Finance Dictionary
Section 80C
A provision of the Indian Income Tax Act allowing a deduction of up to ₹1.5 lakh per financial year for specified investments and expenses, including ELSS, PPF, EPF, life insurance premiums and home loan principal. It is available only under the old tax regime.
Formula
Tax saved = Amount invested (max ₹1,50,000) × Your marginal tax rate
Example
Investing ₹1.5 lakh in ELSS reduces taxable income by the same amount, saving ₹46,800 for someone in the 30% bracket under the old regime.
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