How much tax does Section 80C actually save?

It depends on your slab and, far more importantly, on whether the old regime suits you at all. At the 30% slab the full ₹1,50,000 saves ₹46,800 including 4% cess; at 20% it saves ₹31,200 and at 5% just ₹7,800. But all of those assume you are filing under the old regime. Section 80C does not exist in the new regime, so if the new regime gives you a lower bill — which it does for most people without large HRA or home loan claims — the deduction saves you nothing whatever you invested.

Is Section 80C available in the new tax regime?

No. The new regime disallows Section 80C entirely, along with most of Chapter VI-A, HRA and home loan interest on a self-occupied property. It compensates with wider slabs, a ₹75,000 standard deduction and full rebate up to ₹12 lakh of taxable income. The one investment-linked deduction that survives is the employer contribution to NPS under Section 80CCD(2), now Section 124(1), at up to 14% of salary. Everything else on this page requires you to opt out of the default and into the old regime.

Has Section 80C been abolished? What is Section 123?

It has been renumbered, not abolished. The Income-tax Act, 2025 replaced the 1961 Act on 1 April 2026 and renumbered the whole statute, so Section 80C became Section 123 and the list of eligible instruments moved into Schedule XV. The ₹1.5 lakh limit is unchanged and every qualifying investment still qualifies. Sections 80C, 80CCC and 80CCE have been consolidated into Section 123, and 80CCD has become Section 124. It is a drafting reform rather than a policy change, but the section numbers on your forms and notices will be different.

Which financial year uses Section 80C and which uses Section 123?

Income earned up to 31 March 2026 — that is FY 2025-26, assessment year 2026-27 — is assessed under the 1961 Act and uses Section 80C. Income earned from 1 April 2026 onwards falls under the Income-tax Act, 2025 and uses Section 123. So both names are correct at the moment, depending on which year you mean. The FY 2025-26 return was due on 31 July 2026, and Form 16 for that year still shows the old section numbers. Returns for FY 2026-27, filed in 2027, will use the new ones.

What counts towards the ₹1.5 lakh limit?

A long list, all sharing one ceiling. Employee provident fund and voluntary PF, public provident fund, equity linked savings schemes, life insurance premiums, five-year tax-saving fixed deposits, National Savings Certificates, Sukanya Samriddhi, Senior Citizens Savings Scheme, ULIP premiums, repayment of home loan principal, stamp duty and registration on a house purchase, and tuition fees for up to two children. Your own NPS contribution under 80CCD(1) also competes for the same ₹1.5 lakh. The limit is an aggregate across all of them together, not a limit per instrument.

Does my EPF contribution count automatically?

Yes, and it is the single most common reason people over-invest. The 12% of basic salary deducted from your pay each month goes towards the ₹1.5 lakh limit whether you think about it or not, so on a basic salary of ₹10,00,000 your EPF alone contributes ₹1,20,000 and leaves only ₹30,000 of headroom. Add a life insurance premium and the ceiling is often reached before you buy anything deliberately. Check your payslip or EPF passbook before committing to a new tax-saving investment in March.

What is 80CCD(1B) and how is it different?

It is an additional ₹50,000 for your own contribution to an NPS Tier I account, and the important part is that it sits entirely outside the ₹1.5 lakh aggregate. So the two together allow ₹2,00,000 of deduction, worth ₹62,400 at the 30% slab. It is now Section 124(3) under the 2025 Act and remains old regime only. From 1 April 2026 it also covers contributions a parent makes to an NPS Vatsalya account for up to two minor children, with the ₹50,000 shared across your own and the children.

Can I claim more than ₹1.5 lakh?

Not under this section, but there are three routes to more total deduction. NPS under 80CCD(1B) adds ₹50,000 outside the cap. Employer NPS under 80CCD(2) is separate again, uncapped in rupee terms at up to 14% of salary, and is the only one of the three that works in the new regime. And health insurance under 80D — now Section 126 — gives a further ₹25,000, or ₹50,000 if you or your parents are senior citizens. Beyond that the ₹1.5 lakh is hard: anything above it earns no relief at all.

What is the deadline for 80C investments?

31 March of the financial year — not the filing deadline. An investment made on 2 April counts towards the following year, however early you file. This catches people out because the ITR deadline of 31 July feels like the cut-off and is not; by then the window for that year closed four months earlier. Note also that from FY 2025-26 the ITR forms require you to disclose the policy number, account number or receipt reference for each claim, so the documents need to be to hand rather than merely existing.

Which 80C investment should I choose?

