Last-Minute Tax Saving in India: Best 80C Options Before March 31
It’s December 24, 2025. You’ve got less than three months to save on your income tax for this financial year. You didn’t plan ahead. You didn’t track your deductions. Now you’re staring at your salary slip, wondering how to cut your tax bill before March 31. Don’t panic. There are still solid, legal ways to claim up to ₹1.5 lakh under Section 80C - and some of them can be done in under 48 hours.
What Section 80C Actually Does
Section 80C of the Income Tax Act lets you reduce your taxable income by up to ₹1.5 lakh per year. That’s not a tax credit. It’s a deduction. If you earn ₹12 lakh a year and invest ₹1.5 lakh under 80C, you’re taxed on only ₹10.5 lakh. For someone in the 30% tax bracket, that’s ₹45,000 back in your pocket. The key is: you have to actually invest. You can’t just claim it. And you have to do it before March 31.
It’s not just about putting money aside. It’s about choosing the right instruments. Some options lock your money for years. Others give you liquidity. Some give you returns. Others just give you tax relief. You need to pick what fits your situation right now.
Option 1: ELSS Mutual Funds - Fastest, Highest Return
If you’re looking for speed and growth, ELSS mutual funds are your best bet. These are equity-linked savings schemes. They’re mutual funds with a 3-year lock-in - the shortest among all 80C options. You can invest online in minutes. Many fund houses allow lump-sum investments under ₹5,000. You don’t need a Demat account. Just log into your mutual fund platform - Groww, Zerodha, or AMC’s own app - and buy.
ELSS funds have historically returned 12-15% annually over the last decade. That’s better than PPF or fixed deposits. And since they’re equity-based, your money grows faster than inflation. The lock-in is annoying, but it forces discipline. If you’re planning to stay invested for 5+ years anyway, this is the smartest move you can make right now.
Pro tip: Don’t wait until March 30. Fund houses get overwhelmed in the last week. Transactions can get delayed. Invest by March 15 to be safe.
Option 2: NSC (National Savings Certificate) - Safe, Fixed Returns
If you hate risk, go for NSC. You can buy it at any post office or through authorized banks like SBI or ICICI. The current interest rate is 7.7% (as of 2025), compounded annually. The lock-in is 5 years. But here’s the catch: even though you can’t withdraw early, you can claim the entire investment under 80C in the year you buy it. The interest earned each year is reinvested and also eligible for deduction - but only in the year it’s earned. That’s a hidden bonus.
NSC is perfect if you want guaranteed returns. No market risk. No fund manager decisions. Just government-backed safety. You’ll get a certificate (physical or digital) as proof. Keep it safe. You’ll need it during tax filing.
Option 3: Tax-Saving Fixed Deposits - Simple, But Locked
Most banks offer tax-saving FDs with a 5-year lock-in. Interest rates range from 6.5% to 7.5%. You can open one online in 10 minutes. The minimum deposit is usually ₹100. You can’t break it early. No partial withdrawals. But it’s simple. No paperwork. No fund selection. Just park your money and get your 80C deduction.
It’s not the best return, but it’s the most straightforward. If you’re risk-averse and want zero hassle, this is your option. Just make sure you’re investing in a bank that’s RBI-approved. Avoid small finance banks unless you’re certain of their stability.
Option 4: PPF - Long-Term, Tax-Free
PPF (Public Provident Fund) is the granddaddy of 80C options. It’s backed by the government. The current interest rate is 7.1%. The lock-in is 15 years. But you can withdraw partial amounts after 7 years. The best part? All returns are tax-free - even when you withdraw. That’s called EEE status: Exempt-Exempt-Exempt.
Here’s the catch: you can only invest up to ₹1.5 lakh per year. And you need a PPF account. If you don’t have one, you can open it online through SBI, ICICI, or post office. The process takes 2-3 days. If you’re starting now, you’ll still get the deduction for FY 2025-26 - as long as the funds are credited by March 31. Deposit via net banking. Don’t wait for physical cheques.
PPF is ideal if you’re thinking long-term. It’s not for last-minute relief - but if you’re already saving for retirement, this is where you should put extra money.
Option 5: Life Insurance Premiums - Only If You Need Coverage
If you already have a life insurance policy, the premium you paid this year counts under 80C. But here’s the rule: you can only claim the premium paid during the financial year. And it must be for a policy that qualifies - not any random policy. Term plans, endowment plans, ULIPs - all qualify. But whole life policies with high charges? Not always.
Don’t buy a new policy just for tax saving. The charges eat into your returns. If you don’t need life cover, skip this. But if you’ve been meaning to get a term plan, now’s the time. A ₹50 lakh term plan for ₹8,000/year is a bargain. You get protection and tax deduction in one go.
Option 6: Tuition Fees - For Two Children Only
If you have kids in school or college, the tuition fees you paid this year count under 80C. But only for two children. Full-time education. Not coaching centers. Not extracurriculars. Only fees paid to a recognized Indian institution - universities, colleges, schools. You need to keep receipts. No invoice? No claim.
