The Indian Income Tax Act provides for various deductions under the Old Tax Regime that can significantly reduce your tax liability. These deductions are not available under the New Tax Regime, which offers lower tax rates but no deductions.

For FY25 (Assessment Year 2025-26), here are some key tax deductions available under the Old Tax Regime:

  • Section 80C: This is a popular deduction with a maximum limit of ₹1,50,000. Eligible investments include:  
    • Public Provident Fund (PPF)  
    • Equity Linked Savings Scheme (ELSS)  
    • Life Insurance premiums  
    • Tuition fees of children  
    • Principal repayment of home loan  
    • Five-year fixed deposits  
    • Contributions to Sukanya Samriddhi Yojana  
    • Employee Provident Fund (EPF) contributions exceeding ₹2.5 lakh
  • Section 80D: This deduction covers medical insurance premiums:  
    • For self, spouse, and dependent children: ₹25,000  
    • For senior citizens (self or parents): ₹50,000  
    • For very senior citizens (age 80 and above): ₹50,000 (self or parents)  
    • Preventive health check-ups: ₹5,000 (additional deduction)
  • Section 80TTA and 80TTB: Interest on SavingsUnder Section 80TTA, individuals can claim a deduction of up to Rs 10,000 on interest earned from savings accounts.
  • Senior citizens can claim up to Rs 50,000 under Section 80TTB for interest earned from savings accounts, fixed deposits, or recurring deposits.
  • Section 24(b): This deduction allows for interest on home loans:  
    • Self-occupied property: ₹2 lakh
    • Let-out property: No limit
  • Section 80E: This deduction covers interest on education loans.  
  • Standard Deduction: For FY25, the standard deduction is ₹50,000.
  • House Rent Allowance (HRA): Deduction allowed based on specific conditions. 

Section 80GGC and 80GGB: Political Contributions

Deductions are allowed for contributions made to political parties:

  • 80GGC: For individuals contributing to political parties.
    • 80GGB: For corporate entities making similar contributions.

Section 87A: Tax Rebate

Individuals with taxable income not exceeding Rs 5 lakh are eligible for a rebate under Section 87A, effectively eliminating their tax liability.

The government is expected to announce income tax cut for individuals in the upcoming Union Budget 2025-26.

According to reports, in the upcoming Budget 2025 session of Parliament, the government is likely to introduce a new income tax bill to simplify the current I-T law, make it comprehensible and reduce the number of pages by about 60 per cent.

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He has contributed in ICAI, ICSI and MCCI and other various Newsletters. He is also a speaker at various platforms including seminars / webinars.