Section 80C is the best-known deduction in Indian income tax. It lets you subtract up to Rs 1,50,000 a year from your taxable income for a defined list of investments and payments. It is available only in the old tax regime; the new regime does not allow it.

What counts

• Your own EPF contribution and any VPF top-up
• Public Provident Fund (PPF)
• Life insurance premiums, for self, spouse or children
• Equity Linked Savings Schemes (ELSS mutual funds)
• Five-year tax-saving fixed deposits and National Savings Certificates
• Principal repayment on a home loan, and stamp duty in the year of purchase
• Tuition fees for up to two children
• Sukanya Samriddhi and the Senior Citizens Savings Scheme

The Rs 1.5 lakh cap is a combined ceiling across everything in the list, not per item. Related sections sit alongside it: 80CCC for pension plans and 80CCD(1) for the employee’s NPS contribution share the same overall Rs 1.5 lakh limit, while 80CCD(1B) adds a separate Rs 50,000 for NPS on top.

A quick sense of the value

For someone in the 30% bracket, a fully used Section 80C is worth about Rs 46,800 in tax including cess. Much of it is often filled automatically by EPF and a home loan before you invest anything extra.

Frequently asked questions

Can I claim 80C under the new tax regime?

No. Section 80C is disallowed in the new regime. This is often the deciding factor when choosing between the two.

Does my EPF contribution count towards the Rs 1.5 lakh?

Yes. Your own 12% EPF deduction is an 80C item and frequently uses up a large part of the limit on its own.

Is there a lock-in on 80C investments?

Most have one: three years for ELSS, five years for tax-saving FDs and NSC, and much longer for PPF. Life insurance must be kept in force for at least two years.

See how 80C changes your tax with the Income Tax Calculator, and declare it correctly through Form 12BB so your monthly TDS reflects it.