Income Tax Return Filing 2025: Exemptions and Deductions Available to Individuals in the FY 2024-25

The process of filing Income Tax Returns for individuals is currently underway. During this period, it is crucial for taxpayers to stay informed about the various exemptions and deductions available to them under the Income Tax Act, 1961. In this context, we have undertaken the initiative to provide a concise summary of the key exemptions and deductions applicable to individual taxpayers, with the objective of enhancing awareness and assisting our readers in making informed decisions while filing their returns.

Here’s a comprehensive breakdown of the income tax exemptions and deductions for individuals in FY 2024‑25 (AY 2025‑26) under both Old and New Tax Regimes in India:

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🧾 I. Old Tax Regime

You can claim a wide range of exemptions and deductions:

1. Standard Deduction

• ₹50,000 for salaried individuals and pensioners.

2. Section 80C (up to ₹1.5 lakh)

Eligible investments and expenses include:

• PPF, EPF, ELSS, NSC
• Life insurance premiums, ULIP
• Sukanya Samriddhi Yojana, five-year FDs, home loan principal repayment, SCSS

3. 80CCD(1B) – Additional ₹50,000 for NPS contributions (over and above 80C)

4. 80D – Health insurance & preventive health check-ups

• ₹25,000 for self-spouse-child
• +₹25,000 for parents (₹50,000 if senior citizen)
• +₹5,000 for preventive check-ups

5. 80TTA / 80TTB – Interest on deposits

• 80TTA: ₹10,000 deduction on savings interest (non-senior)
• 80TTB: ₹50,000 limit for senior citizens

6. 80E – Interest on education loans (no cap)

7. 80EE / 80EEA / 80EEB – Interest on loans

• 80EE: up to ₹50,000 for home loan interest, subject to conditions
• 80EEA: ₹1.5 lakh for first-time home buyers (loans sanctioned 2019–22)
• 80EEB: ₹1.5 lakh for e‑vehicle loan interest

8. 80DD, 80DDB, 80U – For medical & disability

• 80DD: ₹75,000 (normal disability), ₹1.25 lakh (severe)
• 80DDB: medical treatment ₹40,000 (others) / ₹1 lakh (senior citizens)
• 80U: ₹75,000 (normal), ₹1.25 lakh (severe disability)

9. 80G, 80GGA, 80GGC – Donations

• 80G: 50–100% deduction depending on fund, cash donations limited to ₹2,000
• 80GGA (scientific/rural), 80GGC (political): eligible deductions

10. 80RRB, 80QQB – Royalties

• Patent royalties: ₹3 lakh max
• Literary royalties (authors): ₹3 lakh max

11. 80GG – House rent (if no HRA):

• • Rs.5000 per month or Rs. 60,000 annually
  • 25% of the total income before making a deduction under section 80GG (excluding income under Section 115A or 115D, short- and long-term capital gains under Section 111A, and deductions under 80C to 80U)
  • Actual rent less 10% of income

12. Other Employer Allowances

• HRA, LTC, professional tax, entertainment allowance (Govt employees), meal coupons up to ₹5,000

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🆕 II. New Tax Regime

Fewer exemptions, but more beneficial slabs:

✅ Allowed:

• Standard Deduction: ₹75,000
• Employer NPS Contribution: up to 14% of salary (Basic + DA)
• Retirement benefits: gratuity, leave encashment
• Agricultural income exemptions
• Section 87A rebate up to ₹25,000 for incomes ≤ ₹7 lakh

❌ Not allowed:

• 80C, 80D, 80TTA/TTB, 80E/E*, 80G, HRA, etc.

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📊 III. Comparative Highlights

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🎯 IV. Choosing Between Regimes

• Old regime is preferable if you maximize deductions under 80C, 80D, etc.
• New regime may benefit those with basic savings, fewer investments, and incomes ≤ ₹12L (effectively ₹12.75L including standard deduction)

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✅ V. Action Checklist for FY 2024‑25

1. Tally investments (80C), insurance (80D), home/education loans, rent.
2. Compute tax under each regime using slabs and deductions.
3. Choose the one with lower tax; if under business income old regime can be chosed once.
4. Prepare proof and fill detailed disclosures in ITR (Excel utility requires substantiation).