Definition
Section 80C
Section 80C allows a deduction from taxable income for specified investments and expenses, such as EPF, PPF, ELSS, life insurance premiums and home-loan principal, under the old regime.
Section 80C is among the most-used tax deductions, letting you reduce taxable income by investing in or paying toward eligible items — EPF, PPF, ELSS mutual funds, life insurance premiums, NSC, tax-saving FDs, principal repayment of home loan and children's tuition fees, among others — up to an overall cap.
The deduction is available only under the old tax regime; choosing the new regime forgoes it. Many salary structures and Form 12BB declarations centre on maximising 80C.
Because the limit covers many instruments together, prioritising those that also serve genuine goals (retirement via EPF/PPF, equity via ELSS) makes the deduction work harder for you.
Related terms
- Old vs New Tax RegimeIndia offers two personal income-tax regimes: the old one with various deductions and exemptions, and the new one with lower slab rates but most exemptions removed.
- EPF (Employer & Employee Split)The Employees' Provident Fund is a retirement savings scheme where both you and your employer contribute a percentage of basic pay each month, building a corpus that earns interest.
- Form 12BBForm 12BB is the declaration an employee submits to their employer detailing investments and expenses claimed for tax, so the employer can deduct the correct TDS from salary.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.