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  5. 30 tax-saving sections of the Income-tax Act 2025 to watch out for in Budget 2026

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30 tax-saving sections of the Income-tax Act 2025 to watch out for in Budget 2026

rajeev kumar
By Rajeev Kumar

7 min read | Updated on January 30, 2026, 10:39 IST

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SUMMARY

The new Income-tax Act 2025 will come into force with effect from April 1, 2026, and several sections relating to deductions, exemptions and rebates under the old Income-tax Act, 1961, have now been reorganised under different sections of the new Act. Here's a list to help you navigate during Budget 2026

income tax act 2025 in budget 2026

Here's a list of all tax saving sections in Income-tax Act 2025. | Image source: Shutterstock

Budget 2026 is going to be interesting for taxpayers. Since the slab rates and rule changes announced in the Union Budget generally apply to the next financial year, taxpayers may be overwhelmed by the likely mention of new sections under the Income-tax Act, 2025 in budget speech. The new Act will come into force with effect from April 1, 2026, and several sections relating to deductions, exemptions and rebates under the old Income-tax Act, 1961, have now been reorganised under different sections of the new Act.

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To help readers navigate confidently between new and old income tax laws, especially with respect to tax-saving rules, this article lists all the important sections of the new Act and where they were covered under the old Act, including a table of Then vs Now comparison table at the end .

Section 123 (Read with Schedule XV): Deduction for life insurance premia, deferred annuity, contributions to provident fund, etc.

Under section, investment up to Rs 1.5 lakh per year in the following instruments can be claimed as a deduction under the old tax regime: PPF, EPF, ELSS funds, Life insurance premium, NSC, SCSS, Sukanya Samriddhi Yojana, Principal repayment of home loan, Children's tuition fees, 5‑year tax‑saving fixed deposit.

Under the Income Tax Act 1961, these deductions were covered under Section 80C, 80CCE and 80CCC.

Section 124 (Read with Schedule XV): Deduction in respect of employer and assessee contribution to pension scheme of Central Government (NPS). Previously, under Section 80CCD as below:

  • 80CCD(1): Employee/self‑employed contribution (within overall 80C limit)

  • 80CCD(1B): Additional ₹50,000 NPS deduction

  • 80CCD(2): Employer’s NPS contribution (10–14% of salary), over and above the 80C limit

Section 125: Deduction in respect of contribution to Agnipath Scheme. Previously under Section 80CH.
Section 126: Deduction in respect of health insurance premia. Previously, under Section 80D
Section 127: Deduction in respect of maintenance including medical treatment of a dependant who is a person with disability. Previously, Section 80DD.
Section 128: Deduction in respect of medical treatment, etc. Previously, Section 80DDB.
Section 129: Deduction in respect of interest on loan taken for higher education. Previously under Section 80E.
Section 130: Deduction in respect of interest on loan taken for residential house property. Previously, Section 80EE.
Section 131: Deduction in respect of interest on loan taken for certain house property. Previously, Section 80EEA.
Section 132: Deduction in respect of purchase of electric vehicle. Previously 80EEB.
Section 133: Deduction in respect of donations to certain funds, charitable institutions, etc. Previously, Section 80G.
Section 134: Deductions in respect of rents paid. Previously, Section 80GG.
Section 135: Deduction in respect of certain donations for scientific research or rural development. Previously, Section 80GGA.
Section 136: Deduction in respect of contributions given by companies to political parties. Previously, Section 80GGB.
Section 137: Deduction in respect of contributions given by any person to political parties. Previously, Section 80GGC.
Section 153: Deduction for savings bank interest on deposits. Previously under Section 80TTA for non-senior citizens (up to Rs 10,000) and Section 80TTB for senior citizens (up to Rs 50,000)
Section 154: Deduction in case of a person with disability. Previously under Section 80U
Section 22: Deductions from income from house property. Previously under Section 24B
Section 11 (Read with Schedules II to VII): Incomes not included in total income. Previously under Section 10.
Section 19: Deductions from salaries, including Standard Deduction for salaried and pensioners. Previously under sections 16, 10(10), 10(10A), 10 (10AA), 10 (10B), 10(10C).
Section 202: New tax regime for individuals, Hindu undivided family and others. Previously under Section 115BAC(2).
Section 156: Rebate of income-tax in case of certain individuals. Previously under Section 87A.
Section 82: Profit on sale of property used for residence. Previously under Section 54 (Capital gains exemptions).
Section 83: Capital gains on transfer of land used for agricultural purposes not to be charged in certain cases. Previously under Section 54B.
Section 84: Capital gains on compulsory acquisition of lands and buildings not to be charged in certain cases. Previously under Section 54D.
Section 85: Capital gains not to be charged on investment in certain bonds. Previously, under Section 54EC.
Section 86: Capital gains on transfer of certain capital assets not to be charged in case of investment in residential house. Previously under Section 54F.
Section 198: Tax on long-term capital gains in certain cases. Previously under Section 112A.
Section 196: Tax on short-term capital gains in certain cases. Previously under Section 111A.
Section 157: Relief when salary, etc., is paid in arrears or in advance. Previously under Section 89.

