Last updated: July 2026 · For FY 2025-26 (AY 2026-27)

Every rupee you can legally deduct from your taxable income is a rupee the taxman can't touch — and India's Income Tax Act gives you dozens of ways to do it, from your PF and health insurance to your home loan and even your parents' medical bills. But here's the catch almost everyone gets wrong in 2025: most of these deductions only work if you're on the old tax regime. If you're on the new regime — which is now the default — your prized 80C investments and 80D premiums save you nothing.

This guide untangles all of it: what every major deduction section covers, the exact FY 2025-26 (AY 2026-27) limits, how to claim them, and — most importantly — which ones still work under the new regime.

Freshness note: The Union Budget 2026 made no changes to these deduction sections or limits, so everything below also applies to FY 2026-27.

Key Takeaways

• Deductions vs the regime is the #1 thing to get right. Almost all Chapter VI-A deductions (80C, 80D, 80E, 80G) and HRA/home-loan-interest are available only in the old regime.
• Section 80C offers up to ₹1,50,000 across EPF, PPF, ELSS, life insurance, home-loan principal, tuition fees and more.
• Section 80CCD(1B) adds a separate ₹50,000 for NPS — potentially ₹2 lakh of NPS-linked deduction when combined with 80C.
• Section 80D covers health insurance: ₹25,000 for you and family, up to ₹1,00,000 if you and your parents are all senior citizens.
• The new regime still gives you a ₹75,000 standard deduction and the employer NPS deduction under 80CCD(2) (now up to 14% of salary) — but nothing else on this list.
• Don't invest only to save tax — but if the old regime suits you, stacking these deductions can save well over ₹1 lakh in tax.

First, the Most Important Rule: Old Regime vs New Regime

India has two parallel tax systems, and your regime decides whether these deductions even exist for you.

	Old Tax Regime	New Tax Regime (default)
Standard deduction	₹50,000	₹75,000
Section 80C, 80CCD(1B), 80D, 80E, 80G	✅ Available	❌ Not available
HRA exemption, home loan interest (24b)	✅ Available	❌ Not available
Employer NPS — Section 80CCD(2)	✅ (up to 10% of salary)	✅ (up to 14% of salary)
Tax rates	Higher	Lower

Bottom line: if you're on the new regime (which applies automatically unless you opt out), the only deductions below that help you are the standard deduction and employer NPS (80CCD(2)). Everything else — 80C, 80D, HRA, home loan interest — is worthless to you until you switch to the old regime.

Not sure which regime is better for you? Read our full old vs new tax regime comparison and run the numbers on the regime tax calculator.

The Master Table: All Major Deductions at a Glance (FY 2025-26)

Section	What it covers	Maximum limit	Regime
80C	EPF, PPF, ELSS, LIC, home-loan principal, tuition fees, 5-yr FD, NSC, SSY, SCSS	₹1,50,000 (combined)	Old only
80CCC	Pension fund premiums	Within the ₹1.5L 80C ceiling	Old only
80CCD(1)	Your own NPS contribution	Within the ₹1.5L 80C ceiling	Old only
80CCD(1B)	Additional NPS contribution	₹50,000 (over and above 80C)	Old only
80CCD(2)	Employer's NPS contribution	10% of salary (old) / 14% (new)	Both
80D	Health insurance & preventive check-ups	₹25,000 / ₹50,000 (senior) — up to ₹1,00,000 total	Old only
80E	Education loan interest	No cap (max 8 years)	Old only
80G	Donations to approved funds/charities	50% or 100% (with/without qualifying limit)	Old only
80GG	Rent paid when you get no HRA	Least of ₹5,000/month, 25% of income, or rent − 10% of income	Old only
80TTA	Savings-account interest (under 60)	₹10,000	Old only
80TTB	Deposit interest (senior citizens)	₹50,000	Old only
80U	Self-disability	₹75,000 / ₹1,25,000 (severe)	Old only
80DD	Dependant with disability	₹75,000 / ₹1,25,000 (severe)	Old only
24(b)	Home loan interest (self-occupied)	₹2,00,000	Old only

All limits verified for FY 2025-26 and unchanged for FY 2026-27.

