Most tax-saving deductions are available only if you choose the old tax regime. The new regime is the default and has lower slabs, so before you invest in anything purely to save tax, compare the two. Our guide to the FY 2026-27 slabs shows how. If the old regime suits you, these are the deductions that matter.
A note on section numbers
The Income-tax Act, 2025 came into force on 1 April 2026 and renumbered the provisions. The old Section 80C is now Section 123 and the extra ₹50,000 NPS deduction (old 80CCD(1B)) is Section 124(3). The limits are unchanged. Many forms, payslips and articles still use the old numbers, so this guide mentions both where we are sure of the mapping.
Section 123 (old 80C): up to ₹1.5 lakh
One combined limit of ₹1,50,000 covers:
- Employee Provident Fund (EPF) contributions and Public Provident Fund (PPF) deposits.
- Life insurance premiums for yourself, spouse or children, subject to the sum-assured conditions.
- Equity Linked Savings Schemes (ELSS) mutual funds.
- 5-year tax-saver fixed deposits with banks and 5-year post office time deposits.
- National Savings Certificates, Sukanya Samriddhi Yojana and Senior Citizens Savings Scheme.
- Tuition fees for up to two children at an Indian school or college (development fees and donations excluded).
- Principal repayment of a home loan, plus stamp duty and registration charges on buying a house.
If your EPF contribution and children's tuition already use up most of the limit, there is little point adding more products.
Extra ₹50,000 for NPS (old 80CCD(1B))
Your own contribution to the National Pension System earns an additional deduction of up to ₹50,000, over and above the ₹1.5 lakh limit. Employer contributions to NPS are deductible even in the new regime, up to 14% of salary in that regime and 10% in the old regime for most private-sector employees.
Health insurance (old 80D)
- Up to ₹25,000 for premiums on yourself, spouse and children (₹50,000 if you are a senior citizen).
- Another ₹25,000 for your parents, rising to ₹50,000 if they are senior citizens.
- A preventive health check-up of up to ₹5,000 is included within these limits.
The highest combined deduction is ₹1 lakh when you and your parents are all senior citizens.
Home loan interest (old Section 24(b))
Interest on a loan for a self-occupied house can be deducted up to ₹2 lakh a year under the old regime. For a let-out property the interest is set off against rental income, with limits on carrying forward the loss.
Other deductions in the old regime
- House Rent Allowance (HRA): exempt up to the least of the HRA received, the rent paid minus 10% of basic salary plus DA, and 50% of basic plus DA in the listed metro cities (40% elsewhere). Under the new Income-tax Rules, 2026 the 50% list includes Bengaluru, Hyderabad, Pune and Ahmedabad along with Delhi, Mumbai, Chennai and Kolkata. Landlord details such as PAN are needed for larger rent claims.
- Education loan interest (old 80E): the full interest for up to 8 years.
- Donations (old 80G): 50% or 100% of eligible donations to approved institutions.
- Savings interest: up to ₹10,000 under old 80TTA, and up to ₹50,000 for senior citizens under old 80TTB.
- Standard deduction: ₹50,000 for salaried individuals (₹75,000 in the new regime).
A simple way to plan
- Add up deductions you already have: EPF, home loan, insurance, rent.
- Compute tax under both regimes with those numbers.
- Invest more only if it genuinely moves you to the old regime's advantage, and only in products you would want anyway.
- Collect proofs before your employer's deadline so TDS is calculated correctly through the year.
Need help?
Our team can compare both regimes and plan investments before the year closes. See tax planning or contact us.
Last reviewed October 2026. This article is general information, not advice for your specific case. Confirm with a chartered accountant before acting.