What is Section 80C?
Section 80C of the Income Tax Act allows a deduction of up to ₹1,50,000 per financial year from your taxable income. This is the most popular tax-saving section and covers a wide range of investments and expenses.
Note: Section 80C deductions are available only under the old tax regime.
80C Investment Options
| Investment | Lock-in Period | Returns | Risk |
|---|---|---|---|
| PPF (Public Provident Fund) | 15 years | ~7.1% (tax-free) | Zero (Govt backed) |
| ELSS (Tax Saving Mutual Funds) | 3 years | 12-15% (market-linked) | Moderate-High |
| EPF (Employee Provident Fund) | Till retirement | ~8.25% | Zero (Govt backed) |
| NSC (National Savings Certificate) | 5 years | ~7.7% | Zero (Govt backed) |
| SCSS (Senior Citizens Savings Scheme) | 5 years | ~8.2% | Zero (Govt backed) |
| Tax Saving FD | 5 years | 6.5-7.5% | Zero (Bank) |
| LIC Premium | Policy term | 4-6% | Zero |
| Sukanya Samriddhi (SSY) | 21 years | ~8.2% (tax-free) | Zero (Govt backed) |
| Home Loan Principal | Loan term | N/A | N/A |
| Children's Tuition Fees | N/A | N/A | N/A |
Tax Savings Under 80C
If you invest the full ₹1.5 lakh under 80C and are in the 30% tax bracket, you save ₹46,800 in taxes (₹1,50,000 x 30% + 4% cess).
- 30% bracket: Save ₹46,800
- 20% bracket: Save ₹31,200
- 5% bracket: Save ₹7,800