ITR filing AY 2026-27: Complete list of deductions and exemptions available under old and new tax regimes

As the income tax return (ITR) filing season for Assessment Year (AY) 2026-27 gets underway, taxpayers must carefully review the deductions and exemptions available under both the old and new tax regimes before filing their returns.

While the old tax regime continues to offer a wide range of tax-saving deductions and exemptions, the new tax regime provides lower tax rates along with a limited set of tax benefits. Understanding these provisions can help taxpayers choose the regime that best suits their income and investment profile.

Deductions and exemptions available under the old tax regime

Taxpayers opting for the old tax regime can claim several deductions and exemptions to reduce their taxable income.

Section 80C deduction under old tax regime

Taxpayers opting for the old tax regime can claim deductions of up to Rs 1.5 lakh under Section 80C on eligible investments and expenses, including:

• Public Provident Fund (PPF)
• Employees' Provident Fund (EPF)
• Equity Linked Savings Schemes (ELSS)
• Tax-saving fixed deposits
• National Savings Certificate (NSC)
• Life insurance premiums
• Tuition fees for children
• Principal repayment of home loans

NPS deduction under Section 80CCD(1B)

Under the old tax regime, taxpayers can claim an additional deduction of up to Rs 50,000 for contributions made to the National Pension System (NPS) under Section 80CCD(1B).

Health insurance deduction under Section 80D

Taxpayers opting for the old tax regime can claim deductions on health insurance premiums under Section 80D.

• Up to Rs 25,000 for self, spouse and dependent children
• Up to Rs 50,000 for senior citizen parents
• Up to Rs 50,000 for senior citizen taxpayers

Home loan tax benefits under old tax regime

The old tax regime allows taxpayers to claim deductions on both home loan interest and principal repayment, subject to specified conditions.

Taxpayers can claim a deduction of up to Rs 2 lakh on interest paid on a self-occupied house property under Section 24(b). The principal repayment component of a home loan also qualifies for deduction under Section 80C.

HRA exemption under old tax regime

Salaried employees opting for the old tax regime can claim House Rent Allowance (HRA) exemption, subject to prescribed conditions.

LTA exemption under old tax regime

The old tax regime also allows Leave Travel Allowance (LTA) exemption for eligible travel expenses incurred within India, subject to conditions.

Section 80G deduction for donations

Taxpayers can claim deductions under Section 80G for donations made to eligible charitable institutions and notified funds.

Other deductions available under the old tax regime include benefits under Sections 80E (education loan interest), 80TTA (savings account interest), 80TTB (interest income for senior citizens), 80GGC (certain political contributions) and 80U (persons with disabilities), subject to eligibility conditions.

Standard deduction under old tax regime

Salaried employees and pensioners can claim a standard deduction of Rs 75,000 under the old tax regime.

Deductions and exemptions available under the new tax regime

Although the new tax regime offers fewer tax-saving opportunities, taxpayers can still claim certain deductions and exemptions.

Standard deduction under new tax regime

Salaried employees and pensioners opting for the new tax regime are eligible for a standard deduction of Rs 75,000.

Employer NPS contribution deduction under Section 80CCD(2)

The new tax regime allows a deduction for employer contributions to an employee's NPS account under Section 80CCD(2). The deduction can be claimed up to the prescribed limit based on salary.

Home loan interest deduction for let-out property

Under the new tax regime, taxpayers can claim a deduction on interest paid on a home loan for a let-out property under Section 24(b).

However, unlike the old tax regime, any resulting loss from house property cannot be set off against income from other heads or carried forward to subsequent years.

Agniveer Corpus Fund deduction under Section 80CCH

Individuals enrolled under the Agnipath Scheme can claim deductions under Section 80CCH for contributions made to the Agniveer Corpus Fund. Contributions made by the Central government to the fund are also deductible.

Family pension deduction under new tax regime

Family pension recipients can claim a deduction of Rs 25,000 or one-third of the pension received, whichever is lower.

Retirement-related exemptions under new tax regime

Certain retirement-related benefits continue to enjoy tax exemptions under the new tax regime, subject to prescribed conditions and limits. These include:

• Gratuity
• Leave encashment
• Compensation received under a Voluntary Retirement Scheme (VRS)

Which tax regime should you choose?

The old tax regime may be more beneficial for taxpayers who regularly claim deductions through investments, insurance premiums, HRA, home loan repayments and other tax-saving avenues.

The new tax regime may suit taxpayers who prefer lower tax rates and do not claim substantial deductions and exemptions.

Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning.