In this guide
What is the Section 80C deduction?
Section 80C allows eligible individuals and Hindu Undivided Families (HUFs) to claim a deduction for specified payments and investments. For AY 2026-27, it applies to qualifying payments made during FY 2025-26, from 1 April 2025 to 31 March 2026.
The deduction is available under the old tax regime. The new tax regime is the default for AY 2026-27, but Section 80C cannot be claimed under it.
A deduction reduces taxable income, not tax payable rupee for rupee. A ₹1 lakh deduction does not necessarily save ₹1 lakh in tax.
What is the maximum deduction?
The maximum deduction under Section 80C is ₹1.5 lakh. This limit is shared with deductions under Sections 80CCC and 80CCD(1); it does not apply separately to each section.
| Eligible payment or investment | Common examples |
|---|---|
| Life insurance premiums | Eligible premiums for policies covering the taxpayer or specified family members |
| Provident fund and savings | Employee PF contributions, PPF and National Savings Certificate |
| Equity-linked savings | ELSS mutual funds |
| Education | Qualifying tuition fees for up to two children |
| Home purchase | Eligible repayment of housing-loan principal and certain purchase costs |
| Other specified savings | Eligible five-year tax-saving deposits and notified investments |
Conditions vary by item. For example, tuition-fee claims are subject to specific requirements, and only eligible home-loan principal payments qualify. Check the rules for each payment before including it in your claim.
How to calculate your claim
Add your eligible payments made during FY 2025-26, then apply the ₹1.5 lakh combined limit. Include any eligible amounts under Sections 80CCC and 80CCD(1) when checking the cap.
Example: If you paid ₹90,000 into eligible investments and paid ₹40,000 into a qualifying annuity plan under Section 80CCC, the combined amount is ₹1.3 lakh. You may claim up to that amount, subject to the conditions for each item. Other eligible payments could bring the deduction up to ₹1.5 lakh.
An additional deduction of up to ₹50,000 may be available for eligible NPS contributions under Section 80CCD(1B), separately from the ₹1.5 lakh limit. This deduction is also unavailable under the new tax regime.
Check your tax regime before investing
To claim Section 80C, you must choose the old tax regime when filing your return, subject to the rules that apply to you.
If you have business or professional income, switching regimes is subject to additional rules and may require filing Form 10-IEA by the applicable deadline. See TaxClear’s Form 10-IEA guide if this applies to you.
Before investing just for a tax deduction, compare your tax under both regimes. TaxClear’s income tax calculator can help you estimate the difference.
Records and ITR reporting
Keep evidence of your payments and investments, such as policy statements, PF records, bank certificates, tuition-fee receipts and home-loan certificates. Some investments have lock-in periods: ELSS investments generally have a three-year lock-in, while tax-saving bank deposits have a five-year term.
For AY 2026-27, the ITR requires details such as the eligible amount and policy or document identification number for relevant claims. Enter the information in Schedule 80C and keep your supporting records. These documents are generally retained rather than attached to the return.
Compare your claim with Form 16 and your own records. Your employer’s tax calculation may differ from your final return calculation, so review the figures before filing. TaxClear’s salaried employee ITR guide explains the return process.
Frequently asked questions
Can I claim ₹1.5 lakh under Section 80C and another ₹1.5 lakh under Section 80CCC?
No. Sections 80C, 80CCC and 80CCD(1) share a combined ₹1.5 lakh limit.
Is Section 80C available under the new tax regime?
No. Section 80C is not available under the new tax regime for AY 2026-27.
If I invest ₹1.5 lakh, will I save ₹1.5 lakh in tax?
No. The deduction reduces eligible taxable income, subject to the rules and your tax position.
Do I need to upload investment proofs with my ITR?
Generally, no. Enter the required details in the return and keep genuine supporting records in case they are requested.
Can I claim an NPS deduction in addition to Section 80C?
An eligible contribution may qualify for the separate deduction under Section 80CCD(1B), up to ₹50,000 under the old tax regime.
