New Tax Regime Deductions: What Is Allowed and Not Allowed
Simple guide to deductions and exemptions under the new tax regime, including standard deduction, employer NPS, HRA, 80C, 80D and home loan benefits.
30-Second Summary
The new tax regime gives lower slab rates but removes many old-regime deductions and exemptions.
| Item | New regime treatment |
|---|---|
| Standard deduction | Usually available for salary/pension |
| Employer NPS | May be available subject to limits |
| 80C | Usually not available |
| 80D | Usually not available |
| HRA exemption | Usually not available |
| Home-loan principal | Usually not available |
Venveel Recommendation
If your deductions are small, start with the new regime. If HRA, 80C, 80D, NPS and home-loan benefits are large, compare both regimes before filing.
What to Read Next
| If you want to... | Open this |
|---|---|
| Compare both regimes | New vs old tax regime guide |
| Calculate payable or refund | Tax Calculator |
| Understand rebate impact | Section 87A rebate guide |
| File under the new regime | New tax regime filing guide |
Usually Available Under New Regime
Commonly relevant items include:
- Standard deduction for salary or pension income, where applicable.
- Employer contribution to NPS, subject to the applicable rules and limits.
- Certain specific deductions that the portal may allow based on law and your profile.
Always follow the current portal prompts and latest tax rules while filing.
Usually Not Available Under New Regime
These are common old-regime benefits that many users cannot claim under the new regime:
- 80C investments such as EPF, PPF, ELSS, life insurance and home-loan principal
- 80D health insurance premium
- HRA exemption
- LTA
- 80TTA savings interest deduction
- Self-occupied home-loan interest benefit in many common cases
- Many Chapter VI-A deductions
Why This Matters
Many users choose the new regime because it is simpler. But the old regime can still win if deductions and exemptions are high.
Example:
| User profile | Usually check |
|---|---|
| No rent, low investments | New regime first |
| High rent and HRA | Compare both |
| Full 80C + 80D + NPS | Compare both |
| Home loan plus insurance | Compare both |
Quick Decision Table
| Your situation | What I would do |
|---|---|
| Few deductions, no rent | Start with new regime |
| High HRA exemption | Compare old regime carefully |
| Full 80C and 80D | Compare both before filing |
| Employer NPS contribution | Check new regime benefit |
| Home loan + HRA + insurance | Old regime may still compete |
| Income near rebate range | Check final portal computation |
Deductions: Allowed vs Usually Not Allowed
| Item | New regime | Old regime |
|---|---|---|
| Standard deduction | Usually available for salary/pension | Usually available |
| Employer NPS | May be available subject to limits | May be available subject to limits |
| Employee 80C | Usually not available | Available subject to limits |
| 80D health insurance | Usually not available | Available subject to limits |
| HRA exemption | Usually not available | Available if conditions are met |
| LTA | Usually not available | Available if conditions are met |
| Home-loan principal | Usually not available | Available under 80C limits |
| Savings interest deduction | Usually not available | May be available subject to rules |
Example: When New Regime Wins
If you do not pay rent, have limited deductions and mostly salary income, the new regime often becomes simpler and competitive. You may not need to collect many investment proofs, and the lower slab rates can be enough.
Example: When Old Regime Can Still Win
If you claim HRA, use full 80C, have health insurance premium, NPS and home-loan benefits, the old regime can still be worth checking. Do not assume new regime wins only because it is the default.
Common Mistakes
- Ignoring old-regime deductions while comparing
- Assuming 80C works in both regimes
- Forgetting employer NPS treatment
- Checking gross income instead of taxable income
- Not reviewing the final portal computation before submitting
What To Collect Before Comparing
| Document | Why |
|---|---|
| Form 16 | Salary, deductions considered and TDS |
| Rent receipts | HRA comparison under old regime |
| 80C proofs | Old regime comparison |
| Health insurance proof | 80D comparison |
| NPS details | Employer and employee contribution check |
| Home loan certificate | Interest/principal comparison |
Final Regime Review
Before submitting, compare the final payable/refund under both regimes if your deductions are meaningful. Do not compare only salary. Include interest, capital gains, TDS/TCS and other income too.
Calculator Tip
Enter all old-regime deductions even if you expect to file under the new regime. The calculator can compare both only when both sides have proper inputs.
Frequently Asked Questions
Can I claim 80C in the new tax regime?
In most common salaried cases, 80C is not available under the new regime. Compare old regime if 80C is a major benefit for you.
Can I claim HRA in the new tax regime?
HRA exemption is generally an old-regime benefit. If HRA is large, compare old and new regime before filing.
Is standard deduction available in the new regime?
Standard deduction is generally available for salary or pension income where applicable. Check the portal computation while filing.
Is employer NPS allowed in the new regime?
Employer NPS contribution may be available subject to rules and limits. Check Form 16 and the portal schedule carefully.
Is the new regime always better?
No. It is often simpler, but the old regime can still win if your exemptions and deductions are large enough.
Should I enter old-regime deductions in the calculator?
Yes. Enter them so you can compare both regimes properly, even if you expect to file under the new regime.
How We Use This Guide
This guide is meant to prevent one common filing mistake: choosing the default regime without comparing. Use it with your Form 16, AIS and deduction proofs before submitting the return.
Recent Updates
| Date | Update |
|---|---|
| July 2026 | Expanded with decision table, allowed-vs-not table, examples and common mistakes |