All Tax Deductions: Old vs New Regime Full List FY 2026-27

Complete list of all tax deductions in old and new regime for FY 2026-27 — 80C, 80D, HRA, NPS, home loan, all sections explained based on Budget 2026 changes.

In my earlier article — New Tax Regime vs Old Regime: Who Wins in 2026? — I showed you break-even tables, five case studies with actual numbers, and a clear income-level verdict on which regime saves more tax.

But many readers came back with one specific follow-up. “I want the full list of every deduction — section by section — so I can calculate my own number.”

That is exactly what this article is. A complete reference guide to every deduction and exemption available for FY 2026-27 (AY 2027-28), updated for Budget 2026, the Income Tax Act 2025, and the Draft Income Tax Rules 2026.

One important clarification before we begin. There are two separate things at play this year:

The Income Tax Act 2025 has received Presidential assent and comes into force from 1st April 2026. This is confirmed law. It replaces the Income Tax Act 1961. Section numbers change. Deduction principles and limits remain the same.

The Draft Income Tax Rules 2026 were released by CBDT on 7th February 2026 and cover the allowance limits, perquisite valuations, and procedural rules under the new Act. These have been through public consultation and are expected to be officially notified before 1st April 2026 — the Budget has been passed by both Houses of Parliament, Presidential assent is imminent, and gazette notification of the Rules is the final remaining step. All major tax publications are treating these as effective from FY 2026-27.

I have included all these changes in this article. Wherever the change comes specifically from the Draft Rules (rather than the Act or Finance Bill itself), I have added a brief note: “subject to official gazette notification of the Rules.” That one line protects you. Once the Rules are officially notified — which is expected any day now — that caveat becomes irrelevant.

All Tax Deductions: Old vs New Regime Full List FY 2026-27

Part 1 — What Changed: Budget 2026 and Rules 2026

1. Income Tax Act 2025 Replaces the 1961 Act

From 1st April 2026, the Income Tax Act 2025 is the operative law. The familiar section numbers — 80C, 80D, 80E, 80CCD — no longer exist. Your Form 16 (now Form 130), ITR, and all official communications will use new section numbers. The deductions and their limits are identical — only the numbering has changed.

Key renumbering relevant to deductions:

Old Section (1961 Act)	New Section (2025 Act)	What It Covers
80C	123	PPF, ELSS, LIC, EPF, SSY, tuition fees etc.
80CCC	123	Annuity plan premiums (merged into 123)
80CCD	124	All NPS deductions
80D	126	Health insurance premiums
80DD	127	Disabled dependent
80DDB	128	Specified disease treatment
80E	129	Education loan interest
80EEA	130	Affordable housing home loan
80EEB	131	EV loan interest
80G	133	Donations
80GG	134	Rent without HRA

I will reference both old and new section numbers throughout so you are not confused when your CA or employer uses an unfamiliar number.

2. “Tax Year” Replaces “Financial Year” and “Assessment Year”

Under the new Act, “Financial Year” is now called “Tax Year.” The concept of a separate “Assessment Year” no longer exists — income is taxed in the Tax Year itself. So FY 2026-27 = Tax Year 2026-27. I will continue using FY and AY in this article since most readers know those terms.

3. Section 80TTB Raised to Rs.1 Lakh for Senior Citizens

The most significant deduction change from Budget 2026. The interest income deduction for senior citizens has been raised from Rs.50,000 to Rs.1 lakh per year. Covers interest from savings accounts, FDs, recurring deposits, and post office deposits. Available under old regime only.

Practical impact: A senior citizen with Rs.15 lakh in FDs at 7.5% earns Rs.1.12 lakh in annual interest. Under the old limit, Rs.62,000 was taxable. Under the new Rs.1 lakh limit, only Rs.12,000 is taxable. A meaningful real-world saving.

