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ArticleSection 80C is the most-used tax break in India — and the most wasted, because people buy poor products just to fill it. Here's how to use the Rs 1,50,000 limit well, and what to claim beyond it. (These are old-regime deductions.)
Reviewed by CA Harika Chebolu, FCA · Last updated 2026-06-13
Quick answer
What actually counts toward the Rs 1.5 lakh 80C limit, how to pick between ELSS, PPF, EPF and NPS, and the deductions that go beyond 80C.
Before investing a rupee, add up what's already happening. EPF deducted from your salary, life-insurance premiums you pay, children's tuition fees and home-loan principal repayment all count toward the same Rs 1,50,000 ceiling. Many people are closer to the limit than they think, and end up over-investing.
Equity-linked savings schemes are the only 80C option that invests in equity, with just a three-year lock-in — the shortest of the lot. They carry market risk but have historically offered the best long-term growth among 80C choices, which suits younger investors with time to ride out volatility.
PPF offers steady, government-backed, tax-free returns over a long horizon — ideal for the conservative part of your portfolio. Five-year tax-saving fixed deposits also qualify under 80C, though their interest is taxable. Pick these for safety, not for maximum growth.
A common mistake is buying an expensive endowment or ULIP policy purely to claim 80C. Insurance is for protection — a term plan covers that cheaply — and locking large sums into low-return policies for a tax break usually costs more than it saves. Separate your protection needs from your tax planning.
The Rs 1,50,000 limit isn't the end. An additional Rs 50,000 for NPS under 80CCD(1B) sits on top of 80C, health-insurance premiums give up to Rs 25,000 under 80D (plus Rs 50,000 for senior-citizen parents), and home-loan interest is separately deductible up to Rs 2,00,000. These often deliver more than squeezing the last rupee into 80C.
Rs 1,50,000 a year, shared across several options. EPF, PPF, ELSS, life-insurance premiums, five-year tax-saving deposits, home-loan principal and children's tuition fees all compete for the same limit. It applies in the old regime.
It depends on your risk and horizon. ELSS offers growth with the shortest (three-year) lock-in; PPF offers safe, tax-free, long-term returns. Avoid buying costly insurance purely for the deduction.
Yes — beyond 80C. An extra Rs 50,000 for NPS under 80CCD(1B), health insurance under 80D, and home-loan interest up to Rs 2,00,000 are all separate from the 80C ceiling.
Want help picking 80C options that fit your goals, not just the deadline? Write to the firm.