Income tax deductions for FY 2026-27
Rules for FY 2026-27 · Checked 24 October 2026
The new regime allows only a few deductions: the ₹75,000 standard deduction and the employer’s NPS contribution are the main ones. The old regime allows many more, including 80C (₹1.5 lakh), 80D, NPS (₹50,000), HRA and home loan interest (₹2 lakh).
All the main deductions at a glance
| Deduction | Yearly limit | Old | New |
|---|---|---|---|
| Standard deduction (salary, pension) | ₹50,000 old, ₹75,000 new | Yes | Yes |
| 80C: PF, PPF, ELSS, life insurance, tuition fees, home loan principal, 5-year FD, NSC, Sukanya Samriddhi | ₹1.5 lakh | Yes | No |
| 80CCD(1B): your own NPS contribution | ₹50,000 over 80C | Yes | No |
| 80CCD(2): employer’s NPS contribution | 10% of basic (old), 14% (new) | Yes | Yes |
| 80D: health insurance | ₹25,000 for family (₹50,000 if 60+), plus ₹25,000/₹50,000 for parents | Yes | No |
| HRA exemption | Formula: see the HRA calculator | Yes | No |
| Home loan interest, self-occupied | ₹2 lakh | Yes | No |
| 80E: education loan interest | No limit, for 8 years | Yes | No |
| 80G: donations to approved funds | 50% or 100% of the gift | Yes | No |
| 80TTA / 80TTB: savings interest | ₹10,000 / ₹50,000 for 60+ | Yes | No |
| 80GG: rent paid without HRA | ₹60,000 | Yes | No |
| Professional tax | ₹2,500 | Yes | No |
| 80DD / 80U: disability | ₹75,000, or ₹1.25 lakh if severe | Yes | No |
The Income-tax Act, 2025 gives these deductions new section numbers from April 2026. Employers, banks and forms still widely use the old names like “80C”, so we use them here too.
Getting the most from 80C
Your EPF contribution already counts towards the ₹1.5 lakh. On a ₹25,000 monthly basic, that is ₹36,000 a year, leaving ₹1.14 lakh to fill with PPF, ELSS, insurance premiums or children’s tuition fees.
ELSS mutual funds have the shortest lock-in (3 years). PPF and Sukanya Samriddhi are tax-free all the way through.
Do deductions make the old regime worth it?
Only if they add up to a lot. At ₹15 lakh salary you need about ₹5.44 lakh of deductions beyond the standard deduction. See the old vs new regime guide for the full table.
Frequently asked questions
Can I claim both 80C and 80CCD(1B)?
Yes. 80CCD(1B) gives an extra ₹50,000 for NPS on top of the ₹1.5 lakh 80C limit, in the old regime.
Is the employer’s NPS contribution deductible in the new regime?
Yes, up to 14% of basic and DA. It is one of the few deductions the new regime keeps.
Can I claim deductions I forgot to tell my employer about?
Yes. Claim them when you file your return, and any extra tax deducted will be refunded.
Sources: Income Tax Department