Who Can Claim Section 80C in AY 2026-27?

If you are planning your tax-saving investments for FY 2025-26, the first question is simple: who can claim 80C deduction in AY 2026-27? Section 80C is available to eligible individuals and Hindu Undivided Families (HUFs), but only taxpayers who choose the old tax regime can generally use it. The maximum deduction under Section 80C is ₹1,50,000 in a financial year.

This deduction covers several popular options, including Employees’ Provident Fund (EPF), Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), life insurance premiums, National Savings Certificate (NSC), eligible fixed deposits, tuition fees and home loan principal repayment.

Who can claim 80C deduction in AY 2026-27?

For AY 2026-27, Section 80C eligibility is limited to the following taxpayers:

• Resident individuals
• Non-resident individuals, where the investment or payment qualifies under Indian tax law
• Hindu Undivided Families (HUFs)

Companies, partnership firms, Limited Liability Partnerships and other taxpayers cannot claim the Section 80C deduction.

Section 80C applies to investments and specified payments made during FY 2025-26, from 1 April 2025 to 31 March 2026. The deduction is claimed while filing the income tax return for AY 2026-27.

You can refer to the Income Tax Department’s guidance on deductions and the relevant provisions of the Income-tax Act, 1961.

80C deduction under old tax regime AY 2026-27

The ₹1,50,000 deduction under Section 80C is available only under the old tax regime for AY 2026-27. If you select the new tax regime, you cannot claim deductions for most investments and payments covered by Section 80C.

Under the old tax regime, a taxpayer may reduce gross total income by eligible Section 80C investments and payments, subject to the overall limit of ₹1,50,000.

Can salaried employees claim 80C deduction in AY 2026-27?

Yes. Salaried employees can claim 80C deduction in AY 2026-27 if they:

1. Choose the old tax regime.
2. Make eligible investments or payments during FY 2025-26.
3. Keep supporting documents such as investment statements, premium receipts or loan certificates.
4. Report the deduction correctly in their income tax return.

An employee may submit investment proof to the employer for accurate tax deduction at source, or claim the deduction directly while filing the income tax return. Submitting proof to the employer is not the same as claiming the deduction. The final claim is made in the income tax return.

For example, assume a salaried employee makes these payments during FY 2025-26:

• EPF contribution: ₹60,000
• ELSS investment: ₹40,000
• Life insurance premium: ₹30,000
• Home loan principal repayment: ₹50,000

The total eligible amount is ₹1,80,000. However, the employee can claim only ₹1,50,000 under Section 80C.

Can 80C deduction be claimed under new tax regime AY 2026-27?

No. 80C deduction cannot generally be claimed under the new tax regime for AY 2026-27.

The new tax regime offers revised slab rates and a higher tax rebate structure, but it removes several deductions and exemptions available under the old regime. Section 80C is one of the deductions that taxpayers generally cannot use under the new regime.

This means the following payments will not normally provide a tax deduction under Section 80C if you select the new tax regime:

• PPF investments
• ELSS investments
• Life insurance premiums
• Employee’s own EPF contribution
• NSC investments
• Eligible five-year bank deposits
• Home loan principal repayment
• Eligible tuition fees

Some deductions remain available under the new regime, such as eligible employer contributions to the National Pension System under Section 80CCD(2), subject to applicable limits. However, this is separate from Section 80C.

Taxpayers should compare the tax payable under both regimes before choosing one. Consider your salary, home loan interest, health insurance premiums, house rent exemption, standard deduction and other eligible deductions.

80C deduction limit ₹1,50,000 for FY 2025-26

The maximum deduction under Section 80C for FY 2025-26 is ₹1,50,000. This limit is not increased merely because you invest more.

The ₹1,50,000 limit is combined with deductions under:

• Section 80CCC, which covers certain annuity or pension schemes
• Section 80CCD(1), which covers an individual’s contribution to the National Pension System, subject to conditions

Therefore, the combined deduction under Sections 80C, 80CCC and 80CCD(1) cannot exceed ₹1,50,000.

The additional deduction of up to ₹50,000 under Section 80CCD(1B) for an individual’s own NPS contribution is separate from this combined limit. It is available under the old tax regime, subject to the conditions applicable to Section 80CCD(1B).

