How to Save Up to Rs 1.5 Lakh in Income Tax Under Section 80C

Section 80C of the Income Tax Act is the most popular tax-saving provision used by salaried individuals in India. It allows you to claim deductions up to Rs 1,50,000 from your taxable income by investing in specified instruments.

The best Section 80C investments depend on your risk appetite and financial goals. ELSS mutual funds offer the highest potential returns (12-15% CAGR historically) with the shortest lock-in period of 3 years. PPF offers guaranteed returns of 7.1% with sovereign safety but has a 15-year lock-in.

For a balanced approach, we recommend allocating Rs 50,000 to ELSS for growth, Rs 50,000 to PPF for safety, and Rs 50,000 to NPS for additional retirement planning (which also gives extra Rs 50,000 under 80CCD(1B)).

Remember that EPF contributions, children's tuition fees, and home loan principal repayment also count under 80C. Many salaried individuals have Rs 50,000-80,000 already covered through EPF before making additional investments.

Important: Section 80C deductions are only available under the Old Tax Regime. If you have opted for the New Tax Regime, these deductions cannot be claimed. Calculate your total tax under both regimes before deciding.