80C / Section 123 Deduction Optimiser (FY 2026-27)
See exactly how much of your Rs 1.5 lakh basket is already used, the headroom left to invest, the extra Rs 50,000 NPS slot, your 80D health cover – and the tax you save. Built for the old regime, where these deductions apply. Verified by a practising CA.
| Section (2025 Act ref) | What it covers | Limit |
|---|---|---|
| 80C (now Section 123) | EPF, PPF, ELSS, LIC, NSC, home loan principal, tuition, 5-yr FD, SSY | Rs 1,50,000 (combined) |
| 80CCD(1B) | Extra NPS (own) contribution | Rs 50,000 (over and above 80C) |
| 80CCD(2) | Employer NPS contribution | 10% of basic+DA (old); 14% (new regime / govt) – allowed even in new regime |
| 80D | Health insurance – self/family | Rs 25,000 (Rs 50,000 if senior) |
| 80D | Health insurance – parents | Rs 25,000 (Rs 50,000 if senior) – extra |
| 80TTA / 80TTB | Savings / deposit interest | Rs 10,000 / Rs 50,000 (seniors) |
| 80E | Education loan interest | No limit (8 years) |
Count the automatic first. Your EPF deduction and home loan principal often fill a big chunk of the Rs 1.5 lakh before you invest a rupee – many people over-invest because they forget these. Then fill the gap with the instrument that fits your goal: PPF/SSY for guaranteed tax-free growth, ELSS for equity with the shortest 3-year lock-in, NSC or a 5-year FD for fixed returns. Then take the NPS Rs 50,000 under 80CCD(1B) – at the 30% slab that is Rs 15,600 of tax saved for a slot nothing else can fill. Finally, 80D – health cover is a deduction you should be buying anyway. Under the new regime none of this applies, so confirm your regime first with our Income Tax Calculator.
80C / Section 123 Optimiser – Frequently Asked Questions
What does Section 123 (the old Section 80C) cover and what is the limit?
Section 123 of the Income-tax Act 2025, which carries forward the old Section 80C, allows a combined deduction of up to ₹1,50,000 a year for investments and payments such as EPF, PPF, ELSS, life insurance premium, principal repayment of a home loan, children’s tuition fees, 5-year tax-saving fixed deposits, NSC and Sukanya Samriddhi. The optimiser caps the total at ₹1,50,000 and shows any headroom left to invest.
Is there an extra deduction for NPS?
Yes. An additional ₹50,000 is available for a contribution to the National Pension System under Section 80CCD(1B), over and above the ₹1,50,000 Section 123 limit. This tool tracks the ₹50,000 NPS slot separately so you can see how much of it is still available.
How much can I claim for health insurance under Section 80D?
You can claim up to ₹25,000 for a policy covering yourself and your family, rising to ₹50,000 if the eldest insured is a senior citizen, plus a further ₹25,000 for your parents (₹50,000 if they are senior citizens). Where both you and your parents are senior citizens the maximum is ₹1,00,000. A preventive health check-up of up to ₹5,000 is included within these limits.
Are these deductions available under the new tax regime?
No. Section 123 (80C), 80CCD(1B), 80D and 80E deductions are available only under the old tax regime. Under the default new regime for FY 2026-27, most Chapter VI-A deductions are not allowed — only the employer’s NPS contribution and the standard deduction apply. Compare your tax under both regimes before choosing, since a person with large deductions may still be better off in the old regime.
Does the tax saving shown include cess?
The saving is your eligible deduction multiplied by your highest income-tax slab rate and, for simplicity, excludes the 4% Health and Education cess and any surcharge. Your actual saving is therefore slightly higher — for example, at the 30% slab the effective saving including cess is about 31.2% of the deduction.
This optimiser is for general guidance and assumes the old tax regime. The benefit depends on your total income and the regime you choose; please confirm your position with your Chartered Accountant before investing.