Top 8 Options To Use Section 80C To Save Tax

Is Section 80C Worth It?

Section 80C allows a taxpayer to claim a deduction in taxes for specified investments and expenses up to ₹1.5 lakh in a financial year. The cap on allowable deductions contains many products (for example: PPF, ELSS, life insurance, NSC, Sukanya Samriddhi); therefore, you will need to use discretion and planning every year to maximise the limit. Remember, if you use NPS, an additional ₹50,000 tax rebate is permitted to you under Section 80CCD(1B) (over and above the ₹1.5 lakh limit).

1) ELSS (Equity-Linked Savings Scheme)

An ELSS fund invests primarily in stocks and holds a 3-year lock-in, the shortest of tax-saving options. It provides capital appreciation potential but does have market risk. ELSS may be the best option, as it allows for long-term wealth creation and tax savings, while accepting risk and volatility. Provide proof of investment (mutual fund statements) in the ITR.

2) NPS (National Pension System)

NPS is a retirement-related, market-based product available to both salaried and self-employed individuals. Contributions qualify for 80C, and in addition, you can claim a further amount up to ₹50,000 when contributing to the NPS under 80CCD(1B), which allows someone to save tax in excess of the ₹1.5 lakh limit of 80C. NPS has a long-term lock-in with exit restrictions on partial withdrawals and annuity, and thus should be primarily viewed as a retirement vehicle.

3) ULIP (Unit Linked Insurance Plans)

ULIPs offer a combination of life insurance and market investment. The premiums are tax-eligible under 80C, and the proceeds from a maturity and death payout potentially are tax-exempt under Section 10(10D) (subject to certain conditions). ULIPs have plans, charges, and a lock-in (typically 5 years) that are all subject to comparison for cost structure before purchasing.

Also Read: How Soon Will My Tax Refund Arrive After I File My ITR?

4) Tax-saving Fixed Deposits (5-year tax FD)

Banks offer tax-saving FDs of 5 years, which qualify for 80C investments. The returns are guaranteed, so you need to consider that the interest is taxable; therefore, your effective post-tax return will depend on your tax slab. There is a 5-year lock-in period for FDs; suitable for conservative investors who prefer capital certainty over having their returns adjusted for tax.

5) PPF (Public Provident Fund)

PPF is government-backed, collects in an EEE manner and is suitable for long-term horizons. It has, as an investment, up to ₹1.5 lakh per annum (it also counts against 80C). For July – September 2025, the PPF interest rate was 7.1% p.a. as compounded yearly; the government adjusts the interest rates on small savings schemes every quarter. PPF is a 15-year fixed deposit; at maturity, you can completely withdraw, but you can withdraw partially or take loans, subject to rules - a good long core holding option for conservative investors.

6) Senior Citizens Saving Scheme (SCSS)

SCSS is for people who are over 60 years of age (and some early retiree species of workers). There is a minimum deposit, a maximum deposit range and a 5-year maturity (you can also extend). The last notified period shows the quarterly rate for SCSS was giving an rate of 8.2%. This is an appealing fixed-income option, safe for retirement and eligible for an 80C investment - do keep in mind that if you are falling short of the thresholds, TDS will also apply on the interest earned.

7) National Savings Certificate (NSC)

The NSC is a time-honoured post office investment plan that sets aside your money for at least 5 years, while still allowing you to claim the investment under 80C. For the period July to September 2025, the NSC interest rate was 7.7% per annum, with interest getting reapplied at maturity. The interest is taxable once you redeem the NSC (unless you redeem it under 80C, of course). The NSC is low-risk in that it runs for a set period (5 years), and you won't know the interest until maturity, and it is appropriate when you need some guaranteed money + tax savings.

8) Sukanya Samriddhi Yojana (SSY)

The SSY is a government-promoted account that IS specifically designed to save for a girl's education/marriage. Your contributions are eligible for deduction under section 80C (min ₹250, max ₹150,000 per year), and when the account matures, you do not pay tax on the interest. For the period from January to September 2025, the SSY interest rate was 8.2% per annum for your public savings fund. The account matures at 21 (but there will be opportunities to take some of your investment out for higher education after 18), which is more compelling if you intend to save for a daughter.