Section 80C Deductions List for AY 2026-27: Full Eligible Investments and the Rs 1.5 Lakh Cap Explained

If you are filing your ITR for AY 2026-27 and choosing the old tax regime, Section 80C is the single most useful tax-saving lever available to you. Used correctly, it cuts up to Rs 46,800 off your tax bill (for someone in the 30% slab plus cess). Used incorrectly, it leaves money on the table, or worse, gets your deduction disallowed during AIS reconciliation.

This guide covers every eligible investment, the Rs 1.5 lakh combined cap under Section 80CCE, how to claim under Chapter VI-A, and what changes when the Income Tax Act 2025 takes over from Tax Year 2026-27.

What Section 80C Actually Allows

Section 80C of the Income Tax Act 1961 lets you reduce your total taxable income by up to Rs 1,50,000 in a financial year, provided you have invested in or paid for specified instruments. The deduction is claimed under Chapter VI-A of the ITR form.

A few important boundaries:

• Available only if you opt for the old tax regime. The new tax regime under Section 115BAC does not allow Section 80C.
• Available to individuals and HUFs only. Companies, LLPs, and firms cannot use Section 80C.
• The Rs 1.5 lakh limit is combined with Sections 80CCC and 80CCD(1) under the umbrella of Section 80CCE. We explain the pooling below.

The Rs 1.5 Lakh Combined Cap (Section 80CCE)

Many taxpayers think they can claim Rs 1.5 lakh under 80C plus another Rs 1.5 lakh under 80CCC and another Rs 1.5 lakh under 80CCD(1). They cannot.

Section 80CCE caps the combined total of these three deductions at Rs 1,50,000 per financial year:

• Section 80C (PPF, ELSS, life insurance, etc.)
• Section 80CCC (contributions to certain pension funds)
• Section 80CCD(1) (employee contribution to NPS, Tier I)

The Rs 50,000 additional NPS deduction under Section 80CCD(1B) is separate. It sits outside the Rs 1.5 lakh cap. If you contribute Rs 50,000 to NPS Tier I beyond the 80CCD(1) limit, you get an extra Rs 50,000 deduction, taking your total Chapter VI-A reduction to Rs 2,00,000.

Full List of Section 80C Eligible Investments and Expenses

1. Public Provident Fund (PPF)

• Annual deposit limit: Rs 1,50,000 per individual
• Lock-in: 15 years (with partial withdrawal allowed from year 7)
• Returns: 7.1% per annum (April-June 2026 quarter, set by the Ministry of Finance)
• Tax treatment: EEE (Exempt at investment, accrual, and withdrawal)

PPF is the most popular 80C investment because of its triple-exempt status and government-backed returns.

2. Equity Linked Savings Scheme (ELSS)

• Annual investment limit: subject to overall Rs 1.5 lakh cap
• Lock-in: 3 years (shortest among 80C options)
• Returns: market-linked, historically 12 to 15% per annum on a 5-year horizon
• Tax treatment: LTCG over Rs 1.25 lakh per year taxed at 12.5% under Section 112A

ELSS suits investors with a 5-plus year horizon and tolerance for equity volatility.

3. National Savings Certificate (NSC)

• Lock-in: 5 years
• Returns: 7.7% per annum (April-June 2026 quarter)
• Tax treatment: interest accrued each year is reinvested and qualifies for 80C; final-year interest is taxable
• Tip: declare reinvested interest as income each year and claim the same as 80C deduction; this avoids a tax shock in year 5

4. Life Insurance Premium

• Premium paid for self, spouse, or any child (married, unmarried, dependent, or not) qualifies
• Cap: deduction restricted to 10% of sum assured for policies issued on or after April 1, 2012
• Important: if a policy is surrendered before 2 years (single premium) or 5 years (regular pay), earlier deductions are reversed and added back to income

5. Employee Provident Fund (EPF) Employee Share

• The 12% of Basic + DA that is deducted from your salary as employee EPF contribution
• Employer's matching 12% does not count toward your 80C; it is a separate exempt component
• Withdrawal before 5 years of continuous service makes the deduction reversible

6. 5-Year Tax-Saving Fixed Deposit

• Lock-in: 5 years (cannot be broken even with penalty for tax-saver FDs)
• Returns: 6.5 to 7.5% per annum depending on the bank (April 2026)
• Tax treatment: interest is taxable in the year of accrual

Useful if you prioritise capital safety and predictable returns over higher equity-linked yields.

