INCOME-TAX

Section 80C Deductions — Complete Guide

CA Sutra Team 4 min January 10, 2025
Income Tax 80C Deductions Tax Saving
Summary

Maximize your tax savings with Section 80C deductions. Learn about all eligible investments and expenses up to ₹1.5 lakh limit.

Understanding the Concept

Section 80C is the most popular tax-saving provision under the Income Tax Act. It allows individuals and HUFs to claim deductions up to ₹1.5 lakh from their total income. This significantly reduces taxable income and overall tax liability.

Key Conditions

  • 1. Life Insurance Premium (LIC, term insurance)
  • 2. Employee Provident Fund (EPF) contributions
  • 3. Public Provident Fund (PPF) deposits
  • 4. Equity Linked Savings Scheme (ELSS) mutual funds
  • 5. National Savings Certificate (NSC)
  • 6. Tax Saving Fixed Deposits (5-year lock-in)
  • 7. Sukanya Samriddhi Yojana
  • 8. Home loan principal repayment
  • 9. Tuition fees for children (max 2 children)
  • 10. Senior Citizen Savings Scheme (SCSS)

Important Points to Remember

  • Maximum deduction limit: ₹1.5 lakh per financial year
  • Combined limit for 80C, 80CCC, and 80CCD(1) is ₹1.5 lakh
  • Additional ₹50,000 under 80CCD(1B) for NPS contributions
  • Lock-in periods vary by investment type
  • ELSS has shortest lock-in of 3 years among tax-saving options

Frequently Asked Questions

The maximum deduction under Section 80C is ₹1.5 lakh per financial year. This is a combined limit for 80C, 80CCC, and 80CCD(1).

Yes, you can claim deduction for life insurance premium paid for yourself, spouse, and children under Section 80C.

It depends on your financial goals. ELSS offers equity exposure with 3-year lock-in, PPF provides safe returns with 15-year lock-in, and EPF is mandatory for salaried employees. Diversification is recommended.
Key Takeaway

Plan your 80C investments early in the financial year to avoid last-minute rush. Consider lock-in periods and returns while choosing investments.

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