Income‑tax Act 1961 vs Income‑tax Act 2025: Then vs Now

Sl. no.Income‑tax Act 2025 (Now)Income‑tax Act 1961 (Then)
1Section 123 (Schedule XV): Deduction for life insurance premia, PF, ELSS, etc.Sections 80C, 80CCE, 80CCC
2Section 124 (Schedule XV): Deduction for employee/employer NPS contributionSection 80CCD(1), 80CCD(1B), 80CCD(2)
3Section 125: Deduction for contribution to Agnipath SchemeSection 80CH
4Section 126: Deduction for health insurance premiaSection 80D
5Section 127: Deduction for dependent with disabilitySection 80DD
6Section 128: Deduction for medical treatment of specified diseasesSection 80DDB
7Section 129: Deduction for education loan interestSection 80E
8Section 130: Deduction for interest on home loan (affordable housing)Section 80EE
9Section 131: Deduction for interest on loan for certain house propertiesSection 80EEA
10Section 132: Deduction for purchase of electric vehicleSection 80EEB
11Section 133: Deduction for donations to charitable institutionsSection 80G
12Section 134: Deduction for rent paidSection 80GG
13Section 135: Deduction for scientific research / rural development donationsSection 80GGA
14Section 136: Company contributions to political partiesSection 80GGB
15Section 137: Individual contributions to political partiesSection 80GGC
16Section 153: Deduction for savings bank interestSection 80TTA, Section 80TTB
17Section 154: Deduction for person with disabilitySection 80U
18Section 22: Deductions from income from house propertySection 24B
19Section 11 (Schedules II–VII): Incomes not included in total incomeSection 10
20Section 19: Salary deductions including standard deductionSections 16, 10(10), 10(10A), 10(10AA), 10(10B), 10(10C)
21Section 202: New tax regime for individuals and HUFSection 115BAC(2)
22Section 156: Rebate for certain individualsSection 87A
23Section 82: Capital gains exemption on sale of residential propertySection 54
24Section 83: Capital gains exemption for agricultural landSection 54B
25Section 84: Capital gains exemption on compulsory acquisitionSection 54D
26Section 85: Capital gains exemption on investment in certain bondsSection 54EC
27Section 86: Capital gains exemption on investment in residential houseSection 54F
28Section 198: Long‑term capital gains taxSection 112A
29Section 196: Short‑term capital gains taxSection 111A
30Section 157: Relief for salary arrears/advanceSection 89
Finance Minister Nirmala Sitharaman will present Union Budget 2026 on Sunday, February 1, 2026. Check our live blog for top tax expectations from the Union Budget.
Have a query related to Income-tax Act 2025? We will try to get them answered by experts. Write to rajeev.kumar@rksv.in
To read our full coverage of Union Budget 2026, Click here
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About The Author

rajeev kumar
Rajeev Kumar is a Deputy Editor at Upstox, and covers personal finance stories. In over 11 years as a journalist, he has written over 2,000 articles on topics like income tax, mutual funds, credit cards, insurance, investing, savings, and pension. He has previously worked with organisations like 1% Club, The Financial Express, Zee Business and Hindustan Times.

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