Which small savings schemes qualify for Section 80C deductions and which don’t?

Which small savings schemes qualify for Section 80C deductions?

Which small savings schemes do not qualify for Section 80C deductions?

Kisan Vikas Patra does not qualify for 80C. The Post Office Monthly Income Scheme are also not covered under 80C. 1, 2, or 3-year Post Office Time Deposits do not qualify for this benefit.

What is Section 80C?

Section 80C of the Income Tax Act 1961 is a key provision that offers tax deduction benefits to taxpayers by reducing their gross total income.

Under Section 80C, deductions up to ₹1.5 lakh on various investments and expenses qualify for tax exemption. These include deductions for life insurance premiums, PPF, home loan principal repayment, ELSS mutual funds, Sukanya Samriddhi Yojana, and many more. However, this deduction is available only for those who opt for the old tax regime.

Post Office Small Savings Schemes interest rate (w.e.f 01.01.2026 to 31.03.2026)

Section 80C is Section 123 in the Income Tax Act 2025

In the Income-Tax Act 2025, tax deductions available under section 80C of the Income-Tax Act, 1961, have been moved to a new section 123. However, the new section continues to allow a deduction of ₹1.5 lakh in a tax year. All the savings instruments that will qualify for deduction under section 123 of the new tax bill have been listed in Schedule XV.

The new Income Tax Act 2025 will come into force from April 1, 2026.