Indian income tax | Deductions

Section 80C Deductions: Eligible Investments, Limits and Conditions

Section 80C of the Income-tax Act, 1961 provides deductions for specified savings, investments and payments, subject to conditions. The deduction is generally available to individuals and Hindu undivided families (HUFs) under the old tax regime.

Important for FY 2025-26 and FY 2026-27: The combined ceiling under Sections 80C, 80CCC and 80CCD(1) is Rs. 1,50,000 under the old regime. Section 80C is generally unavailable under the default new tax regime (Section 115BAC). Tax rules depend on the relevant financial year and applicable legislation.

Who can claim Section 80C?

Individuals and HUFs may claim eligible amounts actually paid or deposited during the financial year, subject to the conditions of each investment or expense. The aggregate deduction cannot exceed the statutory ceiling or eligible gross total income. Companies and firms cannot claim Section 80C.

Eligible investments and payments under Section 80C

Investment or expense	Key conditions
Life insurance premium	Policy on the life of self, spouse or children for individuals, or any HUF member. Premium eligible for deduction is generally limited to 10% of actual capital sum assured for policies issued on or after 1 April 2012; a 15% threshold applies to specified eligible disability or disease cases for policies issued on or after 1 April 2013. Earlier policies generally have a 20% threshold. Premature termination may trigger reversal.
Employees' Provident Fund (EPF) and recognised provident fund	Employee contributions qualify; employer contributions are not an employee's Section 80C deduction. Repayment of a provident fund loan is not eligible merely as a contribution.
Public Provident Fund (PPF)	Eligible subscriptions subject to account rules. The annual PPF deposit limit is Rs. 1,50,000, with a usual minimum of Rs. 500.
Tuition fees	Tuition fees paid to eligible Indian educational institutions for full-time education of up to two children of an individual. Donations, development fees and similar charges are excluded.
Five-year tax-saving bank deposits	Qualifying fixed deposits with scheduled banks, subject to the prescribed five-year lock-in and scheme rules.
Housing loan principal and purchase costs	Qualifying principal repayment for purchase or construction of a residential house, and eligible stamp duty and registration charges. Interest is not claimed under Section 80C. Transfer within five years from the end of the financial year of possession may reverse prior deductions.
National Savings Certificates (NSC)	Qualifying NSC investments; accrued interest deemed reinvested may qualify, except interest payable on maturity.
Equity Linked Savings Scheme (ELSS)	Investments in eligible tax-saving mutual fund schemes, generally with a three-year lock-in.
Unit Linked Insurance Plans (ULIPs)	Qualifying ULIP contributions subject to statutory insurance conditions and plan-specific lock-in rules, typically five years.
Post Office five-year time deposit	Eligible five-year deposits under the applicable post office scheme rules.
Approved superannuation fund and annuity arrangements	Specified employee contributions and eligible annuity-plan payments, subject to the precise statutory provision.
Notified pension funds, housing schemes, NABARD bonds and approved shares or debentures	Only investments specifically qualifying under Section 80C and relevant notifications qualify; not every product in these categories is eligible.

Section 80CCC: Pension annuity plans

Section 80CCC covers qualifying contributions by an individual to specified pension annuity plans of LIC or another insurer. The deduction falls within the combined Rs. 1,50,000 limit under Section 80CCE. Pension receipts and amounts received on surrender are generally taxable as provided by law.

Section 80CCD: National Pension System (NPS)

Section 80CCD(1) generally permits an eligible individual's own NPS contribution up to 10% of salary for employees or 20% of gross total income for self-employed persons, within the overall Section 80CCE ceiling. An additional deduction up to Rs. 50,000 under Section 80CCD(1B) is available under the old regime, subject to conditions and without double-counting contributions.

Employer contributions may qualify separately under Section 80CCD(2), subject to applicable percentage limits. Unlike the usual Section 80C deduction, Section 80CCD(2) may also be available under the new regime, subject to its conditions.

Section 80CCG: Rajiv Gandhi Equity Savings Scheme

The former Section 80CCG provided limited relief for qualifying first-time equity investments under the Rajiv Gandhi Equity Savings Scheme, historically up to 50% of qualifying investment capped at Rs. 25,000, subject to income and lock-in requirements. No deduction is available under Section 80CCG from assessment year 2018-19 onward; it should not be treated as a current tax-saving option.

Practical example

Suppose an individual using the old regime pays Rs. 65,000 into PPF, Rs. 50,000 in eligible EPF contributions and Rs. 55,000 in qualifying tuition fees. The eligible total is Rs. 1,70,000, but the deduction under Section 80C is restricted to Rs. 1,50,000, assuming all statutory conditions are met.

Points to check before claiming

Confirm whether the old or new tax regime applies for the relevant year.
Check product eligibility, contribution dates, ownership and lock-in requirements.
Keep payment records, investment certificates and other supporting documents.
Do not claim the same payment twice under different provisions.
Review tax consequences of premature withdrawal or disposal.

Related income tax guidance

For connected deductions, see the following guides:

This article is general information, not individual tax advice. Verify the law, notifications and return instructions applicable to your assessment year before filing.