What is the maximum deduction under Section 80C in 2025?

The maximum deduction is ₹1.5 lakh per financial year. This limit is shared across Section 80C, 80CCC (pension funds), and 80CCD(1) (NPS).

Which is the best 80C investment for 30% tax bracket?

ELSS (Equity Linked Savings Scheme) is the best option for wealth creation, delivering 11-13% post-tax returns with the shortest 3-year lock-in period.

Can I claim Section 80C under the new tax regime?

No. Section 80C deductions are only available under the old tax regime. The new tax regime does not allow 80C, 80D, or HRA deductions.

Is ELSS better than PPF for tax saving?

Yes, for investors under 50 aiming for wealth creation, as ELSS delivers significantly higher returns (12-15%) compared to PPF (7.1%). PPF is better for risk-averse investors.

Tax Planning 2025

Best Tax Saving Options Under Section 80C for 2025

12 Min Read•Last Updated: Dec 2025• Verified Data

Choosing the best tax saving options under Section 80C can save you up to ₹46,800 annually (30% tax bracket) while building long-term wealth. With 15+ eligible investments ranging from ELSS mutual funds (12-15% returns) to PPF (7.1% returns) and Tax Saver FDs, most taxpayers struggle to maximize the limit efficiently. The critical mistake is focusing only on the tax deduction without comparing post-tax returns—ELSS delivers 11-13% post-tax returns versus PPF's 7.1%, a difference worth ₹10-15 lakh over a decade.

Quick Verdict (30-Second Answer)

ELSS is the #1 choice if you are under 50 and want to build wealth. It offers the highest returns (12-15%) and shortest lock-in (3 years).

PPF & EPF are best for conservative investors seeking guaranteed safety. Tax Saver FD is suitable only for senior citizens.

What is Section 80C?

Section 80C of the Income Tax Act allows individuals and HUFs to claim a deduction of up to ₹1.5 lakh from their total taxable income. It is the most popular tax-saving section in India.

Key Highlights

Limit: ₹1.5 Lakh per financial year (shared across 80C, 80CCC, 80CCD(1)).
Tax Regime: Available ONLY under the Old Tax Regime.
Savings: Up to ₹46,800 tax saved for those in the 30% bracket.

Reference: Income Tax Department (Section 80C rules)

How Section 80C Deductions Work

Let's see a breakdown for someone in the 30% tax bracket:

Gross Taxable Income	₹10,00,000
Less: 80C Investment	- ₹1,50,000
Net Taxable Income	₹8,50,000
Tax Saved (30% + Cess)	₹46,800

Complete List of Section 80C Eligible Investments

List of tax saving options under section 80C

1. Public Provident Fund (PPF)

Returns7.1% (Tax-Free)

Lock-in15 Years

Best for risk-free retirement planning.

2. Employee Provident Fund (EPF)

Returns8.25% (Tax-Free)

Lock-inUntil Retirement

Mandatory and excellent for salaried employees.

3. ELSS Mutual Funds (Top Pick)

Returns12-15% (Market Linked)

Lock-in3 Years (Shortest)

Best for wealth creation and beating inflation.

4. Tax Saver FD

Returns6-7.5% (Taxable)

Lock-in5 Years

Best for senior citizens needing safety.

5. National Pension System (NPS)

Returns: 9-12% (Market Linked).
Lock-in: Until Age 60.

Extra ₹50,000 deduction (80CCD 1B)

6. Sukanya Samriddhi (SSY)

Returns: 8.2% (Tax-Free).
Lock-in: 21 Years.

For Girl Child Only

Other Options: Life Insurance Premiums (Term/LIC), NSC, SCSS, Home Loan Principal Repayment, and Children's Tuition Fees.

Investments Ranked by Returns (Post-Tax)

High-Return Options (10%+ Post-Tax)

Investment	Pre-Tax Return	Post-Tax (30% Slab)	Risk
ELSS Funds	12-15%	11-13%	High
NPS (Equity)	10-12%	9-11%	Medium

Medium-Return Options (7-9% Post-Tax)

Investment	Return	Tax Status	Risk
EPF	8.25%	Tax-Free	Zero
SSY	8.2%	Tax-Free	Zero
PPF	7.1%	Tax-Free	Zero

Low-Return Options (<7% Post-Tax)

Investment	Pre-Tax	Post-Tax (30% Slab)	Risk
Tax Saver FD	6-7.5%	4.2-5.2%	Zero
NSC	7.7%	5.3%	Zero
LIC / Trad.	4-6%	4-6%	Low

Key Insight: ELSS delivers 2-3x higher post-tax returns than FD for investors in the 30% tax bracket.

ELSS vs PPF vs EPF vs FD: Comparison

Feature	ELSS	PPF	EPF	FD
Returns	12-15%	7.1%	8.25%	6-7.5%
Lock-in	3 Years	15 Years	Retirement	5 Years
Risk	High	Zero	Zero	Zero
Tax on Returns	12.5% > 1.25L	Tax-Free	Tax-Free	Fully Taxable
Best For	Wealth	Safety	Salaried	Seniors

Best Tax Saving Strategy for Salaried Employees

If You're in the 30% Tax Bracket (Goal: ₹2 Lakh Deduction)

1
EPF (Approx ₹60k+)Your mandatory monthly contribution automatically counts towards 80C.
2
ELSS SIP (₹60k)Start a ₹5,000/month SIP. This builds wealth while saving tax.
3
PPF (₹30k)Add balance here for stability and debt allocation.
4
NPS (₹50k)Invest extra ₹50,000 under Section 80CCD(1B) forextra ₹15,600 tax savingsover the 1.5L limit.

Total Tax Saved: ₹62,400 / year

Who Should Choose What?

Choose ELSS If...

You are under 50 years old.
You want to beat inflation.
You can wait 3+ years.
You are in the 30% tax slab.

Choose PPF If...

You want zero risk.
You are self-employed.
You are saving for long-term (15y).
You want tax-free interest.

Choose FD If...

You are a Senior Citizen.
You cannot tolerate any volatility.
You are in a lower tax bracket.

Common Mistakes to Avoid

Buying Insurance for TaxTraditional LIC policies give only 4-6% returns. Buy Term Insurance for cover and ELSS for growth.
Ignoring NPSMissing out on the additional ₹50,000 deduction is a waste of ₹15,600 in tax savings.
Too Many PlansDon't buy a new policy every March. Stick to one or two solid investments (ELSS + PPF).

FAQs: Section 80C Tax Saving

Fincado Research Team

Fact Checked

Our analysis is built on deep-dive research into RBI Benchmarks and lender-specific disclosures. We verify every interest rate and fee structure against real-world borrower approvals to ensure the highest level of accuracy for Indian home buyers.

Verified: Jan 2026

Methodology: Data-Driven

Editorial Guidelines

Disclaimer: This content is for informational purposes only and does not constitute financial or tax advice. Tax laws are subject to change. Please consult a Chartered Accountant (CA) or financial advisor before making investment decisions.

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What is Section 80C?

Section 80C of the Income Tax Act allows individuals and HUFs to claim a deduction of up to ₹1.5 lakh from their total taxable income. It is the most popular tax-saving section in India.

Key Highlights

Limit: ₹1.5 Lakh per financial year (shared across 80C, 80CCC, 80CCD(1)).
Tax Regime: Available ONLY under the Old Tax Regime.
Savings: Up to ₹46,800 tax saved for those in the 30% bracket.

Reference: Income Tax Department (Section 80C rules)

Complete List of Section 80C Eligible Investments

1. Public Provident Fund (PPF)

Returns7.1% (Tax-Free)

Lock-in15 Years

Best for risk-free retirement planning.

2. Employee Provident Fund (EPF)

Returns8.25% (Tax-Free)

Lock-inUntil Retirement

Mandatory and excellent for salaried employees.

3. ELSS Mutual Funds (Top Pick)

Returns12-15% (Market Linked)

Lock-in3 Years (Shortest)

Best for wealth creation and beating inflation.

4. Tax Saver FD

Returns6-7.5% (Taxable)

Lock-in5 Years

Best for senior citizens needing safety.

5. National Pension System (NPS)

Returns: 9-12% (Market Linked).
Lock-in: Until Age 60.

Extra ₹50,000 deduction (80CCD 1B)

6. Sukanya Samriddhi (SSY)

Returns: 8.2% (Tax-Free).
Lock-in: 21 Years.

