Tax Saving Investments Under 80C: A 2026 Guide
Section 80C of the Income Tax Act allows you to deduct up to ₹1.5 lakh from your taxable income via specific investments and expenses. For someone in the 30% tax bracket, that’s a ₹45,000 + cess saved every year. Here are all the eligible options ranked by Indian context.
The 80C eligible options
| Instrument | Returns | Lock-in | Risk |
|---|---|---|---|
| EPF (Employee Provident Fund) | ~8.25% | Until retirement / job change | Sovereign |
| PPF (Public Provident Fund) | ~7.1% | 15 years | Sovereign |
| ELSS (Equity-linked Savings Scheme) | 10–18% (long-term avg) | 3 years | Equity (high) |
| Tax-saving FD | ~7% | 5 years | Bank deposit |
| NSC (National Savings Certificate) | ~7.7% | 5 years | Sovereign |
| Sukanya Samriddhi Yojana (girl child) | ~8.2% | 21 years | Sovereign |
| Life insurance premium (term + endowment) | varies | Policy term | Insurance |
| Home loan principal repayment | n/a (already a debt) | n/a | n/a |
| Children’s school tuition fees | n/a | n/a | n/a |
Best 80C strategy by income tier
If you earn ₹5–10 LPA (12-22% effective tax)
Maximise PPF + EPF (already deducted). Add ELSS only if you can hold 3+ years through volatility. Avoid endowment life insurance — it ties up money at low returns.
If you earn ₹10–20 LPA (22-30% effective)
Stack: ₹1.5L EPF/PPF + ₹1.5L ELSS as a separate equity allocation. ELSS doubles as 80C deduction AND your equity SIP. Most efficient stack for working professionals.
If you earn ₹20 LPA+ (30%+ effective)
EPF will likely consume your entire ₹1.5L 80C limit. Add NPS via 80CCD(1B) for additional ₹50K deduction. Consider switching to new tax regime if your total deductions are under ₹4L — the math may favor it.
The 80CCD(1B) NPS bonus
Above 80C’s ₹1.5L limit, you can claim an ADDITIONAL ₹50,000 by investing in NPS Tier-1 under Section 80CCD(1B). Total deduction: ₹2L. NPS returns are mixed but the partial-equity structure beats traditional FDs over the long term.
What’s NOT eligible for 80C
- Mutual fund investments (other than ELSS)
- Gold ETFs / sovereign gold bonds
- Equity stock purchases
- Real estate (other than home loan principal)
- Crypto
The new regime question
Under India’s new tax regime (default from FY 2024-25), 80C deductions are NOT available. The new regime trades lower base rates for no deductions. For most salaried taxpayers with 80C + 80D + HRA + home loan interest under ₹5L total, the OLD regime still wins. Use our tax calculator to compare your specific numbers.
This is independent commentary, not financial or tax advice.