Section 80C of the Income-Tax Act i.e. Section 123 under the updated ITA 2025 provides taxpayers with deduction benefit up to ₹1.5 lakh for investment in certain government saving schemes during a given financial or assessment year. Along with rebate, exemptions and deductions, it allows you to lower your liability.
Only available for filing their returns as per the old tax regime, it offers the dual advantage of interest earnings and tax savings.
Further, you can also claim additional ₹50,000 under Section 80CCD(1B) on contribution to specified pension funds, and Section 80TTB for tax-saver fixed deposits (FDs). This effectively stretches your total deductions under Section 80C to ₹2 lakh in a financial year.
What investments are eligible under Section 80C?
Some of the common financial instruments which provide tax exemption benefits under section 80C include the following:
- Market linked: Unit-linked insurance plan (ULIP) investments, Equity Linked Saving Scheme ().
- For retirement: Public Provident Fund (PPF), Employees Provident Fund (EPF), Senior Citizens Savings Scheme (), National Pension Scheme (NPS), five-year tax-saving fixed deposits.
- For children: Samriddhi Yojana (SSY), tuition fees paid for up to two children.
- For self: Loan principal repayment, Life Insurance Corporation of India (LIC) premiums, registration and stamp duty, National Savings Certificate ().
How to claim Section 80C deductions?
- All investment you make in eligible government small saving schemes and otherwise for must be completed before the financial year end, i.e. by 31 March.
- You must keep proof of investment — deposit slips, bank statements, insurance premium receipts, account statements, deposit invoices, etc. for submission along with your ITR filing.
- Investors can declare investments under Section 80C to their employer in order to adjust (tax deducted at source) under the old tax regime.
- When filing your returns, details of your 80C deductions must be reported under the head ‘Deductions under Chapter VI-A’ of the relevant ITR form.
Who is eligible for Section 80C benefit?
This deduction is not available for companies, firms or LLPs in India. Only individual taxpayers and Hindu Undivided Family () can claim benefits under Section 80C.
Can taxpayers claim Section 80C deductions under new tax regime?
No, Section 80C is only provided under the . Thus, taxpayers (HUF or individuals) who opt for the new tax regime are not allowed to claim this benefit. You can still continue or choose to make investments in the mentioned instruments, but they will not be eligible for deductions when tax is computed.
Is it mandatory to declare Section 80C investments to my employer?
No. It is not mandatory to make declarations under Section 80C to your employer and you can still claim the benefit in your ITR. The only qualifier is that the date of must be before 31 March of the relevant financial year.
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