
- Breaking the lock-in can reverse the deduction and add the amount back to your income.
Section 80C of the Income-tax Act allows an individual or HUF a deduction for specified investments and payments, capped at ₹1,50,000 in a financial year. Section 80CCE makes that ₹1,50,000 a single combined limit for 80C, 80CCC (pension funds) and 80CCD(1) (the employee's own NPS contribution) taken together — you cannot claim ₹1.5 lakh under each. The deduction is available only under the old tax regime. Under the new regime of Section 115BAC, which is the default, 80C is not available at all; only Section 80CCD(2) for the employer's NPS contribution and Section 80CCH survive.
1. Read this before you invest a single rupee for 80C
Since the new regime became the default, the first question is no longer "what should I buy under 80C" but "am I even in the regime where 80C exists".
Under Section 115BAC, the standard set of Chapter VI-A deductions is switched off. The Income Tax Department's own guidance on the e-Filing portal lists the deductions that are not available in the new regime, and Section 80C is among them. What survives is Section 80CCD(2), the employer's contribution to your NPS account, and Section 80CCH.
If you are in the new regime, 80C investments give you no tax benefit
Buying an ELSS fund or a tax-saver FD "to save tax" while filing under the new regime saves nothing. These may still be good products on their own merits, but the tax argument disappears. Salaried taxpayers who want the old regime must opt out of the default — for business or professional income this is done through Form 10-IEA, and the form has its own filing deadline linked to the return.
So the correct sequence is: compute your tax under both regimes with your actual deductions, choose the regime, and only then decide what to buy.
2. The complete list of eligible 80C investments and payments
| Item | What qualifies | Lock-in / condition |
|---|---|---|
| Employees' Provident Fund | Your own contribution to a recognised provident fund | Until the withdrawal event |
| Public Provident Fund | Deposit into your own, spouse's or child's PPF account | 15-year account; limited access earlier |
| ELSS (tax-saving mutual fund) | Subscription to units of an equity-linked savings scheme | 3 years from each instalment |
| Life insurance premium | Premium on a policy for self, spouse or children | Subject to the statutory premium-to-sum-assured test |
| National Savings Certificate (VIII Issue) | Amount invested | 5-year maturity |
| Tax-saver fixed deposit | Term deposit of not less than 5 years with a scheduled bank, under the notified scheme | 5 years, no premature closure |
| Post office 5-year time deposit | Deposit under the notified time deposit scheme | 5 years |
| Sukanya Samriddhi Account | Deposit for a girl child | Long-dated; account runs 21 years |
| Senior Citizens Savings Scheme | Deposit under the notified scheme | 5 years |
| NPS — your own contribution | Claimed under Section 80CCD(1), inside the ₹1.5 lakh cap | Until exit as per PFRDA rules |
| Home loan principal | Repayment of principal on a loan for a residential house | House must not be transferred within 5 years |
| Stamp duty and registration | Paid for the purchase or construction of a residential house | Claimable in the year of payment |
| Tuition fees | Full-time education of any two children at a school, college or university situated in India | Tuition component only |
| Unit Linked Insurance Plan | Contribution to a ULIP | 5 years |
| Sukanya / PPF for dependants | Deposits for spouse and children, within the scheme ceilings | Scheme rules apply |
Two items people get wrong every year
Tuition fees. The deduction covers tuition fees for the full-time education of a maximum of two children, at an institution situated in India. It does not cover donation, development fee, building fund, transport, hostel or coaching charges. A parent can claim for two children; a second parent can claim for two more, but only if the fees are actually paid by that parent.
Life insurance premium. The premium is not automatically deductible in full. The Act restricts the deduction where the annual premium exceeds a specified proportion of the sum assured, and that proportion depends on when the policy was issued. For an old policy, check the issue date before assuming the whole premium qualifies.
3. What is NOT eligible under Section 80C
Commonly mistaken as 80C
- Health insurance premium — that is Section 80D
- Home loan interest — Section 24(b), a separate head
- Education loan interest — Section 80E
- Donations — Section 80G
- NPS extra ₹50,000 — Section 80CCD(1B)
- Employer's NPS contribution — Section 80CCD(2)
Not deductible at all
- Ordinary savings account or fixed deposits of less than five years
- Recurring deposits, gold, crypto assets
- Non-ELSS mutual funds, direct equity, bonds other than notified ones
- Rent, household expenses, personal loan repayment
- Donation, development fee or hostel charges inside a school bill
- Tuition fees for a third child, or for an institution outside India
None of these are "bad" investments. They simply do not sit under Section 80C, and several of them have their own section — which is good news, because deductions under a different section do not eat into your ₹1.5 lakh.
4. The ₹1.5 lakh ceiling: how Section 80CCE actually works
Section 80CCE is the provision that caps the whole family of deductions. It states that the aggregate of the deductions under Sections 80C, 80CCC and 80CCD(1) shall not exceed ₹1,50,000.
Section 80C
Specified investments and payments — everything in the table above.
Section 80CCC
Contribution to a pension fund of an insurer. Inside the ₹1.5 lakh.
Section 80CCD(1)
Your own contribution to NPS or the Atal Pension Yojana. Inside the ₹1.5 lakh.
Section 80CCD(1B)
An additional deduction of up to ₹50,000 for NPS, expressly outside the 80CCE ceiling. The same contribution cannot be claimed twice.
Section 80CCD(2)
The employer's contribution to your NPS. Also outside the ceiling, and it is the one NPS deduction that survives in the new regime. The limit is a percentage of salary — higher for Central and State Government employees than for other employers.
The practical effect: a salaried taxpayer in the old regime with a full EPF contribution often crosses ₹1.5 lakh without buying anything. Add school fees and home loan principal and the cap is usually already exhausted. Check your EPF and tuition numbers before you commit fresh money in March.
