The Income-tax Act, 2025 came into force on 1 April 2026 and renumbered many familiar provisions. The deduction most investors knew as Section 80C now sits in Section 123, read with Schedule XV.
What stayed the same
The combined deduction limit remains ₹1.5 lakh a year, and the list of eligible options is broadly unchanged: ELSS mutual funds, PPF, EPF, NSC, five-year tax-saver deposits, life insurance premiums, children's tuition fees and home-loan principal, among others.
The regime question
These deductions are available only if you opt for the old tax regime. The new regime is the default and does not allow them. For many taxpayers with modest deductions, the new regime may already result in lower tax. The right choice depends on your own numbers, so please speak with a qualified tax professional.
Comparing common options
| Option | Lock-in | Nature of return |
|---|---|---|
| ELSS mutual fund | 3 years | Market-linked, not guaranteed |
| Tax-saver bank FD | 5 years | Fixed interest, taxable |
| NSC | 5 years | Fixed, Government-notified rate |
| Life insurance premium | Policy term | Depends on plan type |
Buying a product only for a tax deduction can lead to poor fit. Consider liquidity, risk and your actual need first. See our tax-saving investment services.