Section 80C: The ₹1.5 Lakh Workhorse

Section 80C is the deduction most Indians know by heart. You can claim up to ₹1,50,000 per year across a wide menu of investments and expenses — but the ₹1.5 lakh is a combined ceiling, not per-instrument.

Eligible investments

• EPF (Employee Provident Fund) — your mandatory salary contribution counts automatically.
• PPF (Public Provident Fund) — 15-year, government-backed, tax-free returns.
• ELSS (Equity-Linked Savings Scheme) — tax-saving mutual funds with the shortest lock-in (3 years) and equity upside.
• Tax-saving 5-year fixed deposits, NSC, SCSS (senior citizens), and Sukanya Samriddhi Yojana (SSY) for a girl child.

Eligible expenses

• Life insurance premiums (self, spouse, children).
• Home loan principal repayment and stamp duty/registration in the year of purchase.
• Children's tuition fees — full-time education, up to two children.

Smart tip: Count your "automatic" 80C first — EPF, insurance premiums, tuition fees. Many salaried people are surprised how little fresh investment they need to hit ₹1.5 lakh. Estimate the gap with our investment calculator.

Section 80CCD: The NPS Trio (and the ₹2 Lakh Opportunity)

NPS is the only common instrument that can stretch your deduction beyond ₹1.5 lakh:

• 80CCD(1): your own NPS contribution — sits inside the ₹1.5 lakh 80C cap.
• 80CCD(1B): an extra ₹50,000 for NPS, over and above 80C. Combined, that's up to ₹2,00,000 of NPS-linked deduction.
• 80CCD(2): your employer's NPS contribution — this is separate from your limits and, uniquely, works in both regimes. From FY 2025-26 the cap rose to 14% of salary (basic + DA) in the new regime (10% in the old). If your employer offers NPS, this is the single most powerful tax break available to new-regime taxpayers.

Section 80D: Health Insurance Deductions

Section 80D rewards you for insuring your family's health:

Who's covered	Maximum deduction
Self, spouse, children (all under 60)	₹25,000
Self & family, any member 60+	₹50,000
Parents (under 60)	+ ₹25,000
Parents (senior citizens)	+ ₹50,000
Max combined (you + parents all senior)	₹1,00,000

Two things people miss:

1. The preventive health check-up sub-limit of ₹5,000 is included within the above caps, not added on top (and cash payment is allowed for it — an exception to the usual no-cash rule).
2. A resident senior citizen with no health policy can claim actual medical expenditure up to ₹50,000 instead.

Section 24(b): Home Loan Interest

Not a Chapter VI-A deduction — it's a deduction from your house property income — but it's one of the biggest. You can deduct up to ₹2,00,000 of home loan interest on a self-occupied property each year. (For a let-out property there's no per-year cap on interest, but the overall house-property loss you can set off is limited to ₹2 lakh.) Pair this with the 80C principal deduction and a home loan becomes highly tax-efficient — in the old regime. Learn more in our HRA calculation and tax benefits guide.

Legacy note: Sections 80EE and 80EEA once offered extra interest deductions for first-time buyers, but 80EEA's sanction window closed on 31 March 2022. No new loans qualify — only borrowers who already met the conditions can continue claiming.

The Rest of the Toolkit

• 80E — Education loan interest: the full interest is deductible with no upper limit, for up to 8 years from when repayment starts. Covers loans for self, spouse or children.
• 80G — Donations: 50% or 100% deductible depending on the fund; cash donations above ₹2,000 don't qualify.
• 80GG — Rent without HRA: for those who pay rent but get no HRA — least of ₹5,000/month, 25% of adjusted total income, or rent minus 10% of income.
• 80TTA / 80TTB — Interest income: ₹10,000 on savings-account interest (under 60), or ₹50,000 on deposit interest for senior citizens.
• 80U / 80DD — Disability: ₹75,000 (40%+ disability) or ₹1,25,000 (severe, 80%+) — 80U for yourself, 80DD for a dependant.

