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Section 80C deductions for NRIs: what you can and cannot claim

NRI Dash Research Team · Last reviewed: 2026-06-28

Section 80C deductions for NRIs refer to the set of income tax deductions available under Chapter VI-A of the Income Tax Act, which NRIs can claim only if they opt for the old tax regime for a given financial year. The aggregate limit for all eligible investments and expenditures under Section 80C is Rs 1.5 lakh per year. NRIs can invest in ELSS mutual funds and claim the full Rs 1.5 lakh deduction, as ELSS has a three-year lock-in period. Life insurance premiums paid for policies on the NRI's own life or that of a spouse and dependent children are also eligible, provided the premium does not exceed 10 percent of the sum assured for policies issued after April 2012. Home loan principal repayment on an Indian residential property qualifies, as do tuition fees paid for up to two children studying in India. NRIs cannot invest in PPF or NSC, so those two popular resident instruments are not available to them.

₹1.5 lakh limit applies to NRIs too

NRIs can claim Section 80C deductions up to ₹1.5 lakh per year, but only on eligible instruments. ELSS mutual funds, life insurance premiums on qualifying policies, NRI home loan principal repayment and term insurance premiums qualify. PPF new accounts, NSC and Post Office schemes are not available to NRIs.

Key points

What NRIs can claim under Section 80C

ELSS mutual funds: up to ₹1.5 lakh investment, 3-year lock-in, available to NRIs (check AMC restrictions for US/Canada NRIs).

Life insurance premiums: qualifying policies on own life, spouse or children — premium must not exceed 10% of sum assured for policies issued after April 2012.

Home loan principal repayment: on a loan for an Indian residential property — principal component of EMI qualifies.

5-year tax-saving FDs with Indian banks: NRIs can invest in 5-year FDs under the tax-saver category at most major banks.

Tuition fees: for full-time education of up to two children at an Indian school, college or university.

What NRIs cannot claim under 80C

PPF new contributions: NRIs cannot open a new PPF account. Existing accounts (opened while resident) may be continued but no new NRI contributions after becoming NRI per amended PPF rules.

NSC (National Savings Certificate): not available to NRIs — NSC is a post office instrument restricted to residents.

Senior Citizens Savings Scheme (SCSS): restricted to residents above 60.

NPS: NRIs can invest in NPS and claim deduction under 80CCD(1B) up to ₹50,000 — separate from 80C.

Home loan (new purchase outside India): only India-property loans qualify.

Frequently asked questions

Can an NRI invest in ELSS?

Yes, most NRIs can invest in ELSS through NRE or NRO accounts. Note: AMCs including SBI, HDFC, Axis and Nippon restrict NRIs based in the USA or Canada from investing in ELSS due to FATCA compliance costs. Check the specific fund house before investing.

Can NRIs claim 80C on existing PPF contributions?

NRIs with a PPF account opened as residents may be permitted to continue existing subscriptions in some cases, but amended rules restrict fresh contributions. Check with your bank or the PPF account-holding post office for current rules.

Is Section 80C available under the new tax regime?

No. Section 80C deductions are available only under the old (non-default) tax regime. If you opt for the new tax regime, 80C deductions are not available — but the lower slab rates may still result in lower tax overall.

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