4. TDS Threshold on Interest Doubled for Senior Citizens

Banks will not deduct TDS on interest until it crosses Rs.1 lakh per year per bank for senior citizens. Was Rs.50,000 earlier. Better cash flow for retirees with multiple FDs.

5. Form 15H Centralised

Senior citizens can now submit a single Form 15H through the NSDL or CDSL portal and it automatically applies to all linked banks. No more separate submission at each bank.

6. No Change in Slabs, Standard Deduction, or 87A Rebate

All of the following continue unchanged:

• New regime slabs and Rs.4 lakh basic exemption
• Rs.75,000 standard deduction under new regime
• Rs.50,000 standard deduction under old regime
• Rs.60,000 Section 87A rebate — zero tax up to Rs.12 lakh taxable income
• All 80C, 80D, NPS, HRA, home loan deduction limits

Changes from Draft Rules 2026 (Subject to official gazette notification — expected before 1st April 2026)

Children’s Education Allowance — 30x increase From Rs.100/month/child to Rs.3,000/month/child (up to 2 children). Annual benefit: Rs.72,000 for two children. Unchanged since 1997. Old regime only.

Hostel Expenditure Allowance — 30x increase From Rs.300/month/child to Rs.9,000/month/child (up to 2 children). Annual benefit: Rs.2,16,000 for two children in hostel. Old regime only.

Combined education + hostel for two children in hostel: Rs.2,88,000/year — against just Rs.9,600 today.

HRA — 50% City List Expanded from 4 to 8 Cities Currently Mumbai, Delhi, Chennai, Kolkata qualify for 50% HRA exemption. From FY 2026-27: Bengaluru, Hyderabad, Pune, and Ahmedabad added. Employees in these four cities move from the 40% bracket to the 50% bracket for HRA calculation.

Impact: A person in Bengaluru with Basic Rs.80,000/month gets additional Rs.8,000/month (10% of Basic) in HRA exemption — Rs.96,000/year extra. Old regime only.

Meal Vouchers — 4x increase From Rs.50/meal to Rs.200/meal. Applies to subsidised meals through office canteen or food vouchers (Sodexo, Pluxee, Zaggle etc.). Available under both old and new regimes — one of the few Draft Rules changes that benefits new regime taxpayers too.

For an employee using meal vouchers on all working days: approximately Rs.50,000–Rs.60,000/year in additional exemption.

Employer Gifts — 3x increase From Rs.5,000/year to Rs.15,000/year. Gifts, vouchers, and tokens from employer up to this limit are not taxable. Available in both regimes.

Employer Medical Loan — 10x increase Interest-free loans from employer for treatment of specified diseases — from Rs.20,000 to Rs.2 lakh. Not taxable as perquisite up to this limit. Available in both regimes.

Employer Education Facility for Children — increased Education provided by employer (whether in employer-owned institution or any other institution) to employee’s children — from Rs.1,000/month/child to Rs.3,000/month/child. This is a perquisite rule — different from the Section 10(14) children’s education allowance above.

Transport Allowance for Disabled Employees — major hike From Rs.3,200/month flat to:

• Metro cities: Rs.15,000/month + DA
• Other cities: Rs.8,000/month + DA Available in both regimes.

Car Perquisite Valuation — goes up (tax negative) This is the one change that increases tax liability. Monthly taxable perquisite values for employer-provided cars used partly for personal purposes have been revised upward — nearly 3x in some cases. Affects both regimes since it impacts taxable salary. If your employer provides a car for personal use, your taxable salary will be higher from FY 2026-27.

Part 2 — What You CAN Claim in the New Regime

The new regime is not a zero-deduction regime. Here is the complete confirmed list.

Standard Deduction — Rs.75,000 All salaried employees and pensioners. No documentation required. Rs.25,000 more than old regime — one of the few areas where new regime is definitively better.

