Table of Contents
- What is Section 80C?
- Complete 80C Investment List
- ELSS vs PPF vs FD vs NSC — Side-by-Side
- ELSS — Best for Long-term Wealth
- PPF — The Safe Compounder
- Tax-saving FD — Simple & Safe
- NSC — Post Office Option
- NPS — Extra ₹50,000 Under 80CCD(1B)
- Who Should Choose What?
- 80C in New vs Old Regime
- 80C Tax Saving Calculator
What is Section 80C?
Section 80C of the Income Tax Act allows you to deduct up to ₹1,50,000 from your taxable income every financial year by investing in specified instruments. At a 30% tax slab, this saves you ₹46,800 annually (including 4% cess).
Complete 80C Investment List
Section 80C covers a wide range of instruments — not just investments, but also certain payments:
- ELSS Mutual Funds
- Public Provident Fund (PPF)
- National Savings Certificate (NSC)
- 5-year Tax-saving Fixed Deposit
- Senior Citizen Savings Scheme (SCSS)
- Sukanya Samriddhi Yojana (SSY)
- National Pension System (NPS) — 80CCD(1)
- ULIP (Unit-linked Insurance Plans)
- Infrastructure Bonds
- Employee Provident Fund (EPF) — auto
- Life Insurance Premium
- Home Loan Principal Repayment
- Tuition Fees (2 children)
- Stamp duty on house purchase (first year)
ELSS vs PPF vs FD vs NSC — Side-by-Side Comparison
Here's the full comparison of the 4 most popular 80C instruments:
| Parameter | ELSS | PPF | Tax FD | NSC |
|---|---|---|---|---|
| Lock-in Period | 3 years | 15 years | 5 years | 5 years |
| Expected Returns | 12–15% p.a.* | 7.1% p.a. | 6.5–7.5% p.a. | 7.7% p.a. |
| Risk Level | High (Market) | Nil | Nil | Nil |
| Tax on Returns | 12.5% LTCG above ₹1.25L | Tax-free | Fully taxable | Taxable (auto) |
| Investment Type | Market-linked | Government | Bank | Post Office |
| Minimum Investment | ₹500 (SIP) | ₹500/year | ₹1,000 | ₹1,000 |
| Loan Against | Yes (after lock-in) | 3rd year onwards | Yes | Yes |
| Best For | Wealth creation | Safe compounding | Simplicity | Guaranteed return |
*ELSS historical returns — past performance is not a guarantee of future results. PPF rate as last notified; revised quarterly by govt; revised quarterly by govt. FD rates vary by bank.
ELSS — Best for Long-term Wealth Creation
Equity Linked Savings Scheme (ELSS) are diversified equity mutual funds that qualify for 80C. They have the shortest lock-in (3 years) among all 80C options and the highest potential returns.
- Shortest lock-in (3 years) in 80C
- Highest historical returns (equity)
- SIP possible from ₹500/month
- LTCG of ₹1.25L/year is tax-free
- Can switch funds after lock-in
- Market risk — value can fall
- No guaranteed returns
- 12.5% LTCG tax on gains above ₹1.25L
- Each SIP instalment locked for 3 years
- Not suitable for short horizon
Who should choose ELSS: Anyone with a 5+ year investment horizon who wants to build wealth, is comfortable with market volatility, and wants the 80C tax benefit simultaneously. Ideal for salaried employees in their 30s and 40s.
PPF — The Safe Long-term Compounder
Public Provident Fund (PPF) is the quintessential safe 80C investment — government-backed, tax-free returns, and EEE (Exempt-Exempt-Exempt) taxation status.
PPF's EEE status is unique — your investment qualifies for 80C deduction, the interest earned is tax-free, AND the maturity amount is completely tax-free. This is unlike ELSS (10% LTCG applies) and FD (interest taxed as income).
- 100% government-backed, zero risk
- EEE — fully tax-free maturity
- Can extend beyond 15 years (5-yr blocks)
- Loan facility from 3rd year
- Cannot be attached by creditors
- 15-year lock-in — very illiquid
- Rate revised quarterly by govt
- No equity upside — fixed return
- Max deposit capped at ₹1.5L/year
- Partial withdrawal only after 6th year
PPF interest tip: Deposit by 5th of the month to earn interest for that full month. Deposits made after the 5th don't earn interest for that month. And for maximum annual benefit, deposit the full ₹1.5L in April each year.
Tax-Saving FD — Simple, Safe, Accessible
A 5-year Tax-saving Fixed Deposit with any scheduled bank qualifies for 80C. It's the simplest 80C instrument — no forms, no demat account, just a regular FD with a 5-year lock-in.
| Bank | Interest Rate (General) | Interest Rate (Senior Citizens) |
|---|---|---|
| SBI | 6.50% | 7.00% |
| HDFC Bank | 7.00% | 7.50% |
| ICICI Bank | 7.00% | 7.50% |
| Axis Bank | 7.00% | 7.75% |
| Kotak Mahindra | 6.20% | 6.70% |
Rates as of April 2026. Always verify current rates with your bank before investing.
NSC — Post Office Savings Option
National Savings Certificate (NSC) is issued by India Post and currently offers 7.7% per annum, compounded annually. Like PPF, it's government-backed with zero risk.
Key points about NSC:
- 5-year maturity — shorter than PPF but longer than ELSS
- Interest is accrued (not paid annually) and is deemed to be reinvested — so each year's accrued interest also qualifies as 80C investment
- Tax on maturity: The interest is taxable as income (added to your salary income), but since it's deemed reinvested, the tax impact occurs mainly at maturity
- Available at all post offices; can be purchased online via India Post Payments Bank
- Can be used as collateral for loans
NPS — Extra ₹50,000 Tax Deduction via 80CCD(1B)
National Pension System (NPS) sits partly under 80C (up to ₹1.5L via 80CCD(1)) and has an additional exclusive deduction of ₹50,000 under Section 80CCD(1B) — over and above the ₹1.5L limit.
The additional ₹50,000 under 80CCD(1B) can save up to ₹15,600 in tax at the 30% slab. However, NPS has restrictions: you cannot withdraw before age 60 (except for specific purposes), and 40% of the corpus must be used to buy an annuity at maturity.
Who Should Choose Which 80C Option?
Want to know your exact salary after all deductions? Use our free Payslip Calculator →
80C in New vs Old Tax Regime
Full ₹1.5L deduction available. Plus 80CCD(1B) extra ₹50K for NPS. Higher slab rates but offset by deductions.
Section 80C, 80D, HRA, LTA deductions all removed. Lower slab rates compensate, but high-investment individuals may fare better in old regime.
If you invest ₹1.5L in 80C instruments and are in the 30% slab, you save ₹46,800 in the old regime. If the tax saved via old regime deductions exceeds the slab difference vs new regime, old regime wins. Use our New vs Old Regime Calculator.
80C Tax Saving Calculator
See exactly how much tax you save based on your 80C investments: