Section 80C of the Income Tax Act 1961

Mon, 18 May 2026 00:00:00 +0000

Section 80C of the Income Tax Act 1961 is the most-used income-tax deduction provision in India, allowing a deduction of up to Rs 1.5 lakh per financial year against eligible investments and expenses including ELSS , PPF , EPF , NSC, tax-saver FDs, life insurance premium, and home loan principal repayment. The deduction reduces the taxpayer’s gross total income before computing tax liability, providing material tax savings for taxpayers in higher tax brackets.

Section 80C deduction for ELSS

Tue, 12 May 2026 00:00:00 +0000

Equity-Linked Savings Scheme (ELSS) is a category of open-ended equity mutual fund regulated by the Securities and Exchange Board of India (SEBI) under the SEBI (Mutual Funds) Regulations 1996. It is the only mutual fund category that qualifies for a tax deduction under Section 80C of the Income Tax Act 1961. An investor may claim a deduction of up to Rs 1,50,000 per financial year on investments in ELSS, subject to the overall Section 80C ceiling. ELSS units carry a statutory lock-in period of three years from the date of allotment of each unit. Upon redemption after the lock-in, any capital gains are long-term capital gains (LTCG) taxed under Section 112A at 12.5% on gains exceeding Rs 1,25,000 per financial year (rates as revised by the Finance Act 2024, effective 23 July 2024).

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Section 80C of the Income Tax Act 1961

Section 80C deduction for ELSS