Which deductions are allowed in the new tax regime in AY 2025-26?

Can I claim 80D in the new tax regime?

The new tax regime has eliminated nearly 70 tax deductions that were previously allowed in the old regime. Under the new regime, deductions for health insurance premiums (Section 80D) and investments up to ₹1.5 lakh (Section 80C) are not available.

What is the new standard deduction for 2025?

The standard deduction for 2025 was raised to $15,750 for single filers, up from the $15,000 previously in place. For married couples filing jointly, it is increased to $31,500, up from $30,000. And for heads of households, their standard deduction will be $23,625, up from $22,500.

What deductions are still allowed?

Some of the more popular above-the-line deductions are for:

• individual retirement account (IRA) contributions.
• health savings account (HSA) contributions.
• student loan interest payment.
• educator expenses.
• self-employed health insurance premiums.

What rebate is allowed in the new tax regime?

Under the new regime, a rebate of Rs.25,000 is allowed for an income up to Rs. 7 lakhs. Under the old regime, a rebate of Rs. 12,500 is allowed for an income up to Rs. 5 lakhs. For FY 2025-26, rebate of Rs. 60,000 is allowed under the new regime for an income up to Rs. 12 lakhs.

Is 80C allowed in new regime?

Section 80C provides deductions up to Rs.1.5 lakhs on various investments and expenses. These include deductions for life insurance premiums, PPF, home loan principal repayment, ELSS mutual funds, Sukanya Samriddhi Yojana, and many more. Deduction under section 80C is not available under the new regime.

What are the benefits of a new tax regime?

New Tax Regime: Lower tax rates, limited deductions, simplicity, and potentially higher take-home pay. Old Tax Regime: Potential for more significant tax savings through various exemptions and deductions but higher tax rates.

What are the deductions for the new tax regime 2025?

Tax-free income in new tax regime (Financial Year 2025-26)

This means that individuals earning up to Rs. 12 lakh will have their tax liability effectively reduced to zero. For salaried employees, an additional standard deduction of Rs. 75,000 elevates the tax-free income threshold to Rs. 12.75 lakh.

Is 80TTA allowed in the new tax regime?

You can claim the Section 80TTA tax deduction at the time of filing your Income Tax Returns. However, the deduction under 80TTA is applicable only to taxpayers who have opted for the old tax regime. Section 80TTA in the new tax regime is not applicable.

Can I claim both 80C and 80D?

3. Can I claim deduction under both Section 80D and Section 80C? Yes, you can claim a deduction of up to ₹ 1.5 lakh under Section 80C^ and of upto ₹ 1 lakh under Section 80D^ of the Income Tax Act, 1961 in a single financial year.

Can I claim anything under the new tax regime?

Yes, Standard deduction of Rs.50,000 or the amount of salary, whichever is lower, is available for both old and new tax regimes from AY 2024-25 onwards.

What is 60,000 rebate in the new tax regime?

Under the new regime, the rebate limit is ₹60,000 for resident individuals whose normal income does not exceed ₹12 lakh. This rebate applies only to tax on income taxed at slab rates. Income taxed at special rates, such as short-term and long-term capital gains, cannot be reduced using this rebate.

What happens if I choose a new tax regime?

The old regime allows various deductions and exemptions, while the new regime offers lower tax rates but no deductions. Key differences include tax rates and availability of deductions. Can I switch between the old and new tax regimes every year? Salaried individuals can switch annually by informing their employer.

What deduction can I claim without receipts?

Tax Deductions Without Receipts

• Home Office Expense Deductions. ...
• Retirement Plan Contribution Deductions. ...
• Health Insurance Premium Deductions. ...
• Understanding Self-Employment Taxes. ...
• Deducting Cell Phone Expenses. ...
• Charitable Contribution Deductions. ...
• Vehicle Expenses and Mileage Claims. ...
• Comparing Standard and Itemized Deductions.

What are the new tax credits for 2025?

The standard deduction increased for 2025 and 2026, and a new temporary “bonus” deduction for adults 65 and older begins in 2025. The child tax credit increased to $2,200 for the 2025 and 2026 tax years; retirement plan contribution limits for IRAs and 401(k)s also increased for 2026.

What expenses can I deduct from my tax return?

To claim expenses, you can choose to use simplified expenses or actual costs.

• Simplified expenses for car, vehicle and travel expenses.
• Goods and materials and clothing for work.
• Payment in kind.
• Marketing and advertising.
• Professional subscriptions and training courses.
• Entertainment or reselling goods.

How can I reduce my taxable income?

What to do at tax time

1. Contribute to tax-advantaged retirement accounts to maximize deductions. Traditional IRAs, 401(k)s, 403(b)s, and 457(b)s accounts allow for a dollar-for-dollar reduction of taxable income for contributions made. ...
2. Compare standard deduction to itemized deductions. ...
3. Consider tax credits.

Is standard deduction available in new tax regime?

benefit of the standard deduction is not available under the new Tax Regime. As per Budget 2024, Salaried taxpayers are now eligible for a standard deduction of Rs. 75,000/- under the new tax regime also from Financial Year 2024-25.

What is the $6000 senior deduction?

The new senior tax deduction of up to $6,000 for single filers and $12,000 for joint filers, was created to help cover taxes on Social Security benefits. Taking the new senior deduction helps to reduce your taxable income, which can mean less tax or potentially an even bigger tax refund when you file your return.