Tax Benefits for AY 2026-27
Learn about all eligible investments and payments under Section 80C that qualify for tax deduction up to ₹1,50,000. Discover Life Insurance, PPF, EPF, ELSS, NSC, housing loan principal and more.
The content on this page provides general guidance on Section 80C deductions and is not exhaustive. For complete details, refer to the Income Tax Act, Rules, Notifications, and official e-Filing resources.
Understanding Section 80C
Section 80C of the Income Tax Act, 1961 allows taxpayers to claim deduction from gross total income for certain investments and payments made during the financial year. This is one of the most popular tax-saving provisions under Chapter VI-A.
The deduction under Section 80C is available to resident individuals and Hindu Undivided Families (HUF). It can be claimed regardless of whether you file ITR-1, ITR-2, ITR-3 or ITR-4.
Deduction Limit
Under the old tax regime, deductions under Section 80C, 80CCC and 80CCD(1) share a combined upper limit of ₹1,50,000 per financial year.
This means you can claim deductions from multiple eligible investments and payments, but the total deduction cannot exceed ₹1,50,000 in a financial year.
Under the new tax regime (Section 115BAC), most deductions under Chapter VI-A including Section 80C are not available. However, employer contribution to pension schemes under Section 80CCD(2) and Section 80CCH deductions may still apply.
Eligible Investments
Premium paid towards life insurance policy ( LIC, Jeevan Anand,-term insurance plans) for self, spouse, dependent children or parents. The policy must be in the name of the assessee or spouse or child.
At least 20% of sum assured must be maintained for the policy to qualify (for policies issued after March 2012).
Contribution to PPF account in the name of self, spouse, child or minor. PPF offers EEE status (Exempt-Exempt-Exempt) – interest is tax-free, withdrawal is tax-free, and contribution qualifies for deduction.
Maximum contribution eligible for 80C: ₹1,50,000 per financial year.
Contribution to EPF through salary deduction from your employer (Statutory PF). Both employee and employer contributions qualify for deduction under Section 80C.
Annuity/pension received from EPF at maturity is taxable.
Investment in ELSS mutual funds that qualify as an eligible investment under Section 80C. These are tax-saving equity mutual funds with a mandatory 3-year lock-in period.
Long-term capital gains up to ₹1,00,000 are exempt; gains above this limit are taxed at 10% without indexation benefit.
Investment in NSC (VIII issue) purchased from post offices. The NSC offers guaranteed returns and tax benefits under Section 80C.
Interest is reinvested and qualifies for deduction each year, though final withdrawal is taxable.
Investment in term deposits of 5 years or more with scheduled banks. These must be time deposits (not recurring deposits) to qualify under Section 80C.
Interest earned is taxable as per your income tax slab.
Investment in Post Office Time Deposits (POTD) for 5 years or more qualify for Section 80C deduction, similar to bank fixed deposits.
Investment in SCSS for resident Indian citizens aged 60 years or more. Earlier maturity extension available for another 3 years.
Interest is taxable (quarterly) and subject to TDS if interest exceeds ₹50,000.
Contribution to Sukanya Samriddhi Account for a girl child (up to 2 accounts - one per girl child). Available for girls below 10 years of age.
This account offers high interest rate and EEE status similar to PPF.
Tuition fees paid to any recognized Indian educational institution within India for full-time education of assessee's own children.
Deduction allowed for maximum 2 children. Does not include developmental fees, donation fees, or building funds.
Repayment of principal amount of housing loan taken from RBI, scheduled bank, NHB, or housing finance company for purchase or construction of residential house property.
Also applies to loan for repairs, renovation, or reconstruction of property (from Financial Year 2024-25).
Contribution to LIC's Annuity Super Saving Plan and other Deferred Annuity Plans where the annuity is receivable as pension.
This falls under Section 80CCC but combines with 80C limit of ₹1,50,000.
Contribution to National Pension System (NPS) or other pension schemes notified by Central Government, where PRAN (Permanent Retirement Account Number) is alloted.
Employee contribution qualifies for 80CCD(1), combining with 80C limit. Government matching contribution qualifies under 80CCD(2).
Investment in ULIP of UTI or LIC (Old policies only - ULIPs issued after Feb 2014 are not eligible for Section 80C).
For policies issued before this date, premium paid qualifies for deduction.
Claiming Deduction
For Salary/Pension income, submit Form 12BB to your employer with details of investments and deductions you plan to claim. This helps the employer calculate correct TDS.
