Deduction

A deduction reduces the amount of income you pay tax on. Under the Income Tax Act 2025, deductions such as Section 80C (up to ₹1.5 lakh for investments like PPF, ELSS, life insurance premiums), Section 80D (health insurance premiums), and Section 80CCD(1B) (up to ₹50,000 for NPS contributions) are subtracted from your gross total income. The new regime (Section 202 of the Act) largely does away with most deductions but allows a standard deduction of ₹75,000.