Section 80C lets an individual or HUF cut taxable income by up to ₹1,50,000 a year for money put into PPF, EPF, ELSS tax saving mutual funds, life insurance, children's school fees, home loan principal and a few other items. It works only in the old tax regime; the new regime, which is the default, gives no 80C deduction.
The ₹1.5 lakh is one shared ceiling for 80C, 80CCC (pension plans) and 80CCD(1) (your own NPS contribution). NPS has an extra ₹50,000 slot and employer NPS has its own limit. What you read here is the FY 2025-26 position under the 1961 Act. In tax year 2026-27 this relief now sits in section 123 of the new 2025 Act. The full list of other deductions is on the deductions hub.
Quick facts
Limit
₹1,50,000 a year, shared by 80C, 80CCC and 80CCD(1)Who can claim
Individuals and HUFsRegime
Old regime onlyExtra NPS
₹50,000 more under 80CCD(1B), old regimeEmployer NPS (80CCD(2))
Outside the ₹1.5 lakh; allowed in the new regime tooProof to employer
Form 12BB for FY 2025-26; Form 124 for tax year 2026-27Under the 2025 Act
Section 123, with the list in Schedule XV
Investments and payments that qualify under section 80C
| Option | Minimum lock-in | Tax on returns |
|---|---|---|
| Employee Provident Fund (your share) and VPF | Till you leave or retire, with limited withdrawals | Interest exempt within limits |
| Public Provident Fund | 15 years | Exempt |
| ELSS (equity linked savings scheme) mutual funds | 3 years | LTCG above ₹1.25 lakh taxed at 12.5% |
| Life insurance premium (self, spouse, children) | 2 years to keep the deduction (5 years for ULIPs) | Maturity exempt under 10(10D) within limits |
| Five-year tax saver bank deposit | 5 years | Interest taxable |
| National Savings Certificate | 5 years | Interest taxable |
| Senior Citizens Savings Scheme | 5 years | Interest taxable |
| Sukanya Samriddhi account for a daughter | Till maturity | Exempt |
| Home loan principal, plus stamp duty and registration | Sell within 5 years and the deduction is reversed | Not applicable |
| Tuition fees for up to two children in India | None | Not applicable |
Only tuition counts in school fees; transport, development fees and donations do not. For insurance, the premium counts only up to 10% of the sum assured for most policies issued in recent years.
Tax saving mutual funds (ELSS) under 80C
ELSS funds invest mostly in shares and have the shortest lock-in among 80C options: three years from each instalment. A monthly SIP of ₹12,500 fills the ₹1.5 lakh limit, and each SIP instalment unlocks three years after its own date.
We do not rank funds. When people search for the best tax saving mutual funds, the useful checks are: how long you can stay invested, the expense ratio, and how the fund did over a full market cycle. Remember that returns are not fixed and gains above ₹1.25 lakh a year on sale are taxed at 12.5% as long-term gains.
Section 80CCC, 80CCD(2) and 80CCH
| Section | For | Limit | New regime? |
|---|---|---|---|
| 80CCC | Premium for an annuity or pension plan of an insurer | Within ₹1.5 lakh | No |
| 80CCD(1) | Your own NPS contribution | Within ₹1.5 lakh; up to 10% of salary (20% of income if self-employed) | No |
| 80CCD(1B) | Extra NPS contribution | ₹50,000 over the ₹1.5 lakh | No |
| 80CCD(2) | Employer's NPS contribution | 10% of salary in the old regime (14% for government employers); 14% in the new regime | Yes |
| 80CCH | Agnipath scheme corpus fund contribution | Full contribution | Yes |
80CCD(2) is the one item in this family that salaried staff who opt for the new regime can still use, so it is worth asking the employer to restructure pay where possible.
Worked example: old vs new regime with section 80C
Facts, FY 2025-26. Priya earns a salary of ₹14,00,000. Her EPF share is ₹72,000, PPF ₹50,000, life cover ₹25,000 and ELSS ₹30,000, a total of ₹1,77,000. She also puts ₹50,000 in NPS.
