Deduction 80C AY 2024-25 & AY 2023-24

Deduction 80C A.Y. 2023-24 & A.Y.2024-25: There are a number of deductions under Chapter VI-A, namely Sections 80C to 80U, that can be deducted from gross income in order to arrive at net income/taxable income. In this article, we will discuss only section 80C deduction. Investments in certain instruments, such as Life Insurance Premiums, Employee Provident Funds (EPFs), Public Provident Funds (PPFs), National Savings Certificates (NSCs), tax-saving fixed savings, five-year post office time deposits, etc., are eligible for deductions under this section. There is a maximum reduction of Rs. 1.5 lakh you can avail under section 80C.

In this article, the deduction under section 80C is included in all amendments of the Finance Act 2023.

Deduction 80C Quick Summary

Amount Eligibile For Deduction	Rs.1.5 Lakh Per Year
Allowed To	Individual and HUF
Popular Payment Eligibile	LIC, LIP, PF, Tution Fee, FD 5 Years, Some Mutual Funds, Senior Citizens Schems, NABARD Bonds, 5 Years Post Office Time Deposit, Sukanya Samriddhi Scheme etc.

Investments Eligible for Deduction 80C

You can avail the benefit of deduction u/s 80C by investing in the following schemes. 

Sr.No.	Investment	Investment Detail
1	Life Insurance Premium (LIP/LIC)	Life Insurance Premium for self, children, spouse in case of individual Life Insurance Premium for any member of HUF - in case of HUF
2	Public Provident Fund (PPF)	Amount Deposited in Public Provident Fund (PPF) for Self, Spouse, Children - In case of Individual  Amount Deposited in Public Provident Fund (PPF) for any member of HUF - In case of HUF
3	Employee's contribution to Statutory Provident Fund	Employee's contribution to Statutory Provident Fund (SPF) or any Approved superannuation fund (ASF) or any Recognised Provident Fund (RPF)
4	National Saving Certificate	Interest accrued on NSC as well as the amount invested in NSC.
5	House Loan Repayment	Bank or financial institution loan repayment for the purchase or construction of a residential House
6	Fixed Deposit (5 Years)	Five-year or longer fixed deposit in a scheduled bank or post office
7	Children Education Fee	Tuition fee paid for children's education (Max 2 children for full-time education in India)
8	NABARD	Deposit in Notified bonds of NABARD (National Bank for Agriculture and Rural Development)
9	Senior Citizen Saving Scheme	Deposit in Senior Citizen Saving Scheme
10	ULIP	Contribution towards Unit Linked Insurance Plan (ULIP)
11	Mutual Funds	Notified units of Mutual Funds or UTI
12	Pension Scheme	Notified Pension scheme of UTI or MF
13	Sukanya Samridhi Scheme	Deposit in Sukanya Samridhi Scheme Account (for any girl child of an individual or girl child for whom such individual is a legal guardian)
14	Stamp Duty	Stamp duty, the registration fee for the acquisition of house property
15	Pension Scheme in 80CCD	Contribution to the pension scheme described in section 80CCD by an employee of CG for a fixed period of three years or more (NPS tier 2).

Notes:

If any previous year, an assessee

• has not paid his premiums for two years or terminated his LIP,
• hasn’t paid ULIP premiums for more than five years or has terminated the policy
• transfers house before 5 years from the end of the financial year in which possession is obtained
• the amount is withdrawn from a FD or Senior Citizen Savings Scheme before 5 years,

then all deductions allowed earlier will be considered income in the year of violation or withdrawal.

More on IncomeTaxIndia’s Official Website

80C Deduction Point To Note

The highest deduction: Section 80C allows for a maximum deduction of Rs. 1.5 lakh. This means that investments can only go up to this much.

Eligible investments and Expenses: You can claim deductions under section 80C for various investments and expenses such as Employees Provident Fund (EPF), Public Provident Fund (PPF), National Savings Certificates (NSC), Tax saving fixed deposits, home loan repayment, tuition fees, life insurance premiums etc., National Pension System Contributions etc. For the complete list of eligible investments and expenditures, please refer to the Income Tax Act India or the official website of Income Tax India.

Lock-in period: Three years is the lock-in period for ELSS, while five years is the lock-in period for tax-saving fixed accounts.

Joint Investments allowed: Along with one’s investment, an individual can claim deductions for their children’s investment or contribution made to certain plans like SSY (Sukanya Samriddhi Yojana), PPF, LIP, etc are also considered under Section 80C.

Who can benefit from it? Individuals and HUFs (Hindu Undivided Families) can avail themselves of exemptions from taxable income according to section 80c.

Proof of Investment required: Proper record keeping and furnishing proof of investments/costs is important under section 80C. Tax officers may call for receipts/Certificates/Statements as evidence supporting the claim made.

• Restriction on Deduction under New Tax Regime:
• No Assessee shall be allowed any deduction under section 80c in the new tax regime except
• Deduction in respect of employer’s contribution to the National Pension Scheme
• Deduction in respect of central govt contribution under Agniveer Corpus Fund

Maximum Deductible amount under Section 80C

The limit of Rs. 1.5 lakh is a ceiling limit which means that the total of all deductions claimed under section 80C cannot exceed Rs. 1.5 lakhs. The cap applies to each and every sub-sections falling under this particular section such as PPF, ELSS, NPS & insurance premium etc.. If you invest more than Rs. 150000 then that excess portion will not be allowed as a deduction from income chargeable under the head ‘income’. Aggregative deduction u/s 80C, 80CCC, 80CCD and new section 80CCE – should not exceed Rs.1,50,000/-.