Section 80C deduction: what qualifies and the limit
What the section 80C deduction of the Income Tax Act covers, the aggregate limit shared with sections 80CCC and 80CCD(1), which investments and payments qualify, and why it applies only under the old tax regime.
In this guide
Section 80C of the Income Tax Act, 1961 lets an individual or Hindu Undivided Family deduct up to ₹1,50,000 a year for specified investments and payments, such as life insurance premium, EPF and PPF contributions, ELSS, principal repayment of a home loan, and tuition fees. The ₹1,50,000 ceiling is shared across sections 80C, 80CCC, and 80CCD(1) under section 80CCE. The deduction is available only if the taxpayer opts for the old tax regime. From 1 April 2026 the same relief is section 123 of the Income-tax Act, 2025.
What does section 80C allow?
Section 80C of the Income Tax Act, 1961 lets an individual or Hindu Undivided Family reduce taxable income by the amount invested or paid into specified options. Section 80C lists those options, which range from provident fund contributions to life insurance premium and home loan principal. From 1 April 2026 the same relief is section 123 of the Income-tax Act, 2025.
The deduction is from gross total income, so it lowers the income on which tax is computed. It is available only to an individual or HUF, and only under the old tax regime.
What is the section 80C limit?
The section 80C limit is ₹1,50,000 in a financial year. Amounts above that give no further 80C benefit, however much is invested.
Section 80CCE makes this a combined ceiling. The total of deductions under sections 80C, 80CCC, and 80CCD(1) cannot exceed ₹1,50,000 together, so a pension contribution under 80CCC uses part of the same ₹1,50,000 as an EPF contribution under 80C.
Which investments and payments qualify?
Section 80C covers a defined list. The common ones fall into contributions, insurance, loan repayment, and school fees.
| Item | Note |
|---|---|
| EPF and PPF contributions | Employee EPF share and PPF deposits |
| Life insurance premium | Self, spouse, or child; premium-to-sum-assured cap applies |
| ELSS mutual funds | Three-year lock-in |
| Home loan principal | Interest is separate under section 24(b) |
| Tuition fees | Full-time education of up to two children in India |
| Tax-saving fixed deposit | Five-year lock-in with a scheduled bank |
Does 80C work under the new tax regime?
No. Section 80C is not available under the new tax regime. The new regime offers lower slab rates in exchange for giving up most Chapter VI-A deductions, and 80C is one of them.
A taxpayer who wants the 80C benefit must opt for the old regime for that year. To compare the two before choosing, read our new vs old tax regime guide.
How do 80CCC and 80CCD fit in?
Section 80CCC covers a contribution to a pension fund, and section 80CCD(1) covers an employee or self-employed contribution to the National Pension System. Both share the ₹1,50,000 ceiling with 80C through section 80CCE.
Section 80CCD(1B) is the exception. It gives an extra deduction of up to ₹50,000 for an NPS contribution, over and above the ₹1,50,000 ceiling, so it is not squeezed into the shared limit.
How do I claim the deduction?
- Confirm you are filing under the old tax regime for the year.
- Total your qualifying 80C, 80CCC, and 80CCD(1) amounts.
- Cap the total at ₹1,50,000 under section 80CCE.
- Enter it in the Chapter VI-A deductions part of your ITR.
- Keep the premium receipts, deposit proofs, and fee receipts on file.
Where do taxpayers go wrong?
- Claiming 80C while filing under the new regime.
- Treating the ₹1,50,000 as separate for 80C and 80CCD(1).
- Counting home loan interest under 80C instead of section 24(b).
- Claiming development fees or donations as tuition fees.
- Breaking a lock-in and losing the deduction already taken.
Where is section 80C published?
The deduction sits in section 80C of the Income Tax Act, the shared ceiling in section 80CCE, and the NPS additions in sections 80CCD(1) and 80CCD(1B). For the interest side of a home loan, see section 24(b). Complied AI keeps CBDT / Income Tax updates in one feed so you can open a notification that changes a limit and read section 123 of the Income-tax Act, 2025 next to it.
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Common questions
What is the maximum deduction under section 80C?
The maximum deduction under section 80C is ₹1,50,000 in a financial year. Under section 80CCE this ceiling is a combined limit across sections 80C, 80CCC, and 80CCD(1), so the total of those three deductions cannot exceed ₹1,50,000, whatever the split between them.
Who can claim a section 80C deduction?
Only an individual or a Hindu Undivided Family can claim under section 80C. A company, firm, or LLP cannot. The taxpayer must also be under the old tax regime, because the deduction is not available where income is taxed under the concessional new regime.
Is section 80C available under the new tax regime?
No. Section 80C is not allowed under the new tax regime. A taxpayer who opts for the new regime forgoes most Chapter VI-A deductions, including 80C, in exchange for lower slab rates. To claim 80C the taxpayer must choose the old regime for that year.
Does the home loan principal count under section 80C?
Yes. Repayment of the principal of a home loan for a residential house qualifies under section 80C, within the overall ₹1,50,000 limit. The interest on the same loan is a separate deduction under section 24(b) and does not use the 80C ceiling.
Are children's tuition fees deductible under section 80C?
Yes, tuition fees paid to any school, college, university, or other educational institution in India for the full-time education of up to two children qualify under section 80C. The deduction covers tuition fees only, not development fees, donations, or transport charges.
Is there a lock-in on section 80C investments?
Several qualifying options carry a lock-in. An ELSS mutual fund has a three-year lock-in, a tax-saving fixed deposit has five years, and PPF has a 15-year term with limited early withdrawal. The lock-in is a condition of the deduction, so premature exit from some of these can reverse the benefit.
Can I claim 80C for a life insurance premium on my spouse's policy?
Yes. A life insurance premium paid on a policy for the taxpayer, the spouse, or any child qualifies under section 80C, within the ₹1,50,000 limit and subject to the premium-to-sum-assured cap in the section. For an HUF, the premium can be for any member.
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How this guide was prepared
This guide is published by the Complied AI research desk. Its source list and stated position were checked against the official records shown below on 19 September 2026.
Automation, including AI, may assist research, drafting and structure. It does not replace the official record or amount to an independent professional review. Read our editorial standards and corrections policy.
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