The Income-tax Act, 2025 reorganises the deductions earlier available under Chapter VI-A of the Income-tax Act, 1961. From 1 April 2026, these provisions move mainly to Chapter VIII—Deductions, and the familiar section numbers change. However, taxpayers should note that the new Act largely reorganises existing provisions rather than introducing a completely new deduction system.
Chapter VIII: Deductions
Under Section 122 of the Income-tax Act, 2025, eligible deductions are allowed from gross total income, subject to the conditions of Chapter VIII. Total deductions cannot exceed the taxpayer’s gross total income.
|
Income-tax Act,
1961 |
Income-tax Act,
2025 |
Main provision |
|
Section 80C |
Section 123 |
Specified savings, investments and payments |
|
Section 80CCD |
Section 124 |
Contributions to pension schemes, including NPS |
|
Section 80CCH |
Section 125 |
Contribution to Agniveer Corpus Fund |
|
Section 80D |
Section 126 |
Medical insurance and specified medical expenses |
|
Section 80DD |
Section 127 |
Maintenance of a dependant with disability |
|
Section 80DDB |
Section 128 |
Medical treatment for specified diseases |
|
Section 80E |
Section 129 |
Interest on an education loan |
|
Section 80EE |
Section 130 |
Interest on loan for certain residential houses |
|
Section 80EEA |
Section 131 |
Interest on eligible affordable-housing loans |
|
Section 80EEB |
Section 132 |
Interest on a loan for purchasing an electric vehicle |
|
Section 80G |
Section 133 |
Donations to approved funds and institutions |
|
Section 80GG |
Section 134 |
Rent paid by certain individuals |
|
Section 80GGA |
Section 135 |
Donations for scientific research or rural development |
|
Section 80GGB |
Section 136 |
Contributions by Indian companies to political parties |
|
Section 80GGC |
Section 137 |
Contributions by other taxpayers to political parties |
|
Section 80JJAA |
Section 138 |
Deduction for employment of new employees |
|
Section 80LA |
Section 139 |
Income of an offshore banking unit or an International Financial Services Centre unit |
|
Section 80M |
Section 140 |
Deduction for inter-corporate dividends |
|
Section 80P |
Section 141 |
Deductions available to cooperative societies |
|
Section 80QQB |
Section 142 |
Royalty income of authors |
|
Section 80RRB |
Section 143 |
Royalty income of patent holders |
|
Section 80TTA |
Section 144 |
Interest on deposits in savings accounts |
|
Section 80TTB |
Section 145 |
Interest income of senior citizens |
|
Section 80U |
Section 146 |
Deduction for a taxpayer with a disability |
This mapping is a practical reference. Taxpayers should consult the enacted text, schedules, and applicable rules before claiming a deduction.
Section 123 Replaces Section 80C
Section 123 is the principal replacement for Section 80C. It covers eligible payments and investments such as life insurance premiums, provident fund contributions, tuition fees, repayment of housing-loan principal, and specified savings instruments.
The maximum deduction remains ₹1.5 lakh, subject to the conditions and limits prescribed under Schedule XV of the Income-tax Act, 2025. Therefore, taxpayers should not rely only on the old Section 80C wording; they should check Schedule XV for the current list of eligible investments and payments.
Sections 124 and 125: NPS and Agniveer Contributions
Section 124 covers deductions for contributions to eligible pension schemes, including the National Pension System. It broadly carries forward the role earlier performed by Section 80CCD.
Section 125 deals with contributions to the Agniveer Corpus Fund. This provision corresponds broadly to the earlier Section 80CCH. Salaried employees should distinguish between their own eligible contribution and an employer’s contribution because separate conditions may apply.
Sections 126 to 132: Health, Education and Housing
Section 126 provides deductions for medical insurance premiums and certain medical expenses. Sections 127 and 128 address expenses related to dependants with disabilities and specified diseases, respectively.
Furthermore, Section 129 covers interest paid on an education loan. Sections 130 and 131 apply to interest on eligible housing loans, while Section 132 concerns interest on an electric-vehicle loan. These provisions may assist salaried taxpayers who maintain proper loan certificates and payment records.
Sections 133 to 137: Donations and Rent
Section 133 replaces the broad donation-related role of Section 80G. It applies to donations made to approved funds and institutions, subject to qualifying conditions and documentation.
Section 134 provides rent-related relief for eligible individuals who cannot claim a house-rent allowance exemption. In addition, Sections 135, 136, and 137 cover specified donations and political contributions by eligible taxpayers.
Sections 144 to 146: Interest and Disability Relief
Section 144 covers interest earned on savings accounts, similar to Section 80TTA. Section 145 provides a corresponding deduction for eligible senior citizens, broadly replacing Section 80TTB.
Finally, Section 146 provides relief to an individual with a disability, corresponding to the earlier Section 80U. The taxpayer should retain the prescribed medical certificate and supporting records.
Important Note for Salaried Persons
The Income-tax Act, 2025 changes the section numbers, but eligibility, limits, and tax-regime restrictions still matter. Many Chapter VIII deductions generally apply when an individual chooses the old tax regime, while the new tax regime permits only specific deductions.
Therefore, salaried employees should compare both regimes, verify Form 16, retain investment proofs, and use the correct 2025 Act section while preparing tax documents for the relevant tax year.
