Section 80C is a part of the Income Tax Act, 1961, that allows Indian citizens to lower their taxable outgo by decreasing their taxable income by investing in a few government-defined citizens.

By investing in instruments that fall under the Section 80C, one can reduce his/her taxable income by maximum Rs. 1,50,000 per financial year. Thus, Section 80C provides citizens of the country with tax relief of up to Rs. 1,50,000 lakh.

Section 80C instruments are:

1. Five- year bank deposits; with a lock-in period of 5 years 2. Public Provident Fund (PPF); with a lock-in period of 15 years 3. National Savings Certificate; with a lock-in period of 5 years 4. National Pension Scheme; with a lock-in up to retirement 5. ELSS Funds; with a lock-in period of 3 years Other than the instruments stated above, premiums paid towards a life insurance policy; the principal component of a housing loan repayment; expenses on children’s tuition fee and many more are included in Section 80C deductions. Most people talk about Section 80C when discussing the Union Budget because it is in the Budget that the government can increase the deduction limit of Section 80C from the current Rs. 1,50,000 to whatever it may choose. In fact, there were speculations that the government might increase the Section 80C deduction limit from Rs. 1,50,000 to Rs. 2,00,000 in last year’s Union Budget. However, the government didn’t make any such announcement. Hence, expectations are higher this year of an increase in Section 80C deduction limit.