This is often overlooked. If you paid ₹1.2 lakh in tuition for two kids, you’ve already used up your entire 80C limit. No need to invest elsewhere. Just file your receipts with your ITR.
Option 7: Home Loan Principal Repayment - If You’re a Homeowner
If you have a home loan, the principal amount you repaid in FY 2025-26 counts under 80C. Not the interest. The principal. This includes EMIs paid from April to March. If you made a prepayment in December, that counts too. You can claim up to ₹1.5 lakh - but only if you haven’t used it elsewhere.
Check your bank statement. Look for the principal portion of your EMI. Many banks provide a year-end statement showing principal vs. interest. If you made a lump-sum payment, keep the receipt. This is one of the most powerful 80C tools - because you’re paying off debt and saving tax at the same time.
Option 8: Sukanya Samriddhi Yojana - For Daughters Only
If you have a daughter under 10, you can open a Sukanya Samriddhi Account (SSA). The interest rate is 8.2% (2025). The lock-in is 21 years or until marriage, whichever is earlier. You can deposit up to ₹1.5 lakh per year. The returns are tax-free. And it’s 100% government-backed.
It’s not for everyone. But if you have a daughter and haven’t opened an SSA yet, this is your last chance to invest for FY 2025-26. You can open it at any post office or bank. Online registration is available through SBI and PNB. Deposit before March 31. The account will be active from the date of deposit.
What NOT to Do
Don’t buy gold. Gold coins or bars don’t qualify under 80C. Don’t invest in real estate. Land or property purchases aren’t eligible. Don’t try to fake donations. Only approved institutions qualify for Section 80G - and that’s a different section. Don’t invest in non-qualifying mutual funds. Only ELSS qualifies. Don’t wait until the last day. Systems crash. Banks freeze transactions. Pay by March 20.
How to Track Your 80C Investments
Make a simple spreadsheet. List each investment, amount, date, and proof. Include:
- ELSS folio number
- NSC certificate number
- FD receipt
- PPF account statement
- Tuition receipts
- Home loan principal statement
- Insurance premium receipt
- SSA deposit confirmation
Keep digital copies. Upload them to Google Drive or your tax app. You won’t need to submit them now - but you’ll need them if the IT department asks.
What If You’ve Already Used Your ₹1.5 Lakh Limit?
If you’ve already invested ₹1.5 lakh through your employer’s PF, ELSS, or insurance - you’re done. No need to do more. But if you’ve only invested ₹80,000, you still have ₹70,000 left. Don’t leave it on the table. Pick one of the above options and act now.
Final Checklist: Last-Minute 80C Action Plan
- Check your current 80C investments so far (from salary deductions, insurance, etc.)
- Calculate how much you still have left (₹1.5 lakh minus what you’ve used)
- Choose one or two options that match your risk profile and timeline
- Invest before March 15 - not March 30
- Save all receipts, statements, and confirmations
- Update your tax records
Section 80C isn’t a loophole. It’s a tool. The government wants you to save. And if you use it right, you keep more of your own money. Don’t wait. March 31 is closer than you think.
Can I claim 80C deductions if I’m a salaried employee?
Yes. Salaried employees can claim 80C deductions on investments made during the financial year. Many employers deduct contributions like EPF and insurance premiums automatically. But you can still make additional investments - like ELSS, NSC, or tax-saving FDs - and claim them when filing your ITR. Just ensure you provide proof to your employer or keep it for your own tax filing.
Can I claim 80C for my spouse’s investments?
No. Each individual has their own ₹1.5 lakh limit under Section 80C. You can’t claim your spouse’s ELSS or PPF investments. However, if you pay tuition fees for your spouse’s education, that can be claimed - but only if they are a full-time student in India. Spousal insurance premiums or FDs in their name don’t count for your deduction.
Do I need to submit proof to the income tax department now?
No, you don’t need to submit proof when filing your ITR. But you must keep all documents - receipts, statements, folio numbers - for at least six years. The department can ask for them during an audit or scrutiny. If you can’t produce them, your deduction may be disallowed.
Can I invest in multiple 80C options in the same year?
Yes. You can invest in ELSS, PPF, NSC, tuition fees, and home loan principal all in the same year. But the total across all options cannot exceed ₹1.5 lakh. For example, if you invest ₹50,000 in ELSS and ₹70,000 in PPF, you can only claim ₹20,000 more from other options. Track your total carefully.
Is the interest on NSC or PPF taxable?
The interest earned on NSC is reinvested and eligible for deduction under 80C each year - so it’s not taxed annually. However, the final maturity amount is taxable. For PPF, both the principal and interest are completely tax-free. That’s why PPF is called EEE: Exempt-Exempt-Exempt. NSC is EET - Exempt-Exempt-Taxable on maturity.
Can I claim 80C if I’m self-employed?
Yes. Self-employed individuals can claim all 80C deductions just like salaried employees. You can invest in ELSS, PPF, NSC, insurance premiums, tuition fees, and home loan principal. The only difference is you don’t have employer deductions. So you have full control over how much and where to invest - but you’re also responsible for tracking everything yourself.
