Overall Deduction Limit

• The maximum deduction allowed under Section 80C is ₹1,50,000 per financial year.
  
• This limit is common for all eligible investments and expenses combined.
  
• Applicable to individual taxpayers and Hindu Undivided Families (HUFs).
  
• Deduction is made from gross total income before calculating tax.
  
• It helps reduce overall taxable income, leading to lower tax liability.
  

Included Sections Within the Limit

• Section 80C: Covers investments like PPF, EPF, life insurance premiums, ELSS, and more.
  
• Section 80CCC: Includes contributions to pension funds from life insurance companies.
  
• Section 80CCD(1): Includes employee’s or individual’s contribution to the National Pension System (NPS).
  
• Combined deduction under 80C + 80CCC + 80CCD(1) cannot exceed ₹1,50,000.
  
• All these components are added together to calculate the total deduction claimed.
  

Additional Benefit Under 80CCD(1B)

• An additional deduction of ₹50,000 is available under Section 80CCD(1B) for contributions to NPS.
  
• This is over and above the ₹1,50,000 limit under Section 80C.
  
• It increases the total potential deduction to ₹2,00,000 for NPS contributors.
  
• Only contributions to Tier I NPS accounts are eligible for this extra benefit.
  
• This benefit is available only to individual taxpayers, not HUFs.
  

Applicable Under Old Tax Regime

• Deductions under Section 80C are available only under the old tax regime.
  
• Taxpayers opting for the new tax regime cannot claim this benefit.
  
• Choosing the right regime depends on the total income and eligible deductions.
  
• Comparison is recommended before finalizing the regime each year.
  
• Correct use of 80C helps maximize tax savings within legal provisions.