Employer NPS Contribution — Section 80CCD(2) [New Act: Section 124] Employer’s contribution to NPS Tier-1 — not included in taxable salary in both regimes:

• Private sector: Up to 14% of Basic + DA
• Government employees: Up to 14% of Basic + DA

No upper rupee ceiling. Most underused deduction in the new regime. Ask your HR to restructure CTC so a portion of employer contribution goes to NPS. Your employer’s cost does not change. Your taxable income reduces.

For a private sector employee with Basic Rs.10 lakh, employer can route Rs.1 lakh to NPS. At 20% tax slab that saves Rs.20,800 per year — without you investing a single extra rupee.

Home Loan Interest on Let-Out Property — Section 24(b) Full interest paid — no ceiling. Both regimes. The Rs.2 lakh cap applies only to self-occupied property and only in the old regime.

Family Pension Deduction Lower of Rs.25,000 or one-third of family pension received.

Section 80CCH — Agniveer Corpus Fund Both own contribution and government’s matching contribution to Seva Nidhi — fully deductible. Both regimes.

Gratuity — Section 10(10)

• Government employees: Fully exempt
• Private sector (Gratuity Act covered): Up to Rs.20 lakh
• Private sector (not covered): Lower of half month’s salary per year of service or Rs.20 lakh

Leave Encashment at Retirement — Section 10(10AA)

• Government employees: Fully exempt
• Private sector: Up to Rs.25 lakh

VRS Compensation — Section 10(10C) Exempt up to Rs.5 lakh.

Life Insurance Maturity — Section 10(10D) Tax-free in both regimes subject to conditions. Policies issued after 1st April 2023 with annual premium above Rs.5 lakh — maturity proceeds taxable at slab rates.

Employer Contribution Cap — Rs.7.5 Lakh Combined employer contribution to EPF + NPS + Superannuation tax-free up to Rs.7.5 lakh per year. Excess taxable. Both regimes.

Meal Vouchers — Rs.200/meal (Subject to official gazette notification of Rules) Available in both old and new regimes — one of the few draft rule changes that benefits new regime taxpayers.

Employer Gifts — Rs.15,000/year (Subject to official gazette notification of Rules) Both regimes.

Employer Medical Loan — Up to Rs.2 Lakh (Subject to official gazette notification of Rules) Interest-free employer loans for specified disease treatment not taxable. Both regimes.

Transport Allowance — Disabled Employees (Subject to official gazette notification of Rules) Rs.15,000/month + DA (metro) / Rs.8,000/month + DA (others). Both regimes.

What Is NOT Available in the New Regime

No exceptions:

80C (Section 123), 80CCD(1B) own NPS (Section 124), 80D (Section 126), 80DD (Section 127), 80DDB (Section 128), 80E (Section 129), 80EEA (Section 130), 80EEB (Section 131), 80G (Section 133), 80GG (Section 134), 80TTA, 80TTB, 80U, HRA — Section 10(13A), LTA — Section 10(5), Section 24(b) for self-occupied home loan, professional tax, children’s education allowance, hostel allowance.

Part 3 — Complete Old Regime Deduction List

Salary-Related Exemptions

Standard Deduction — Rs.50,000 All salaried employees and pensioners.

HRA — House Rent Allowance — Section 10(13A) Exempt amount is the lowest of:

• Actual HRA received from employer
• Rent paid minus 10% of Basic salary
• 50% of Basic salary — for Mumbai, Delhi, Chennai, Kolkata, and from FY 2026-27: Bengaluru, Hyderabad, Pune, Ahmedabad (subject to gazette notification of Rules)
• 40% of Basic salary — all remaining cities

Practical example: Basic Rs.60,000/month, HRA Rs.25,000/month, Rent Rs.22,000/month in Bengaluru:

• Actual HRA = Rs.25,000
• Rent minus 10% of Basic = Rs.16,000
• 50% of Basic (new) = Rs.30,000 (vs 40% = Rs.24,000 earlier) Lowest = Rs.16,000/month = Rs.1,92,000/year in this example. But for higher rent levels, the 50% city upgrade materially increases the exempt amount.

