Section 80C Deductions List - Income Tax Deduction Under Section 80C
Introduction
One of the most widely used tax‑saving provisions in India is Section 80C of the Income‑tax Act, 1961. Under this section, individuals and Hindu Undivided Families (HUFs) can claim deductions for specified investments or payments, thereby reducing their taxable income. For FY 2025‑26 (Assessment Year 2026‑27), the deduction limit remains at ₹1,50,000 per financial year. It covers a wide variety of instruments — from life‑insurance premiums to home‑loan principal repayments, from PPF to ELSS, and more. Even with the newer optional tax regime available, the 80C deduction remains relevant for taxpayers who use the “old tax regime” or want to maximise deductions.
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What is Section 80C?
Section 80C allows a deduction from the “gross total income” of an individual or HUF for certain payments or investments made during the financial year. The effect: your taxable income is reduced by the deduction amount (up to a limit), thereby lowering your tax liability. The deduction is over and above standard deductions etc, but is only available if you’re following the old tax regime (or if you switch accordingly).
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Who can claim?
- Resident Individuals and HUFs (Hindu Undivided Families).
- Not available to companies, firms, etc.
- Investments/payments must be in India and satisfy conditions.
Deduction Limit
- The maximum deduction under Section 80C remains ₹1,50,000 in FY 2025‑26.
- This is the cap for the aggregate of eligible investments/payments under Section 80C (and certain related sections) in that year.
- Note: If you opt for the new tax regime, many of these deductions (including 80C) may not apply — check your regime choice.
Eligible Investments & Payments Under Section 80C
Here’s a summary of common qualifying items (with conditions) for Section 80C:
Investment/Payment
Description / Conditions
Life insurance premium
Premium paid for policy on the life of the self, spouse, or children.
Employee Provident Fund (EPF) / Voluntary Provident Fund (VPF)
Contribution by the employee to EPF/VPF qualifies.
Contribution up to prescribed limits qualifies.
National Savings Certificate (NSC)
Investment in NSC in the specified series qualifies.
Equity Linked Savings Scheme (ELSS)
Investment in ELSS mutual funds with a lock‑in qualifies.
Home loan principal repayment
The principal portion of the EMI on a residential house loan qualifies.
Stamp duty & registration fees for the purchase of a residential house
Payments made for registration/stamp duty of property purchase/ construction qualify.
Tuition fees for up to two children
Tuition for full‑time education in India for up to two children qualifies (other charges like donations, development fees may not).
Sukanya Samriddhi Yojana (SSY)
Contribution to the SSY account for the girl child qualifies.
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Five‑year fixed deposit with bank/post office
Tax‑saving FD with a lock‑in of 5 years qualifies.
Infrastructure / notified bonds (under earlier notifications)
Investment in certain notified bonds qualifies (subject to notification).
Important: The above list isn’t exhaustive. The official site of the Central Board of Direct Taxes has a detailed table of deductions under Section 80C.
How to Claim the Deduction
- Invest or incur the payment in the relevant financial year (e.g., from 1 April to 31 March).
- Keep proofs: receipts, certificates, bank statements, and enrolment documents.
- While filing your Income‑Tax Return (ITR) for the Assessment Year (e.g., AY 2026‑27 for FY 2025‑26), report the amount claimed under Section 80C.
- Ensure the total of all eligible items under Section 80C does not exceed the limit (₹1,50,000).
- If you switch to the new tax regime, understand that the Section 80C deduction may not apply
Recent Updates & What to Watch
- The Budget/Tax Bills have clarified that no change was made to the ₹1,50,000 limit under Section 80C in recent updates.
- The proposed Income Tax Bill 2025 intends to shift Section 80C deductions to Clause 123 of a new framework effective 1 April 2026, but as of now, the deduction continues under Section 80C
- It remains crucial to choose the old tax regime if you wish to fully utilise Section 80C deductions. Under the new regime, many deductions may not apply.
Who Should Use Section 80C Strategically?
- Salaried employees who have taxable income and want to reduce tax via investments/ payments.
- Self‑employed individuals & professionals (resident individuals/HUFs) who have taxable income and can use these instruments.
- Those using the old tax regime and able to invest/commit to the lock‑in/terms of instruments.
- Individuals seeking a mix of tax saving + long‑term saving/investment features (since many options under 80C also serve savings/retirement goals).
Conclusion
Section 80C remains the cornerstone of tax planning for many Indian taxpayers. With a deduction limit of ₹1,50,000 for FY 2025‑26, it offers a broad range of investments and payments that also serve long‑term savings, retirement, or educational goals. While the new tax regime offers simplified slabs, Section 80C under the old regime continues to deliver value for those eligible and willing to invest/commit.