7. Tuition Fees for Up to Two Children

• Only the tuition fee component qualifies; donations, building fund, transport, and uniform charges do not
• Available for any two children of the assessee, at any school, college, or university in India
• Claim is limited to fees actually paid in the financial year

8. Home Loan Principal Repayment

• Principal repaid on a self-occupied or let-out residential property home loan qualifies
• Stamp duty and registration charges paid in the year of purchase are also eligible (one-time)
• Property must not be sold within 5 years; if it is, earlier deductions are reversed
• Interest portion is not under 80C; it falls under Section 24(b) with a separate Rs 2 lakh cap for self-occupied property

9. Sukanya Samriddhi Yojana (SSY)

• Available for a girl child below 10 years of age
• Annual deposit: Rs 250 to Rs 1,50,000
• Lock-in: until the girl turns 21 (partial withdrawal at 18 for higher education or marriage)
• Returns: 8.2% per annum (April-June 2026 quarter)
• Tax treatment: EEE

10. Senior Citizens Savings Scheme (SCSS)

• For individuals aged 60 plus (55 plus for VRS retirees with conditions)
• Annual deposit limit: Rs 30 lakh (raised from Rs 15 lakh in Budget 2023)
• Lock-in: 5 years (extendable by 3)
• Returns: 8.2% per annum (April-June 2026 quarter)
• Tax treatment: interest fully taxable

Counts toward 80C up to Rs 1.5 lakh of the deposit, not the full Rs 30 lakh.

11. Post Office Time Deposit (5-year)

• Lock-in: 5 years specifically for the 80C-eligible variant
• Returns: 7.5% per annum (April-June 2026 quarter)
• Tax treatment: interest is taxable; only 5-year deposit qualifies for 80C

12. Unit Linked Insurance Plan (ULIP)

• Premium paid up to 10% of sum assured qualifies
• Lock-in: 5 years
• High commission and management charges in the early years; pure-term insurance plus a separate ELSS investment is usually more efficient than a ULIP

Quick-Reference 80C Comparison Table

How to Claim Section 80C in Your ITR for AY 2026-27

1. Pick the old tax regime. Salaried filers can choose at the time of filing. Business income filers must opt for the old regime by filing Form 10-IEA before the due date.
2. Open Schedule VIA in your ITR form. This is the Chapter VI-A deductions schedule.
3. Enter the total under Section 80C (or 80CCC + 80CCD(1) breakdown if applicable). The portal applies the Rs 1.5 lakh cap automatically under Section 80CCE.
4. Claim Section 80CCD(1B) separately if you contributed beyond the 80CCD(1) limit to NPS Tier I. This is a separate field in Schedule VIA.
5. Keep proofs. Investment certificates, premium receipts, FD certificates, school fee receipts. The Income Tax Department can ask for these during processing or scrutiny.

For the broader context on which regime to pick, see our old vs new tax regime comparison guide and the income tax slab rates for FY 2025-26.

Common Section 80C Mistakes to Avoid

• Claiming the employer EPF contribution as 80C. Only the employee share (12% of Basic + DA deducted from your salary) counts. Employer contribution is separately exempt and not part of 80C.
• Double-counting NPS within the Rs 1.5 lakh cap. Section 80CCD(1) sits under the cap. Section 80CCD(1B) is a separate Rs 50,000 outside the cap. Do not stack them inside the same field.
• Forgetting the 5-year property hold rule. If you claim home loan principal repayment under 80C and sell the property within 5 years of taking possession, earlier deductions get reversed and added back to income.
• Including non-tuition school charges. Only the tuition fee qualifies. Donations, capitation fees, transport, mess, and uniform charges do not.
• Claiming 80C in the new regime. The new regime under Section 115BAC does not allow 80C. Filing under the new regime automatically disallows the claim.

What Changes from Tax Year 2026-27 (Income Tax Act 2025)

This is the last assessment year where Section 80C of the Income Tax Act 1961 applies. From Tax Year 2026-27 (income earned from April 1, 2026), the deduction shifts to a renumbered framework:

• Section 80C is replaced by Section 123 read with Schedule XV of the Income Tax Act 2025
• The Rs 1.5 lakh combined cap continues, with similar pooling logic across what were 80C, 80CCC, and 80CCD(1)
• Eligible instruments largely carry forward: PPF, ELSS, EPF, life insurance, home loan principal, SSY, etc.
• The new regime under the Income Tax Act 2025 continues to disallow these deductions

For AY 2026-27 returns being filed in 2026 (covering FY 2025-26 income), use the existing Section 80C framework. For income earned from April 1, 2026 onwards, your AY 2027-28 return will follow Section 123 of the new Act.

