Section 80C deductions: the full list for 2026, and whether you still need them
Section 80C is still the deduction most people search for, even though it has a new number. From 1 April 2026 it sits in section 123 of the Income-tax Act, 2025, read with Schedule XV. The limit is unchanged at ₹1.5 lakh a year, and it still works only in the old tax regime.
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Quick answer
Section 80C is now section 123 of the Income-tax Act, 2025, read with Schedule XV, from 1 April 2026. The limit is still ₹1.5 lakh a year across PPF, ELSS, EPF, life insurance, home loan principal, tuition fees and similar items, and it applies only in the old tax regime.
- Limit: ₹1.5 lakh a year, unchanged
- PPF 7.1%, SSY 8.2%, NSC 7.7% (October to December 2026)
- Not available in the new regime; employer NPS up to 14% still is
Official source: Income Tax Department: FAQs on the transition to the Income-tax Act, 2025
What changed with the new Act
The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026, so financial year 2026-27 is the first year governed by it. The savings deductions that lived in section 80C now sit in section 123 read with Schedule XV. The Income Tax Department’s transition FAQs confirm the mapping and the ₹1.5 lakh aggregate cap.
Nothing about the eligible investments changed in substance. Your bank, your employer’s payroll software and most tax sites will keep calling it “80C” for years. What matters is the regime you pick: section 123 is not available under the concessional regime in section 202 (the “new regime”), which is the default.
The full list of Section 80C (section 123) deductions
| Investment or payment | Lock-in | Return (Jul-Sep 2026) | Notes |
|---|---|---|---|
| Employee Provident Fund (your share) | Till retirement or exit | Notified yearly | Deducted from salary automatically; Voluntary PF also counts |
| Public Provident Fund (PPF) | 15 years | 7.1% | Maximum deposit ₹1.5 lakh a year; interest and maturity tax-free |
| ELSS mutual funds | 3 years | Market-linked | Shortest lock-in of the lot; gains taxed as equity capital gains |
| Life insurance premium | Policy term | Varies | Premium counts only up to 10% of sum assured for policies issued after 1 April 2012 (15% for specified disability or illness) |
| National Savings Certificate (NSC) | 5 years | 7.7% | Accrued interest of the first four years is itself eligible |
| Tax-saver fixed deposit | 5 years | About 7.5% (post office) | Interest is taxable every year |
| Sukanya Samriddhi Yojana | Till the girl turns 21 | 8.2% | Up to two daughters; interest tax-free |
| Senior Citizens Savings Scheme | 5 years | 8.2% | For residents aged 60 and above; interest taxable |
| Home loan principal repayment | Sell before 5 years and the deduction reverses | Not applicable | Stamp duty and registration paid in the year of purchase also count |
| Children’s tuition fees | None | Not applicable | Up to two children, full-time education in India; excludes donations and development fees |
| NPS, your own contribution | Till 60 | Market-linked | Up to 10% of salary counts inside the ₹1.5 lakh cap |
| Pension fund contributions (old 80CCC) | As per plan | Varies | Counts inside the same ₹1.5 lakh cap |
Rates for small-savings schemes are reset every quarter by the Ministry of Finance. The figures above are for July to September 2026.
Deductions that sit outside the ₹1.5 lakh cap
Several deductions people bundle with 80C actually have their own limits, and in the old regime you can stack them on top:
- Additional NPS contribution (old 80CCD(1B)): up to ₹50,000 over and above ₹1.5 lakh, old regime only.
- Employer’s NPS contribution (old 80CCD(2)): up to 14% of basic pay plus DA in the new regime. This is one of the few deductions the new regime allows.
- Health insurance (old 80D): ₹25,000 for yourself and family, another ₹25,000 for parents, raised to ₹50,000 where the insured person is a senior citizen.
- Education loan interest (old 80E): the full interest, for up to eight years.
- Home loan interest: up to ₹2 lakh on a self-occupied house, old regime only.
Old regime or new regime: when 80C is worth it
The new regime has a ₹75,000 standard deduction for salaried people and a rebate that makes income up to ₹12 lakh tax-free. Below that level, 80C does nothing for you. Above it, the answer depends on how much you can actually claim.
| Salary (before standard deduction) | Deductions needed in the old regime to break even, roughly |
|---|---|
| ₹12 lakh or less | No amount of deductions beats the new regime |
| ₹15 lakh | About ₹5.4 lakh |
| ₹20 lakh | About ₹7.1 lakh |
| ₹25 lakh and above | About ₹8 lakh |
“Deductions” here means everything combined: 80C, 80D, home loan interest, HRA exemption, NPS. Few people cross ₹5 lakh without a home loan and a rented house, which is why most salaried people now pick the new regime. Run your own numbers in our old vs new regime calculator; it takes a minute.
How to claim it
- Tell your employer early. Salaried people declare their regime and planned investments at the start of the year, then submit proofs, usually by January. Proofs that arrive late lead to extra TDS, which you can still recover in the return.
- Keep the evidence. PPF passbook, ELSS statement, premium receipts, tuition fee receipts, home loan certificate. The ITR asks for policy numbers and account details for several items.
- Claim it in the return. The deduction goes in the Chapter VI-A schedule of ITR-1, ITR-2, ITR-3 or ITR-4, depending on your income. If you are unsure which form, use our ITR form selector.
- Choose the regime correctly. Salaried people can switch every year when filing. People with business income get only limited switches and must file the prescribed form before the return due date.
Mistakes that cost a deduction
- Paying tuition fees for a third child, or claiming development or transport fees: only tuition for two children counts.
- Claiming the premium on a policy where the premium exceeds 10% of sum assured: only the 10% portion counts.
- Paying ELSS or insurance for a sibling or parent: only yourself, spouse and children (and for insurance, the HUF’s members) qualify.
- Investing on 31 March through a cheque that clears in April: the date of payment decides the year.
- Selling a house within five years of purchase: every 80C deduction claimed on its principal is added back to income in the year of sale.
Frequently asked questions
What is the Section 80C limit for FY 2026-27?
The limit is ₹1.5 lakh a year. From 1 April 2026 the deduction sits in section 123 of the Income-tax Act, 2025, read with Schedule XV, with the same limit.
Can I claim 80C in the new tax regime?
No. Section 123 (old 80C) is available only in the old regime. In the new regime the main deduction left for employees is the employer’s NPS contribution, up to 14% of basic pay plus DA.
Is PPF or ELSS better for 80C?
PPF gives 7.1% (October to December 2026) with a 15-year lock-in and tax-free returns. ELSS is market-linked with a 3-year lock-in and gains taxed as equity capital gains. Many people split between them.
Does the home loan principal count under 80C?
Yes, principal repaid in the year counts, along with stamp duty and registration paid in the year you bought the house. Interest is a separate deduction of up to ₹2 lakh on a self-occupied house.
Is the 50,000 NPS deduction part of 80C?
No. The additional NPS deduction (old 80CCD(1B)) is up to ₹50,000 over and above the ₹1.5 lakh cap, but only in the old regime.
Not sure which regime saves you more?
A FilingBase CA compares both regimes on your actual numbers and files your return, from ₹499.
Keep reading.
Income from house property
Annual value, the 30% deduction, interest limits by regime, self-occupied vs let-out, and set-off of losses.
Read guide→GuideRebate under section 87A
How the rebate makes income up to ₹12 lakh tax-free, how marginal relief works just above it, and what it does not cover.
Read guide→Official references
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