Which investments qualify for an 80C deduction?
Section 80C lets an individual deduct specified investments and payments, up to ₹1.5 lakh in the year, and only if that person is taxed under the old regime. The new regime is the default and does not allow this deduction. The Act does not name a best product.
Does 80C apply in the new regime?
No. Most of Chapter VI-A, including section 80C, is switched off in the new regime. A salaried person who wants the deduction opts for the old regime when filing the return. The slabs that apply in the new regime for assessment year 2026-27 are on the Budget 2025 page. The return itself is on the income-tax return page.
Which payments count?
Inside the one cap, the usual eligible items are these. Rates change by notification and are not fixed here.
- Public provident fund, and the employee’s own contribution to a recognised provident fund.
- A tax-saving fixed deposit with a lock-in of five years, and National Savings Certificates.
- An equity-linked savings scheme, with a lock-in of three years.
- Life-insurance premium, subject to the premium limits in the Act. A maturity is exempt under section 10(10D) only when the policy meets those conditions. A unit-linked plan issued on or after 1 February 2021 with an annual premium above ₹2.5 lakh is outside that exemption.
- Sukanya Samriddhi and the Senior Citizen Savings Scheme, where the person is eligible for the scheme.
- Tuition fees for children, and principal repaid on a housing loan. Interest on that loan is not section 80C. It is on the home-loan page.
Where does NPS sit?
The individual’s own contribution can use section 80C and, in the old regime, an extra ₹50,000 under section 80CCD(1B). That extra deduction is also outside the new regime. The employer’s contribution under section 80CCD(2) is different: the new regime still allows it, within the percentage the section sets.
What is the cap?
₹1.5 lakh for section 80C, section 80CCC, and section 80CCD(1) together. The extra ₹50,000 under section 80CCD(1B) sits outside that ₹1.5 lakh. Paying more than the cap does not increase the deduction. A company does not claim section 80C. This list is for an individual.
Frequently asked questions
Four questions cover a ranking, the new regime, home-loan interest, and scheme rates.
Is there one best tax-saving investment?
No. Section 80C lists eligible payments. It does not rank them. Lock-in, risk, and whether the person is in the old regime decide what fits.
Does the new regime allow section 80C?
No. A person in the default new regime does not claim 80C. The deduction needs the old regime.
Is home-loan interest inside section 80C?
No. Section 80C can include principal repaid, inside the ₹1.5 lakh cap. Interest is section 24(b), on the home-loan page.
Does this page fix the interest rate?
No. Rates on PPF, NSC, and similar schemes are notified and change. The deduction does not depend on quoting this year’s rate.
Sources
The deduction is section 80C. The new-regime slabs for AY 2026-27 are on the Budget 2025 page.