Which Deductions Are Not Allowed in the New Tax Regime?
Which Deductions Are Not Allowed in the New Tax Regime?
Complete List of Disallowed Exemptions for FY 2024–25 | AY 2025–26
The new tax regime, introduced under Section 115BAC, offers reduced tax slab rates, but comes at a cost—you have to forego most of the common deductions and exemptions.
"Which deductions are not allowed in the new tax regime?"
This is a crucial question for anyone deciding between the old and new tax systems.
Let’s walk through the complete list so you can make an informed choice.
✅ What's the Trade-Off in the New Tax Regime?
While the new regime offers lower slab rates and a simplified filing process, it disallows the majority of tax-saving benefits available in the old regime. So, if you usually claim HRA, 80C, 80D, or home loan deductions, it’s important to know what you’ll be giving up.
❌ Deductions and Exemptions Not Allowed Under New Regime
Here’s a list of key deductions and exemptions that are disallowed if you opt for the new regime in FY 2024–25:
🔹 1. Section 80C – Not Allowed
No deduction for:
• Provident Fund (PF, PPF)
• Life insurance premium (LIC)
• ELSS mutual funds
• Sukanya Samriddhi Yojana
• 5-year tax-saving fixed deposits
• Tuition fees
• Home loan principal repayment
🔹 2. Section 80D – Not Allowed
• Medical insurance premiums for self, family, or parents
• Preventive health check-ups
🔹 3. Section 24(b) – Not Allowed
• No deduction for interest on home loan for self-occupied property
• Cannot claim ₹2,00,000 benefit
🔹 4. House Rent Allowance (HRA) – Not Allowed
• Cannot claim HRA exemption under Section 10(13A), even if you pay rent
🔹 5. Leave Travel Allowance (LTA) – Not Allowed
• Cannot claim tax-free travel reimbursement for domestic vacations
🔹 6. Standard Exemptions on Allowances – Not Allowed
Such as:
• Mobile phone/internet reimbursements
• Food coupons or meal vouchers
• Children's education allowance
• Hostel allowance
🔹 7. Professional Tax – Not Deductible
• Professional tax paid to the state government is not allowed as a deduction
🔹 8. Section 80E – Not Allowed
• No deduction for interest on education loans
🔹 9. Section 80G – Not Allowed
• Donations to charitable institutions are not allowed as a deduction
🔹 10. Section 80TTA / 80TTB – Not Allowed
• No deduction for interest on savings accounts or senior citizen FD interest
✅ What Is Allowed in the New Regime?
Although most deductions are disallowed, a few remain:
| Allowed in the New Regime | Section |
| Standard Deduction (₹50,000 for salaried) | Section 16(ia) |
| Employer’s Contribution to NPS | Section 80CCD(2) |
| Agniveer Corpus Fund | Section 80CCH |
| Family Pension Deduction | Section 57(iia) |
| Rebate under 87A (if income ≤ ₹7L) | ✅ Applicable |
So, while the list of allowed deductions is very limited, the benefit is simplified tax filing with lower slab rates.
📌 Who Should Opt for the New Regime?
The new regime is more suitable for:
• Individuals who don’t make tax-saving investments
• Those with fixed salaries and minimal salary structuring
• People who prefer ease of filing over documentation
✅ Final Thoughts
The new tax regime disallows over 50 popular deductions and exemptions, including 80C, 80D, HRA, and home loan benefits.
If your total deductions exceed ₹2.5–₹3 lakh, the old regime is usually better. But if you don’t claim many benefits, the new regime could save you time and tax.
