Which deductions are not allowed in the new tax regime?

Is PPF tax-free in the new tax regime?

Understanding PPF in the New Tax Regime

Yes, this means most deductions under Section 80C , including PPF, are not available in the new regime. So, choosing the new regime means you won't get the 80C deduction, but both your maturity amount and interest still remain tax-free.

Is 80CCD 1B allowed under the new tax regime?

NPS Deductions under the New Tax Regime

Only the employer's contribution (Section 80CCD(2)) remains deductible under the new regime. Section 80CCD(1) (your own contribution) and 80CCD(1B) (the extra ₹50,000) are not available if you opt for the new regime.

What is Section 80DD in the new tax regime?

Section 80DD of Income Tax Act. Section 80DD of the Income Tax Act allows tax deductions for expenses on dependents with disabilities (40%+ impairment), offering Rs. 75,000 for disability and Rs. 1.25 lakh for severe disability (80%+).

What are the drawbacks of the new regime?

A key feature of the new regime is the limited scope for deductions. Taxpayers cannot claim most common deductions available under the old regime, including Section 80C (investments in LIC, PPF, ELSS, etc.), Section 80D (health insurance premiums), Section 80E (education loan interest), and House Rent Allowance (HRA).

Can I claim both 80D and 80C?

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.

Is 80TTB allowed in the new tax regime?

Imagine Mrs. Sharma, age 65, with interest income of ₹ 35,000 from fixed deposits and savings in a year. Under the old tax regime, she could deduct that full ₹ 35,000 (because it's under the ₹ 50,000 limit via Section 80TTB). But under the new tax regime, that ₹ 35,000 becomes fully taxable — no deduction is available.

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 are the deductions allowed in the new tax regime for FY 2025-26?

For FY 2025–26, the new tax regime effectively makes income up to ₹12 lakh tax-free due to the enhanced rebate of ₹60,000. In addition, a standard deduction of ₹75,000 is available for salaried individuals, making a salary income of up to ₹12.75 lakh effectively tax-free.

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 80G allowed in the new regime?

80G Deduction Under New Tax Regime

Deduction for donations made to specified charitable institutions or funds is only available under the old tax regime. Taxpayers opting for the new tax regime cannot claim the deduction under section 80G.

Which is better, old tax regime or new?

Choosing between the Old and New Tax Regimes depends on your income level, deductions, and exemptions. For salaried individuals with minimal deductions, the New Regime is likely more beneficial due to relaxed tax slabs and a rebate up to ₹7 lakh or ₹12 lakh (based on updated 87A provisions).

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.

Is 80C allowed in new regime?

For the financial year 2025–26, individuals under the old tax regime can still claim deductions up to Rs. 1.5 lakh under Section 80C. Those following the new tax regime, however, will not be able to claim these deductions—making Section 80C relevant mainly for old regime taxpayers.

Can I claim 80D in the new tax regime?

No, an individual or HUF cannot claim a deduction under sec 80D for payment of insurance premium if you choose to pay tax under the new tax regime as the deduction is available only under the old tax regime.

Can we claim fuel reimbursement in a new tax regime?

These include reimbursements for fuel & travel, driver's salary, phone or internet, books & periodicals, etc. You can save tax by opting for these reimbursements. They are not subject to tax under both the old and new tax regimes, provided you present the bills and the proof.

What all deductions are allowed in the new regime?

The new tax regime allows salaried people and senior citizens earning pensions a standard deduction of ₹75,000. Family Pension: If you have a family pension income, the new regime offers a deduction for it. You can claim a deduction of ₹25,000 or one-third of the pension amount, whichever is lower.

Can I claim both 80C and 80CCD 1B?

In contrast, deductions that are available under 80CCD cannot be availed under 80C. The combined deductions that are allowed are up to Rs 1,50,000 only. At the same time, one can claim an additional deduction of Rs 50,000 under Section 80CCD(1B).

What exemptions are in the new tax regime?

Ans. In the old tax regime, the basic exemption limit for senior citizens is INR 3,00,000/- and for super senior citizens, it is INR 5,00,000/-. In the new tax regime, no income tax is payable upto the total income of INR 7 lakh.

What is the extra 50000 tax benefit in NPS?

Section 80CCD(1B) allows an additional tax deduction of up to Rs. 50,000 for contributions made to the NPS Tier I account. This deduction is available exclusively to NPS subscribers and is over and above the Rs. 1.5 lakh deduction available under Section 80C.