For Girl Child Only

Other Options: Life Insurance Premiums (Term/LIC), NSC, SCSS, Home Loan Principal Repayment, and Children's Tuition Fees.

Investment

Pre-Tax Return

Post-Tax (30% Slab)

Risk

ELSS Funds

12-15%

11-13%

High

NPS (Equity)

10-12%

9-11%

Medium

Investment

Return

Tax Status

Risk

EPF

8.25%

Tax-Free

Zero

SSY

8.2%

Tax-Free

Zero

PPF

7.1%

Tax-Free

Zero

Investment

Pre-Tax

Post-Tax (30% Slab)

Risk

Tax Saver FD

6-7.5%

4.2-5.2%

Zero

NSC

7.7%

5.3%

Zero

LIC / Trad.

4-6%

Low

Feature

ELSS

PPF

EPF

Returns

12-15%

7.1%

8.25%

6-7.5%

Lock-in

3 Years

15 Years

Retirement

5 Years

Risk

High

Zero

Tax on Returns

12.5% > 1.25L

Tax-Free

Fully Taxable

Best For

Wealth

Safety

Salaried

Seniors

Best Tax Saving Strategy for Salaried Employees

If You're in the 30% Tax Bracket (Goal: ₹2 Lakh Deduction)

1
EPF (Approx ₹60k+)Your mandatory monthly contribution automatically counts towards 80C.
2
ELSS SIP (₹60k)Start a ₹5,000/month SIP. This builds wealth while saving tax.
3
PPF (₹30k)Add balance here for stability and debt allocation.
4
NPS (₹50k)Invest extra ₹50,000 under Section 80CCD(1B) forextra ₹15,600 tax savingsover the 1.5L limit.

Total Tax Saved: ₹62,400 / year

Who Should Choose What?

Choose ELSS If...

You are under 50 years old.
You want to beat inflation.
You can wait 3+ years.
You are in the 30% tax slab.

Choose PPF If...

You want zero risk.
You are self-employed.
You are saving for long-term (15y).
You want tax-free interest.

Choose FD If...

You are a Senior Citizen.
You cannot tolerate any volatility.
You are in a lower tax bracket.

Common Mistakes to Avoid

Buying Insurance for TaxTraditional LIC policies give only 4-6% returns. Buy Term Insurance for cover and ELSS for growth.
Ignoring NPSMissing out on the additional ₹50,000 deduction is a waste of ₹15,600 in tax savings.
Too Many PlansDon't buy a new policy every March. Stick to one or two solid investments (ELSS + PPF).

What is Section 80C?

Key Highlights

How Section 80C Deductions Work

Complete List of Section 80C Eligible Investments

5. National Pension System (NPS)

6. Sukanya Samriddhi (SSY)

High-Return Options (10%+ Post-Tax)

Medium-Return Options (7-9% Post-Tax)

Low-Return Options (<7% Post-Tax)

ELSS vs PPF vs EPF vs FD: Comparison

Best Tax Saving Strategy for Salaried Employees

Who Should Choose What?

Common Mistakes to Avoid

FAQs: Section 80C Tax Saving

What is the maximum deduction under Section 80C in 2025?

Which is the best 80C investment for 30% tax bracket?

Can I claim Section 80C under the new tax regime?

Is ELSS better than PPF for tax saving?

Does Home Loan Principal count under 80C?

Fincado Research Team

Ready to Save Tax?

What is Section 80C?

Key Highlights

How Section 80C Deductions Work

Complete List of Section 80C Eligible Investments

5. National Pension System (NPS)

6. Sukanya Samriddhi (SSY)

High-Return Options (10%+ Post-Tax)

Medium-Return Options (7-9% Post-Tax)

Low-Return Options (<7% Post-Tax)

ELSS vs PPF vs EPF vs FD: Comparison

Best Tax Saving Strategy for Salaried Employees

Who Should Choose What?

Common Mistakes to Avoid

FAQs: Section 80C Tax Saving

What is the maximum deduction under Section 80C in 2025?

Which is the best 80C investment for 30% tax bracket?

Can I claim Section 80C under the new tax regime?

Is ELSS better than PPF for tax saving?

Does Home Loan Principal count under 80C?

Fincado Research Team

Ready to Save Tax?