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.
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 plan your 80C investments, there’s one thing most salaried employees miss: your EPF contribution almost certainly eats into this ₹1.5L limit before you invest a single rupee elsewhere.
This guide covers every eligible 80C investment, their lock-in periods, returns, and a strategy by income level. Plus the question you should answer before any of this: should you even be on the old regime?
What Section 80C Actually Does
Under the old tax regime, Section 80C of the Income Tax Act lets you deduct eligible investments and expenses from your taxable income, up to a combined maximum of ₹1,50,000 per financial year.
If your taxable income is ₹10 lakh and you invest ₹1.5 lakh in qualifying instruments, your taxable income drops to ₹8.5 lakh. At a 20% marginal rate, that’s ₹30,000 in actual tax saved.
Critical point: Section 80C deductions apply only under the old tax regime. If you’re on the new tax regime (the default from FY 2023-24), investing in PPF, ELSS, or NPS under Section 80C(1) saves you exactly ₹0 in tax. You’re still building wealth — but you’re not reducing tax with it.
The EPF Trap Most Employees Walk Into
Here’s the calculation almost no one does before the year-end tax scramble:
Your employee EPF contribution is an 80C-eligible investment. If your basic salary is ₹50,000/month and EPF is deducted at 12% of basic (capped at ₹15,000), your monthly EPF deduction is ₹1,800. Over 12 months, that’s ₹21,600 per year from your EPF alone.
But if your basic salary is ₹1 lakh/month and your employer contributes EPF on the full basic (not capped), your annual employee EPF contribution could be ₹1,44,000 — consuming 96% of the ₹1.5L Section 80C limit before you open a PPF account.
Check this first: Take your monthly basic salary × 12% × 12. That’s your annual EPF contribution. Subtract it from ₹1,50,000. The remainder is your actual 80C headroom for other investments.
Complete List of Section 80C Eligible Investments
| Investment | Max Amount | Lock-in | Expected Returns | Risk | Liquidity |
|---|---|---|---|---|---|
| Employee Provident Fund (EPF) | ₹1,50,000 (shared limit) | Till retirement (partial withdrawal allowed) | 8.25% p.a. [VERIFY] | None | Low |
| Public Provident Fund (PPF) | ₹1,50,000 | 15 years (partial from year 7) | 7.1% p.a. [VERIFY] | None | Low |
| ELSS Mutual Funds | No upper limit (deduction capped at ₹1.5L) | 3 years | Market-linked (~12–14% historical) [VERIFY] | High | Moderate after lock-in |
| NPS (80CCD(1)) | Up to 10% of basic salary, within ₹1.5L cap | Till retirement (60 years) | Market-linked (~9–11% historical) [VERIFY] | Medium | Very low |
| National Savings Certificate (NSC) | No upper limit (deduction capped) | 5 years | 7.7% p.a. [VERIFY] | None | None |
| Senior Citizens Savings Scheme (SCSS) | ₹30 lakh (deduction capped at ₹1.5L) | 5 years | 8.2% p.a. [VERIFY] | None | Partial allowed |
| 5-Year Tax-Saving FD | No upper limit (deduction capped) | 5 years | 6.5–7.5% (varies by bank) [VERIFY] | None (DICGC insured up to ₹5L) | None |
| Sukanya Samriddhi Yojana (SSY) | ₹1,50,000 | Till daughter turns 21 | 8.2% p.a. [VERIFY] | None | Partial allowed |
| Life Insurance Premium | Premium amount | Policy term | Policy-specific | Low | Low |
| Tuition Fees (children) | Up to 2 children’s fees | N/A (school/college year) | N/A | N/A | N/A |
| Home Loan Principal Repayment | Actual repayment (capped at ₹1.5L) | 5-year lock-in on house | N/A | N/A | N/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 deducted from your payslip each month. No additional action needed — your employer handles it. But because it counts toward 80C, know your annual contribution before planning the rest.
PPF (Public Provident Fund)
Government-backed, fully tax-free: contributions are 80C-deductible, interest is tax-free, and maturity proceeds are tax-free. That’s triple tax benefit. The trade-off: 15-year lock-in with limited exit options. Good for long-term wealth building, not for people who might need the money in 5–7 years.
Partial withdrawal is allowed from year 7 onwards. You can also take a loan against PPF balance between years 3 and 6.
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, so returns vary. The 3-year lock-in is per SIP instalment — each monthly investment in an ELSS fund locks for 3 years from that specific date.
Historical 10-year category returns for ELSS funds have been 12–14% [VERIFY], which is significantly higher than PPF or NSC. But that comes with equity risk — there have been years with negative returns.
ELSS is not suitable if you need capital preservation or are within a few years of a large expense.
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 is over and above the ₹1.5L limit, making it valuable for high-income earners in the old regime.
NPS lock-in is till age 60. At maturity, 60% of the corpus is tax-free; the remaining 40% must be annuitised (used to buy a pension).
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. Worth checking your CTC letter.
5-Year Tax-Saving FD
The safest 80C option after EPF and PPF. Fixed 5-year lock-in. Interest is taxable (unlike PPF), but the principal investment is 80C-deductible. DICGC insures deposits up to ₹5 lakh per bank. Good for capital-preservation-first investors.
Sukanya Samriddhi Yojana (SSY)
Only for parents or legal guardians of girl children below 10 years old. One of the highest-returning government-backed instruments — currently 8.2% p.a. [VERIFY], tax-free on all three fronts (EEE: exempt-exempt-exempt). Maximum contribution ₹1.5 lakh/year per account. Account matures when the girl turns 21, or upon marriage after age 18.
Life Insurance Premium
Premiums paid for life insurance (not health insurance — that falls under Section 80D) are 80C-eligible, subject to conditions. Term insurance premiums qualify. But buying insurance purely for the 80C benefit is poor financial planning — term insurance should be sized for your income protection need, not to fill 80C headroom.
Tuition Fees
Tuition fees (not development fees, bus fees, or activity charges — only tuition) paid to schools, colleges, or universities in India for up to 2 children are 80C-eligible. No upper limit stated separately — just the ₹1.5L combined cap.
Home Loan Principal Repayment
The principal portion of your EMI is 80C-deductible. The interest portion is deductible under Section 24(b) (up to ₹2 lakh for self-occupied property) — that’s a separate deduction. Be careful: if you sell the house within 5 years of 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) does not allow Section 80C deductions. Instead, it offers:
- Lower tax slabs across the board
- ₹75,000 standard deduction
- Full income tax rebate under Section 87A for taxable income up to ₹12 lakh — meaning zero tax
For most salaried employees earning up to ₹12 lakh, the new regime results in zero or near-zero tax without requiring any investment. Under the old regime, you’d need significant 80C investments, HRA claims, and other deductions to beat that.
Use our Tax Regime Comparison tool to calculate which regime saves you more with your specific numbers. Don’t assume — the answer changes based on your salary structure.
Best 80C Strategy by Income Level
Under ₹10 Lakh Annual Income
At this income level under the new regime, income up to ₹12 lakh already attracts zero tax (thanks to Section 87A rebate). You almost certainly don’t need the old regime. The 80C deduction is irrelevant.
If you choose to invest in PPF or ELSS anyway, do it for the wealth-building benefit — not for tax saving. The investment decision and the tax decision are separate.
₹10 Lakh to ₹20 Lakh Annual Income
This is the range where the comparison is closest. Run the actual calculation on both regimes with your deductions. Common scenario: an employee with ₹1.5L in 80C, ₹50,000 in 80CCD(1B) (NPS), and HRA exemption of ₹1.5L would save meaningful tax in the old regime. But an employee with only EPF as their 80C contribution and no other deductions will likely pay less tax under the new regime.
Above ₹20 Lakh Annual Income
Tax rates under the new regime are still capped at 30% marginal rate for income above ₹15 lakh [VERIFY]. For high earners with significant deductions — home loan interest under 24(b), large 80C investments, 80CCD(1B) NPS contributions, 80D health insurance — the old regime can save ₹60,000–₹1,50,000+ per year. But it requires actually making those investments and maintaining documentation.
The higher your income above ₹20 lakh, the more likely the old regime wins — provided you’re actually investing, not just claiming you will.
Frequently Asked Questions
Q: Can I claim Section 80C deduction in the new tax regime?
No. Section 80C deductions are only available under the old tax regime. If you’re on the new regime (which is the default), 80C investments reduce your tax by ₹0. They’re still worth making for wealth building, but they won’t lower your tax bill.
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 80C headroom. Whether to fill it depends on whether you’re on the old regime and whether the resulting tax saving is more than what the new regime gives you without any investment. 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 repayment under 80C (within their individual ₹1.5L cap) and up to ₹2L of interest under Section 24(b). This is one of the most under-utilised deduction opportunities for dual-income households [VERIFY: confirm co-borrower conditions].
Q: Is ELSS better than PPF for tax saving?
ELSS offers higher potential returns and a shorter lock-in. PPF offers a guaranteed, tax-free return with zero risk. The right answer depends on your risk tolerance, investment horizon, and whether you need the money in the next 5 years. For tax saving alone, they’re equivalent — both give the same 80C deduction. The difference is in the investment outcome.
Related Reading
- New vs Old Tax Regime 2026-27: Which Saves You More? — calculate which regime saves more with your specific deductions and salary
- HRA Exemption Calculation 2026-27 — HRA is often the deciding factor in whether the old regime wins
- Section 87A Marginal Relief: The ₹12 Lakh Tax Cliff — why most employees under ₹12 lakh pay zero tax in the new regime