Section 80C: Definition, Meaning & Guide for Indian Businesses

Section 80C allows individuals to claim a deduction up to ₹1.5 lakh from taxable income for investments in approved instruments like PPF, ELSS, LIC, EPF, and home loan principal.

What is Section 80C?

Section 80C of the Income Tax Act is the most popular tax deduction for individuals in India. You can deduct up to ₹1,50,000 from your taxable income for amounts invested or paid in specified instruments. Eligible investments include EPF (employee's share), PPF (Public Provident Fund), LIC premiums (your own, spouse, children), ELSS mutual funds, home loan principal repayment, tuition fees (up to 2 children), Sukanya Samriddhi Yojana for daughters, 5-year tax-saver FDs, NPS contributions (up to ₹1.5L combined with this section), and others. Section 80C is only available under the OLD tax regime. The NEW tax regime does NOT allow 80C, which is why people who claim heavy 80C usually find the old regime more beneficial.