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Summary
Section 80C allows Indian taxpayers (under the old regime) to deduct up to Rs 1,50,000 from taxable income for specified investments and expenses. The calculator helps you optimise your 80C allocation by comparing the lock-in periods, returns, and risk profiles of eligible instruments like PPF, ELSS, EPF, NPS, NSC, life insurance, and tuition fees.
How it works
The Rs 1.5 lakh limit
The combined total of all 80C-eligible investments and expenses cannot exceed Rs 1,50,000 per financial year. This is a deduction from gross income — the actual tax saving depends on your marginal rate:
| Tax bracket | Tax saved on Rs 1.5 lakh |
|---|---|
| 5% slab | Rs 7,500 |
| 20% slab | Rs 30,000 |
| 30% slab | Rs 45,000 |
Plus 4% cess on each, so the maximum saving is approximately Rs 46,800.
Eligible investments
| Investment | Lock-in | Returns (approx) | Risk | Tax on returns |
|---|---|---|---|---|
| PPF | 15 years | 7.1% (govt-set) | None | Tax-free (EEE) |
| ELSS mutual funds | 3 years | 12-15% (market) | High | LTCG above Rs 1.25L at 12.5% |
| EPF (employee share) | Until retirement | 8.15% | None | Tax-free (EEE) up to Rs 2.5L/yr contribution |
| NSC | 5 years | 7.7% | None | Taxable on maturity |
| Tax-saver FD | 5 years | 6.5-7.5% | None | Interest taxable yearly |
| Life insurance premium | Policy term | Varies | Low | Conditional exemption |
| Children’s tuition fees | N/A | N/A | N/A | Deduction only |
| Home loan principal | N/A | N/A | N/A | Deduction only |
Optimisation strategy
- EPF is usually auto-deducted from salary — count this first toward the Rs 1.5 lakh
- If EPF doesn’t fill the limit, PPF offers safe, tax-free returns
- For higher-risk tolerance, ELSS offers the shortest lock-in (3 years) and potential for equity returns
- Tuition fees and home loan principal are non-investment 80C claims that further reduce your remaining allocation
- Consider Section 80CCD(1B) for an additional Rs 50,000 NPS deduction (beyond 80C)
Worked example
Salary: Rs 12,00,000, EPF contribution: Rs 42,000/year, 30% bracket
- EPF auto-contribution: Rs 42,000 (counts under 80C)
- Remaining 80C capacity: Rs 1,50,000 - Rs 42,000 = Rs 1,08,000
- PPF investment: Rs 50,000
- ELSS investment: Rs 50,000
- Life insurance premium: Rs 8,000
- Total 80C: Rs 1,50,000
- Tax saving: Rs 1,50,000 x 30% = Rs 45,000
- Cess saving: Rs 45,000 x 4% = Rs 1,800
- Total saving: Rs 46,800
Inputs explained
- Gross salary — to determine your tax bracket and EPF contribution
- Existing investments — EPF, insurance, tuition fees already counting toward 80C
- Risk tolerance — to recommend between PPF (safe) and ELSS (equity)
- Investment horizon — shortest acceptable lock-in period
Outputs explained
- Current 80C utilisation — how much of the Rs 1.5 lakh limit is used
- Gap to fill — remaining capacity
- Recommended allocation — suggested instruments based on your profile
- Tax saving — actual rupee saving at your marginal rate
Assumptions & limitations
- Section 80C is only available under the old tax regime. Under the new regime, these deductions cannot be claimed.
- EPF contributions above Rs 2.5 lakh per year attract tax on interest (high-salary employees).
- ELSS returns are market-linked and not guaranteed. Past returns do not predict future performance.
- The Rs 1.5 lakh limit is shared across all 80C/80CCC/80CCD(1) instruments — you cannot claim Rs 1.5 lakh each.
数据来源
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