Every rupee of eligible deduction reduces the income on which you pay tax. Section 80C of the Income-tax Act, 1961 is one such provision, and using it correctly can meaningfully lower your tax bill.

This guide explains Section 80C in plain language — the deduction limit, who can claim it, what is covered, the documents to keep, and the exact steps to claim it in your ITR.

What is 80C?

Section 80C is the most widely used deduction in the Income-tax Act. It lets an individual or HUF reduce taxable income by up to ₹1,50,000 a year by investing in, or spending on, a defined list of instruments.

How much can you claim?

Up to ₹1,50,000 per financial year (combined with Sections 80CCC and 80CCD(1)).

Who is eligible

  • Individuals and Hindu Undivided Families (HUFs).
  • Available only if you file under the old tax regime.
  • The investment/expense must be made during the relevant financial year (1 April – 31 March).

What is covered

  • Employee Provident Fund (EPF) and Public Provident Fund (PPF)
  • Equity Linked Savings Scheme (ELSS) mutual funds
  • Life insurance premium (self, spouse, children)
  • 5-year tax-saving fixed deposits and NSC
  • Principal repayment on a home loan
  • Sukanya Samriddhi Account and Senior Citizens Savings Scheme
  • Tuition fees for up to two children

Documents and proof to keep

  • Investment statements / premium receipts
  • Home loan principal certificate from the lender
  • Tuition fee receipts from the school/college

Retain these documents even though they are not attached to the return — the tax department can ask for them during processing or assessment.

How the ₹1.5 lakh cap works

If you contribute ₹60,000 to EPF, pay ₹40,000 in LIC premium and invest ₹80,000 in ELSS, your total is ₹1,80,000 — but the deduction is capped at ₹1,50,000. The extra ₹30,000 gives no further tax benefit under 80C.

Points to remember

  • The ₹1.5 lakh ceiling is shared across 80C, 80CCC and 80CCD(1) — they are not separate limits.
  • ELSS has the shortest lock-in (3 years) among 80C options.

How to claim it in your ITR

  1. Gather proof. Collect the certificates, receipts or statements listed above for the financial year.
  2. Choose the right regime. Opt for the old regime in your return, otherwise the deduction will not apply.
  3. Enter the amount. Report the eligible amount against Section 80C in the deductions schedule of your ITR on the income-tax e-filing portal.
  4. Verify and file. Cross-check against Form 26AS / AIS, then submit and e-verify the return within the prescribed time.

Frequently asked questions

Can I claim 80C under the new tax regime?

No. Section 80C is not available under the new (default) regime. You must opt for the old regime to claim it.

Is the home loan principal part of 80C?

Yes — the principal portion of your EMI qualifies under 80C (up to the ₹1.5 lakh cap), while the interest is claimed separately under Section 24(b).