Section 80C Tax-Saving Deductions 2025-26

In this article

80C Overview
Investment Instruments
Additional Deductions
FAQs

Section 80C — The ₹1.5 Lakh Tax-Saving Umbrella

Section 80C of the Income Tax Act, 1961 allows individuals and HUFs to claim a deduction of up to ₹1.5 lakh per financial year from their gross total income by investing in specified instruments. This is only available under the Old Tax Regime.

Important for AY 2026-27: Section 80C deductions are NOT available under the New Tax Regime (Section 115BAC). If you wish to claim 80C benefits, you must explicitly opt for the Old Tax Regime while filing your ITR.

80C Investment Instruments — Complete List

Instrument	Lock-in	Returns	Risk
PPF (Public Provident Fund)	15 years	7.1% p.a. (tax-free)	Very Low
ELSS (Equity Linked Savings Scheme)	3 years	Market-linked (12–15% hist.)	Moderate-High
EPF (Employee Provident Fund)	Till retirement	8.25% p.a. (tax-free)	Very Low
NSC (National Savings Certificate)	5 years	7.7% p.a. (taxable)	Very Low
5-Year Tax Saver FD	5 years	6.5–7.5% p.a. (taxable)	Very Low
Life Insurance Premium (LIC)	Policy term	4–6% p.a.	Low
Tuition Fees (2 children)	N/A	N/A	N/A
Home Loan Principal	5 years	N/A	N/A
SCSS (Senior Citizens Savings Scheme)	5 years	8.2% p.a. (taxable)	Very Low
Sukanya Samriddhi Yojana	Till girl is 21	8.2% p.a. (tax-free)	Very Low

Best combination for most salaried employees: EPF contribution is automatic (₹~60K), top up with PPF (₹~50K) + ELSS (₹~40K) to max out the ₹1.5L limit with a mix of safety and growth.

Beyond Section 80C — Additional Deductions

80D Health insurance premium — up to ₹25,000 self/family; ₹50,000 for senior citizen parents

80CCD(1B) NPS self-contribution — additional ₹50,000 over and above 80C limit

80CCD(2) Employer NPS contribution — up to 14% of basic salary (also available in New Regime)

80E Education loan interest — unlimited deduction for 8 years

80G Donations to approved charities — 50%–100% deduction

24(b) Home loan interest — up to ₹2 lakh for self-occupied property

Income Tax Slabs FY 2025-26 — New vs Old Regime

The new tax slab in India for FY 2025-26 (AY 2026-27) under the New Tax Regime is now the default for all taxpayers. Understanding the new tax slab in India is essential before deciding whether to claim 80C deductions — because if you choose the New Regime, 80C deductions are not available. The table below shows both regimes so you can compare:

Income Slab	New Regime Tax Rate	Old Regime Tax Rate
Up to ₹3,00,000	Nil	Nil
₹3,00,001 – ₹6,00,000	5%	5% (up to ₹5L) / 20% (₹5–6L)
₹6,00,001 – ₹9,00,000	10%	20%
₹9,00,001 – ₹12,00,000	15%	20% / 30%
₹12,00,001 – ₹15,00,000	20%	30%
Above ₹15,00,000	30%	30%

New Regime Advantage: Tax rebate under Section 87A means zero tax for income up to ₹7 lakh under the New Regime (up to ₹5 lakh under Old Regime). However, 80C, HRA, LTA, and most deductions are NOT available in the New Regime — making the Old Regime beneficial for taxpayers who can claim ₹1.5L+ in deductions.

Short-Term Capital Gains Tax India — Rates & Rules

Asset Type	Holding Period (Short-Term)	STCG Tax Rate
Equity shares / Equity MF	< 12 months	20% (w.e.f. 23 July 2024, previously 15%)
Debt mutual funds (post-Apr 2023)	Any period	Added to income — taxed at slab rate
Real estate / Land	< 24 months	Added to income — taxed at slab rate
Gold / Other assets	< 36 months	Added to income — taxed at slab rate

Budget 2024 Change: STCG on equity was raised from 15% to 20% effective 23 July 2024. LTCG on equity was raised from 10% to 12.5% (with exemption raised from ₹1L to ₹1.25L per year).

Frequently Asked Questions

Can I claim 80C even if my EPF contribution already exceeds ₹1.5 lakh?

No. The total 80C deduction is capped at ₹1.5 lakh regardless of how many instruments you invest in. If your EPF alone exceeds this, additional 80C investments will not give you extra deduction — but 80CCD(1B) for NPS gives you an additional ₹50,000.

Is ELSS better than PPF for tax saving?

ELSS has a shorter lock-in (3 years vs 15 years) and historically higher returns (equity-linked), but comes with market risk. PPF gives guaranteed, tax-free returns with sovereign backing. The right choice depends on your risk appetite and investment horizon.

Can I claim tuition fees for my spouse under 80C?

No. Section 80C allows deduction for tuition fees paid for full-time education of your own children only (up to 2 children). Spouse fees do not qualify.

Is the maturity amount of PPF taxable?

No. PPF is an EEE (Exempt-Exempt-Exempt) instrument — the contribution, interest, and maturity amount are all tax-free. This makes it one of the most tax-efficient savings instruments available.

Section 80C Deductions: Complete List of Tax-Saving Investments for 2025–26