Section 80C & 80D Deductions: Complete Eligibility List, Investment Limits & Maximum Tax Savings
Complete guide to Section 80C (₹1.5 Lakh limit) and Section 80D (health insurance up to ₹1 Lakh). Eligible instruments: EPF, PPF, ELSS, NPS, and medical checkups.
Section 80C: The ₹1.5 Lakh Ceiling Explained
Section 80C of the Income Tax Act allows individual taxpayers and HUFs to deduct up to ₹1,50,000 from their gross total income under the Old Tax Regime. This limit is shared collectively across Section 80C, 80CCC (pension funds), and 80CCD(1) (employee NPS contribution).
Full List of Section 80C Eligible Instruments
- Employees' Provident Fund (EPF): The 12% employee contribution deducted from your salary.
- Public Provident Fund (PPF): Government-backed 15-year deposit with 7.1% tax-free returns.
- Equity Linked Savings Schemes (ELSS): Mutual funds with the shortest lock-in period (3 years) and high equity potential.
- Home Loan Principal Repayment: Principal component of your home loan EMI paid during the year.
- Children's Tuition Fees: Paid for full-time education for up to two children.
- National Savings Certificate (NSC) & Sukanya Samriddhi Yojana (SSY): For girl children below 10 years.
- Life Insurance Premiums: For self, spouse, and children.
Section 80D: Health Insurance Deductions (Up to ₹1,00,000)
Section 80D provides separate tax relief for premiums paid toward health insurance policies:
| Category | Self, Spouse & Children | Parents | Total Deduction Limit |
|---|---|---|---|
| Both < 60 Years | ₹25,000 | ₹25,000 | ₹50,000 |
| Parents Senior Citizens (≥ 60) | ₹25,000 | ₹50,000 | ₹75,000 |
| Both Senior Citizens (≥ 60) | ₹50,000 | ₹50,000 | ₹1,00,000 |
Within these limits, an expenditure up to ₹5,000 is permitted for annual preventive health checkups.
Additional ₹50,000 NPS Benefit Under Section 80CCD(1B)
Investments in the National Pension System (NPS Tier 1 account) enjoy an exclusive deduction of up to ₹50,000 over and above the ₹1.5 Lakh 80C limit under Section 80CCD(1B), raising your total potential deduction ceiling to ₹2,00,000.
Are 80C and 80D Allowed in the New Tax Regime?
Neither Section 80C nor Section 80D is deductible under the New Tax Regime (Section 115BAC). Only employer NPS contribution under Section 80CCD(2) up to 14% of salary is allowable under both regimes.
🏛️ Official Statutory Sources & Regulatory Citations
All rules, dimensions, and financial slabs in this guide have been verified against official publications:
Written by Ananya Deshmukh, CA
Chartered Accountant & Direct Tax Consultant
Practicing Chartered Accountant specializing in Indian personal taxation, Section 115BAC compliance, salary structuring, and corporate tax advisory.