Section 80C is the most used and most misunderstood line in the Indian tax code. Most salaried people know the ₹1.5 lakh number, scramble every March to hit it, and end up buying a bad insurance policy they did not need. The aim of this guide is the opposite: understand the full list once, fill the cap with things you would own anyway, and stop the annual panic.
The full Section 80C list
Every option below counts towards the same ₹1.5 lakh ceiling. You do not get ₹1.5 lakh per instrument, you get ₹1.5 lakh total across all of them. Returns and lock-ins shown are current as of mid-2026 and should be re-checked before you commit.
| Option | Type | Lock-in | Return / benefit |
|---|---|---|---|
| EPF (your own contribution) | Retirement | Till retirement / job change | 8.25 percent, automatic from salary |
| PPF | Govt savings | 15 years | 7.1 percent, fully tax-free |
| ELSS mutual fund | Equity | 3 years (shortest of all) | Market-linked, historically the highest |
| Sukanya Samriddhi (for a daughter) | Govt savings | Till age 21 / 18 for part | 8.2 percent, fully tax-free |
| 5-year tax-saving FD | Bank deposit | 5 years | Around 7 percent, interest is taxable |
| NSC | Govt savings | 5 years | 7.7 percent, interest taxable |
| Life insurance premium (term plan) | Protection | Policy term | Not an investment, but the premium counts |
| Home-loan principal repayment | Already spending | Per loan | No extra outlay, you are paying it anyway |
| Children's tuition fees | Already spending | None | No extra outlay, school/college fees count |
The order to fill your ₹1.5 lakh
Most people fill 80C in the wrong order, buying a new product before counting what they already spend. Do it in this sequence and you will often find the cap is nearly full before you invest anything new.
- Start with what is already happening. Your EPF deduction, your home-loan principal, and your children's tuition fees all count, and you are paying them regardless. Total these first. Many salaried parents with a home loan are already at or past ₹1.5 lakh without buying a single new product.
- If there is room left and you want growth, use ELSS. It has the shortest lock-in (3 years) of any 80C option and the highest long-run return potential, because it is equity. Run it as a SIP, not a March lump sum.
- If you want safety and a daughter under 10, Sukanya Samriddhi at 8.2 percent tax-free is hard to beat. Otherwise PPF at 7.1 percent tax-free is the quiet workhorse.
- Only buy a tax-saving FD or NSC if you have genuinely run out of better options and want capital protection. Their interest is taxable, which drags the real return.
- Buy a term life insurance plan because your family needs the cover, and let the premium count towards 80C as a bonus. Never buy insurance only for the deduction. That is how people end up with expensive endowment and ULIP policies that serve neither protection nor returns.
Frequently asked
What to do next
- First, decide your regime. If you are unsure, run both through the income tax calculator before investing anything for 80C.
- If you are on the old regime, add up what already counts: your EPF, home-loan principal, and tuition fees. See how much of the ₹1.5 lakh is already used.
- Fill any remaining room with ELSS (via SIP) for growth, or PPF and Sukanya Samriddhi for safety.
- Buy term insurance for the cover your family needs, and let the premium count as a bonus, not the reason.
- If you have filled 80C and want to save more tax, put ₹50,000 into NPS under Section 80CCD(1B).
