Not differentiating between investment and non-investment related products under section 80C is one of the biggest mistakes people make.

Savings under section 80C can be broadly classified as investment-based, like PPF, EPF, VPF, NSC, bank FDs, ELSS, RGESS, etc, and non-investment based like principal repayment of home loan on first home, tuition fees, insurance, etc.

Though not an investment, insurance is often considered as a long term investment and remains a preferred tax-saving instrument. One should refrain from buying unnecessary insurance products for the purpose of tax savings. The purpose for taking insurance cover should be to ensure adequate risk coverage, not tax savings.

Another common mistake is not understanding the benefits of section 80C in totality .

We often ignore the various contributions that can account for deductions in this section. The investments under 80C should only be made after assessing contribution to one's provident fund account, home loan principal payment and tuition fees of two children, etc