Reviewed by CA Pritam Sharma | EasyTax Global IT Solutions | Updated for AY 2026-27
Quick Answer
For AY 2026-27, Section 80C lets you claim up to ₹1,50,000 on investments like EPF, PPF, ELSS, life insurance and home loan principal. Section 80D allows up to ₹25,000 (₹50,000 for senior citizens) on health insurance premiums. An extra ₹50,000 is available under 80CCD(1B) for NPS. Important: almost all of these deductions apply only if you choose the Old Tax Regime. The New (default) Regime offers lower slab rates but disallows most deductions.
Note: Figures below are for FY 2025-26 (AY 2026-27). Deduction limits are subject to change through Finance Act amendments and CBDT notifications — always confirm the latest rules before filing.
Every rupee you claim as a deduction reduces your taxable income — and your tax bill. Chapter VI-A of the Income Tax Act houses dozens of these deductions, but Section 80C and 80D do the heavy lifting for most taxpayers. This guide gives you the complete, up-to-date deductions list for AY 2026-27, with limits, eligibility, and the one rule that trips up thousands of filers: which regime actually lets you claim them.
First: Deductions Apply Mainly Under the Old Tax Regime
Since the New Tax Regime became the default, this is the most important thing to understand before claiming anything. Under the New Regime you get lower slab rates and a standard deduction, but you cannot claim 80C, 80D, 80CCD(1B), HRA and most other deductions.
If you have significant investments and insurance, the Old Regime (where all these deductions apply) may still save you more — but you must actively opt for it while filing. Always compare both regimes before you decide.
Expert tip: Don’t assume the Old Regime is better just because it allows deductions. Run the numbers both ways. For many salaried taxpayers with few investments, the New Regime now wins even without deductions.
Section 80C: The ₹1.5 Lakh Deduction Explained
Section 80C lets you deduct up to ₹1,50,000 per year (Old Regime) for eligible investments and expenses. This is a combined ceiling — the total across all the items below cannot exceed ₹1.5 lakh:
- Employees’ Provident Fund (EPF) & Voluntary Provident Fund (VPF)
- Public Provident Fund (PPF)
- Equity Linked Savings Scheme (ELSS) mutual funds
- Life insurance premiums (self, spouse, children)
- Principal repayment on a home loan
- Children’s tuition fees (up to two children)
- 5-year tax-saving fixed deposits & National Savings Certificate (NSC)
- Sukanya Samriddhi Yojana
- Senior Citizens Savings Scheme (SCSS)
Related sub-sections: 80CCC (pension fund premiums) and 80CCD(1) (your own NPS contribution) share the same ₹1.5 lakh ceiling as 80C. Together, 80C + 80CCC + 80CCD(1) cannot exceed ₹1,50,000.
Section 80CCD(1B): Extra ₹50,000 for NPS
This is one of the most under-used deductions. On top of the ₹1.5 lakh 80C limit, you can claim an additional ₹50,000 for your contribution to the National Pension System (NPS) under Section 80CCD(1B). That effectively raises your combined deduction potential to ₹2 lakh under the Old Regime.
Section 80D: Health Insurance Deduction
Section 80D lets you deduct premiums paid for health insurance for yourself, your family and your parents. Limits depend on age:
| Who is insured | If below 60 | If senior citizen (60+) |
|---|---|---|
| Self, spouse & children | ₹25,000 | ₹50,000 |
| Parents (additional) | ₹25,000 | ₹50,000 |
| Maximum possible | ₹50,000 | ₹1,00,000 |
A preventive health check-up of up to ₹5,000 is included within the above limits. The maximum of ₹1,00,000 applies when both you and your parents are senior citizens.