If you do not receive HRA from employer — see Section 80GG.

LTA — Leave Travel Allowance — Section 10(5) Actual transport costs (air/train/bus) within India. Two journeys in a 4-year block. Current block: 2022–2025. Hotels, food, sightseeing not covered. Air travel — capped at economy class fare for shortest route.

Children’s Education Allowance — Section 10(14) From FY 2026-27: Rs.3,000/month/child, up to 2 children (Rs.72,000/year for two children). (Subject to official gazette notification of Rules. Current operative limit: Rs.100/month/child.) Old regime only.

Hostel Expenditure Allowance — Section 10(14) From FY 2026-27: Rs.9,000/month/child, up to 2 children (Rs.2,16,000/year for two children). (Subject to official gazette notification of Rules. Current operative limit: Rs.300/month/child.) Old regime only.

Meal Vouchers From FY 2026-27: Rs.200/meal not taxable. (Subject to official gazette notification of Rules. Current limit: Rs.50/meal.) Available in both regimes.

Professional Tax — Section 16(iii) Actual professional tax deducted from salary. Typically Rs.2,400–Rs.2,500/year in Karnataka and Maharashtra.

Home Loan — Section 24(b)

Self-Occupied Property Up to Rs.2 lakh/year on interest paid.

• Loan must be for purchase or construction — not repair (Rs.30,000 limit)
• Construction must complete within 5 years of loan — else limit drops to Rs.30,000
• Joint owners with joint loan: each co-owner claims Rs.2 lakh independently — Rs.4 lakh for a couple
• Pre-construction interest: 5 equal instalments from year construction completes

Let-Out Property Full interest — no ceiling. Both regimes. Loss set off against other heads capped at Rs.2 lakh/year; balance carried forward 8 years.

Chapter VI-A Deductions

Section 80C [New Act: Section 123] — Rs.1.5 Lakh Combined Ceiling

All of the following combined — maximum Rs.1.5 lakh per year:

• EPF — Own contribution only. Employer’s 12% separately exempt.
• PPF — 7.1% interest, tax-free. 15-year lock-in. No market risk.
• ELSS — 3-year lock-in. Market-linked returns. LTCG above Rs.1.25 lakh at 12.5%.
• Life Insurance Premium — Pure term or traditional with sum assured at least 10x premium. Policies after 1st April 2023 with premium above Rs.5 lakh — maturity taxable.
• Home Loan Principal Repayment — Principal portion of EMI. Stamp duty and registration in purchase year also qualify.
• Sukanya Samriddhi Yojana (SSY) — Girl child up to age 10. Currently 8.2%, tax-free including maturity. Best under 80C.
• NSC — 5-year lock-in. Currently 7.7%. Interest accrued each year (except last) deemed reinvested — also qualifies as separate 80C deduction.
• 5-Year Tax-Saving FD — Scheduled bank or post office. 5-year lock-in. Interest is taxable.
• SCSS — For 60+. Currently 8.2%. Maximum Rs.30 lakh.
• Tuition Fees — Full-time education in Indian school/college/university for up to 2 children. Only tuition fees — not development fees, transport, or donations.
• NPS own contribution under Section 80CCD(1) — Within Rs.1.5 lakh ceiling.

Section 80CCD(1B) [New Act: Section 124] — Additional NPS Rs.50,000 Over and above Rs.1.5 lakh ceiling. Own NPS Tier-1 contribution only. Old regime only. Combined with 80C = Rs.2 lakh maximum on these fronts.

Section 80CCD(2) [New Act: Section 124] — Employer NPS Contribution Both regimes. Private sector: 10% of Basic + DA. Government: 14% of Basic + DA. No upper rupee ceiling.

