Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
What counts
- EPF, PPF, NSC, 5-year tax-saving FD
- ELSS mutual funds, life-insurance premiums
- Home-loan principal, children’s tuition fees
Old regime only
The new regime removes 80C, so it only helps if you’re on the old regime. Confirm the current limit.
Making the 1.5 lakh work harder
The ₹1.5 lakh under Section 80C is a single combined ceiling across everything that qualifies, so the aim is to fill it with things you’d do anyway rather than stretching for it. Several outflows you may already have count: your share of EPF deducted from salary, the principal portion of home-loan EMIs, life-insurance premiums, and children’s tuition fees (the tuition component, not the full school fee). What’s left of the ₹1.5 lakh can then go into a deliberate choice — ELSS for growth with a three-year lock-in, PPF for safety and tax-free interest, NSC or a five-year tax-saving FD for certainty. The National Pension System adds a further ₹50,000 under Section 80CCD(1B), separate from the ₹1.5 lakh, for those who want it. All of this is old-regime only; the new regime removes 80C entirely, so the deduction helps only if your overall position favours the old regime once these are counted. A common mistake is buying a poorly-suited insurance policy in March just to use 80C when the limit is already met by EPF, principal and tuition. Mapping what you already pay before investing more is how to use the limit efficiently. Confirm the current limit and eligible items.