Example of the combined limit

Suppose a taxpayer invests:

• ₹1,00,000 in PPF
• ₹30,000 in ELSS
• ₹40,000 in NPS under Section 80CCD(1)

The total eligible contribution is ₹1,70,000. The taxpayer can claim only ₹1,50,000 under the combined limit of Sections 80C, 80CCC and 80CCD(1).

If the taxpayer also contributes ₹50,000 to NPS and qualifies under Section 80CCD(1B), the additional amount may be claimed separately under the old tax regime.

Eligible investments for Section 80C deduction FY 2025-26

The following are the main eligible investments and payments for Section 80C deduction in FY 2025-26.

1. Employee Provident Fund

An employee’s contribution to EPF qualifies for Section 80C, subject to the overall limit of ₹1,50,000.

Only the employee’s contribution is relevant for the Section 80C claim. The employer’s contribution is governed by separate provisions and is not claimed by the employee under Section 80C.

EPF deductions are often automatically reflected in salary records, but employees should verify the amount in their Form 16 and annual information statement.

2. Public Provident Fund

Contributions to PPF qualify for Section 80C. The PPF account has a statutory tenure of 15 years, with permitted extensions under the applicable rules.

The National Savings Institute’s PPF information provides official details about PPF rules and account operation.

Important points include:

• The minimum yearly contribution is subject to PPF rules.
• Contributions must be made within the relevant financial year.
• The deduction is available for the amount actually deposited, subject to the ₹1,50,000 limit.
• Interest earned on PPF is treated under the tax rules applicable to PPF and is not claimed as a Section 80C investment.

3. Equity Linked Savings Scheme

ELSS is a tax-saving mutual fund scheme with a statutory lock-in period of three years. Investments in eligible ELSS funds qualify under Section 80C.

The deduction applies to the amount invested during FY 2025-26, subject to the overall limit. ELSS returns and redemption taxation are separate from the deduction claim.

Investors should retain the mutual fund account statement or transaction confirmation as proof.

4. Life insurance premiums

Life insurance premiums paid for an eligible policy can qualify under Section 80C. The deduction may apply to policies taken for:

• The taxpayer
• The taxpayer’s spouse
• The taxpayer’s children

For policies issued on or after 1 April 2012, the premium generally must not exceed 10% of the actual capital sum assured. A higher threshold can apply in specified cases involving disability or certain diseases.

Policyholders should also consider the policy continuation conditions. If an eligible life insurance policy is terminated prematurely or does not satisfy the required holding conditions, the earlier deduction may be affected under the tax rules.

5. Home loan principal repayment

The principal portion of repayment of a qualifying housing loan can qualify under Section 80C. The loan must generally be taken for the purchase or construction of a residential house property from specified lenders or institutions.

Eligible payments can also include:

• Stamp duty
• Registration fees
• Certain transfer-related expenses paid for acquiring the house

These expenses must relate to the purchase or construction of the residential property and must be paid during the relevant financial year.

If the taxpayer transfers the property before the specified holding period, the earlier deduction may be added back to income according to the applicable provisions.

6. Tuition fees

Parents can claim tuition fee payments made for the full-time education of their children in India, subject to Section 80C conditions.

Key conditions include:

• The payment must be tuition fees.
• The payment must be for full-time education.
• The institution must be located in India.
• The deduction is generally restricted to the tuition fees of up to two children.
• Payments for private coaching, development fees, donation, transport, hostel charges and similar items do not qualify as tuition fees under Section 80C.

Parents should retain fee receipts that clearly identify the student, institution and amount paid.

7. National Savings Certificate

Investment in NSC qualifies under Section 80C. Interest accrued on NSC may also be treated as reinvested and eligible for deduction in certain years, except for the final year, subject to the overall limit and applicable conditions.

Keep the NSC certificate or electronic investment statement for records.

8. Five-year tax-saving fixed deposits

A fixed deposit with a scheduled bank or eligible post office for a minimum lock-in period of five years can qualify under Section 80C.

The following points matter:

• The deposit must satisfy the prescribed five-year lock-in requirement.
• A regular short-term fixed deposit does not qualify.
• Premature withdrawal can have tax and interest consequences.
• Interest earned on the deposit is generally taxable, even though the original investment may qualify for Section 80C.

9. Senior Citizens’ Savings Scheme

Deposits under the Senior Citizens’ Savings Scheme can qualify under Section 80C, subject to the prescribed rules and the overall ₹1,50,000 limit.