That depends on your horizon and risk appetite rather than on tax, since every instrument in the list gives the identical deduction. ELSS has the shortest lock-in at three years and carries equity risk; PPF locks money for fifteen years at a government-set rate with tax-free returns; five-year tax-saving deposits are safe but the interest is taxable, which erodes much of the benefit; and life insurance should be bought because you need cover, not because of the deduction. Choosing on the basis of tax alone is how people end up with policies they do not want.

Section 80C Deduction Calculator

Almost every article about Section 80C tells you it saves ₹46,800 in tax. For most people reading this in 2026, that figure is wrong — and not because the arithmetic is off. It is wrong because Section 80C exists only in the old tax regime, the new regime has been the default since FY 2023-24, and i...

YOUR CLAIM

FINANCIAL YEAR

Assessed under the Income-tax Act, 2025, where this deduction is Section 123 and eligible instruments are listed in Schedule XV.

GROSS TOTAL INCOME (₹)

₹15.00 lakh

WHAT COUNTS TOWARDS THE ₹1,50,000 CAP

EPF / VPF

PPF

ELSS

LIFE INSURANCE

HOME LOAN PRINCIPAL

TUITION FEES

5-YEAR FD / NSC

SUKANYA SAMRIDDHI

OTHER ELIGIBLE

NPS OWN — 80CCD(1)

Your own NPS contribution shares this cap. Employer contributions do not — those sit under 80CCD(2) and survive in both regimes.

NPS, OWN — SECTION 124(3) · OUTSIDE THE CAP

A further ₹50,000 sitting entirely outside the ₹1,50,000 aggregate, so the two together can reach ₹2,00,000. Old regime only.

WHAT SECTION 123 ACTUALLY SAVES YOU

₹0

The new regime costs you less even before this deduction, so claiming it changes nothing. Your ₹78,000 would have saved ₹24,336 — but only if you were on the old regime, and you should not be.

COUNTED

₹78,000

HEADROOM

₹72,000

BEST REGIME

New

Declared

₹78,000

Counted towards the cap

₹78,000

Headroom left

₹72,000

NPS, Section 124(3)

₹0

Old regime, with deduction

₹2,25,264

Old regime, without

₹2,49,600

New regime

₹97,500

Lower of the two

₹97,500

Effective rate saved

Regime to choose

New

This is not tax advice and the figures are an estimate. Surcharge, marginal relief and several allowances are simplified here, and your Form 16 or Form 130 is the authority on your actual position. For the full computation across both regimes, use the India income tax calculator; for anything consequential, speak to a chartered accountant.

THE CAP

The deduction is worth nothing to you. Section 123 exists only in the old regime, and the new regime costs you ₹1,27,764 less even after the full claim. Most calculators would tell you that ₹78,000 saved you ₹24,336. It did not, because you should not be in the regime where that saving exists.

Live calculation · updates as you type

Created with❤️byeaglecalculator.com

HOW TO USE

1
Choose the financial year. FY 2025-26 is assessed under the 1961 Act, where this is Section 80C; FY 2026-27 falls under the Income-tax Act, 2025, where it is Section 123. The page renames itself accordingly.
2
Enter your gross total income and then each eligible investment separately. EPF, PPF, ELSS, life insurance, home loan principal, tuition fees and the rest all compete for one shared ₹1,50,000 ceiling.
3
Open "your other deductions" and fill in 80D, home loan interest and HRA. These decide which regime suits you — and if the new regime wins, your entire 80C claim is worth nothing. Leaving them blank biases the answer.
4
Read the headline figure. It is what the deduction actually saves you after comparing both regimes, which is not the same as what it would save if the old regime were your only option.

WHAT THE DEDUCTION IS WORTH BY SLAB

Old regime slab	Rate + 4% cess	Full ₹1.5 lakh saves	With NPS ₹2 lakh
Up to ₹2,50,000	0% → 0.0%	₹0	₹0
₹2,50,001 to ₹5,00,000	5% → 5.2%	₹7,800	₹10,400
₹5,00,001 to ₹10,00,000	20% → 20.8%	₹31,200	₹41,600
Above ₹10,00,000	30% → 31.2%	₹46,800	₹62,400

The widely quoted figure of ₹46,800 is the 30% row, and it assumes three things that are often untrue: that you are in the old regime, that your income is above ₹10 lakh after all other deductions, and that you have ₹1.5 lakh of eligible investment. Change any one of them and the number changes. Every figure here excludes surcharge, which applies above ₹50 lakh and raises the saving further.

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Last updated: 30 July 2026 · Rates verified against CBDT and the Income-tax Act, 2025 · Estimate only, not tax advice.