Section 80D [New Act: Section 126] — Health Insurance Premium

Who is Covered	Below 60	Senior Citizen
Self + Spouse + Children	Rs.25,000	Rs.50,000
Parents	Rs.25,000	Rs.50,000
Maximum Total	Rs.50,000	Rs.1,00,000

Preventive health check-up included within limits — up to Rs.5,000/year. Can be paid in cash. All other premiums must be non-cash.

Section 80DD [New Act: Section 127] — Disabled Dependent Spouse, child, parent, or sibling with disability:

• Disability 40%+: Rs.75,000 flat — not expense-linked
• Severe disability 80%+: Rs.1,25,000 flat Form 10-IA from certified medical authority required.

Section 80DDB [New Act: Section 128] — Specified Disease Treatment Actual treatment expenses for self or dependent:

• Below 60: Up to Rs.40,000
• Senior citizens: Up to Rs.1 lakh

Qualifying diseases: neurological conditions (dementia, Parkinson’s, motor neuron disease, ataxia, chorea, aphasia), malignant cancers, full-blown AIDS, chronic renal failure, haemophilia, thalassemia. Certificate from specialist at government hospital required.

Section 80E [New Act: Section 129] — Education Loan Interest

• No upper limit on deduction
• 8 consecutive years from year repayment begins — or until fully repaid
• Loan from bank, financial institution, or approved charitable institution only — not family
• Higher education (any course after Class 12) — self, spouse, children, or legal ward. India or abroad.

Most underappreciated deduction in the entire tax code. For Rs.25 lakh loan at 10%, annual interest of Rs.2–2.5 lakh is fully deductible. No ceiling whatsoever.

Section 80EEA [New Act: Section 130] — Affordable Housing Home Loan Additional Rs.1.5 lakh on interest over Section 24(b), if:

• Loan sanctioned: 1st April 2019 to 31st March 2022
• Stamp duty value: Not above Rs.45 lakh
• No other residential property on date of sanction Window closed for new loans. Existing eligible borrowers continue claiming until 8-year limit.

Section 80EEB [New Act: Section 131] — EV Loan Interest Up to Rs.1.5 lakh. Loans sanctioned 1st April 2019 to 31st March 2023. Closed for new loans.

Section 80G [New Act: Section 133] — Donations

• 100% without limit: National Defence Fund, PM National Relief Fund, National Children’s Fund, Clean Ganga Fund, Swachh Bharat Kosh
• 50% without limit: PM Drought Relief Fund, Jawaharlal Nehru Memorial Fund
• 100% with 10% of adjusted gross income ceiling: Approved research associations, approved universities
• 50% with 10% ceiling: All other approved charitable institutions Donations above Rs.2,000 must be non-cash.

Section 80GG [New Act: Section 134] — Rent Without HRA If you pay rent but no HRA from employer, or self-employed. Lowest of:

• Rs.5,000/month (Rs.60,000/year)
• 25% of total income
• Rent paid minus 10% of total income

Condition: You, your spouse, or minor child should not own a house at place of employment.

Section 80TTA — Savings Account Interest Non-senior citizens only. Up to Rs.10,000/year on savings account interest. Banks, cooperative banks, post office. FD interest does not qualify.

Section 80TTB — Senior Citizen Interest Income — RAISED IN BUDGET 2026 For 60+. Raised from Rs.50,000 to Rs.1 lakh per year — Budget 2026 confirmed change. Covers savings accounts, FDs, recurring deposits, post office deposits. Replaces 80TTA for senior citizens.

Section 80U — Self with Disability

• Disability 40%+: Rs.75,000
• Severe disability 80%+: Rs.1,25,000 Certificate from medical authority required.

