Understanding Section 80C and 80D Deduction Limits and How They Impact Your Tax Filing
- Rajesh Kumar Kar
- Jun 11
- 8 min read
Understanding the deduction limits under Section 80C and Section 80D is crucial for reducing your tax liability for FY 2024-25. Section 80C covers popular tax-saving investments like EPF, PPF, and ELSS, while Section 80D allows deductions for health insurance premiums and medical expenses. Together, these sections can help taxpayers claim up to ₹2.5 lakh in deductions. Knowing how these deductions work under the old and new tax regimes enables better tax planning. This guide breaks down their limits, eligibility, and impact on your income tax return—ensuring every eligible rupee gets claimed efficiently.
Both Section 80C and 80D serve as powerful tools in the hands of informed taxpayers. While one encourages long-term financial security through investments, the other promotes health coverage. Filing platforms like TaxBuddy make it easier to claim these deductions with clarity and compliance, guiding users at every step through automation and expert help.
Table of Contents
What Are Section 80C and Section 80D Deductions?
Section 80C and Section 80D are provisions under the Income Tax Act, 1961, allowing individuals and Hindu Undivided Families (HUFs) to reduce their taxable income by investing in specified instruments and incurring eligible expenses.
Section 80C: Offers a deduction of up to ₹1.5 lakh on investments and expenses such as EPF, PPF, ELSS, LIC premiums, principal repayment on home loans, and tuition fees.
Section 80D: Provides additional deductions for health insurance premiums and preventive health checkups, up to ₹1 lakh depending on the age of the insured individuals.
Together, they not only lower your tax outgo but also encourage responsible financial planning and healthcare security.
Is Section 80C Allowed in the New Tax Regime?
No, Section 80C is not available under the new tax regime introduced under Section 115BAC. Taxpayers opting for the new regime must forgo most exemptions and deductions, including those under Section 80C.
The new regime offers lower tax rates but removes popular tax-saving benefits. Therefore, it is essential to evaluate whether the lower tax rates outweigh the savings from deductions like 80C before making a choice.
How Section 80C Works in the Old Tax Regime
Under the old tax regime, Section 80C is one of the most widely used tax-saving provisions. It enables taxpayers to claim deductions of up to ₹1.5 lakh from their gross total income.
Section 80C Deduction Limit: ₹1.5 Lakh
The maximum limit of ₹1.5 lakh can be claimed collectively across eligible investments and expenses. This deduction is applicable only to individuals and HUFs.
Eligible Investments and Expenses Under Section 80C
Employee Provident Fund (EPF)
Equity Linked Savings Scheme (ELSS)
National Savings Certificate (NSC)
Life Insurance Premiums (for self/spouse/children)
5-year Tax-saving Fixed Deposits
Sukanya Samriddhi Yojana (for girl child)
Tuition fees (up to 2 children)
Principal repayment on home loan
Common Mistakes While Claiming 80C
Including ineligible insurance policies (like ULIPs with low cover)
Overlooking tuition fee conditions (not allowed for private coaching)
Misinterpreting lock-in periods, especially for ELSS and FDs
Careful documentation and correct categorization are vital for availing the full benefit.
Is Section 80D Allowed in the New Tax Regime?
No, Section 80D is not available under the new tax regime. Just like Section 80C, opting into the new regime disqualifies you from claiming deductions under Section 80D.
Taxpayers considering the new regime must evaluate whether the tax saved through deductions like 80D (especially if covering senior citizens) outweighs the rate benefit under the new slab structure.
How Section 80D Works in the Old Tax Regime
Section 80D allows deductions for premiums paid toward health insurance policies and expenses for preventive health checkups and medical costs for senior citizens.
Section 80D Deduction Limits Explained
Insured Persons | Deduction Limit (₹) |
Self + Family (all < 60 years) | ₹25,000 |
Parents (< 60 years) | ₹25,000 |
Self/Family (≥ 60 years) | ₹50,000 |
Parents (≥ 60 years) | ₹50,000 |
Max Deduction (if both ≥ 60 years) | ₹1,00,000 |
Eligibility for Family and Senior Citizens
Covers self, spouse, dependent children, and parents
Not applicable for siblings, in-laws, or non-dependent members
Preventive Health Checkups & Medical Expenses
Up to ₹5,000 can be claimed for preventive checkups within the overall limit
Senior citizens without health insurance can claim up to ₹50,000 in medical expenses instead of premiums
TaxBuddy helps users keep track of these limits, eligibility conditions, and required documentation, ensuring deductions are maximized without errors.
