Deductions

Deductions reduce taxable income

Under the old regime, deductions lower your taxable income before tax is computed. Knowing them is the core of personal tax planning.

Section 80C and 80D

Section 80C allows up to ₹1.5 lakh for investments like EPF, PPF, ELSS, life insurance premiums, principal on home loans and children's tuition. Section 80D allows deduction for health-insurance premiums — typically ₹25,000 (₹50,000 for senior citizens), with extra for parents.

HRA and LTA

House Rent Allowance (HRA) exemption is the least of: actual HRA, rent paid minus 10% of salary, or 40%/50% of salary (non-metro/metro). Leave Travel Allowance (LTA) exempts domestic travel cost twice in a block of four years.

Other notable sections

80CCD(1B) gives an extra ₹50,000 for NPS; 80E covers education-loan interest; 80TTA/80TTB cover savings-interest. Most of these are unavailable under the new regime, which is why the regime choice hinges on how many deductions you can use.