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    Deductions and the 87A rebate

    Taxpayers weighing the old-regime deduction stack against the new regime, and wanting to claim everything they are entitled to.

    Most income-tax deductions in India sit in the old regime. The big ones are Section 80C (up to Rs 1.5 lakh for EPF, PPF, ELSS, life insurance, home-loan principal and tuition), the extra Rs 50,000 for NPS under 80CCD(1B), Section 80D for health insurance, home-loan interest under Section 24(b), and the disability and illness deductions under 80U, 80DD and 80DDB. The Section 87A rebate makes income up to Rs 12 lakh tax-free under the new regime (Rs 5 lakh under the old). This hub covers what you can claim, and the central decision: whether your old-regime deductions beat the new regime's Rs 12 lakh tax-free band.

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    Guidance, not advice. We explain the rules, we don't assess your situation. Always seek financial or tax advice from your accountant, or contact Income Tax Department. Read our editorial scope →

    Guides in this hub

    Old regime or nothing, for most deductions

    80C, 80D, 80TTB, self-occupied home-loan interest and most of Chapter VI-A apply only under the old regime. The new regime allows only a short list (employer NPS under 80CCD(2), Agnipath 80CCH, 80JJAA, family pension and let-out home-loan interest). So claiming deductions and choosing the new regime are largely mutually exclusive.

    The 87A exclusions

    The Section 87A rebate does not apply to special-rate income, equity long-term gains (112A), equity short-term gains (111A), lottery winnings (115BB) and crypto (115BBH). So a person with income just under Rs 12 lakh that includes such gains can still owe tax on the special-rate part, even though the rebate covers the rest.

    Calculators for this topic

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