Combined Impact of Section 80C and 80D on Tax Filing
When aligned strategically under the old tax regime, deductions under Section 80C and Section 80D create a powerful opportunity to reduce taxable income substantially. They serve two distinct purposes—promoting long-term wealth creation and encouraging responsible health coverage—yet work in tandem to offer meaningful tax relief.
Total Deduction Potential
Taxpayers can unlock combined benefits of up to ₹2.5 lakh annually by leveraging both sections thoughtfully:
Section 80C: Offers deductions up to ₹1.5 lakh through investments in instruments such as ELSS, PPF, EPF, tax-saving FDs, and payments like tuition fees or home loan principal.
Section 80D: Provides deductions up to ₹1 lakh if the taxpayer and their parents are both senior citizens and covered under health insurance (or incur medical expenses if uninsured).
Together, these deductions directly lower the gross total income, thereby reducing the final tax liability. This can mean significant savings, especially for taxpayers in the 20% or 30% tax brackets.
Strategy for Maximum Tax Saving
To fully capitalize on both sections, a proactive approach throughout the financial year is essential. Here’s how to structure your tax-saving strategy:
1. Begin Early with Section 80C Investments
Avoid the common year-end scramble by planning your 80C investments early in the financial year. Not only does this ensure availability of funds, but it also allows better choices:
ELSS offers the dual benefit of market-linked returns and the shortest lock-in period (3 years).
PPF provides tax-free returns with a long-term savings horizon.
Systematic investing (like SIPs in ELSS) spreads the burden and maximizes compounding.
Waiting until March often leads to hurried, suboptimal decisions or even missing the limit altogether.
2. Secure Health Insurance for Family and Parents
Purchasing health insurance early ensures coverage continuity and eligibility for maximum deduction under Section 80D:
If you and your family (spouse, children) are under 60, a ₹25,000 deduction is available.
An additional ₹50,000 can be claimed for insuring parents who are above 60 years of age.
Even if parents aren’t covered under a health policy, actual medical expenses up to ₹50,000 can be claimed.
Comprehensive plans not only offer deduction benefits but also act as financial shields against medical emergencies.
3. Maintain Proper Documentation and Payment Proofs
Many deductions get disallowed due to incomplete or mismatched documentation. Ensure:
Investment certificates or policy documents for 80C claims are safely stored.
Premium receipts for health insurance under 80D are dated and valid for the current financial year.
Preventive health check-up bills (up to ₹5,000) are retained even if paid in cash (as permitted).
Using tax platforms like TaxBuddy simplifies this process by organizing documents, tracking deduction limits, and validating eligibility in real time.
How TaxBuddy Simplifies Claiming These Deductions
TaxBuddy’s mobile app transforms tax filing into a smooth, stress-free process by combining automation with expert insight. Once you sign in, the app guides you through a streamlined workflow where you can upload documents directly or link your email to fetch Form 16, investment proofs, and insurance receipts. Its smart scanning system automatically extracts relevant details—detecting eligible expenses like LIC premiums, ELSS contributions, or health insurance payments—and maps them to appropriate deduction sections like 80C or 80D.
The app then analyzes your total income and deductions in real time, showing how much tax you can save based on current limits. If something’s missing—say a health policy receipt or an underutilized investment cap—the system flags it and suggests possible actions to optimize savings. TaxBuddy doesn’t stop at automation. With its expert-assisted filing option, a qualified tax professional reviews your return for accuracy, helps fix red flags, and ensures all eligible deductions are fully claimed—minimizing the chances of errors, notices, or missed savings.
Conclusion
Sections 80C and 80D are the cornerstones of tax-saving strategies for individuals opting for the old regime. When planned wisely, these deductions can collectively reduce taxable income by ₹2.5 lakh, easing your financial burden. With tools like TaxBuddy, taxpayers can file income tax returns seamlessly, verify deduction eligibility, and ensure documentation is complete and accurate.
