Section 80C is not a strategy: what to actually do before 31 March

March tax-saving has a predictable shape. An email goes out from HR in January asking for investment proof. Nothing happens until the middle of March. Then, in a week, people commit to five-year lock-ins and twenty-year insurance premiums to save a deduction they may not even be able to claim.

The order of the decisions matters more than the products. Here is the sequence that avoids most of the damage.

First: check whether deductions are worth anything to you at all

Under the new regime, 80C does nothing. Neither does 80D, nor HRA, nor home loan interest on a self-occupied property. If the new regime is cheaper for you — which it is for most people without a large home loan — then every rupee you lock into an ELSS or a tax-saving deposit buys you exactly zero tax benefit.

This is the step people skip, and it is the only one that can make the entire exercise pointless. Run both regimes side by side before you buy anything. The calculator also shows the deduction level at which the old regime would catch up, which tells you immediately whether filling 80C could ever change the answer.

Second: count what you are already contributing

Most people have used more of the ₹1.5 lakh limit than they think. The following all count:

• Your EPF contribution — 12% of basic, deducted every month
• The principal portion of your home loan EMI
• Children's tuition fees, for up to two children
• Life insurance premiums you already pay
• PPF, ELSS, NSC, Sukanya Samriddhi, five-year tax-saving deposits

A salaried person earning ₹18 lakh with a basic of 40% contributes about ₹86,000 a year to EPF without doing anything. Add a home loan and the limit is often already full. The 80C planner adds these up and shows what headroom is actually left.

Third: fill the headroom with something you would own anyway

If there is room left and the old regime is genuinely cheaper, the question becomes which instrument. The honest test is whether you would buy it with no tax benefit attached.

PPF

A fifteen-year government-backed account, currently paying 7.1%, tax-free at every stage. For the stable part of a long-horizon portfolio it is difficult to beat: at the 30% slab its tax-free return is equivalent to a taxable deposit paying over 10%. Deposit before the 5th of the month — interest is calculated on the lowest balance between the 5th and month end. See what a full contribution builds over fifteen years.

ELSS

Equity funds with a three-year lock-in, the shortest of any 80C option. Returns are not guaranteed and a three-year horizon is short for equity, so treat the lock-in as a minimum rather than a plan. Suitable if you were going to invest in equity regardless.

NPS

The extra ₹50,000 under 80CCD(1B) sits on top of the ₹1.5 lakh, which makes it the only straightforward way to extend the limit. The trade-off is that 40% of the corpus must buy an annuity at 60, and annuity income is taxable. Project the corpus and the pension it buys before committing.

Tax-saving fixed deposits

Five-year lock-in, no premature withdrawal, and the interest is fully taxable each year. They make sense only for someone who would not invest in anything else and needs the deduction.

What not to do

Do not buy a traditional endowment or money-back insurance policy to save tax. These bundle a weak investment with thin cover and commit you for fifteen to twenty years. The returns typically land between 4% and 6%, and surrendering early forfeits a large part of what you paid. If you need life cover, buy term insurance — it costs a fraction and covers several times more.

Do not buy anything on 30 March that you have not read. Products sold in the last week of March are sold on the deadline, not on their merits.

The deductions outside 80C worth claiming

• 80D — health insurance, up to ₹25,000 for your own family and a further ₹25,000 or ₹50,000 for parents. This is cover you should hold regardless.
• 80CCD(1B) — the additional ₹50,000 for NPS.
• Section 24(b) — up to ₹2 lakh of home loan interest on a self-occupied property.
• 80E — education loan interest, with no upper limit, for eight years.
• 80G — donations, at 50% or 100% depending on the institution.

A sensible March

Check the regime. Count what you already contribute. Fill any remaining headroom with PPF or ELSS depending on your horizon. Make sure your health cover is adequate. Submit proof before your employer's deadline so the TDS is corrected rather than claimed back as a refund months later.

That is the whole exercise. It takes an hour, not a week, and it does not require buying anything you would otherwise decline.