5. Lock-in periods compared
| Instrument | Lock-in | Return type | Interest taxable? |
|---|---|---|---|
| ELSS | 3 years | Market-linked | Capital gains on redemption |
| Tax-saver bank FD | 5 years | Fixed, declared by the bank | Yes, fully taxable |
| NSC (VIII Issue) | 5 years | Government-notified | Yes, but reinvested interest can be claimed under 80C |
| Senior Citizens Savings Scheme | 5 years | Government-notified | Yes |
| PPF | 15 years | Government-notified, quarterly review | No — exempt |
| Sukanya Samriddhi | Long-dated, account runs 21 years | Government-notified | No — exempt |
| EPF | Until a permitted withdrawal event | Rate declared by EPFO each year | Exempt subject to conditions |
| NPS | Until exit under PFRDA rules | Market-linked | Partly exempt at exit |
ELSS has the shortest lock-in of the lot, but it carries equity risk and the lock-in applies to each instalment separately — a SIP started in January 2026 has units unlocking month by month through 2029. A tax-saver FD cannot be broken at all before five years, and cannot be pledged for a loan.
Breaking the rules can reverse an earlier deduction
Section 80C has clawback provisions. Sell or transfer a house within five years of the end of the year in which you took possession and the principal, stamp duty and registration deductions already allowed are added back to your income in the year of transfer. Similar add-back rules apply where a life insurance policy is terminated early or a specified deposit is closed before its term. The deduction is conditional, not final.
6. How to claim 80C correctly at filing time
Three things decide whether your claim holds up.
Declare it to your employer on time. Your employer computes TDS on salary and will issue Form 16 reflecting only the proofs you submitted. If you miss the employer's deadline, you have not lost the deduction — you claim it directly in your return and the excess TDS comes back as a refund.
Claim against the right section. In the ITR, 80C, 80CCC, 80CCD(1), 80CCD(1B) and 80CCD(2) are separate fields. Putting your NPS contribution in the wrong box either wastes the extra ₹50,000 or triggers a mismatch.
Keep the evidence. Premium receipts, PPF passbook entries, ELSS statements, school fee receipts showing the tuition component separately, the bank's provisional interest and principal certificate for a home loan, and the stamp duty receipt. You do not attach these to the return, but you must be able to produce them.
Finally, remember the limit is on what you paid or deposited during the financial year. A premium due in March but paid in April falls into the next year's claim.
Frequently asked questions
What is the maximum deduction under Section 80C?
₹1,50,000 in a financial year. Under Section 80CCE this is a combined ceiling for Sections 80C, 80CCC and 80CCD(1) taken together, so you cannot claim ₹1.5 lakh separately under each.
Can I claim 80C under the new tax regime?
No. Under Section 115BAC, which is the default regime, Section 80C is not available. The Income Tax Department's guidance lists it among the deductions that cannot be claimed in the new regime. Only Section 80CCD(2) for the employer's NPS contribution and Section 80CCH remain available.
Is the NPS deduction of ₹50,000 inside the ₹1.5 lakh limit?
No. The additional deduction of up to ₹50,000 under Section 80CCD(1B) is outside the Section 80CCE ceiling. Your own NPS contribution claimed under Section 80CCD(1) is inside the ceiling, and the same amount cannot be claimed under both.
Are school tuition fees eligible under 80C?
Yes, for the full-time education of a maximum of two children at a school, college or university situated in India. Only the tuition component qualifies. Donation, development fee, building fund, transport, hostel and coaching charges are excluded.
Does home loan EMI qualify under 80C?
Only the principal portion of the EMI falls under 80C. The interest portion is claimed separately under Section 24(b) and does not use up your ₹1.5 lakh. Stamp duty and registration charges paid on the purchase are also eligible under 80C, in the year of payment.
Which 80C option has the shortest lock-in?
ELSS, at three years, against five years for a tax-saver bank fixed deposit and NSC and fifteen years for PPF. ELSS is market-linked, so the shorter lock-in comes with capital risk, and the three years run separately from the date of each instalment.
What happens if I sell my house within five years?
The deductions already allowed for principal repayment, stamp duty and registration are withdrawn. The amount is added back to your income in the year of transfer and taxed accordingly. Similar add-back rules apply if a life insurance policy or a specified deposit is terminated before its term.
I missed giving proofs to my employer. Have I lost the deduction?
No. Your employer's Form 16 will show higher TDS, but you can still claim the eligible 80C amount while filing your income tax return. The excess tax deducted comes back to you as a refund after the return is processed.
Sources: Income Tax Department e-Filing portal — deductions available and not available under the old and new regimes; Income Tax Department, Government of India — Income-tax Act, Sections 80C, 80CCC, 80CCD, 80CCE and 115BAC; Department of Posts — Public Provident Fund Scheme 2019, National Savings Certificate (VIII Issue) Scheme 2019 and Sukanya Samriddhi Account Scheme; Department of Economic Affairs, Ministry of Finance — quarterly small savings rate notifications.
Related guides on BeInCareer
- PPF Account Rules: Deposits, Lock-In, Loan and Maturity
- EPF Withdrawal Rules in India 2026: Forms, Limits and Claim Steps
- Save Tax on Your First Salary: New vs Old Regime
- New Income Tax Rules and Slabs From April 1
- How to File Your ITR for the First Time
- Education Loan Repayment and the Section 80E Deduction
- NPS vs PPF vs EPF: Which Retirement Plan Works Best
- Best Investment Plans for Salaried Employees in India
- Term and Health Insurance for Freshers
- Mutual Funds for Beginners in India
