Section 80C — How to Save ₹46,800 in Tax Every Year

Short answer: Section 80C lets you deduct up to ₹1.5 lakh a year, saving ₹46,800 in tax at the 30% slab — but only under the old regime. Under the new regime, 80C does not exist, which is the single most misunderstood point in Indian tax planning.

Rates and slabs are indicative, as of August 2026

80C allows ₹1.5 lakh deduction from taxable income. In the 30% bracket, this saves ₹46,800/year (₹45,000 tax + ₹1,800 cess). Yet crores of Indians either underuse it or waste it on wrong products.

Smart 80C Strategy

First, count your EPF. If basic salary is ₹50K/month, EPF is ₹72,000/year — already half of 80C used. For the remaining ₹78,000: invest in PPF (safe, tax-free returns) and/or ELSS mutual funds (shortest 3-year lock-in, potential for higher returns).

What NOT to Do

Do not buy LIC endowment policies just for 80C. They lock money for 15-20 years at 4-5% returns. Buy cheap term insurance separately, invest in PPF/ELSS for tax benefit. Also avoid 5-year bank FDs for 80C — PPF gives higher rate and tax-free interest.

Full List of 80C Investments

EPF, PPF, ELSS, 5-yr tax FD, NSC, SSY, life insurance premium, children's tuition (max 2 kids), home loan principal, SCSS. Combined limit: ₹1.5 lakh per year.

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Sources

The official pages this page is checked against. If one of them disagrees with us, it wins.

• Income Tax Rates and Slabs, AY 2026-27 — Income Tax Department
• FAQs on New Tax Regime vs Old Tax Regime — Income Tax Department