Best Tax-Saving Investments Under 80C 2026

Quick Answer

Under Section 80C of the old tax regime, you can save up to Rs 46,800 in taxes per year by investing Rs 1.5 lakh. For 2026, ELSS mutual funds, PPF, and NPS Tier 1 remain the top three choices based on post-tax returns, liquidity, and risk profile.

Last updated: 2026-04-06 · 6 picks · Category: Tax

How We Ranked

Instruments were ranked on post-tax return over 5-15 years (30%), liquidity and lock-in period (20%), risk level (15%), ease of investing (15%), and additional tax benefits outside 80C (20%). All returns assume investing Rs 1.5 lakh annually.

#1

ELSS Mutual Funds

9.5/10CalcHub Score
Lock-in
3 years
Expected Return
10-13% CAGR (long-term)
Risk
Moderate-High
Max Investment
Rs 1.5L (80C limit)
LTCG Tax
10% above Rs 1L/yr

Pros

  • +Shortest lock-in under 80C (3 years)
  • +Highest long-term return expectations (10-13% CAGR)
  • +Equity ownership for long-term wealth creation
  • +Direct plans available via Zerodha Coin, Groww, Kuvera

Cons

  • −Returns are market-linked and not guaranteed
  • −LTCG of 10% applies on gains above Rs 1 lakh/year

Best for

Investors with 7+ year horizon comfortable with equity volatility

Start ELSS SIP
#2

Public Provident Fund (PPF)

9.2/10CalcHub Score
Lock-in
15 years
Current Rate
7.1%
Risk
Very Low (sovereign)
Max Investment
Rs 1.5L per year
Tax on Interest
0% (EEE)

Pros

  • +Government-backed with sovereign safety
  • +Tax-free interest and maturity (EEE status)
  • +Current rate 7.1% (April 2026) reviewed quarterly
  • +Partial withdrawal allowed from year 7

Cons

  • −15-year lock-in (with partial withdrawal flexibility)
  • −Max Rs 1.5 lakh per year

Best for

Conservative investors building a long-term debt allocation

Open PPF Account
#3

NPS Tier 1 (National Pension System)

9.0/10CalcHub Score
Lock-in
Till age 60
Expected Return
9-11% CAGR
Risk
Moderate
Max 80C
Rs 1.5L + Rs 50K under 80CCD(1B)
Tax on Maturity
60% tax-free, 40% annuity

Pros

  • +Extra Rs 50,000 deduction under 80CCD(1B) over and above 80C
  • +Equity exposure up to 75% (auto choice)
  • +Low fund management charges
  • +Tax-free maturity up to 60% of corpus

Cons

  • −Lock-in till age 60
  • −40% of corpus must be used to buy annuity (taxable)

Best for

Retirement-focused investors looking to maximise deductions

Open NPS Account
#4

Tax-Saving Fixed Deposit

8.2/10CalcHub Score
Lock-in
5 years
Current Rate
6.5-7.5%
Risk
Very Low (bank FD)
Max Investment
Rs 1.5L (80C)
Tax on Interest
Slab rate

Pros

  • +Guaranteed returns
  • +Simple and familiar instrument
  • +DICGC insurance up to Rs 5 lakh

Cons

  • −5-year lock-in with no premature withdrawal
  • −Interest taxable at slab rate
  • −Rates (6.5-7.5%) trail ELSS and PPF post-tax

Best for

Highly conservative investors in the lowest tax slab

Book 80C FD
#5

Sukanya Samriddhi Yojana (SSY)

9.0/10CalcHub Score
Lock-in
Till girl turns 21
Current Rate
8.2%
Risk
Very Low (sovereign)
Max Investment
Rs 1.5L per year
Tax on Interest
0% (EEE)

Pros

  • +Highest small-savings rate (8.2% as of April 2026)
  • +EEE tax status - fully tax-free
  • +Government-backed
  • +Dedicated vehicle for girl child education/marriage

Cons

  • −Only for girl child under 10 years of age
  • −Long lock-in (till girl turns 21)

Best for

Parents of daughters under age 10

Open SSY Account
#6

Life Insurance Premium (Term Plan)

7.8/10CalcHub Score
Lock-in
Policy term
Expected Return
N/A (protection)
Risk
N/A
80C Limit
Rs 1.5L
Death Benefit
Tax-free 10(10D)

Pros

  • +Protection + small tax deduction
  • +Death benefit tax-free under 10(10D)

Cons

  • −Term plans are protection, not investment
  • −Endowment and ULIP return profiles trail ELSS/PPF

Best for

Claiming 80C benefit on already-needed term insurance premiums

Get Term Insurance

Frequently Asked Questions

Is 80C still available in the new tax regime?+

No, Section 80C deductions are not available under the new tax regime (default from AY 2024-25). If you want to claim 80C, you must explicitly choose the old regime when filing your ITR or submitting your employer declaration.

Which is the best 80C investment for a 30-year-old salaried professional?+

For most 30-year-olds with a 20+ year horizon, ELSS via direct plans delivers the best post-tax return. A common split is Rs 75,000 in ELSS, Rs 50,000 in PPF for debt allocation, and Rs 25,000 in term insurance premium.

Can I exceed Rs 1.5 lakh under 80C for higher tax savings?+

The 80C ceiling is Rs 1.5 lakh combined across all eligible instruments. You can, however, add Rs 50,000 under 80CCD(1B) by investing in NPS Tier 1, bringing total retirement-linked deductions to Rs 2 lakh.

Is ELSS better than PPF for 80C?+

ELSS has historically delivered 3-5% higher returns than PPF over 10+ year periods, but returns are market-linked and volatile. A balanced approach is to split the Rs 1.5 lakh limit - 50-70% in ELSS for growth and 30-50% in PPF for stability.

Disclosure: Rankings based on publicly available data as of April 2026. Rates and terms change; verify with the provider. CalcHub may earn a commission from some links at no cost to you.