Section 80C — ₹1.5 Lakh Deduction Guide
Section 80C is the most-used deduction, covering PPF, EPF, ELSS, LIC premium, home-loan principal, tuition fees, ULIP, NSC and Sukanya Samriddhi. Total cap ₹1.5L including 80CCC (pension) and 80CCD(1) (NPS employee) but not 80CCD(1B) additional ₹50k. Not available in new regime.
- ₹1.5L annual cap (combined with 80CCC & 80CCD(1))
- ELSS: 3-year lock-in, LTCG > ₹1L taxable at 10%
- PPF: 15-year lock-in, tax-free interest, EEE status
- Home-loan principal deductible; interest is separate under 24(b)
- Tuition fees: only 2 children, only in India
Definition
Section 80C
What is Section 80C?
Section 80C is the most-used deduction, covering PPF, EPF, ELSS, LIC premium, home-loan principal, tuition fees, ULIP, NSC and Sukanya Samriddhi. Total cap ₹1.5L including 80CCC (pension) and 80CCD(1) (NPS employee) but not 80CCD(1B) additional ₹50k. Not available in new regime.
Key rules to remember
- ₹1.5L annual cap (combined with 80CCC & 80CCD(1))
- ELSS: 3-year lock-in, LTCG > ₹1L taxable at 10%
- PPF: 15-year lock-in, tax-free interest, EEE status
- Home-loan principal deductible; interest is separate under 24(b)
- Tuition fees: only 2 children, only in India
Worked example
Bengaluru IT employee: ₹1.2L PF + ₹40k ELSS + ₹18k LIC + ₹36k tuition = ₹2.14L → capped at ₹1.5L; saves ₹46,800 tax at 30% bracket in old regime.
Which ITR form applies
- ITR-1 (Sahaj) — Up to ₹50 lakh total income
- ITR-2 — No upper limit
- ITR-3 — No upper limit
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Frequently asked questions
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Related reading
- Which ITR Form Should You File in 2025? Complete Guide (ITR-1 to ITR-4)
- Section 80C Deduction Guide AY 2026-27: Maximum Tax Saving Explained
- Section 24(b) Home Loan Interest Deduction AY 2026-27: ₹2 Lakh Cap, Pre-Construction, Let-Out vs Self-Occupied & 20 Examples
- The Ultimate Income Tax Deductions Guide AY 2026-27 — Complete Tax Saving Handbook
- ITR-1, ITR-2, ITR-3, ITR-4 — Which Form Do You Actually Need to File?
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People also ask
Do I get an extra tax deduction?+
Yes — ₹50,000 additional deduction under Section 80CCD(1B), over and above ₹1.5L in 80C.
via NPS CalculatorAre 80C/80D deductions available in the new regime?+
Most Chapter VI-A deductions (80C, 80D, 80E, HRA, LTA) are NOT available in the new regime. Only NPS employer contribution and standard deduction survive.
via Income Tax Calculator FY 2025-26Can I invest more than ₹1.5 lakh in PPF?+
No. The statutory cap is ₹1.5 lakh per financial year across all your PPF accounts.
via PPF CalculatorIs gratuity taxable?+
For covered employees, up to ₹20 lakh is exempt under Section 10(10). Excess is taxable.
via Gratuity Calculator