Deduction for Specified Investments and Payments
Section 80C is India's best-known tax deduction: up to ₹1,50,000 from gross total income for specified savings and payments — LIC premium, PF, PPF, ELSS, principal repayment of housing loans, children's tuition fees and more. Available only under the old tax regime.
The provision, in plain terms
An individual or HUF may deduct up to ₹1.5 lakh in aggregate for amounts paid or deposited in the previous year toward listed items: life insurance premium (capped at 10% of sum assured for post-2012 policies), contributions to RPF/PPF/superannuation, NSC, ELSS mutual funds, five-year bank/post-office deposits, tuition fees for up to two children (full-time education in India), principal repayment of housing loan and stamp duty/registration on purchase, Sukanya Samriddhi deposits, and others. The overall ₹1.5 lakh cap operates jointly with 80CCC and 80CCD(1) via section 80CCE.
Points worth memorising
- Cap: ₹1,50,000 aggregate (with 80CCC and 80CCD(1) under section 80CCE); additional ₹50,000 for NPS under 80CCD(1B) sits outside it.
- Only individuals and HUFs can claim; companies and firms cannot.
- Not available under the default (new) regime of section 115BAC — a key old-vs-new regime comparison point.
- Lock-ins apply: ELSS 3 years, tax-saver FD 5 years, PPF 15 years; early exit can reverse the deduction.
- Housing-loan principal qualifies only after construction is complete; sale within 5 years reverses past deductions.
How the exam tests it
Every CA Intermediate Taxation computation of total income routes through Chapter VI-A: 80C item eligibility, the 80CCE cap and regime-choice implications are guaranteed marks.
Tested at: intermediate · final
Related sections
Have questions?
Find answers.
Still unsure about something? We're happy to help you figure it out.
Talk to usIs 80C available under the new tax regime?
No. Under section 115BAC (the default regime), most Chapter VI-A deductions including 80C are unavailable — only specified items like 80CCD(2) employer NPS contributions survive. Taxpayers may opt for the old regime to claim 80C.
Does tuition fee for a third child qualify?
No — the deduction covers full-time education fees for a maximum of two children per taxpaying individual (a couple can together cover four children).