Yes, Section 80C deductions (up to ₹1.5 lakh for PPF, LIC, ELSS, etc.) are removed in the new tax regime. The new regime offers lower tax rates but eliminates most exemptions, including 80C, 80D, and HRA, to simplify tax filing. Only a standard deduction of ₹75,000 (for FY 25-26) and specific employer contributions are allowed. IDFC FIRST Bank +5
Please note: Section 80C deduction is not available in the new tax regime except deduction u/s 80CCD(2)/80CCH/80JJAA as per the provision of Section 115BAC of the Income Tax Act, 1961.
The basic tax exemption limit under the new tax regime has been increased to ₹4 lakh in FY2025-26 from the previous ₹3 lakh in FY 2024-25. This means those with an income up to ₹4 lakh have no tax liability at all if they opt for the new tax regime.
The new tax regime has eliminated nearly 70 tax deductions that were previously allowed in the old regime. Under the new regime, deductions for health insurance premiums (Section 80D) and investments up to ₹1.5 lakh (Section 80C) are not available.
Some of the most common federal tax deductions include:
These deductions are independent of each other and do not overlap, allowing you to take full advantage of both. For example, you can invest ₹1.5 lakh in eligible 80C instruments like PPF or life insurance and also pay health insurance premiums for yourself and your parents to claim deductions under 80D.
Here are some common examples of tax-free and tax-efficient investments:
Yes, Public Provident Fund (PPF) is completely tax-free as it falls under the EEE (Exempt-Exempt-Exempt) category. Here's what this means: Exempt at Investment: Contributions up to Rs. 1.5 lakh a year are eligible for deduction under Section 80C of the Income Tax Act.
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From 2025 to 2028, adults age 65+ can claim a temporary bonus deduction of $6,000 if single or $12,000 if married filing jointly. For the 2025 tax year, the total standard plus bonus deduction for those age 65 and older is $21,750 for a single person and $43,500 for a married couple filing a joint return.
Sections 80CCC and 80CCD provide deductions for investments in pension schemes. The combined maximum deduction allowed under Sections 80C, 80CCC, and 80CCD(1) is ₹1.5 lakh. However, you can claim an additional deduction of ₹50,000 under Section 80CCD(1B) for contributions made to the National Pension Scheme (NPS).
Rebate is a tax reduction available to resident individuals when they earn income within 10% tax slab. Under the new regime, a rebate of Rs.60,000 is allowed for an income up to Rs. 12 lakhs. Under the old regime, a rebate of Rs. 12,500 is allowed for an income up to Rs. 5 lakhs.
Eligibility Criteria for Deductions Under Section 80C
Note that companies, partnerships and LLPs can't claim deductions under this section. 2. Eligible Investment and Expenses: Only the above-mentioned investment plans and expenses such as term life insurance, ULIPs, PPF, tuition fees, etc.
Some of the most common errors include failing to submit proof of investment or premium payments, claiming deductions without proper documentation, or overestimating the investment amounts.
Section 80CCD(1B): Additional NPS Tax Deduction of ₹50,000
Rs 50,000 NPS tax benefit is available only under the old regime, and not available under the new regime.
Those following the new tax regime, however, will not be able to claim these deductions—making Section 80C relevant mainly for old regime taxpayers.
This is calculated at the current interest rate of 7.1%. Investing the maximum amount of Rs 1.5 lakh every year in a PPF account would build a corpus of Rs 40.68 lakh in 15 years. At the same time, opting for extensions, with or without contributions, can further lead to a rise in the maturity amount.
Budget 2024 has increased the standard deduction under the new tax regime to Rs. 75,000. The family pension deduction has also been increased from Rs. 15,000 to Rs. 25,000. With the revised tax structure the taxpayer will save Rs.17,500.
The five key mistakes to avoid in a TFSA are over-contributing (and re-depositing withdrawals in the same year), treating it like a basic savings account (missing out on investment growth), failing to track your room (relying solely on CRA data), improperly moving funds (withdrawing and redepositing instead of transferring), and investing in non-qualified assets or high-risk trades (like day trading or certain foreign stocks that incur withholding tax).
April 10, 2025, the House adopted the Senate's amended version of the budget resolution, which allows $5.3 trillion in deficit-financed tax cuts (the combination of $3.8 trillion of tax cuts assumed to be “costless” under a current policy baseline plus $1.5 trillion in additional deficits permitted), deficit increases ...
Under the old tax regime, House Rent Allowance (HRA) is exempted under section 10(13A) for salaried individuals. However, this exemption is not available in the new tax regime.
Contribution to Public Provident Fund can be claimed as a deduction under section 80C of the Income Tax Act. A maximum deduction of Rs. 1.5 lakhs can be claimed, but only under the old regime. Deduction for contribution to Public Provident Fund is not available under the new tax regime.
Most of the deductions under Section 80 are also available to NRIs. For FY 2023-24, a maximum deduction of up to Rs 1.5 lakh is allowed under Section 80C from gross total income for an individual.
These deductions are claimed in Part C of the third tab of 'Computation of Income and Tax'. If you are filing ITR-1 online, then some of these details get auto-populated from the details provided in Form 24Q, which is filled by your employer.