Section 80C and 80D: How Much Tax Can You Save?

By Paarth · Published 24 October 2026 · Updated 24 October 2026

Under the old tax regime, you can reduce your taxable income by up to ₹1.5 lakh under 80C, ₹50,000 more for NPS, and ₹25,000 to ₹50,000 for health insurance. For someone in the 30% slab, ₹2.5 lakh of deductions saves about ₹78,000 of tax. None of this applies in the new regime.

Rules and rates here are as understood in October 2026. The Income-tax Act, 2025 has applied from 1 April 2026 and renumbers many sections, so the old section numbers used below (80C, 80D, 24(b), 194A and so on) may appear under new numbers on current forms. The amounts and ideas are what matter; confirm details on the Income Tax Department website.

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What these sections allow

Section 80C: up to ₹1,50,000. EPF and VPF, PPF, ELSS mutual funds (3-year lock-in), 5-year tax-saver FDs, NSC, Sukanya Samriddhi, life insurance premiums, children's tuition fees, and the principal part of your home loan EMI. Stamp duty and registration costs on a home also count in the year you pay them.
Section 80CCD(1B): up to ₹50,000 extra for your own NPS contributions, over and above the 80C limit.
Section 80D: health insurance. ₹25,000 for yourself and family, and ₹25,000 for parents. The limit rises to ₹50,000 for each senior citizen.
Section 24(b): up to ₹2,00,000 of home loan interest on a self-occupied house. See our home loan tax guide.

How much tax does it save?

A deduction saves tax at your highest slab rate, plus 4% cess. At 30%, each ₹1 of deduction saves ₹0.312.

₹1,50,000 under 80C saves ₹46,800
₹50,000 in NPS saves ₹15,600
₹25,000 of health insurance saves ₹7,800 (₹15,600 for ₹50,000)

Using all of these: ₹1.5 lakh in 80C, ₹50,000 in NPS and ₹25,000 each for yourself and your parents gives ₹2,50,000 of deductions and a saving of ₹78,000. At a 20% slab the same deductions save about ₹52,000, and at 5% much less. The benefit depends heavily on your slab.

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Do these deductions make the old regime better?

Not automatically. The new regime has lower rates, a ₹75,000 standard deduction, and a tax rebate that makes income up to ₹12 lakh effectively tax-free. The old regime tends to win only when your total deductions are large, such as 80C, NPS, health insurance, home loan interest and HRA together. Compare both with our regime guide and the income tax calculator before you decide.

Pick the investment, not just the deduction

Within 80C, PPF and NSC are fixed-return and government-backed, ELSS has market risk but only a 3-year lock-in, and EPF is already deducted from many salaries. Many people find they have used a large part of the ₹1.5 lakh through EPF and home loan principal before investing anything. Check what is already counted, then fill the remaining gap with options that suit your goals. NSC vs PPF vs FD compares the fixed-return choices.

Frequently asked questions

Can I claim 80C and 80D in the new tax regime?

No. The new regime does not allow Section 80C, 80D or the NPS deduction under 80CCD(1B). It offers lower slab rates and a higher standard deduction instead. Employer NPS contributions under 80CCD(2) are a separate case that is allowed in both.

What is the maximum deduction for health insurance under 80D?

Up to ₹25,000 for yourself, your spouse and children, and another ₹25,000 for your parents. The limit is ₹50,000 for each if the person insured is a senior citizen. Preventive health check-ups are included within these limits.

Should I invest only to save tax?

No. Choose investments for your goals, time horizon and risk, and treat the tax benefit as a bonus. Many 80C options lock your money in for years, so check the lock-in before you commit.

Disclaimer: This article is for general education only and is not financial, investment, tax or legal advice. Figures are illustrative, and rates and rules change. Check official sources and consult a SEBI-registered investment adviser or qualified tax professional before you decide.

Paarth builds the free calculators on PropertiesOnline.in and has been writing about money and everyday tools in India for over 15 years. These guides are practical and honest — not investment advice. Invest based on your own goals or a qualified adviser's guidance.