Old regime. Salary ₹14,00,000 less standard deduction ₹50,000, 80C capped at ₹1,50,000 and 80CCD(1B) ₹50,000 gives ₹11,50,000. Tax: ₹12,500 + ₹1,00,000 + ₹45,000 = ₹1,57,500. Cess ₹6,300. Total ₹1,63,800.
New regime. Salary less ₹75,000 standard deduction is ₹13,25,000. Tax: ₹20,000 + ₹40,000 + ₹18,750 = ₹78,750. Cess ₹3,150. Total ₹81,900.
Result. Even with the full 80C and NPS claims, the old regime bill of ₹1,63,800 is double the new regime bill. Priya saves ₹81,900 by choosing the new regime.
80C helps mostly when you also have large claims such as HRA or home loan interest. Compare both regimes in the regime calculator before committing money only to save tax.
ULIP tax benefits under section 80C
ULIP premium counts for 80C like any life policy, subject to the 10% of sum assured rule. If you stop paying or surrender within five years, the deductions you claimed are added back to income in the year you exit. For newer ULIPs the maturity amount is exempt under section 10(10D) only when the yearly premium across your ULIPs is ₹2.5 lakh or less; above that, gains are taxed like equity fund gains.
How to claim 80C at work and in the ITR
- Opt for the old regime with your employer when the year begins, or pick it when you file.
- Give investment proofs with Form 12BB for FY 2025-26 (Form 124 from tax year 2026-27) so less TDS is cut from salary.
- Check that the deduction shows in Part B of your Form 16.
- In the return on the e-filing portal, open the deductions schedule (Chapter VI-A) and enter each 80C item.
- If your employer never got the details, the claim can still be made in the ITR, and any excess TDS is refunded after processing of the return.
What changed for section 80C on 1 April 2026
| Point | FY 2025-26 | Tax year 2026-27 |
|---|---|---|
| Section | 80C, Income-tax Act, 1961 | 123, Income-tax Act, 2025 |
| List of items | Inside section 80C | Schedule XV |
| Limit | ₹1,50,000 | ₹1,50,000 |
| Regime | Old regime only | Only in the old regime |
| Employee declaration | Form 12BB | Form 124 |
Money invested on or after 1 April 2026 is claimed under the new section. Money put in up to 31 March of FY 2025-26 belongs to that year's return.
80C mistakes and fixes
| Error | Fix |
|---|---|
| Claiming 80C while filing under the new regime | Switch to the old regime when filing, if allowed, or drop the claim |
| Adding 80CCD(1) and 80C above ₹1.5 lakh | They share one limit; only 80CCD(1B) adds ₹50,000 |
| Counting school transport and annual charges | Only tuition fees qualify |
| Selling the house within five years after claiming principal | Earlier claims are added back to income in the year of sale |
The figures on this page are a general guide to 80C and are not a recommendation to buy any product. For your own return, check the current limits on the e-filing portal, and with a chartered accountant where needed.
Sources we checked
- Income-tax Act, 1961, sections 80C, 80CCC, 80CCD and 80CCE
- Income-tax Act, 2025, section 123 and Schedule XV
- Income-tax Act, 1961, section 10(10D)
Frequently asked questions
What is 80C in income tax?
Section 80C of income tax act is a deduction of up to ₹1.5 lakh a year for specified savings and payments such as PPF, EPF, ELSS, life insurance premium, tuition fees and home loan principal. It is available only in the old regime.
Can I claim 80C in the new tax regime?
No. 80C, 80CCC and 80CCD(1) are all barred under the new regime. Employer NPS under 80CCD(2) and the Agnipath fund under 80CCH are the exceptions.
What is section 80CCD(2) of income tax act?
It allows a deduction for the employer's NPS contribution, outside the ₹1.5 lakh limit. In the new regime the cap is 14% of salary.
Which tax saving mutual fund has the shortest lock-in?
ELSS funds have a three-year lock-in, the shortest among 80C options. We do not name or rank schemes.
What is deduction under section 80C to 80U?
It is the Chapter VI-A group of deductions, from 80C (savings) to 80U (disability). Most of them apply only in the old regime; see the deductions list for each limit.