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Section 80C Deductions List (India 2025): Best Tax-Saving Investments to Save ₹1.5 Lakh

Introduction

Tax-saving is a priority for every salaried and self-employed individual in India. One of the most popular ways to reduce taxable income is by utilizing Section 80C of the Income Tax Act, which allows deductions of up to ₹1.5 lakh per financial year.

But how can you maximize tax savings under 80C? Which investments qualify for deductions? In this guide, we’ll break down the full list of 80C deductions, helping you choose the best tax-saving options for FY 2024-25.

What is Section 80C?

Section 80C is a provision under the Income Tax Act, 1961, that allows individuals and Hindu Undivided Families (HUFs) to claim deductions up to ₹1.5 lakh on specific investments and expenses.

 Who Can Claim 80C?
 Salaried Employees
 Self-Employed Individuals
 Hindu Undivided Families (HUFs)

 Who Cannot Claim 80C?
 Companies, LLPs, and Partnership Firms

Full List of Section 80C Deductions (FY 2024-25)

 Employees’ Provident Fund (EPF) & Voluntary Provident Fund (VPF)

  • EPF contribution by employee is tax-deductible under 80C.
  • VPF (Voluntary Provident Fund) contributions can also be claimed.
  • Returns: ~8.15% (EPF interest rate 2024-25)
  • Lock-in period: Until retirement or withdrawal after 5 years.

 Public Provident Fund (PPF)

  • PPF is one of the safest tax-saving instruments backed by the government.
  • Returns: ~7.1% (Varies quarterly)
  • Lock-in period: 15 years (Partial withdrawal allowed after 6 years).
  • Interest is tax-free under Exempt-Exempt-Exempt (EEE) status.

 National Pension System (NPS) – 80CCD(1)

  • NPS contributions up to ₹1.5 lakh are eligible under 80C.
  • Additional ₹50,000 deduction under 80CCD(1B) for NPS subscribers.
  • Returns: 8-12% (Market-linked).
  • Lock-in period: Until retirement (Partial withdrawal allowed).

 Tax-Saving Fixed Deposits (FDs)

  • 5-year tax-saving FDs qualify for 80C deductions.
  • Returns: 6-7.5% (Varies by bank).
  • Lock-in period: 5 years (No premature withdrawal).
  • Interest is taxable as per your income tax slab.

 Life Insurance Premiums

  • Premiums paid for life insurance policies (term plans, ULIPs, endowment policies) qualify under 80C.
  • Policy should be in the name of self, spouse, or children.
  • Returns: Varies (depends on policy type).
  • Lock-in period: 2 years (ULIPs – 5 years).

 Equity-Linked Savings Scheme (ELSS) Mutual Funds

  • ELSS is a market-linked tax-saving investment with the shortest lock-in.
  • Returns: 10-15% (Market-dependent).
  • Lock-in period: 3 years (Shortest among 80C options).
  • Gains above ₹1 lakh taxed at 10% under LTCG.

 Sukanya Samriddhi Yojana (SSY)

  • A scheme for girl child savings with high interest.
  • Returns: ~8% (Govt. backed, tax-free).
  • Lock-in period: Until the girl turns 21 (Partial withdrawals at 18).
  • EEE tax status (Investments, Interest, and Maturity are tax-free).

 National Savings Certificate (NSC)

  • Safe, fixed-income investment offered by India Post.
  • Returns: ~7.7% (Compounded annually).
  • Lock-in period: 5 years.
  • Interest is taxable but qualifies under 80C.

 Tuition Fees for Children’s Education

  • School/college tuition fees paid for up to 2 children are eligible under 80C.
  • Only tuition fees (not transport, books, or donations) qualify.

 Home Loan Principal Repayment

  • Principal component of home loan EMI is eligible under 80C.
  • Loan must be from a registered bank/NBFC.
  • Property cannot be sold within 5 years of claiming the deduction.

How to Maximize Your 80C Tax Savings?

To make the most of 80C, follow these strategies:

 Diversify Investments – Use a mix of PPF, ELSS, and NPS for tax savings + growth.
 Consider Lock-in Periods – If you need liquidity, opt for ELSS (3 years) over PPF (15 years).
 Use Family Benefits – Pay tuition fees or buy life insurance to reach the ₹1.5 lakh limit.
 Plan Early – Invest at the beginning of the financial year to avoid last-minute tax planning.

Old vs. New Tax Regime: Can You Claim 80C?

  • 80C deductions are allowed only under the Old Tax Regime.
  • The New Tax Regime (default) does NOT allow any deductions under 80C.
  • If you plan to claim deductions, opt for the Old Regime while filing ITR.

Conclusion

Section 80C provides an excellent opportunity to save up to ₹1.5 lakh in taxes through strategic investments. Choosing the right tax-saving instruments depends on your financial goals, risk appetite, and lock-in preferences.

 Need help with tax planning? Consult us at taxnoteblog@gmail.com for expert guidance on maximizing your tax savings.

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