Is Section 80C Applicable in the New Tax Regime?
Is Section 80C Applicable in the New Tax Regime?
Updated Guide for FY 2024–25 | AY 2025–26
If you’re planning your taxes and wondering
“Can I claim deductions under Section 80C in the New Tax Regime?”
This article is for you.
Section 80C has been a go-to tax-saving tool for years, covering everything from LIC premiums to PPF, ELSS, tuition fees, and home loan principal. But with the rise of the New Tax Regime, many taxpayers are confused about whether this powerful deduction still applies.
Let’s break it down.
❌ Is 80C Allowed in the New Tax Regime?
No. Under the New Tax Regime (Section 115BAC), deduction under Section 80C is NOT allowed.
This means you cannot claim the usual ₹1.5 lakh deduction for investments in:
• Life Insurance Premiums (LIC)
• Public Provident Fund (PPF)
• Equity-Linked Saving Scheme (ELSS)
• 5-Year Tax-Saving FDs
• Employee Provident Fund (EPF)
• Principal repayment of the home loan
• Children's tuition fees
So, if you opt for the New Regime, your tax slab rates are lower, but you lose the benefit of claiming these common deductions.
✅ Is 80C Still Available in the Old Regime?
Yes. Under the Old Tax Regime, Section 80C is fully available. You can claim up to ₹1.5 lakh deduction by investing in approved instruments or making eligible expenses.
💡 If you actively invest in tax-saving options under 80C, you may benefit more from the Old Regime—especially if your total deductions exceed ₹2.5 lakh (including 80D, HRA, etc.).
📊 Quick Comparison: Old vs New Regime
| Feature | Old Regime | New Regime (Default) |
| Section 80C Allowed? | ✅ Yes | ❌ No |
| Standard Deduction | ₹50,000 | ₹50,000 |
| Other Deductions (80D, HRA) | ✅ Yes | ❌ No |
| Tax Slabs | Higher | Lower |
| Ideal for | Those who invest & claim | Those with low/no deductions |
🧠 Should You Still Invest in 80C Instruments Under the New Regime?
You can still invest in PPF, LIC, ELSS, etc., under the New Regime, but it won’t help reduce your tax. These will only serve investment or insurance purposes, not tax savings.
🔁 Any Exceptions?
As of FY 2024–25, there are no exceptions that allow you to claim 80C under the New Regime.
However, you may still claim:
• Standard deduction (₹50,000)
• Employer NPS contributions under 80CCD(2) (in specific cases)
These limited benefits are allowed to make the regime more balanced.
Final Words
Section 80C is NOT applicable under the New Tax Regime for FY 2024–25.
So, if you rely on tax-saving investments like PPF, ELSS, LIC, or home loan principal to reduce your taxable income, the Old Regime may be better for you.
