If you’re preparing your tax planning for FY 2024–25, one question will definitely come to your mind — Section 80C vs 80D vs 80CCD, which one actually saves the most tax?
As tax season comes closer, you and millions of other taxpayers compare these sections to understand how to legally reduce your tax outflow. In this guide, I’ll explain everything in a simple, human way so you can easily apply these rules in your real life.
By the end of this article, you’ll know exactly how to combine Section 80C, Section 80D, and Section 80CCD to maximize your tax savings in 2025.
Quick Introduction to These Sections (80C, 80D, and 80CCD)
Before we compare them, here’s a quick overview:
- Section 80C: Tax-saving investments (Limit: ₹1,50,000)
- Section 80D: Medical insurance & preventive health check-up (Limit: ₹75,000 depending on age)
- Section 80CCD: NPS-related tax benefits (Extra deduction: ₹50,000)
Now let’s go deeper and compare them one by one.
Section 80C – The Most Popular Tax-Saving Section
If you are like most Indian taxpayers, you already use Section 80C as your main tax-saving tool. It allows you to claim deductions up to ₹1.5 lakh per year.
What Comes Under Section 80C?
- ELSS Mutual Funds (3-year lock-in)
- PPF (15-year lock-in)
- Life Insurance Premiums
- Tax-Saver FD (5-year lock-in)
- EPF (Employee Provident Fund)
- Children’s tuition fees
- Sukanya Samriddhi Yojana
From all these, ELSS Mutual Funds have become the most popular choice because they offer the highest return potential.
For full details, check this guide:
ELSS Mutual Fund Complete Guide
How Much Tax Can You Save With 80C?
Under the old tax regime:
- If you fall in the 5% bracket → You save ₹7,500
- If you fall in the 20% bracket → You save ₹30,000
- If you fall in the 30% bracket → You save ₹45,000
So 80C gives you a good start — but it is not enough alone.
Section 80D – Tax Benefit on Health Insurance Premiums
Section 80D is one of the smartest ways to save tax because it also protects your health and your family’s medical needs.
Deduction Limits Under Section 80D
| Category | Self & Family | Parents |
|---|---|---|
| Below 60 years | ₹25,000 | ₹25,000 |
| Parents above 60 years | – | ₹50,000 |
This means you can claim from ₹25,000 to ₹75,000 depending on your situation.
Section 80D includes:
- Health insurance premium
- Preventive health check-up (₹5,000 limit)
- Critical illness policies
- Top-up health insurance
Real-Life Example
Let’s say:
- Your age: Below 60
- Your parents: Above 60
You can claim:
- ₹25,000 (self + family)
- ₹50,000 (parents)
Total = ₹75,000 deduction.
Section 80CCD – Additional Tax Saving Through NPS
Section 80CCD has become very popular in recent years, especially because it offers an extra deduction over and above 80C.
Section 80CCD(1) – Included Inside 80C Limit
This includes the contribution you make to your NPS account up to 10% of your salary (for salaried individuals).
But this is counted inside the ₹1.5 lakh limit of 80C.
Section 80CCD(1B) – EXTRA ₹50,000 Deduction
This is the most powerful part of NPS — you get an extra dedicated exemption of ₹50,000 which is not included in 80C.
This section alone helps you save:
- ₹10,000 (5% bracket)
- ₹20,000 (20% bracket)
- ₹30,000 (30% bracket)
If you want to understand NPS more deeply, read this:
NPS Tax Benefits Explained
Video Explanation
The Biggest Question – Which Section Saves the MOST Tax?
Let’s compare all three based on real numbers.
Below is the easiest way to understand how much you can save using each section.
Comparison Table
| Section | Maximum Deduction | Best For |
|---|---|---|
| 80C | ₹1,50,000 | Investments |
| 80D | ₹75,000 | Health Insurance |
| 80CCD(1B) | ₹50,000 | NPS |
Combined Maximum Tax Deduction
Total possible deduction = ₹1.5 lakh (80C) + ₹75,000 (80D) + ₹50,000 (80CCD)
= ₹2,75,000
If you are in the 30% tax bracket, your total tax saved will be:
₹82,500 + cess (~₹86,000 approx)
That’s huge.
The Most Powerful Combination Strategy for Maximum Tax Saving
Here’s the exact order you should follow for 2025 tax planning:
Step 1 – Max Out 80C (₹1.5 lakh)
Your 80C should ideally include:
- ₹50,000 in ELSS (for high return)
- EPF contribution automatically
- Remaining in PPF or SSY depending on your goals
Step 2 – Use 80D for Health Security (₹25,000 to ₹75,000)
Buy a good health insurance plan. This will not only save tax but also protect your family.
Step 3 – Add NPS for Extra ₹50,000 Benefit
This deduction is over and above everything else.
It is the easiest way to increase your total tax savings.
NPS Tax Benefit video
Real-Life Example – Lakhs Saved
Let’s assume:
- You: 30% tax bracket
- Claim full 80C = ₹1,50,000
- Health insurance (80D) = ₹50,000
- NPS under 80CCD(1B) = ₹50,000
Total Tax Saved
₹1,50,000 × 30% = ₹45,000
₹50,000 × 30% = ₹15,000
₹50,000 × 30% = ₹15,000
Total = ₹75,000 + cess (~₹78,000)
Video – How to Save Maximum Tax in 2025
External References (For Updated Rules)
For the most accurate and updated tax rules, follow:
Which Section Should YOU Use More?
Here’s a simple rule:
- If you want highest return → Prioritise ELSS under 80C
- If you want health security → Use 80D properly
- If you want extra tax saving → Go for 80CCD(1B)
Conclusion – So, Which Section Saves the Most?
If you are looking at pure deduction power, then:
- 80C = ₹1,50,000
- 80D = up to ₹75,000
- 80CCD(1B) = ₹50,000
Winner = Section 80C (highest limit)
But the real winner in practical tax saving is the combination of these three sections.
If you use the strategy explained above, you can reduce your tax by almost ₹80,000 to ₹90,000 legally under the old tax regime.
FAQs
1. Can I claim both 80C and 80CCD(1B)?
Yes, 80CCD(1B) is an extra deduction above 80C.
2. Is 80D applicable without health insurance?
You can claim ₹5,000 for preventive health check-up, but for full benefits, you need a health insurance policy.
3. Which is better for investment, ELSS or NPS?
ELSS gives better liquidity and return potential. NPS gives higher tax benefits and retirement security.
4. Can I claim 80C under the new tax regime?
No, these deductions are available only under the old tax regime.
5. What is the maximum tax I can save with all three sections?
Up to around ₹86,000 including cess if you are in the 30% tax bracket.
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