Deductions

80C, 80D & NPS: How to Maximise Your Tax Deductions (FY 2025-26)

By CA Aman Singhal5 June 20267 min read

If you choose the old tax regime, deductions are how you legally bring down your taxable income. Used fully, the sections below can reduce your taxable income by well over ₹2.5 lakh. Here is what actually qualifies and the exact limits for FY 2025-26.

Important: Most of these deductions are available under the old regime only. The new regime allows very few (mainly the employer NPS contribution under 80CCD(2)). So this guide matters most if you are on, or considering, the old regime.

Section 80C — up to ₹1,50,000

The workhorse deduction. Eligible investments and payments include:

EPF and PPF contributions
ELSS (tax-saving mutual funds)
Life insurance premiums and NSC
5-year tax-saving fixed deposits and Sukanya Samriddhi
Home-loan principal repayment and children's tuition fees

Section 80D — health insurance

₹25,000 for premiums for yourself, spouse and children
An additional ₹25,000 for parents (₹50,000 if they are 60+)
Up to ₹5,000 within these limits for preventive health check-ups

So a person below 60 insuring senior-citizen parents can claim up to ₹75,000 under 80D alone.

Section 80CCD(1B) — extra ₹50,000 for NPS

A contribution to the National Pension System gives you an additional ₹50,000 deduction, over and above the ₹1.5 lakh 80C limit. This is one of the most under-used tax breaks available.

80CCD(2) — employer NPS (works in both regimes)

If your employer contributes to your NPS, that amount is deductible — up to 14% of basic salary — and crucially, this one is allowed even under the new regime. It is worth asking your employer to include it in your salary structure.

Don't forget these

Section 24(b): home-loan interest up to ₹2,00,000
Section 80E: full interest on an education loan
Section 80TTA / 80TTB: savings-account / senior-citizen interest
Section 80G: donations to eligible charities

The bottom line: a full 80C (₹1.5L) + 80CCD(1B) (₹50k) + 80D (₹50k) already removes ₹2.5 lakh from your taxable income — and that is before HRA or home-loan interest. Plan these before 31 March, not at the last minute.

Want to see exactly how much each deduction saves you? Run the numbers in our Income Tax Calculator, or get a personalised plan from a CA.

Try the Income Tax CalculatorFree, CA-verified, runs in your browser.

This article is for general information based on provisions for FY 2025-26 and is not individual tax advice. Rules change and exceptions apply — please confirm with a qualified Chartered Accountant before acting.