Section 80CCE of Income Tax: The Rs. 1.5 Lakh Combined Limit

Section 80CCE is a limit and not a deduction. It adds up what you claim under Sections 80C, 80CCC and 80CCD(1), and it allows no more than Rs. 1,50,000.
 

• Covered: Section 80C, Section 80CCC (annuity plans) and Section 80CCD(1) (your National Pension System (NPS) contribution)
• Extra: Rs. 50,000 under Section 80CCD(1B), over and above the cap
• Outside the cap: your employer's NPS contribution under Section 80CCD(2)
• Regime: the old regime, except the employer's contribution
• Home loan: principal repaid counts toward the cap, and interest sits under Section 24(b)

• From 1 April 2026: Section 123 of the Income Tax Act, 2025 covers the Section 80C family

  
  

Add up your Section 80C items before the year ends, because anything above Rs. 1,50,000 earns no deduction. Then check how much of the cap your home loan principal already uses.

Section 80CCE is the provision of the Income Tax Act, 1961 that caps the total deduction under Sections 80C, 80CCC and 80CCD(1) at Rs. 1,50,000 a year. It gives no deduction of its own, so it is not an extra limit beyond Section 80C.

The mechanism is a ceiling. You add what you claim under the three sections, and the Act allows the lower of that sum and Rs. 1,50,000. Any amount above the ceiling earns nothing, and it does not carry forward to a later year.

The cap covers 3 sections, and 2 related deductions sit outside it.
 

Read the guide to Section 80C deductions for the full list of items that share the cap.

In the old regime, you can deduct up to Rs. 2,00,000 under these sections, plus your employer's NPS contribution. The cap gives Rs. 1,50,000 and Section 80CCD(1B) adds Rs. 50,000.

Formula used: Total = lower of (80C + 80CCC + 80CCD(1), Rs. 1,50,000) + lower of (80CCD(1B) contribution, Rs. 50,000) + 80CCD(2).

At the 30% slab, the Rs. 2,00,000 saves Rs. 62,400 with 4% cess. Trade-off: a deduction saves tax, but the money that you invest stays locked in until maturity, so invest for the product and not only for the tax.

The principal part of your equated monthly instalment (EMI) counts under Section 80C, so it uses the same Rs. 1,50,000 cap. Stamp duty and registration charges also count under Section 80C, in the year that you pay them.

The interest part sits under Section 24(b), which has its own limit of Rs. 2,00,000 for a self-occupied home. Read the guide to Section 24(b) for that limit.

A salaried borrower often fills the cap with the provident fund contribution alone. The home loan principal then adds no further deduction, even though it counts.

No, apart from one deduction. The new regime disallows Sections 80C, 80CCC, 80CCD(1) and 80CCD(1B), so Section 80CCE has nothing to cap.

Your employer's NPS contribution under Section 80CCD(2) works in both regimes. It is allowed up to 14% of basic pay in the new regime and 10% in the old regime.

Compare your total tax in both regimes before you choose. A deduction of Rs. 2,00,000 rarely outweighs the new regime's lower slab rates on its own, as the example below shows.

The Income Tax Act, 2025 has no separate number for Section 80CCE in the published mapping. That mapping places the Section 80C family under Section 123 and Section 80CCD under Section 124, from 1 April 2026.

Returns for financial year 2025-26 still cite the 1961 numbers. The cap applies to those returns, and the Tax Year 2026-27 return follows the 2025 Act. Check the section numbers on your return form.

Karan Malhotra, 37, lives in Gurugram and earns Rs. 2.4 lakh a month (Rs. 28,80,000 a year), with basic pay of Rs. 12,00,000 and a CIBIL Score of 782. He pays Rs. 99,511 of home loan principal on a Rs. 50,00,000 loan at 8.50% p.a. for 20 years, and he has 4 other items.
 

He adds Rs. 50,000 under Section 80CCD(1B), and his employer adds Rs. 1,20,000 under Section 80CCD(2). The old regime then gives deductions of Rs. 3,20,000 with a standard deduction of Rs. 50,000. The new regime gives only the employer's share and Rs. 75,000.
 

The new regime costs Rs. 1,87,200 less, so Karan files in the new regime.

No. Bajaj Finance assesses income, existing obligations and credit record, and a tax deduction does not change your eligibility. The deduction changes your tax bill and not your loan amount.

The principal part of your EMI counts toward the Section 80CCE cap. In the example above, Karan's Rs. 99,511 of principal fills part of the cap, and his provident fund fills most of the rest.

Approval timelines can extend where income or loan records need clarification, and minimum income thresholds can differ by city. Check your home loan eligibility with your EMI included.