While filing your ITR, enter the eligible deduction amount under Schedule Part A - Deductions from Total Income. Ensure you have documentary proof for all claimed amounts.
Retain all receipts, certificates, and policy documents as proof. These may be verified during income tax assessment or e-Filing verification.
Documentation
| Investment / Payment | Documents Required |
|---|---|
| Life Insurance Premium | Policy document, Premium receipt, Policy number, Sum assured details |
| PPF / EPF | Account number, Contribution certificate, Form 16 (for EPF) |
| ELSS Mutual Funds | Investment statement, Fund name, Folio number, Amount invested |
| NSC | NSC Certificate, Purchase receipt, Investment amount |
| Fixed Deposits / Post Office Deposits | FD/TD certificate, Bank/Post Office name, Deposit amount |
| SCSS / SSY | Account number, Passbook, Contribution receipt |
| Tuition Fees | Fee receipt, Institution name, Bonafide certificate |
| Housing Loan Principal | Loan account number, Sanction letter, Repayment certificate, Lender details |
| NPS / Pension Scheme | PRAN (Permanent Retirement Account Number), Contribution statement, Scheme name |
Tax Planning
Common Questions
The maximum deduction under Section 80C (combined with 80CCC and 80CCD(1)) is ₹1,50,000 per financial year. This is the combined limit for all eligible investments and payments.
Yes, contribution to National Pension System (NPS) by an employee qualifies under Section 80CCD(1), which combines with Section 80C limit of ₹1,50,000. You need your PRAN (Permanent Retirement Account Number) to claim this deduction.
No, deduction for tuition fees is limited to 2 children. You cannot claim deduction for tuition fees paid for a third child under Section 80C.
No, under the new tax regime (Section 115BAC), deductions under Section 80C, 80CCC and most other Chapter VI-A deductions are not available. However, employer contribution to pension schemes under Section 80CCD(2) may still be claimed.
Life Insurance policies (including term insurance, endowment, money-back, and ULIP policies issued before Feb 2014) qualify, provided the policy is in the name of the assessee, spouse, or child. The policy must maintain at least 20% of sum assured for policies issued after March 2012.
Yes, you can contribute to PPF accounts in the name of your spouse or dependent child, and claim deduction under Section 80C. The contribution counts towards your own ₹1,50,000 limit.
Yes, repayment of principal amount of a housing loan from any financial institution (bank, housing finance company, or NHB) qualifies for Section 80C deduction. This includes loans for purchase, construction, repair, or renovation of residential property.
Resident Indian citizens aged 60 years or more can invest in SCSS. Non-resident Indians (NRIs) are not eligible. The scheme is available at post offices and authorized banks.
ELSS funds have a mandatory lock-in period of 3 years from the date of investment. You cannot redeem or switch units before completing 3 years. After 3 years, the investment is tax-efficient with LTCG taxed at 10% above ₹1,00,000.
Deduction Interaction
An additional deduction up to ₹50,000 is available under Section 80CCD(1B) for contribution to NPS. This is over and above the ₹1,50,000 limit under 80C/80CCD(1).
This deduction is available for both old and new tax regimes.
Deduction for employer's contribution to NPS (after the employee's joining) is available under Section 80CCD(2). This is over and above the 80C limit.
Limit is 14% of salary for Central/State Government employers, and 10% for other employers.
Additional interest deduction up to ₹1,50,000 is available under Section 80EEA for first-time home buyers (loan sanctioned between April 2019 and March 2022).
This is available only after exhausting the Section 24(b) interest limit of ₹2,00,000.
Understanding Provisions
| Section | Covers | Combined Limit |
|---|---|---|
| Section 80C | Life Insurance Premium, PPF, EPF, ELSS, NSC, 5-Year Bank FDs, Post Office Deposits, SCSS, SSY, Tuition Fees (max 2 children), Housing Loan Principal, ULIP (old policies) | ₹1,50,000 |
| Section 80CCC | Annuity plan of LIC (pension policies) - now merged with 80C | |
| Section 80CCD(1) | Employee contribution to NPS/pension schemes | |
| Section 80CCD(1B) | Additional employee contribution to NPS (over 80C limit) | ₹50,000 extra |
| Section 80CCD(2) | Employer contribution to NPS | 14% or 10% of salary |
All three sections (80C, 80CCC, 80CCD(1)) share the same ₹1,50,000 limit. Claims under these sections are mutually exclusive – the same amount cannot be claimed under multiple sections.