Complete Summary Table

Deduction	Old Regime	New Regime	Limit FY 2026-27	Change
Standard Deduction	Yes	Yes	Rs.50K / Rs.75K	No change
HRA	Yes	No	Formula-based	8 cities at 50% (was 4)
LTA	Yes	No	Actual travel cost	No change
Home loan interest — self-occupied	Yes	No	Rs.2 lakh	No change
Home loan interest — let-out	Yes	Yes	No limit	No change
Section 80C	Yes	No	Rs.1.5 lakh	No change
Section 80CCD(1B) — own NPS	Yes	No	Rs.50,000	No change
Section 80CCD(2) — employer NPS	Yes	Yes	10%/14% of Basic+DA (Old Regime. But in new 14% of Basic + DA for all.	No change
Section 80D — health insurance	Yes	No	Up to Rs.1 lakh	No change
Section 80DD — disabled dependent	Yes	No	Rs.75K / Rs.1.25L	No change
Section 80DDB — specified disease	Yes	No	Rs.40K / Rs.1L	No change
Section 80E — education loan	Yes	No	No limit	No change
Section 80EEA — affordable housing	Yes	No	Rs.1.5 lakh	Closed for new loans
Section 80EEB — EV loan	Yes	No	Rs.1.5 lakh	Closed for new loans
Section 80G — donations	Yes	No	50%/100%	No change
Section 80GG — rent without HRA	Yes	No	Rs.60,000/year	No change
Section 80TTA — savings interest	Yes	No	Rs.10,000	No change
Section 80TTB — senior interest	Yes	No	Rs.1 lakh	Raised from Rs.50K — Budget 2026
Section 80U — self disability	Yes	No	Rs.75K / Rs.1.25L	No change
Gratuity	Yes	Yes	Rs.20 lakh	No change
Leave encashment	Yes	Yes	Rs.25 lakh (pvt)	No change
Section 80CCH — Agniveer	Yes	Yes	Full amount	No change
Professional tax	Yes	No	Actual	No change
Children’s education allowance	Yes	No	Rs.3,000/month/child*	Raised from Rs.100*
Hostel expenditure allowance	Yes	No	Rs.9,000/month/child*	Raised from Rs.300*
Meal voucher exemption	Yes	Yes	Rs.200/meal*	Raised from Rs.50*
Employer gifts	Yes	Yes	Rs.15,000/year*	Raised from Rs.5,000*
Employer medical loan	Yes	Yes	Rs.2 lakh*	Raised from Rs.20,000*
Transport allowance — disabled	Yes	Yes	Rs.15K+DA (metro)*	Raised from Rs.3,200*
Car perquisite (employer-provided)	Both	Both	Higher taxable value*	Increased — tax negative*

Rows marked * are from Draft Income Tax Rules 2026. The Income Tax Act 2025 has received Presidential assent. The Rules are expected to be officially notified before 1st April 2026, subject to gazette notification.

How to Use This Article –

Step 1: Go through the old regime column and mark every deduction that genuinely applies to your situation.

Step 2: Use your actual numbers — not the maximum limits. Your HRA exemption is formula-based. Your 80D depends on actual premium. Your 80C depends on what you actually invest.

Step 3: Subtract Rs.50,000 (old regime standard deduction). This gives your net deduction beyond standard.

Step 4: Go to the break-even table in New Tax Regime vs Old Regime: Who Wins in 2026? and check whether your total crosses the threshold for your income level.

Step 5: If it crosses, calculate exact tax under both regimes. If not, new regime wins — go with it.

That 30-minute exercise could save you Rs.20,000 to Rs.1 lakh this year.

Note: All deductions reflect provisions of the Income Tax Act 2025 and Finance Bill 2026, applicable from FY 2026-27 (AY 2027-28). The Income Tax Act 2025 has received Presidential assent and is in force from 1st April 2026. Items marked * are from the Draft Income Tax Rules 2026 released by CBDT on 7th February 2026 — Finance Bill 2026 has been passed by both Houses of Parliament and these rules are expected to be officially notified before 1st April 2026 via gazette notification. Old section numbers from the 1961 Act are included alongside new Act numbers for reference. The 80TTB increase to Rs.1 lakh is a confirmed Budget 2026 change. Please consult a qualified tax professional for advice specific to your situation.