New Act — Section 123 (Old 80C)

Section 123 of Income Tax Act 2025 (Old 80C): ₹1.5L Deduction Guide

Old Sec 80C = New Sec 123. Same ₹1.5L limit, same EPF/PPF/ELSS/LIC/tuition/principal menu — old regime only. New-regime filers get zero.

Old → New in 10 seconds

80C (₹1.5L) → Sec 123. 80CCD(1) → 124 (₹50k NPS). 80CCD(2) → 125 (14% employer — survives in new regime).

EPF, PPF, ELSS, tax-saver FD, NSC, SSY, LIC, ULIP (≤₹2.5L/yr premium), tuition fees (2 kids), home-loan principal, stamp duty.
All inside one ₹1.5L umbrella; old regime only; NPS extra ₹50k sits outside it (124).
Traps: breaking 5-yr FD, NSC last year, PPF over-deposit — 7 80C mistakes →

Full 80C/80D list → · All section numbers mapped →

123 vs 124 vs 125 (don't mix them up)

Section	What	Limit	New regime?
123 (old 80C)	EPF/PPF/ELSS/LIC/tuition/principal	₹1.5L combined	No
124 (old 80CCD(1))	Your own NPS contribution	₹50,000 extra	No
125 (old 80CCD(2))	Employer's NPS contribution	14% of Basic+DA	Yes

Example — filling ₹1.5L smartly

Rohan's EPF cuts ₹82,000/yr automatically. He adds a ₹48,000 ELSS SIP + ₹20,000 PPF = ₹1,50,000 exactly. Anything more earns returns but zero extra deduction.

Filling ₹1.5L in the right order (our suggested sequence)

Step 1 — count the automatic: EPF deduction + employer's... no wait, only YOUR EPF counts (employer's share isn't your deduction). Note your yearly EPF, then fill the REMAINDER.
Step 2 — safe core: PPF for the risk-averse portion (7.1%*, EEE, 15-yr discipline).
Step 3 — growth kicker: ELSS SIP for the rest (3-yr lock, equity upside, LTCG above ₹1.25L/yr).
Step 4 — beyond ₹1.5L: NPS extra ₹50,000 (Sec 124) — the only 80C-family deduction that escapes the cap.

*PPF rate revised quarterly — check the latest before deciding.

Our take: most people do this backwards — random LIC premium in March to 'complete 80C'. Decide the split in APRIL, automate monthly SIPs, and March becomes a non-event. The full product-by-product maths lives on the comparison page.

Full maths: PPF vs ELSS vs NPS vs SSY →

💡 Pro tip: tuition fees are stealth 80C

Two kids in private school? Their tuition fees (not donation, not development charges) qualify for 80C up to the shared ₹1.5L cap — receipts from the school are the only proof needed. Two children max, any number of... actually any number of children? No — maximum two children. For many parents, tuition + EPF already fills 80C — check before buying that March LIC policy 'for tax saving'. The cheapest 80C is the one you've already paid.

By TaxSetu Editorial Team · Last reviewed: 7 October 2026

Based on the Income-tax Act 2025, Income Tax Rules 2026 and CBDT notifications; sections per the Income-tax Act 1961 (as amended) with 2025-Act mappings where notified · Verify on the official portal: incometax.gov.in

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Frequently Asked Questions

What is Section 123 of the new Income Tax Act?+

The new address of 80C: ₹1.5L deduction for EPF/PPF/ELSS/LIC/tuition/principal — old regime only. NPS extras moved to 124/125.

Does Section 123 apply in the new regime?+

No — like 80C, it gives zero in the new regime. Only employer NPS (125, 14%) survives there. Survivors list.

What are the biggest 80C traps?+

Breaking 5-yr FDs, NSC's last year, PPF over-deposit, ULIP above ₹2.5L/yr. All 7 traps.