Section 80C & Other Tax-Saving Deductions: A Complete Guide

Tax-saving deductions only work if you plan for them — and remember, they apply only if you choose the old tax regime. Here is what actually counts, and how to use the limits effectively.

Section 80C — up to ₹1.5 lakh

This is the most commonly used deduction, covering a wide range of investments and expenses:

• Employee Provident Fund (EPF) and Public Provident Fund (PPF) contributions
• Equity Linked Savings Scheme (ELSS) mutual funds
• Life insurance premiums
• Principal repayment on a home loan
• Sukanya Samriddhi Yojana
• National Savings Certificate (NSC)
• Tuition fees for up to two children
• Five-year tax-saving fixed deposits

The combined total across all of these is capped at ₹1.5 lakh — it is not ₹1.5 lakh per item.

Section 80D — health insurance premiums

A separate deduction for health insurance premiums, over and above 80C:

• Up to ₹25,000 for premiums paid for self, spouse and children
• An additional amount for premiums paid for parents, higher if the parents are senior citizens

Section 24(b) — home loan interest

Interest paid on a home loan for a self-occupied property is deductible up to a prescribed limit, separate from the 80C principal repayment deduction. This is one of the largest deductions available to homeowners.

Other deductions worth knowing

• Section 80CCD(1B) — an additional deduction for contributions to the National Pension System (NPS), over and above the 80C limit
• Section 80E — interest paid on an education loan, with no upper limit for a specified number of years
• Section 80G — donations to eligible charitable institutions
• Section 80TTA / 80TTB — deduction on savings account interest (higher limit for senior citizens under 80TTB)

The most common planning mistake

Most people scramble in February and March to make tax-saving investments before the financial year ends, often choosing products in a hurry that don't fit their actual financial goals. Planning your 80C and other deductions at the start of the year, spread across the months, generally leads to better investment decisions and less last-minute stress.

Remember: only under the old regime

None of these deductions apply if you opt for the new tax regime. Before making tax-saving investments purely to reduce tax, it is worth comparing whether the old regime with these deductions, or the new regime's lower rates, actually works out better for you.

Plan it properly

We help clients build a tax-saving plan that fits their actual financial goals — not just whatever reduces tax on paper. If you would like a personalised review of your deductions and investment options, get in touch.