Section 80C: The Full Investment List for FY 2026-27
Reviewed on August 14, 2026 • Author: Upaman Research Team • Reviewer: India Tax Review Desk
Section 80C lets you deduct up to ₹1,50,000 a year from your taxable income by putting money into certain investments or spending it on certain things. It is the most used tax break in India and the most misunderstood, because two facts about it are usually left out: the limit is a single shared ceiling, not ₹1.5 lakh per option, and it only exists in the old regime.
Settle this before you invest anything
If you are on the new regime, Section 80C does nothing for you. Not a reduced benefit — nothing. The new regime has been the default since FY 2023-24, so unless you actively opted out, this is probably you.
That does not automatically make the old regime better. The new regime charges lower rates in exchange for removing deductions, and for most salaried people the lower rates win. The question is arithmetic, not preference: work out your tax both ways with the income tax calculator, or read the old vs new regime breakeven guide for the deduction total you would need to make the old regime pay.
The rough shape of the answer: on a ₹16 lakh salary you need roughly ₹6.19 lakh of deductions before the old regime beats the new one. A full ₹1.5 lakh of 80C is less than a quarter of the way there. 80C alone is almost never enough to justify the old regime — it has to arrive alongside a large HRA exemption or a home-loan interest claim.
The full list of what qualifies
Everything below shares the same ₹1.5 lakh ceiling. Fill it with one option or ten — the deduction stops at ₹1.5 lakh either way.
| Option | Lock-in | Return (FY 2026-27) | Taxed on exit? |
|---|---|---|---|
| ELSS mutual funds | 3 years | Market-linked | LTCG at 12.5% above ₹1.25 lakh |
| PPF (Public Provident Fund) | 15 years | 7.1% | Fully exempt |
| EPF (your own contribution) | Until you leave service | 8.25% | Exempt after 5 years |
| Sukanya Samriddhi (daughter under 10) | 21 years | 8.2% | Fully exempt |
| NSC (National Savings Certificate) | 5 years | 7.7% | Interest taxable |
| 5-year tax-saving bank FD | 5 years | ~6.5–7.5% | Interest fully taxable |
| Senior Citizens Savings Scheme | 5 years | 8.2% | Interest taxable |
| Life insurance premium | Policy term | Varies widely | Usually exempt under 10(10D) |
| ULIP premium | 5 years | Market-linked | Taxable if premium > ₹2.5 lakh/yr |
| NPS Tier I (within 80C) | Until 60 | Market-linked | 60% exempt, 40% annuitised |
Three things count toward 80C that are not investments at all, and people routinely forget them:
- Home loan principal repayment — the principal portion of your EMI, not the interest (interest goes under Section 24(b), a separate ₹2 lakh limit). On a large home loan this alone can consume most of your ₹1.5 lakh without you investing a rupee. Check your amortisation split in the EMI calculator before buying anything else for 80C.
- Children’s tuition fees — full-time education at an Indian school, college, or university, for up to two children. Tuition only: no donations, development fees, or transport.
- Stamp duty and registration on a house purchase, claimable in the year you paid it. A one-off, but often a large one.
What ₹1.5 lakh of 80C is actually worth
The deduction saves you tax at your marginal rate — the rate on your highest slab, not your average rate. That makes the same ₹1.5 lakh worth very different amounts to different people:
| Your marginal rate (old regime) | Tax saved by a full ₹1.5 lakh |
|---|---|
| 5% | ₹7,800 (including 4% cess) |
| 20% | ₹31,200 |
| 30% | ₹46,800 |
Note what this means at the bottom of the table. If your marginal rate is 5%, locking ₹1.5 lakh away for five years to save ₹7,800 is a poor trade — you would almost certainly do better on the new regime with the money free. 80C rewards high earners and penalises low ones, which is the opposite of how it is usually marketed.
Where the ₹1.5 lakh should go
Assuming you have established the old regime is right for you, fill the limit in this order:
- Count what you are already paying. EPF deductions, home-loan principal, tuition fees, and insurance premiums are already in the bucket. Many people discover the limit is half full before they invest anything, then over-invest and get no deduction for the excess.
- Fill the rest with ELSS if your horizon is long. Three-year lock-in — the shortest available — and equity returns. The trade is volatility: a three-year window can end badly, and you cannot exit early.
- Use PPF if you want certainty. 7.1%, tax-free on the way out, sovereign-backed. The cost is a fifteen-year lock-in, which is a long time to be certain about anything. Model it in the PPF calculator.
- Treat tax-saving FDs as a last resort. Five-year lock-in and the interest is fully taxable at your slab — so a 7% FD returns under 5% after tax at the 30% rate. It is the weakest option on the list and the most heavily sold.
Beyond the ₹1.5 lakh
Two deductions sit outside the 80C ceiling and are worth knowing because they extend your total:
- Section 80CCD(1B) — an extra ₹50,000 for NPS Tier I, on top of 80C.
- Section 80D — health insurance premiums, ₹25,000 for yourself and family, plus ₹50,000 more for senior-citizen parents.
Stack all three and a taxpayer with senior parents can reach ₹2.75 lakh of deductions before HRA or home-loan interest enter the picture. That is the point at which the old regime starts to become genuinely competitive.
The mistake to avoid
Every March, people buy insurance policies they do not need because a deadline is approaching and the tax saving feels urgent. A bad thirty-year product bought to save ₹46,800 once is not a good trade. The deduction is a discount on an investment you should want anyway — if you would not buy it without the tax break, the tax break is not a reason to buy it.
Run your numbers
Compare both regimes with your own salary and deduction figures in the Income Tax Calculator, project a PPF balance in the PPF Calculator, or check what your home-loan principal is contributing with the EMI Calculator. This is general education, not personalized financial advice.