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Income Tax Deductions & Exemptions in India (FY 2025-26)

Deductions reduce taxable income, but many popular deductions are available only in the old tax regime. For FY 2025-26, start by deciding the regime, then include only the deductions allowed in that regime.

Deductions allowed in the new regime

Deductions generally available only in the old regime

Key deductions explained

Standard deduction

Salary taxpayers get a direct standard deduction: ₹75,000 in the new regime and ₹50,000 in the old regime. This does not require investment proof.

Section 80C and 80D

Section 80C up to ₹1.5L and Section 80D health insurance deduction are old-regime benefits. If these are large, compare the old regime carefully against the new regime slabs.

NPS deductions

Employee NPS under 80CCD(1B) up to ₹50,000 is old-regime only. Employer NPS contribution under 80CCD(2), up to 14% of basic salary, is available in the new regime.

HRA, LTA and home loan interest

HRA, LTA and self-occupied home-loan interest up to ₹2L are old-regime items. If you pay rent or have a home loan, include these in your new vs old regime comparison.

What actually counts under Section 80C?

Section 80C is the most-used deduction, with a combined ceiling of ₹1.5 lakh a year (old regime only). Many people don't realise how many things already qualify before they invest anything extra:

• Employee EPF contribution deducted from your salary.
• Life insurance premiums for self, spouse and children.
• PPF and Sukanya Samriddhi deposits.
• ELSS tax-saving mutual funds (3-year lock-in) and 5-year tax-saving FDs.
• Principal repayment on a home loan, plus stamp duty and registration in the year of purchase.
• Children's tuition fees (up to two children) and NSC.

Because salary EPF and home-loan principal alone often use up a big chunk of the ₹1.5 lakh, tally your existing commitments first and only then top up with fresh investments.

Health cover: Section 80D limits

Under the old regime, Section 80D allows a deduction for health-insurance premiums: up to ₹25,000 for yourself, spouse and children, plus another ₹25,000 for parents — rising to ₹50,000 where the insured is a senior citizen. A preventive health check-up of up to ₹5,000 is included within these limits. If your parents are seniors, the combined deduction can reach ₹75,000–₹1,00,000, which makes 80D one of the most valuable old-regime benefits after 80C.

Interest and donations: 80TTA, 80TTB and 80G

• Section 80TTA — up to ₹10,000 of savings-account interest for taxpayers below 60 (old regime).
• Section 80TTB — up to ₹50,000 of interest (savings + FD/RD) for senior citizens, in place of 80TTA.
• Section 80G — donations to eligible funds and charities, deductible at 50% or 100% depending on the institution, subject to conditions.
• Section 80E — full deduction on interest paid on an education loan for higher studies, for up to 8 years.

Should you choose the regime for the deductions?

A useful rule of thumb: the old regime tends to win only if your total deductions are large relative to your income — typically once 80C, 80D, HRA and home-loan interest together cross a break-even that rises with your salary. If you claim few deductions, the new regime's lower slab rates and ₹75,000 standard deduction usually leave you better off. Don't guess — plug your actual figures into the ITR calculator, which computes both regimes side by side, and review the detailed comparison.