For anyone looking for assistance in tax filing, it’s highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
Frequently Asked Question (FAQs)
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy offers complete flexibility for taxpayers. You can choose the self-filing route if you're comfortable filing on your own, with prompts and deduction suggestions built into the platform. Alternatively, if you prefer professional guidance, TaxBuddy's expert-assisted plans connect you with trained tax professionals who handle your ITR from start to finish—including deduction optimization and documentation review.
Q2. Which is the best site to file ITR?
While the official Income Tax Department portal is functional, many users prefer platforms like TaxBuddy for a more intuitive experience. TaxBuddy stands out for its smart deduction detection, real-time tax-saving suggestions, and responsive support—making it especially helpful for those unfamiliar with complex tax rules or who want to avoid manual errors.
Q3. Where to file an income tax return?
Income tax returns (ITRs) can be filed through:
The Income Tax e-filing portal (direct government site), or
Authorized third-party e-filing platforms like TaxBuddy, which simplify the process and provide additional services like document scans, deduction insights, and expert assistance.
Q4. What is the maximum deduction I can claim under Section 80C for FY 2024-25?
Under Section 80C, you can claim a maximum deduction of ₹1.5 lakh in a financial year. This includes eligible investments and payments like EPF, PPF, ELSS, NSC, LIC premiums, Sukanya Samriddhi Yojana, 5-year FDs, tuition fees for children, and principal repayment of home loans.
Q5. Can I claim Section 80D deduction for my in-laws?
No. Section 80D allows deductions only for premiums paid toward health insurance for self, spouse, dependent children, and parents. In-laws are not covered, even if they live with you or are financially dependent.
Q6. Is the deduction for preventive health check-up under Section 80D over and above the ₹25,000/₹50,000 limit?
No, it is not additional. The maximum deduction for preventive health check-ups is ₹5,000, but it is included within the overall limit of ₹25,000 or ₹50,000—depending on the age of the insured person. It cannot be claimed separately over and above the maximum cap.
Q7. Can I claim medical expenses for senior citizen parents if they are not insured?
Yes. If your senior citizen parents (aged 60 or above) do not have any health insurance, you can claim actual medical expenses up to ₹50,000 under Section 80D. This includes hospitalization, treatment costs, and doctor consultation fees—provided you have valid bills or payment proof.
Q8. How can TaxBuddy help with tax filing and claiming these deductions?
TaxBuddy offers a smart mobile app and desktop platform that makes tax filing seamless. It auto-scans your uploaded documents, recommends applicable deductions under Sections 80C and 80D, tracks unused limits, and helps you avoid common filing mistakes. The expert-assisted service adds an extra layer of review to ensure your return is fully compliant and optimized for savings.
Q9. Can both individuals and HUFs claim these deductions?
Yes. Both individual taxpayers and Hindu Undivided Families (HUFs) are eligible to claim deductions under Sections 80C and 80D. However, the deduction limit remains the same regardless of whether the filer is an individual or an HUF.
Q10. What documents are required to claim deductions under 80C and 80D?
You must retain proof of eligible investments and expenses, such as:
Investment receipts for ELSS, PPF, LIC, NSC, etc.
Premium payment certificates for health insurance
Tuition fee receipts for children
Home loan repayment certificates from the lender
Bills for medical expenses (in case of senior citizens without insurance)
Preventive health check-up payment invoices
These are essential in case of scrutiny by the Income Tax Department.
Q11. Can I claim 80D even if I don’t have insurance but incurred medical expenses for my senior citizen parent?
Yes, as per Section 80D, you can claim up to ₹50,000 towards actual medical expenses for your senior citizen parents if they are not covered under any health insurance policy. Ensure that all bills, prescriptions, and payment proofs are available to support the claim.
Q12. Are these deductions available every year or only once?
Both Section 80C and 80D deductions are available every financial year, provided you make the eligible investments or payments within that year. Planning your tax-saving actions early each year ensures you can fully utilize these limits and avoid last-minute errors.
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