Question 1

What investments qualify for Section 80C deduction?

Accepted Answer

Section 80C allows deductions for investments in PPF (Public Provident Fund), ELSS (Equity Linked Savings Scheme), EPF (Employee Provident Fund), Life Insurance premiums, NPS (National Pension System under 80CCD), NSC (National Savings Certificate), SSY (Sukanya Samriddhi Yojana), 5-year Tax-Saver Fixed Deposits, home loan principal repayment, and tuition fees for up to 2 children. The combined limit is ₹1,50,000 per financial year.

Question 2

What is the maximum deduction limit under Section 80C?

Accepted Answer

The maximum deduction under Section 80C is ₹1,50,000 per financial year. This is a combined limit — all eligible investments and expenses are added together, and only the first ₹1.5 lakh qualifies for deduction. Note that Section 80C deductions are only available under the old tax regime. The new regime does not allow 80C deductions.

Question 3

How much tax can I actually save with Section 80C?

Accepted Answer

The actual tax saved depends on your income tax slab. If you are in the 30% bracket, investing the full ₹1.5 lakh saves approximately ₹46,800 (including 4% cess). In the 20% bracket, savings are about ₹31,200, and in the 5% bracket, about ₹7,800. These savings are only available under the old tax regime.

Financial Calculators