Tax deductions under the old regime: 80C, 80D, HRA and home loan

These apply under the old regime

The new regime allows a standard deduction and the employer's NPS contribution, but not the deductions below. Run both computations before deciding — see our income tax calculator.

Section 80C — the ₹1.5 lakh bucket

EPF and VPF, PPF, ELSS mutual funds, life insurance premium, five-year tax-saving fixed deposits, Sukanya Samriddhi, NSC, principal repayment on a home loan, and tuition fees for up to two children all share one ₹1.5 lakh ceiling. Most salaried taxpayers already fill a large part of it through EPF before investing a rupee extra.

Section 80CCD(1B) — ₹50,000 over and above

An additional deduction for NPS Tier-I contributions, separate from the 80C limit. The employer's NPS contribution under 80CCD(2) is separate again, and is one of the few deductions surviving in the new regime.

Section 80D — health insurance

Premium for self, spouse and children, with a higher ceiling where the insured is a senior citizen, plus a separate limit for parents' policies. Preventive health check-ups are included within the overall limit. Cash-paid premiums are not allowed — pay digitally.

HRA exemption

The exemption is the least of: actual HRA received, rent paid minus 10% of salary, and 50% of salary in a metro (40% elsewhere). Rent above ₹1 lakh a year needs the landlord's PAN. Our HRA calculator works the three figures out for you.

Rent paid to a parent is allowed, but only if it is genuine: an actual bank transfer, a rent agreement, and the parent declaring that rent as income.

Home loan — sections 24(b) and 80C

Interest on a self-occupied property is deductible up to ₹2 lakh a year; there is no cap for a let-out property, though the set-off against other income is limited. The principal falls inside 80C. Pre-construction interest is claimed in five equal instalments starting from the year of possession.

Claims that draw attention

Fake rent receipts without bank transfers, donation deductions under 80G to unregistered entities, and 80DDB or 80U claims without the prescribed certificate are the common triggers. Every deduction should have a document you could produce on demand — keep them for at least six years.