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Section 80C Deductions 2026: Full Investment List

Section 80C lets you reduce taxable income by up to ₹1.5 lakh under the old tax regime. Here is every eligible investment, lock-in periods, returns, and who should actually use it.

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Section 80C gives you a deduction of up to ₹1.5 lakh per year from your taxable income — but only under the old tax regime. And before you start planning investments to fill that limit, there’s one calculation most salaried employees skip entirely: your EPF contribution probably already uses a chunk of it.

This guide covers every eligible 80C instrument, lock-in periods, returns, and what strategy makes sense at different income levels. But first — the question that determines whether any of this matters for you: should you even be on the old regime?

What Section 80C Actually Does

Under the old tax regime, Section 80C lets you deduct qualifying investments and certain expenses from your taxable income, up to a combined cap of ₹1,50,000 per financial year.

If your taxable income is ₹10 lakh and you invest ₹1.5 lakh in eligible instruments, your taxable income drops to ₹8.5 lakh. At a 20% marginal rate, that’s ₹30,000 in actual tax saved.

One hard rule: Section 80C deductions only work under the old tax regime. If you’re on the new regime (the default from FY 2023-24), investing in PPF, ELSS, or NPS contributions under 80C reduces your tax by exactly ₹0. The investments are still worth making for wealth building — but they won’t lower your tax bill.

The EPF Trap Most Employees Walk Into

Here’s the math almost no one does before the year-end scramble:

Your employee EPF contribution qualifies under 80C. If your basic is ₹50,000/month and EPF is deducted at 12% of basic (capped at ₹15,000), your monthly EPF deduction is ₹1,800 — which is ₹21,600/year. That’s already consuming ₹21,600 of your ₹1.5L limit.

But if your basic is ₹1 lakh/month and your employer contributes EPF on the full basic (not capped at ₹15,000), your annual employee EPF contribution could reach ₹1,44,000 — which is 96% of the Section 80C limit before you’ve opened a single PPF account.

Do this first: Take your monthly basic × 12% × 12. That’s your annual EPF contribution. Subtract from ₹1,50,000. What’s left is your actual 80C headroom for other investments.

Complete List of Section 80C Eligible Investments

InvestmentMax AmountLock-inExpected ReturnsRiskLiquidity
Employee Provident Fund (EPF)₹1,50,000 (shared limit)Till retirement (partial withdrawal allowed)8.25% p.a. [VERIFY]NoneLow
Public Provident Fund (PPF)₹1,50,00015 years (partial from year 7)7.1% p.a. [VERIFY]NoneLow
ELSS Mutual FundsNo upper limit (deduction capped at ₹1.5L)3 yearsMarket-linked (~12–14% historical) [VERIFY]HighModerate after lock-in
NPS (80CCD(1))Up to 10% of basic salary, within ₹1.5L capTill retirement (60 years)Market-linked (~9–11% historical) [VERIFY]MediumVery low
National Savings Certificate (NSC)No upper limit (deduction capped)5 years7.7% p.a. [VERIFY]NoneNone
Senior Citizens Savings Scheme (SCSS)₹30 lakh (deduction capped at ₹1.5L)5 years8.2% p.a. [VERIFY]NonePartial allowed
5-Year Tax-Saving FDNo upper limit (deduction capped)5 years6.5–7.5% (varies by bank) [VERIFY]None (DICGC insured up to ₹5L)None
Sukanya Samriddhi Yojana (SSY)₹1,50,000Till daughter turns 218.2% p.a. [VERIFY]NonePartial allowed
Life Insurance PremiumPremium amountPolicy termPolicy-specificLowLow
Tuition Fees (children)Up to 2 children’s feesN/A (school/college year)N/AN/AN/A
Home Loan Principal RepaymentActual repayment (capped at ₹1.5L)5-year lock-in on houseN/AN/AN/A

[VERIFY: All interest rates — PPF, NSC, SCSS, SSY are government-notified quarterly. EPF rate is EPFO-notified annually. Confirm latest rates before publishing.]

EPF

Already coming out of your payslip every month. No action needed — your employer handles it. But because it counts toward your 80C limit, calculate your annual contribution before planning anything else.

PPF (Public Provident Fund)

Government-backed, with triple tax benefit: contributions are 80C-deductible, interest is tax-free, and maturity proceeds are tax-free. That’s what’s called an EEE instrument — exempt at all three stages.

The trade-off is liquidity. 15-year lock-in with limited exit options. Partial withdrawal is allowed from year 7 onwards, and you can take a loan against the balance between years 3 and 6. Good for disciplined long-term savers. Not suitable for people who might need the money within 5–7 years.

ELSS (Equity Linked Savings Scheme)

The only 80C instrument with market-linked returns and the shortest lock-in at 3 years. ELSS funds invest primarily in equities — returns vary, but historical 10-year category returns have been in the 12–14% range [VERIFY]. The 3-year lock-in applies per instalment: each monthly SIP into an ELSS fund has its own 3-year clock from that specific investment date.

