Income-tax Act 2025
80C, 80D, 87A Under the 2025 Act: New Section Numbers
80C is now section 123, 80D is 126, 87A is 156 and 115BAC is 202. A table of deduction sections for Tax Year 2026-27, with the limits and new regime rules.
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From Tax Year 2026-27, the deductions you know by their 1961 numbers have new ones: 80C is section 123, 80D is section 126, the 87A rebate is section 156, and the new tax regime of section 115BAC is section 202. The limits are the same: ₹1.5 lakh under section 123, ₹25,000 or ₹50,000 for health insurance, a rebate of up to ₹60,000 under the new regime, and a ₹75,000 standard deduction for salaried people in that regime.
The new numbers apply to income earned from 1 April 2026. Your return for FY 2025-26 (AY 2026-27), filed in 2026, uses the old numbers, because section 536 of the 2025 Act keeps the 1961 Act for years that began before 1 April 2026.
The table
Each pair was checked against the text of the Income-tax Act, 2025 as amended by the Finance Act, 2026, by comparing the new section's heading and its limits with the old section.
| 1961 Act | 2025 Act | What it allows | Limit |
|---|---|---|---|
| 16(ia) | 19, Table Sl. No. 2 | Standard deduction from salary | ₹75,000 in the new regime; ₹50,000 otherwise |
| 16(iii) | 19, Table Sl. No. 1 | Tax on employment (professional tax) | Amount paid |
| 80C, 80CCC, 80CCD(1) | 123, with Schedule XV | Life insurance, provident fund, tuition fees, home loan principal, notified deposits, pension contributions and more | ₹1,50,000 in total |
| 80CCD(1B) | 124(3) | Your own extra contribution to the notified pension scheme | ₹50,000 |
| 80CCD(2) | 124(1) and 124(2) | Employer's contribution to the notified pension scheme | 14% of salary for government employers; 10% for others, raised to 14% in the new regime |
| 80D | 126 | Health insurance, preventive check-up, medical expenditure | ₹25,000 each for self/family and parents; ₹50,000 if a senior citizen |
| 80E | 129 | Interest on an education loan | No cap; first year of interest and the next seven |
| 80G | 133 | Donations to notified funds and charities | 100% or 50%, some within 10% of adjusted income; cash only up to ₹2,000 |
| 80TTA, 80TTB | 153 | Interest on deposits | ₹10,000 on savings accounts; ₹50,000 on all deposits for senior citizens |
| 80U | 154 | Resident individual with a disability | ₹75,000; ₹1,25,000 for severe disability |
| 87A | 156 | Rebate of tax for resident individuals | Up to ₹12,500 (income to ₹5 lakh); up to ₹60,000 in the new regime (income to ₹12 lakh) |
| 115BAC | 202 | The default new tax regime and the option to leave it | Slabs from nil to 30% |
A few practical notes on the table:
- Section 123 lists its items in Schedule XV at the end of the Act instead of inside the section. The ₹1.5 lakh ceiling covers everything in that schedule, including the items that used to sit in 80CCC and 80CCD(1). Some familiar names, such as PPF or Sukanya Samriddhi, are not named in the schedule; they come in through general items such as notified provident funds and notified deposit schemes.
- Section 156 used to mean something else. Under the 1961 Act, section 156 was the notice of demand. Under the 2025 Act it is the rebate. A demand notice is now section 289.
The new regime under section 202
Section 202 keeps the new regime as the default for individuals. The slabs in section 202(1) are:
| Total income | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 to ₹8,00,000 | 5% |
| ₹8,00,001 to ₹12,00,000 | 10% |
| ₹12,00,001 to ₹16,00,000 | 15% |
| ₹16,00,001 to ₹20,00,000 | 20% |
| ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Section 202(2) switches off most deductions in this regime. The Chapter VIII deductions it still allows include the employer's pension contribution under section 124(1) and (2). Section 123, 126, 129, 133, 153 and 154 deductions are not available, and neither is the professional tax deduction. The ₹75,000 standard deduction is available, because section 19 gives it specifically where tax is computed under section 202(1).
Leaving the new regime. If you have no business or professional income, you choose the old regime with your return each year, under section 202(4). If you do have business or professional income, the option has to be exercised by the return due date, carries on to later years, and can be withdrawn only once.
Worked examples for Tax Year 2026-27
These use the section 202(1) slabs and leave out cess.
Salary of ₹12,75,000, new regime. Taxable income after the ₹75,000 standard deduction is ₹12,00,000. Tax is 5% of ₹4,00,000 (₹20,000) plus 10% of ₹4,00,000 (₹40,000), which is ₹60,000. The section 156 rebate is the whole tax or ₹60,000, whichever is less, so tax payable is nil.
Salary of ₹13,00,000, new regime. Taxable income is ₹12,25,000. Tax on it is ₹60,000 plus 15% of ₹25,000, which is ₹63,750. Section 156 gives marginal relief above ₹12 lakh: the tax cannot exceed the income above ₹12 lakh, here ₹25,000. So tax payable is ₹25,000, not ₹63,750.
Same salary, old regime. With ₹1,50,000 under section 123, ₹25,000 under section 126 for a family health policy, ₹50,000 under section 124(3) and the ₹50,000 standard deduction, the deductions add up to ₹2,75,000, leaving ₹10,25,000 taxable. Whether that beats ₹25,000 depends on the old-regime slab rates and any home loan interest or HRA, so run both computations. Our old vs new regime comparison walks through the trade-off with AY 2026-27 figures.
Numbers this table does not cover
HRA, home loan interest and deductions such as 80DDB, 80GG and 80EEA are not in the table because they could not be matched to a single new section with confidence. If you need one of them, check the Act text or the department's section pages on incometaxindia.gov.in before quoting a number, and ask a chartered accountant if a claim depends on it. Salary-side changes from April 2026 are in salary rules from April 2026.
For the notice, interest and refund sections, see old to new section numbers for your notices.
FAQ
What is section 80C called in the Income-tax Act, 2025?
Section 123, read with Schedule XV. The total limit is still ₹1,50,000, and it now also takes in the items that used to be under sections 80CCC and 80CCD(1).
Which section replaces 87A?
Section 156. It gives a rebate of up to ₹12,500 where total income is up to ₹5 lakh, and up to ₹60,000 in the new regime where total income is up to ₹12 lakh, with marginal relief just above ₹12 lakh.
Is the new regime still the default under the 2025 Act?
Yes. Section 202(1) applies unless you opt out under section 202(4). Without business income, you choose the old regime with each year's return.
Which section should I quote in my AY 2026-27 return?
The old ones. The AY 2026-27 return covers FY 2025-26 income and is filed under the 1961 Act, so its deduction schedules still say 80C, 80D and 87A.
Sources
Topics
- Section 123
- Section 126
- Section 156
- Section 202
- Tax Year 2026-27
- Section 87A Rebate
- New Tax Regime
- Standard Deduction
- AY 2026-27
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