Full Income Tax Deductions List (AY 2026-27)
| Section | Deduction for | Maximum limit |
|---|---|---|
| 80C | EPF, PPF, ELSS, LIC, home loan principal, tuition fees | ₹1,50,000 |
| 80CCD(1B) | Additional NPS contribution | ₹50,000 |
| 80CCD(2) | Employer’s NPS contribution (allowed in both regimes) | Up to 14% of salary* |
| 80D | Health insurance premium | ₹25,000 / ₹50,000 |
| 80DD | Maintenance of disabled dependent | ₹75,000 / ₹1,25,000 |
| 80DDB | Treatment of specified diseases | ₹40,000 / ₹1,00,000 |
| 80E | Interest on education loan | No limit (up to 8 years) |
| 80EEB | Interest on electric vehicle loan** | ₹1,50,000 |
| 80G | Donations to eligible charities/funds | 50% or 100% |
| 80GG | Rent paid (if no HRA received) | Up to ₹60,000/yr |
| 80TTA | Savings account interest (below 60) | ₹10,000 |
| 80TTB | Interest income (senior citizens) | ₹50,000 |
| 80U | Self — disability | ₹75,000 / ₹1,25,000 |
*80CCD(2): up to 14% of salary under the New Regime; 10% under the Old Regime (14% for government employees). **80EEB applies to loans sanctioned within the eligible window; check eligibility for your loan date.
Deductions Allowed Under the New Tax Regime
The New Regime disallows most Chapter VI-A deductions, but a few are still available:
- Standard deduction of ₹75,000 for salaried employees and pensioners.
- Section 80CCD(2) — employer’s contribution to NPS (up to 14% of salary).
- Section 80CCH — contribution to the Agniveer Corpus Fund.
- Family pension deduction of ₹25,000.
Worked Example: How Deductions Reduce Taxable Income
Suppose Riya earns a gross salary of ₹12,00,000 and opts for the Old Regime with these deductions:
- 80C (EPF + ELSS + LIC): ₹1,50,000
- 80CCD(1B) (NPS): ₹50,000
- 80D (health insurance): ₹25,000
- Standard deduction: ₹50,000
Total deductions = ₹2,75,000. Her taxable income falls from ₹12,00,000 to ₹9,25,000 — a meaningful drop that directly lowers her tax. The exact saving depends on her slab, so she should still compare this against the New Regime before filing.
Common Mistakes to Avoid
- Claiming 80C/80D under the New Regime — they simply won’t be allowed.
- Exceeding the ₹1.5 lakh 80C ceiling by adding EPF, PPF and LIC together and expecting all of it.
- Missing the extra ₹50,000 NPS deduction under 80CCD(1B).
- Not keeping premium receipts and investment proofs for verification.
- Choosing the Old Regime for deductions without checking whether the New Regime saves more overall.
Frequently Asked Questions
What is the maximum deduction under Section 80C for AY 2026-27?
The maximum deduction under Section 80C is ₹1,50,000 per financial year, available only under the Old Tax Regime. This is a combined limit across 80C, 80CCC and 80CCD(1).
Can I claim 80C and 80D under the New Tax Regime?
No. Section 80C and 80D deductions are not allowed under the New Tax Regime. To claim them, you must opt for the Old Regime while filing your return.
What is the deduction limit under Section 80D?
Section 80D allows up to ₹25,000 for health insurance premiums for yourself and family, or ₹50,000 if the insured is a senior citizen. An additional ₹25,000 (or ₹50,000 for senior citizen parents) can be claimed for parents, up to a maximum of ₹1,00,000.
How can I claim an extra ₹50,000 deduction for NPS?
Under Section 80CCD(1B), you can claim an additional ₹50,000 for your NPS contribution, over and above the ₹1.5 lakh 80C limit — raising your total deduction potential to ₹2 lakh under the Old Regime.
Which deductions are available under the New Tax Regime?
The New Regime allows the standard deduction of ₹75,000 for salaried taxpayers, the employer’s NPS contribution under 80CCD(2), the Agniveer Corpus Fund deduction under 80CCH, and the ₹25,000 family pension deduction.
This article was reviewed for accuracy by CA Pritam Sharma. EasyTax Global IT Solutions helps individuals and businesses file returns and claim every eligible deduction. Tax rules can change — verify current limits before filing.