How to Claim These Deductions: Step by Step

1. Confirm your regime. Deductions only help in the old regime (except standard deduction and 80CCD(2)). Salaried employees declare their regime to the employer for TDS but can still switch when filing the ITR.
2. Gather proof through the year — PPF/ELSS statements, insurance premium receipts, home-loan interest certificate, tuition-fee receipts, donation 80G certificates, NPS statements.
3. Submit proofs to your employer (usually Jan–Feb) so TDS is adjusted, or claim directly at ITR time if you missed the employer window.
4. Enter each deduction in the correct ITR schedule — Chapter VI-A deductions under "Schedule VI-A", home loan interest under "Income from House Property".
5. Keep records for 6+ years in case of scrutiny — you don't upload proofs, but you must produce them if asked.

Worked Example: How Deductions Stack Up (Old Regime)

Rahul earns a ₹14 lakh salary and is on the old regime:

Deduction	Amount
Standard deduction	₹50,000
80C (EPF + ELSS + LIC)	₹1,50,000
80CCD(1B) — NPS	₹50,000
80D — health insurance (self + senior parents)	₹75,000
24(b) — home loan interest	₹2,00,000
Total deductions	₹5,25,000

Rahul's taxable income drops from ₹14,00,000 to ₹8,75,000 — pushing him out of the 30% bracket and saving roughly ₹1.6 lakh in tax versus claiming nothing. That's the power of stacking deductions — but only worth it if the old regime beats the new one for him. Check with the tax comparison chart.

Common Mistakes to Avoid

• Claiming 80C/80D on the new regime — the single biggest error. They're disallowed; you save nothing.
• Thinking preventive check-up is extra — the ₹5,000 sits inside the 80D cap.
• Treating 80CCD(1B) as part of 80C — it's a separate ₹50,000; don't leave it unclaimed.
• Assuming 80EE/80EEA still apply — the window is closed for new loans.
• Forgetting employer NPS (80CCD(2)) works in the new regime — new-regime taxpayers routinely miss this.
• No documentation — an unproven deduction is a disallowed deduction under scrutiny.

Expert Tips

• Max out 80CCD(1B) if you're on the old regime — an easy extra ₹50,000 deduction most people forget.
• Route retirement savings through employer NPS if you're on the new regime — it's the only meaningful deduction you have.
• Buy your parents' health cover separately to unlock the higher 80D bracket if they're seniors.
• Don't over-invest in 80C if your EPF + insurance + tuition already fill the ₹1.5 lakh — put the rest toward goals, not tax.
• Recompute both regimes every year — a new home loan or senior-citizen parent can flip the answer.

Frequently Asked Questions

Are Section 80C and 80D available in the new tax regime?

No. Both 80C and 80D are Chapter VI-A deductions available only under the old tax regime. Under the new regime (the default), they cannot be claimed.

Which deductions still work under the new tax regime?

The ₹75,000 standard deduction and the employer NPS contribution under Section 80CCD(2) (up to 14% of salary), plus a few niche items like transport allowance for differently-abled employees. 80C, 80D, HRA and home loan interest do not apply.

What is the maximum deduction under Section 80C for FY 2025-26?

₹1,50,000 combined across all eligible investments and expenses. It's a single ceiling, not per-instrument.

Can I claim more than ₹1.5 lakh for NPS?

Yes — Section 80CCD(1B) gives an additional ₹50,000 over the 80C limit, so your own NPS deduction can reach ₹2 lakh. Employer NPS under 80CCD(2) is separate again.

How much health insurance deduction can I claim under 80D?

Up to ₹25,000 for yourself and family, or ₹50,000 if a member is a senior citizen, plus up to ₹50,000 for senior-citizen parents — a maximum of ₹1,00,000. The ₹5,000 preventive check-up is included within these caps.

Is there a limit on the education loan deduction under 80E?

No cap on the interest amount — you can deduct the full interest for up to 8 years from when repayment begins.

Did Budget 2026 change any deduction limits?

No. The deduction sections and their limits from Budget 2025 continue unchanged for FY 2026-27.

Summary

India's deduction toolkit — led by Section 80C (₹1.5 lakh), 80CCD(1B) (₹50,000 for NPS) and 80D (health insurance) — can slash your tax bill by well over ₹1 lakh a year. But the golden rule for FY 2025-26 is this: almost all of them only work in the old regime. On the default new regime, only the standard deduction and employer NPS survive. So the smart sequence is: pick your regime first, then stack every deduction it allows.

Want to see exactly how much these deductions save you? Use our free CTC calculator and in-hand salary calculator to model your take-home pay under both regimes.