80C, 80D and NPS under the Income-tax Act, 2025: new section numbers, limits and who can claim
80C, 80D and NPS under the Income-tax Act, 2025: new sections 123, 126 and 124, limits for tax year 2026-27 and what the new regime still allows.
Under the Income-tax Act, 2025, the familiar Chapter VI-A deductions now sit in Chapter VIII, with new numbers but essentially the same limits. The ₹1.5 lakh investment deduction (formerly 80C) is section 123. Health insurance (formerly 80D) is section 126. NPS contributions (formerly 80CCD) are section 124. Education loan interest (formerly 80E) is section 129, donations (80G) are section 133, and interest on savings and deposits (80TTA/80TTB) is section 153. All of these are available only in the old regime, with one important exception: your employer's NPS contribution is deductible in the new regime as well. Each deduction saves tax at your marginal rate, up to 31.2% including cess.
The deductions individuals use most
| Deduction | 1961 Act | 2025 Act | Limit for tax year 2026-27 | New regime? |
|---|---|---|---|---|
| Investments and payments (PF, PPF, ELSS, life insurance, tuition, home loan principal and more) | 80C (with 80CCC, 80CCD(1)) | 123 | ₹1,50,000 combined | No |
| Own NPS contribution, extra | 80CCD(1B) | 124 | ₹50,000 over the ₹1.5 lakh | No |
| Employer NPS contribution | 80CCD(2) | 124 | 14% of basic + DA in the new regime; 10% in the old (14% for government employers) | Yes |
| Health insurance and check-ups | 80D | 126 | ₹25,000 self/family (₹50,000 if senior); parents ₹25,000 (₹50,000 if senior) | No |
| Education loan interest | 80E | 129 | Full interest, up to 8 years | No |
| Donations to approved funds and charities | 80G | 133 | 50% or 100%, some with a ceiling | No |
| Rent paid without HRA | 80GG | 134 | Least of ₹5,000 a month, 25% of income, or rent minus 10% of income | No |
| Savings account interest (below 60) | 80TTA | 153 | ₹10,000 | No |
| Deposit interest for senior citizens | 80TTB | 153 | ₹50,000 | No |
| Disabled dependant / own disability | 80DD / 80U | 127 / 154 | ₹75,000, or ₹1,25,000 for severe disability | No |
| Agniveer corpus fund | 80CCH | 125 | Contributions | Yes |
Limits are as carried into the 2025 Act. Confirm details on the Income Tax Department's site, especially for less common deductions.
Section 123: the ₹1.5 lakh basket
Eligible items include:
- Employee PF contributions and voluntary PF;
- Public Provident Fund, up to ₹1.5 lakh a year per account holder;
- ELSS mutual funds (3-year lock-in);
- Life insurance premiums, subject to the premium being within a percentage of the sum assured;
- Children's tuition fees for up to two children (tuition only, not development or transport fees);
- Home loan principal repayment, and stamp duty and registration in the year paid;
- Sukanya Samriddhi Yojana, National Savings Certificates, the Senior Citizens' Savings Scheme and 5-year tax-saving bank deposits;
- pension plans of insurers (the old 80CCC) and your own NPS contribution within the ₹1.5 lakh.
Illustrative example. PF ₹72,000 + life premium ₹30,000 + tuition fees ₹60,000 = ₹1,62,000. The deduction is capped at ₹1,50,000. At the 30% slab plus cess it saves ₹46,800. In the 20% slab it saves ₹31,200.
Compare products in the tax-saving investments guide.
Section 126: health insurance
- Premium for yourself, spouse and dependent children: up to ₹25,000, or ₹50,000 if you (or your spouse) are a senior citizen.
- Premium for parents: a further ₹25,000, or ₹50,000 if either parent is a senior citizen.
- Preventive health check-ups up to ₹5,000 within these limits. Payment for check-ups can be in cash. Insurance premiums must be paid by a non-cash mode.
- Medical expenditure for a senior citizen with no health insurance can be claimed within the ₹50,000 limit.
Illustrative maximum. You are 40 and your parents are 68: ₹25,000 + ₹50,000 = ₹75,000, saving up to ₹23,400 at 31.2%.
Section 124: NPS in both regimes
- Your own contribution: within the ₹1.5 lakh basket, plus an extra ₹50,000 that only NPS gets. Old regime only.
- Your employer's contribution: deductible from your salary income. In the new regime the cap is 14% of basic plus DA. In the old regime it is 10% for private employers. Employer contributions to PF, NPS and superannuation together are tax-free only up to ₹7.5 lakh a year.
Illustrative example (new regime). Basic ₹12 lakh, employer NPS 10% = ₹1,20,000, deducted. At a 15% marginal slab that saves ₹18,720 including cess. It also brings some people back under the ₹12 lakh rebate limit.
Deductions the new regime still allows
Section 202(2) disallows Chapter VIII deductions except section 124(1), 124(2), 125(2) and 146. For individuals the practical ones are employer NPS, the Agniveer corpus and the ₹75,000 standard deduction (which is in the salary chapter, section 19). Health insurance, PPF, ELSS, tuition fees, donations and savings interest deductions are lost in the new regime. That is why the old vs new regime comparison matters before you invest for tax reasons.
Proof and timing
- An investment counts in the tax year in which you pay, so the last date is 31 March 2027 for tax year 2026-27.
- Keep receipts, policy statements and certificates. You do not attach them to the return, but you need them for your employer's proof check and for any scrutiny.
- Donations need the charity's registration details and, for cash donations, the deduction is denied above ₹2,000.
Use the deduction tax-saving calculator to see what your claims are worth. For the overall method, see the worked examples.
Two claims that often decide the regime choice have their own guides: the HRA exemption and home loan interest.
Frequently asked questions
Can I claim the ₹50,000 NPS deduction in the new regime?
No. Only the employer's contribution is allowed in the new regime.
Does home loan principal count under section 123?
Yes, within the ₹1.5 lakh limit, in the old regime. If you sell the house within five years of the end of the year of purchase, deductions claimed may be reversed.
Do ULIPs qualify?
Premiums can qualify within the ₹1.5 lakh limit, but maturity proceeds of high-premium ULIPs may be taxable. Check the conditions.
Is the ₹1.5 lakh limit per person?
Yes. A married couple can each claim up to ₹1.5 lakh from their own taxable income.
Sources
- Income Tax Department: Chapter VIII of the Income-tax Act, 2025, sections 123 to 154
- Pension Fund Regulatory and Development Authority: NPS rules and contribution limits
- National Savings Institute: PPF, NSC, SCSS and Sukanya Samriddhi rules
- Insurance Regulatory and Development Authority of India: health insurance policyholder information