The interest received from the scheme is separate from the deduction and must be considered while calculating taxable income.

10. Sukanya Samriddhi Account

Eligible deposits in a Sukanya Samriddhi Account can qualify under Section 80C, subject to the account rules.

The account is intended for the benefit of a girl child and can generally be opened and operated by an eligible parent or legal guardian. The person claiming the deduction should ensure that the deposit and account ownership meet the prescribed conditions.

Section 80C eligibility for individuals and HUF in AY 2026-27

Individuals and HUFs may both be eligible for Section 80C, but the nature of the payment must match the taxpayer’s legal ownership and responsibility.

Individual taxpayers

An individual can claim eligible payments made for:

• Their own qualifying investments
• Their spouse’s eligible life insurance premium
• Their children’s eligible life insurance premium
• Their children’s qualifying tuition fees
• Their own home loan principal repayment
• Their employee EPF contribution

The taxpayer must be able to establish that the payment was made by them and that the investment or payment satisfies Section 80C conditions.

HUF taxpayers

An HUF can claim eligible investments made from HUF funds for the benefit of the HUF, subject to the specific conditions of the investment.

An HUF cannot claim a deduction simply because an individual member made a personal investment. The payment must relate to the HUF and be properly recorded in its books and documents.

HUFs should be particularly careful with:

• Ownership of investments
• Source of funds
• Whether the investment product permits HUF investment
• Whether the deduction has already been claimed by a member in an individual capacity

What is not covered by Section 80C?

Several common payments do not qualify under Section 80C. These include:

• Health insurance premiums, which may qualify under Section 80D
• Interest paid on a home loan
• Principal repayment beyond the eligible amount
• School or college donations
• Private coaching fees
• Transport and hostel charges
• Ordinary savings account deposits
• Regular fixed deposits with a maturity period below five years
• Personal NPS contributions claimed under Section 80CCD(1B), which are covered by a separate provision

The tax treatment of each payment depends on the specific section and conditions. Do not include every financial investment under Section 80C merely because it is tax-related.

How to claim 80C deduction in AY 2026-27

Follow these steps to claim the deduction:

1. List all eligible payments made between 1 April 2025 and 31 March 2026.
2. Remove amounts that do not meet Section 80C conditions.
3. Add eligible amounts under Sections 80C, 80CCC and 80CCD(1).
4. Restrict the combined claim to ₹1,50,000.
5. Confirm that you have selected the old tax regime.
6. Enter the eligible amount in the appropriate schedule of your income tax return.
7. Retain receipts, certificates, statements and loan documents.

You generally do not need to attach proof with the income tax return, but the documents should be retained in case the Income Tax Department requests verification.

Common questions about 80C deduction for AY 2026-27

Can I claim 80C if I have no salary income?

Yes. Section 80C is not restricted to salaried taxpayers. An eligible individual with income from business, profession, house property or other sources can claim it under the old tax regime, subject to the applicable conditions.

Can I claim 80C if I invest after 31 March 2026?

No. Investments made after 31 March 2026 belong to FY 2026-27 and cannot be claimed for AY 2026-27.

Can I claim both EPF and PPF?

Yes. EPF and PPF can both be included in the Section 80C calculation. However, the total deduction under Section 80C remains limited to ₹1,50,000.

Is NPS included in the ₹1,50,000 Section 80C limit?

An individual’s contribution to NPS under Section 80CCD(1) falls within the combined ₹1,50,000 limit of Sections 80C, 80CCC and 80CCD(1). The additional contribution eligible under Section 80CCD(1B) has a separate limit of ₹50,000 under the old tax regime.

Can I claim 80C without making a fresh investment every year?

Yes, where the eligible payment is recurring or ongoing. For example, EPF contributions, home loan principal repayment and certain insurance premiums may continue to qualify each year, subject to the relevant rules and the amount actually paid during that financial year.

Summary

Who can claim 80C deduction in AY 2026-27? Eligible individuals and HUFs can claim it for qualifying investments and payments made in FY 2025-26. The 80C deduction limit is ₹1,50,000 for FY 2025-26, and the benefit is available only under the old tax regime. Salaried employees can claim deductions for EPF, PPF, ELSS, life insurance, home loan principal, tuition fees and other eligible payments, while taxpayers under the new tax regime cannot generally claim the 80C deduction under AY 2026-27. Compare both regimes, collect your documents and report eligible amounts accurately while filing your return.