Deductions and Exemptions

Income tax offers deductions and exemptions under various sections. Most of them are available only in the old tax regime. In the new regime, only a handful apply — mainly the standard deduction, employer NPS contributions, and interest on a let-out property. Check the regime before you rely on a deduction.

Standard deduction

Regime	Standard deduction
New	₹75,000
Old	₹50,000

The standard deduction applies to salary and pension without any proof.

Section 80C — investments

Section 80C covers life insurance premiums, provident fund contributions, ELSS, PPF, NSC, tuition fees, and housing-loan principal. The combined limit is ₹1,50,000. Available only in the old regime.

Section 80CCD — NPS

• 80CCD(1) — your contribution to the National Pension System, within the 80C limit.
• 80CCD(1B) — an additional ₹50,000 towards NPS (old regime).
• 80CCD(2) — your employer’s contribution to NPS: 14% of salary for central government employees, 10% for others. This is allowed in both regimes.

Section 80D — health insurance

Person covered	Limit
Self, spouse, dependent children	₹25,000 (₹50,000 if a senior citizen)
Parents	₹25,000 (₹50,000 if a senior citizen)

A preventive health check-up up to ₹5,000 is included in the limit. Medical expenditure on a senior citizen is deductible up to ₹50,000 if no health premium is paid. Available only in the old regime.

House property interest — Section 24(b)

Interest paid on a housing loan is deductible from income from house property.

Nature of property	Loan taken	Purpose	Deduction
Self-occupied	On/after 1 Apr 1999	Purchase or construction	₹2,00,000
Self-occupied	On/after 1 Apr 1999	Repairs	₹30,000
Self-occupied	Before 1 Apr 1999	Purchase or construction	₹30,000
Let-out	Any time	Purchase or construction	Actual interest (no cap)

Interest on a self-occupied property is not deductible in the new regime.