Introduction — The Question Every Taxpayer Eventually Faces
The New Tax Regime looks attractive at first glance.
The slabs are lower, the structure feels simpler, and there’s no pressure to chase investment proofs at the last moment.
But then reality hits.
You remember your PPF, ELSS funds, LIC premiums, or EPF contributions — and the doubt kicks in:
“Are Section 80C deductions still applicable in the New Tax Regime?”
The straightforward answer is No.
Under Section 115BAC, most common deductions have been removed — and that includes the popular ₹1.5 lakh deduction under Section 80C.
Read the official framework here:
👉 https://www.incometax.gov.in/iec/foportal/help/individual/section-115bac
Let’s unpack what this really means in everyday financial life — without jargon, without confusion — just practical clarity.
What Section 80C Actually Covers (Old Tax Regime Perspective)
Before we talk about what you lose, it’s important to understand what Section 80C gives you under the Old Tax Regime.
Under Section 80C, taxpayers can claim a deduction of up to ₹1.5 lakh per year on eligible investments and payments such as:
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Employee Provident Fund (EPF)
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Public Provident Fund (PPF)
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Equity Linked Savings Schemes (ELSS)
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Life insurance premiums
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Children’s school tuition fees
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Tax-saving fixed deposits
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National Savings Certificate (NSC)
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Principal repayment on home loan
Official reference:
👉 https://www.incometaxindia.gov.in/Pages/acts/income-tax-act.aspx
For many households, these aren’t “extra investments” — they are unavoidable financial commitments.
That’s why Section 80C became one of the most widely-used tax provisions in India.
But the equation changes once you opt for the New Tax Regime.
Section 80C in the New Tax Regime — What the Law Really Says
Section 80C Deduction: Allowed or Not Allowed?
Under the New Tax Regime, the government introduced lower tax rates — but in exchange, taxpayers must forgo most exemptions and deductions.
That means:
Section 80C deduction is not available under the New Regime.
More details from the IT department:
👉 https://www.incometax.gov.in/iec/foportal/help/individual/know-your-tax-regime
Even if you:
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invest in PPF
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contribute to EPF
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pay LIC premiums
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or invest in ELSS
…you cannot claim Section 80C benefit if you file tax under Section 115BAC.
The regime is intentionally “no-deduction, flat-rate style.”
Why the Government Removed 80C From the New Regime
The earlier tax system encouraged taxpayers to invest only to save tax, not necessarily for financial goals — and over time, the system became complex due to too many exemptions.
The idea behind the New Tax Regime is:
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lower rates
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fewer decisions
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no paperwork pressure
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same rules for everyone
Policy direction reference (Budget & reform notes):
👉 https://www.indiabudget.gov.in
But simplicity comes with a trade-off — you lose Section 80C benefits.
Real-Life Example — Old vs New Tax Regime With 80C
Meet Amit, a salaried employee earning ₹9,00,000 per year.
He invests:
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₹60,000 in EPF
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₹40,000 in ELSS
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₹30,000 in PPF
Total = ₹1,30,000 under Section 80C
To compare regimes, you can use the government calculator:
👉 https://www.incometax.gov.in/iec/foportal/tax-calculator
In many such cases, the Old Tax Regime turns out cheaper.
That’s why the choice isn’t emotional — it’s a calculation decision.
Does That Mean You Should Stop Investing Under 80C?
Absolutely not.
Even though deductions under Section 80C are not allowed under the New Regime, these investments still matter for:
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retirement planning
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emergency reserves
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long-term wealth creation
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protecting your family
PPF & EPF frameworks:
👉 https://www.nsiindia.gov.in
👉 https://epfindia.gov.in
Tax saving should be a bonus — not the only reason to invest.
Who Should Prefer the New Tax Regime?
The New Regime usually benefits people who:
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don’t invest much in tax-saving products
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don’t claim HRA
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have limited deductions
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prefer simplicity over optimisation
Guidance article from the department:
👉 https://www.incometax.gov.in/iec/foportal/help/individual/tax-regime-guide
Who Should Stick to the Old Tax Regime?
You should strongly consider the Old Regime if you:
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regularly invest under Section 80C
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pay home loan principal and insurance premiums
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contribute to EPF / PPF / ELSS
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claim additional deductions like 80D or NPS
NPS deduction details:
👉 https://www.npscra.nsdl.co.in
Here, the combined tax benefits can outweigh lower slab rates.
Common Mistakes People Make About Section 80C & the New Regime
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Assuming 80C applies automatically
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Choosing the New Regime just because it “looks simpler”
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Not comparing both regimes before filing
Return-filing help centre:
👉 https://www.incometax.gov.in/iec/foportal/help
How to Decide Which Regime Is Right for You (Practical Steps)
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List yearly deductions
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Calculate tax in both regimes
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Choose the one with lower payable tax
You can revisit the choice every year (for salaried employees).
Conclusion — So, Is Section 80C Applicable in the New Tax Regime?
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Section 80C allows ₹1.5 lakh deduction — but
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It is NOT available under the New Regime
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The right choice depends on your income, investments & lifestyle
If you already invest heavily under 80C, the Old Regime may work better.
If not, the New Regime may be simpler and smarter.
Call to Action
Not sure which regime benefits you more?
Share your income, deductions, and investments — and I’ll help you compare both options so you don’t end up paying extra tax unnecessarily.
