Payroll & statutory · Updated October 2026
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.
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.
Section 80C is a 1961-Act number. For income earned from 1 April 2026 (tax year 2026-27), the same deduction sits in Section 123 of the Income-tax Act, 2025, with the Rs 1.5 lakh cap and the old-regime-only condition carried over. The NPS deductions that sat beside it are now in Section 124. Returns for FY 2025-26 still quote 80C, while this year’s investment declaration to your employer uses the new reference.
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.
No. Section 80C is disallowed in the new regime. This is often the deciding factor when choosing between the two.
Yes. Your own 12% EPF deduction is an 80C item and frequently uses up a large part of the limit on its own.
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.