How to Save Tax Under Section 80C in India (Complete Guide)
Introduction Saving tax legally is one of the most important aspects of personal finance in India.Section 80C of the Income Tax Act allows individuals to reduce their taxable income by investing in specific instruments. In this guide, we will explain...
Introduction
Saving tax legally is one of the most important aspects of personal finance in India.
Section 80C of the Income Tax Act allows individuals to reduce their taxable income by investing in specific instruments.
In this guide, we will explain:
What Section 80C is
The best tax-saving options
How to choose the right investment
Common mistakes to avoid
What Is Section 80C?
Section 80C allows a maximum deduction of ₹1,50,000 per financial year from your total taxable income.
This deduction is available to:
Salaried individuals
Self-employed individuals
Hindu Undivided Families (HUFs)
List of Popular 80C Tax-Saving Investments
| Investment Option | Lock-in Period | Risk Level | Returns |
| Public Provident Fund (PPF) | 15 years | Low | 7–8% |
| ELSS Mutual Funds | 3 years | High | Market-linked |
| National Savings Certificate (NSC) | 5 years | Low | Fixed |
| Tax Saver Fixed Deposit | 5 years | Low | Fixed |
| Life Insurance Premium | NA | Low | Protection |
Best 80C Options Based on Your Profile
For Salaried Individuals
EPF + ELSS combination
PPF for long-term stability
For Self-Employed Professionals
PPF
ELSS Mutual Funds
NSC
For Risk-Averse Investors
PPF
Tax Saver FD
NSC
ELSS vs PPF: Which Is Better?
ELSS offers:
Shortest lock-in (3 years)
Higher return potential
Market risk
PPF offers:
Guaranteed returns
Tax-free maturity
Long lock-in period
👉 A balanced portfolio often includes both.
Common Mistakes to Avoid
Waiting until March to invest
Investing only for tax saving, not goals
Ignoring lock-in periods
Not reviewing investments yearly
Frequently Asked Questions (FAQs)
What is the maximum limit under Section 80C?
The maximum deduction allowed is ₹1,50,000 per financial year.
Can I invest more than ₹1.5 lakh under 80C?
Yes, but deductions will still be capped at ₹1.5 lakh.
Is ELSS better than tax-saving FD?
ELSS generally offers higher returns but comes with market risk.
Final Thoughts
Section 80C is a powerful tool for reducing tax liability while building long-term wealth.
Choosing the right mix of investments can help you achieve both tax efficiency and financial growth.
Need Professional Tax Planning Help?
If you want personalized tax-saving strategies,
contact WonderTax experts today.
