Section 80C, 80D and HRA: A Plain Guide to India's Key Tax Deductions

Deductions only matter under the old tax regime, but for many households they are large enough to decide which regime to choose. Three provisions do most of the work: Section 80C, Section 80D and the house rent allowance exemption.

Section 80C allows a combined deduction of up to ₹1,50,000 a year. Eligible items include your own contribution to the Employees' Provident Fund, Public Provident Fund deposits, Equity Linked Savings Schemes, life insurance premiums, Sukanya Samriddhi deposits, five-year tax-saving fixed deposits, National Savings Certificates, children's tuition fees and the principal portion of home-loan EMIs. Check your payslip first: EPF alone often uses a large part of the limit.

Section 80D covers health insurance premiums. You can claim up to ₹25,000 for yourself, your spouse and children, rising to ₹50,000 if you are a senior citizen. A further ₹25,000 is available for premiums paid for parents, or ₹50,000 if they are senior citizens. Preventive health check-ups up to ₹5,000 fall within these limits. Premiums must be paid by any mode other than cash.

The HRA exemption is the least of three figures: the HRA actually received; rent paid minus 10% of basic salary plus dearness allowance; and 50% of basic salary for those living in Mumbai, Delhi, Kolkata or Chennai, or 40% elsewhere. If your annual rent exceeds ₹1 lakh, your employer will need your landlord's PAN.

Beyond these, the old regime offers an extra ₹50,000 for NPS contributions under Section 80CCD(1B), interest on education loans under 80E, donations under 80G and up to ₹2 lakh of home-loan interest on a self-occupied property under Section 24(b).

Keep evidence for every claim: rent receipts and agreements, premium receipts, investment statements and loan interest certificates. Employers ask for proof towards the end of the financial year, and the Income Tax Department can query unsupported claims after you file.

Once you know your eligible total, enter the figures into the TaxSaathi India Income Tax Calculator. It caps 80C at ₹1.5 lakh automatically and shows whether those deductions make the old regime worthwhile compared with the new regime's lower rates.