IT Act 1961 → 2025 / Salaried employees / Deductions
Deductions in the old regime
Chapter VIII deductions (old Chapter VI-A) and house property interest — only if you opt out of the new regime.
Tax year 2026-27 · Income-tax Act, 2025 as amended by Finance Act 2026 · reviewed 5 November 2026
Summary table
| Deduction | New section | Old section | Limit |
|---|---|---|---|
| EPF, PPF, ELSS, life insurance, tuition fees, home loan principal, NSC, SSY, 5-year FD, own NPS | 123 + Schedule XV | 80C, 80CCC, 80CCD(1) | ₹1,50,000 combined |
| Additional own NPS contribution | 124(3) | 80CCD(1B) | ₹50,000 |
| Employer NPS contribution | 124(1) | 80CCD(2) | 10% of salary for private employers (14% for Government employers) in the old regime; 14% for all employers if you stay in the new regime |
| Health insurance — self, spouse, children | 126 | 80D | ₹25,000 (₹50,000 if senior) |
| Health insurance — parents | 126 | 80D | ₹25,000 (₹50,000 if senior) |
| Preventive health check-up | 126(3) | 80D (proviso) | ₹5,000 within the above; cash allowed |
| Dependant with disability | 127 | 80DD | ₹75,000 (₹1,25,000 if severe) |
| Specified diseases | 128 | 80DDB | ₹40,000 (₹1,00,000 if senior) |
| Education loan interest | 129 | 80E | No limit; 8 years |
| Home loan interest — self-occupied | 22(1)(b), (c), 22(2) | 24(b) | ₹2,00,000 incl. pre-construction interest |
| Extra home loan interest (old loans) | 130, 131 | 80EE, 80EEA | ₹50,000 / ₹1,50,000 |
| Donations | 133 | 80G | 50% or 100%; some capped at 10% of adjusted GTI |
| Rent without HRA | 134 | 80GG | Least of ₹5,000 a month, 25% of total income, rent − 10% of total income |
| Savings bank interest | 153 | 80TTA, 80TTB | ₹10,000; seniors ₹50,000 on all deposits |
Points that trip people up
- The ₹1.5 lakh in section 123 is one combined limit for 80C-type items and your own NPS under 80CCD(1).
- Health insurance must be paid by a non-cash mode; only the preventive check-up can be paid in cash (126(9)).
- Home loan interest cap of ₹2 lakh now covers pre-construction interest instalments too (section 22(2), Finance Act 2026).
- Donations in cash above ₹2,000 are not deductible.
- 80EE (section 130) and 80EEA (section 131) apply only to loans sanctioned in their original windows.
Frequently asked
What is the 80C limit under the new Income Tax Act?
₹1.5 lakh under section 123 read with Schedule XV, old regime only.
Is 80D allowed in the new tax regime?
No. Section 126 (old 80D) is a Chapter VIII deduction and is not allowed under section 202.
Old vs new section pages
80C→123Deduction for life insurance, PF, PPF, ELSS, tuition fees, home-loan principal and other specified savings80CCD→124Deduction for NPS contributions: employer (80CCD(2)) and additional ₹50,000 (80CCD(1B))80D→126Deduction for health insurance premium, preventive health check-up and medical expenditure for senior citizens24→22Deductions from income from house property: 30% standard deduction and home-loan interest80E→129Deduction for interest on education loan80G→133Deduction for donations to approved funds and charitable institutions80GG→134Deduction for rent paid by those who do not receive HRA80TTA / 80TTB→153Deduction for interest on savings accounts (80TTA) and deposits of senior citizens (80TTB)
More for salaried employees
All provisionsSlab rates for tax year 2026-27Rebate under section 156 (old 87A) explainedOld vs new regime: how to chooseSalary computation sections 15–19Perquisites what is taxed and what is notHRA, LTA and allowances old regimeNew regime: what you can still claimTDS and filing for salaried taxpayers