Section 80C
Definition
A provision under the Income Tax Act allowing a deduction of up to ₹1,50,000 on investments in specified instruments including EPF, PPF, ELSS, life insurance premiums, NSC, SSY, home loan principal, and 5-year tax-saver FDs. Available only under the old tax regime.
Why is Section 80C Important?
Navigating the Indian tax system requires a clear understanding of terms like Section 80C. With the introduction of the new income tax regime alongside the old one, taxpayers must evaluate their deductions, exemptions, and tax brackets carefully. This concept is a key component in optimizing your tax liabilities under the Income Tax Act and GST framework.
Proper tax planning using this metric can help individuals and businesses maximize their take-home income while remaining fully compliant with government regulations. We provide free tax calculators to help you estimate these figures accurately and make informed decisions before filing your returns.
What is Section 80C?
Section 80C of the Income Tax Act allows deductions of up to ₹1,50,000 per financial year from your gross taxable income. It is the most widely used tax-saving section and covers a broad range of investments and expenses.
Eligible Investments Under 80C
| Investment | Lock-in | Returns | Risk |
|---|---|---|---|
| ELSS Mutual Funds | 3 years | 10-15% | Market-linked |
| PPF | 15 years | 7.1% | Zero |
| EPF (Employee PF) | Until retirement | 8.25% | Zero |
| NSC | 5 years | 7.7% | Zero |
| Tax-Saving FD | 5 years | 6.5-7% | Very Low |
| SCSS | 5 years | 8.2% | Zero |
| Life Insurance Premium | Varies | 4-6% | Low |
| Home Loan Principal | — | Savings on interest | — |
| Children's Tuition Fees | — | — | — |
| Stamp Duty | — | — | — |