What qualifies under Section 80C
Section 80C of the Income Tax Act lets you deduct up to ₹1.5 lakh a year (old regime only) for specified investments and expenses. The list includes: EPF and VPF, PPF, ELSS funds, life insurance premiums, NSC, tax-saver FDs (5-year lock-in), Sukanya Samriddhi (girl child), tuition fees for up to two children, and home loan principal repayment. The cap is shared across all of these.
If your EPF contribution is ₹60,000 a year and you pay ₹40,000 in life insurance premiums, you have used ₹1 lakh of the ₹1.5 lakh limit. You only need to deploy another ₹50,000 to max it out. ELSS is usually the highest-return option for that gap; PPF if you need ballast.
Buying a fresh endowment policy every March 'for tax saving'. The 4% to 5% returns lock you into low-yielding contracts for 15 to 20 years. ELSS does the same job, with a 3-year lock-in and double the long-term return.
A 60-second lesson on this, with a worked drill in rupees, lives inside the Finlo app. Free, forever, on the basics.