Last updated: April 2026

A tax deduction reduces taxable income before tax is computed; a tax credit or rebate reduces tax payable after computation. Most of what Indian taxpayers commonly call "tax saving" is technically deductions under Sections 80C–80U, available under the old tax regime. The new regime eliminates almost all deductions, with two important exceptions.

Common deductions:

80C (₹1.5 lakh) — EPF, PPF, ELSS, life insurance premium, home loan principal, NSC, 5-year tax-saver FDs, Sukanya Samriddhi, tuition fees for up to two children.

80CCD(1B) (₹50,000) — additional NPS Tier-1 contribution beyond 80C.

80CCD(2) — employer NPS contribution. Up to 10% of (basic + DA), fully deductible without counting against 80C. This is the only deduction that survives in the new regime, alongside the standard deduction.

80D — health insurance: ₹25,000 for self/spouse/children, ₹25,000–₹50,000 for parents depending on age. ₹5,000 preventive health check-up included within these caps.

80E — education loan interest, no upper limit, deductible for up to 8 years.

80G — approved donations at 50% or 100%, with or without a 10% qualifying limit on adjusted gross total income. Cash donations above ₹2,000 are not eligible. The donee must file Form 10BD listing your donation.

80TTA / 80TTB — savings interest of up to ₹10,000 (non-seniors) or ₹50,000 of savings + FD + RD interest (seniors aged 60+).

Section 24(b) — home loan interest: up to ₹2 lakh for self-occupied; uncapped for let-out (but loss set-off against other heads capped at ₹2 lakh per year).

HRA — Section 10(13A) — exemption (not technically a deduction) equal to the least of actual HRA, rent minus 10% of basic, and 50%/40% of basic by city tier.

Standard deduction — ₹50,000 (old regime) or ₹75,000 (new regime), available to all salaried taxpayers.

What survives in the new regime. Standard deduction (₹75,000), employer NPS u/s 80CCD(2), Agniveer Corpus Fund u/s 80CCH, and a few minor items. The big-three (80C, 80D, HRA) are off the table.

Example. A salaried taxpayer in Bengaluru with ₹1.5 lakh in EPF (80C), ₹25,000 in family health insurance (80D), ₹2.4 lakh annual rent (HRA), and ₹2 lakh in home loan interest (24(b)) has ~₹6 lakh of annual deductions — comfortably enough that the old regime beats the new.

Related: tax-saving planner (/calculators/tax-saving-planner), Tax Planning Strategies (/glossary/tax-planning-strategies-revised-tax), HRA exemption calculator (/calculators/hra-exemption)