Save Tax Under Section 80C: Best Options Compared for 2026
A beginner-friendly guide to section 80C tax saving in India for 2026. Compare ELSS, PPF, EPF, NPS, FDs and insurance by returns, lock-in and risk.
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3. Employees' Provident Fund (EPF) — The One You May Already Have
If you are a salaried employee, your monthly EPF contribution already counts toward your 80C limit.
- Lock-in: Broadly until retirement or a job change, subject to specific withdrawal rules.
- Returns: A government-declared rate, usually competitive with other low-risk options.
- Risk: Very low.
- Tax: Generally tax-free within prescribed conditions and limits.
Check your salary slip. Your existing EPF deduction may already fill part of your Rupees 1.5 lakh limit, which means you may need to invest less elsewhere than you assumed.
4. National Pension System (NPS) — An Extra Deduction Option
NPS is a retirement-focused, market-linked scheme that holds a mix of equity and debt.
- Lock-in: Until age 60, with partial withdrawals permitted for specified needs.
- Returns: Market-linked, typically falling between pure equity and pure debt over time, and not guaranteed.
- Risk: Low to moderate, depending on your chosen asset allocation.
- Bonus deduction: An additional Rupees 50,000 under Section 80CCD(1B), over and above the Rupees 1.5 lakh 80C limit.
That extra deduction makes NPS worth considering for those who have already exhausted 80C and want to lower their tax further. The trade-off: at maturity, a portion of the corpus must be used to buy an annuity, and the rules can change.