The numbering changes do not affect what you invest in this year. They affect how next year's return form will reference your deductions.

For more on the new Act, see our Income Tax Act 2025 explainer.

Tax Savings: A Worked Example

Suppose your taxable income (before deductions) is Rs 12,00,000 in FY 2025-26 and you choose the old regime:

• Without any 80C: tax under old regime is roughly Rs 1,72,500 (plus 4% cess)
• With Rs 1.5 lakh full 80C: taxable income drops to Rs 10,50,000; tax becomes roughly Rs 1,27,500
• Savings: roughly Rs 45,000 plus cess

For someone in the 30% slab (income above Rs 10 lakh under old regime), Section 80C saves up to Rs 46,800 per year (Rs 45,000 tax + 4% cess).

If your total deductions under Chapter VI-A (80C plus 80D plus HRA plus home loan interest plus Section 80CCD(1B) and others) are below roughly Rs 3.75-4 lakh, the new regime usually beats the old regime even after accounting for 80C. Run a comparison both ways before choosing.

Tax Garden Can Help

Picking 80C investments is half the work. Pairing them with the right regime, claiming Section 24(b) home loan interest, optimising HRA, and reconciling against AIS at filing time is the other half. Tax Garden's tax compliance services handle the full ITR cycle for individuals and small businesses with flat-fee pricing.

For broader pre-filing prep, see our guide on AIS, Form 26AS, and TIS reconciliation before filing.

Frequently Asked Questions

Can I claim Section 80C in the new tax regime for AY 2026-27?

No. The new tax regime under Section 115BAC does not allow Section 80C deductions. If you want to use 80C, you must opt for the old regime. Salaried filers choose at ITR time; business income filers must file Form 10-IEA before the due date.

Is the Rs 1.5 lakh limit per person or per family?

Per individual. Each tax-paying member of a family (e.g., husband and wife both filing returns) can claim Section 80C up to Rs 1.5 lakh independently. HUFs also have a separate Rs 1.5 lakh limit.

Does NPS contribution count toward the Rs 1.5 lakh 80C cap?

Yes for Section 80CCD(1) (the standard NPS contribution up to 10% of salary). It is pooled with 80C and 80CCC under Section 80CCE. Section 80CCD(1B), an additional Rs 50,000 for NPS Tier I, sits outside this Rs 1.5 lakh cap.

If I withdraw from PPF before 15 years, do I lose the 80C deduction?

PPF allows partial withdrawal from year 7 without losing earlier deductions. Premature closure (allowed only in specific cases like education or medical emergency) follows separate rules. The 80C deduction for past contributions is not reversed; only the current-year deduction depends on actual deposit.

Does Section 80C exist after April 1, 2026?

The numbering changes. From Tax Year 2026-27 (income earned from April 1, 2026 onwards), the equivalent provision is Section 123 read with Schedule XV of the Income Tax Act 2025. The Rs 1.5 lakh cap and the eligible instruments largely carry forward. AY 2026-27 returns (filed in 2026) still use the old Section 80C numbering.

Are 80C investments locked till age 60?

No. Lock-in periods vary by instrument: 3 years for ELSS, 5 years for tax-saving FDs and NSC, 15 years for PPF, until the girl child turns 21 for SSY. EPF locks until employment exit. Plan your liquidity accordingly.

Sources

This guide is verified against incometax.gov.in (Income Tax Department portal, Section 80C provisions and Chapter VI-A guidance), the Finance Act 2025 amendments to Section 87A and the new tax regime, the Income Tax Act 2025 (Section 123 and Schedule XV references), CBDT circulars on AY 2026-27 ITR forms, and confirmatory coverage from ClearTax, Bajaj Finserv, BankBazaar, and Tax2Win. Returns rates for small savings schemes (PPF, NSC, SSY, SCSS, Post Office TD) reflect the Ministry of Finance notification for the April-June 2026 quarter and may change quarterly.