Under the old tax regime, Section 80C allows deductions up to ₹1.5 lakh a year for instruments like ELSS mutual funds, PPF, EPF, and life insurance premiums — ELSS has the shortest lock-in among these, at 3 years.
Beyond 80C, Section 80D covers health insurance premiums, and the NPS offers an additional ₹50,000 deduction under Section 80CCD(1B), on top of the 80C limit.
The newer tax regime offers lower slab rates but removes most deductions and exemptions — which regime works out cheaper depends on how much you’re already claiming, so it’s worth comparing both each year.
Quick tip.Don’t pick a tax-saving instrument for the deduction alone — an ELSS fund and a traditional insurance-cum-investment plan can have very different long-term returns even if both offer 80C benefits.