Section 80C changes to Section 123 in New Tax Bill: Deductions include SSY, NPS, EPF, ELSS, NSC, LIC, ULIP

All the savings instruments that will qualify for deduction under section 123 of the new tax bill have been listed in Schedule XV.

"The deduction limit remains clearly stated within the section, while the schedule provides an easy-to-understand breakdown of eligible deductions," the CBDT said.

The new arrangement proposed in the Income-Tax Bill 2025 is expected to simplify the process for taxpayers, making it more transparent and organised.

List of savings instruments in Schedule XV eligible for deduction under Section 123

• Premium paid for a life insurance policy

• Sum paid under a deferred annuity contract other than the annuity plan

• Sum deducted from salary payable by or on behalf of the Government to any individual for securing deferred annuity or making provision for his spouse or children, to the extent of 20% of salary

• Contribution by an employee to employees' provident fund

• Contribution by an employee to an approved superannuation fund

• Subscription to any security or deposit scheme notified by the Central Government in the name of an individual or any girl child of that individual (eg: Sukanya Samriddhi Yojana)

• Subscription to National Savings Certificate

• Contribution to a Unit-linked Insurance Plan

• Sum paid for an annuity plan of the Life Insurance Corporation or any other insurer notified by the Central Government

• Subscription to any units of an Equity-Linked Savings Scheme (ELSS)

• Subscription to a deposit scheme or contribution to a pension fund set up by the National Housing Bank

• Tuition fees (excluding any development fees or donation or payment of similar nature) paid by an individual to any University, college, school or other educational institution situated in India for full- time education of any two children of such individual

• Payment made for purchase or construction of a residential house property, the income from which is chargeable to tax under the head “Income from house property”
• Term deposit for a fixed period of not less than five years

• Subscription to bonds issued by the National Bank for Agriculture and Rural Development (NABARD)

• Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004

• Five-year term deposit in an account under the Post Office Time Deposit Rules, 1981

• Contribution made by an individual to a pension scheme notified by the Central Government (Eg. NPS)

Please note that the new income-tax bill is proposed to come into force from April 1, 2026. Till then, it might undergo some revisions.