Section 80C remains the most widely used tax-saving deduction in the old regime, but it only pays off if the instrument actually fits your financial goal — not just your tax bill.
How the ₹1.5 lakh limit works
You can claim up to ₹1.5 lakh in total deductions under 80C across all eligible instruments combined — it's a shared limit, not a separate ₹1.5 lakh for each option.
The main options compared
PPF suits long-term, risk-free savings with a 15-year lock-in. ELSS mutual funds carry market risk but the shortest lock-in (3 years) and potential for higher returns. Life insurance premiums qualify too, but buying insurance purely for the tax deduction is rarely the most efficient use of the limit. Principal repayment on a home loan also counts within this same ceiling.
The mistake most people make
Rushing to invest ₹1.5 lakh in March purely to save tax, without any regard for the underlying financial goal. The better approach is planning 80C investments from April, spread across the year, matched to what you're actually saving for.
CA Jaipal Roy
Chartered Accountant, J Roy & Co.
Jaipal is a young, ex-PwC Chartered Accountant with 5+ years of experience across audit, tax, and compliance. He and his team help startups and MSMEs across India with taxation, registration, and end-to-end compliance.