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nism-series-xa-section-80c-investment-deduction-ceiling[ INVESTMENT ADVISER (LEVEL 1) ]

Under Section 123 of the Income-tax Act, 2025 (the erstwhile Section 80C, Section 80CCC, and Section 80CCD(1), as governed by the erstwhile Section 80CCE, of the Income-tax Act, 1961), what is the overall combined ceiling for these deductions under the Old Tax Regime?

[ A ]Maximum ₹5,00,000.
[ B ]Unlimited deduction with zero ceiling.
[ C ]Maximum ₹50,000.
[ D ]Maximum ₹1,50,000 (₹1.50 Lakhs) per financial year.[ CORRECT ]
Takeaway

Option D is correct: Maximum ₹1,50,000 (₹1.50 Lakhs) per financial year.

Derivation
Section 123 of the Income-tax Act, 2025 (the erstwhile Section 80CCE of the Income-tax Act, 1961) acts as a single provision that merges what were three otherwise separate deduction provisions — the erstwhile Section 80C (covering instruments such as PPF, EPF, ELSS, life insurance premiums, and home loan principal repayment), the erstwhile Section 80CCC (pension plan contributions), and the erstwhile Section 80CCD(1) (the base NPS contribution deduction) — into a single combined ceiling of ₹1,50,000 per financial year. A taxpayer cannot claim ₹1,50,000 under 80C separately and then another ₹1,50,000 under 80CCC; all three provisions draw from the same ₹1,50,000 pool. This is distinct from Section 124 (the erstwhile Section 80CCD(1B)), which carves out an additional ₹50,000 specifically for NPS contributions outside this combined ceiling.
Why the others fail
A — Maximum ₹5,00,000.
₹5,00,000 is far above the actual statutory ceiling; Section 123 (the erstwhile Section 80CCE) caps the combined 80C/80CCC/80CCD(1) deductions at ₹1,50,000 per financial year.
B — Unlimited deduction with zero ceiling.
Section 123 (the erstwhile Section 80CCE) explicitly imposes a ceiling on these combined deductions; there is no unlimited deduction available under this provision.
C — Maximum ₹50,000.
₹50,000 is the separate, additional NPS deduction available under Section 124 (the erstwhile Section 80CCD(1B)), not the overall Section 123 ceiling (the erstwhile Section 80CCE), which is three times larger.