ELSS carries equity risk. There have been years with negative returns. It’s not suitable if you need capital preservation or have a large expense coming up in the next few years.

NPS Under Section 80CCD(1)

NPS contributions within 10% of your basic salary count under 80C (within the ₹1.5L cap). There’s an additional ₹50,000 deduction available under Section 80CCD(1B) — this sits over and above the ₹1.5L limit, which makes it valuable for high earners in the old regime.

Lock-in is till age 60. At maturity, 60% of the corpus is tax-free; the remaining 40% must go toward buying an annuity (pension).

One thing many employees miss: if your employer contributes to NPS on your behalf, that’s deductible under Section 80CCD(2) — and this deduction is available even under the new tax regime. Check your CTC letter.

5-Year Tax-Saving FD

The safest 80C option after EPF and PPF. Fixed 5-year lock-in, no premature withdrawal. Interest is taxable (unlike PPF), but the principal qualifies for 80C. DICGC insurance covers up to ₹5 lakh per bank. Good fit for capital-preservation-first investors who want certainty.

Sukanya Samriddhi Yojana (SSY)

Only available for parents or legal guardians of girl children below 10 years old. One of the best-returning government-backed instruments currently — 8.2% p.a. [VERIFY], tax-free on all three fronts (EEE). Maximum ₹1.5 lakh/year per account. Account runs until the girl turns 21, or upon marriage after age 18. Worth knowing for parents with daughters in this age window.

Life Insurance Premium

Term and traditional insurance premiums qualify for 80C. But buying insurance purely to fill the 80C limit is poor planning. Term insurance should be sized to replace your income for your dependents — the 80C benefit is a secondary consideration.

Tuition Fees

School and college tuition fees (not development fees, bus fees, or activity charges — only tuition) paid for up to 2 children qualify. All within the ₹1.5L combined cap.

Home Loan Principal Repayment

The principal portion of your home loan EMI is 80C-deductible. The interest portion is separate — deductible under Section 24(b) up to ₹2L for self-occupied property. Important caveat: if you sell the house within 5 years of taking possession, the 80C deductions previously claimed are added back to your income in the year of sale.

Why 80C Often Doesn’t Matter Under the New Regime

The new tax regime (default for FY 2026-27) doesn’t allow Section 80C deductions. Instead:

  • Lower tax slabs across the board
  • ₹75,000 standard deduction
  • Section 87A rebate making income up to ₹12 lakh completely tax-free

For most salaried employees under ₹12 lakh, the new regime means zero tax without investing a single rupee in 80C instruments. Under the old regime, you’d need significant 80C investments, HRA claims, and other deductions to match that outcome.

Use our Tax Regime Comparison tool to calculate which regime saves more for your exact numbers. Don’t assume.

Best 80C Strategy by Income Level

Under ₹10 Lakh Annual Income

At this level under the new regime, income up to ₹12 lakh already attracts zero tax. The old regime with 80C investments is likely to cost you more. Invest in PPF or ELSS if you want to — but do it for wealth building, not for tax saving. The two decisions are separate.

₹10 Lakh to ₹20 Lakh Annual Income

This is where the comparison is closest and the calculation matters most. An employee with ₹1.5L in 80C, ₹50,000 in NPS under 80CCD(1B), and ₹1.5L HRA exemption may save meaningful tax in the old regime. But an employee with only EPF contributions and no other deductions will likely pay less tax under the new regime. Run the actual numbers.

Above ₹20 Lakh Annual Income

For high earners with genuine deductions — home loan interest under 24(b), full 80C investments, 80CCD(1B) NPS contributions, 80D health insurance — the old regime can save ₹60,000–₹1,50,000+ per year [VERIFY: tax rates above ₹20L under new regime for FY 2026-27]. But the savings only materialize if you’re actually making those investments and maintaining the documentation to claim them.

Frequently Asked Questions

Q: Can I claim Section 80C deduction in the new tax regime?

No. 80C deductions are only available under the old regime. If you’re on the new regime (the default), your 80C investments build wealth but don’t reduce your tax.

Q: My EPF deduction is ₹1,800/month. Do I need to invest in anything else for 80C?

Your annual EPF of ₹21,600 leaves ₹1,28,400 of headroom. Whether to fill it depends on whether you’re on the old regime, and whether the resulting tax saving beats what the new regime gives you with no investment at all. Use our CTC Salary Calculator to model both scenarios.

Q: Can both spouses claim 80C for the same home loan?

Yes — if both are co-borrowers and co-owners of the property, each can claim up to ₹1.5L of principal under 80C (within their individual limit) and up to ₹2L of interest under Section 24(b). This is one of the most under-used deduction opportunities for dual-income households [VERIFY: co-borrower and co-ownership conditions under IT Act].

Q: Is ELSS better than PPF for tax saving?

For the 80C deduction itself — they’re identical. Both give the same ₹1.5L deduction. The difference is in the investment outcome. ELSS has higher potential returns and a shorter lock-in. PPF offers guaranteed, tax-free returns at zero risk. The right choice depends on your risk tolerance, how long you can stay invested, and whether you might need the money in the next 5 years.