Deductions under Chapter VIII- Income Tax Act 2025

GNANAGURUSAMY BALAKRISHNAN 30 Mar 2026 2,769 Views 0 comment Print Income Tax | Articles

Deductions under Chapter VIII- Income Tax Act 2025 [Equivalent to Deductions under Chapter VI A of Income Tax Act 1961]

TheIncome-tax Act, 2025 introduces Chapter VIII deductions, replacing the earlier Chapter VI-A structure with a more streamlined and segmented framework covering payments, incomes, and special categories. Section 122 lays down general conditions, including deduction from gross total income, prohibition of double deduction, mandatory timely return filing, and arm length pricing for inter-unit transactions. Section 123 (similar to Section 80C) allows deductions up to Rs. 1.5 lakh for specified investments listed in Schedule XV. Additional deductions include NPS contributions (Sec 124), health insurance (Sec 126), disability-related expenses (Secs 127 & 154), specified disease treatment (Sec 128), and interest on education, housing, and electric vehicle loans. Donations, rent payments, and political contributions are also covered with specific conditions. Importantly, judicial principles affirm that deductions may still be allowed if gross total income is positive despite business losses. Overall, the new regime emphasizes structured compliance, clarity, and restriction on misuse, making deduction claims more rule-driven and system-oriented.

PROVISIONS RELATED TO “DEDUCTIONS UNDER
CHAPTER VIII” UNDER INCOME TAX ACT, 2025

Like Chapter VI-A deductions under Income Tax Act 1961 (Section 80C, 80D, 80 IA etc.), the New Act is also having the following broad structure for deductions from Total Income under Chapter VIII:

A. Part A : General provisions applicable for deductions. (Sec 122)

B. Part B : Deductions in respect of certain Payments. (Sec 123 to 137)

C. Part C : Deductions in respect of certain Incomes. (Sec 138 to 152)

D. Part D : Deductions in respect of other Incomes.

E. Part E : Deductions in respect of other payments.

PART A

A. General Provisions – Sec 122:

Section 122 of IT Act, 2025 prescribes general conditions for claim deductions.

Important provisions are given below:

1) In computing the total income of an assessee, the deduction specified in this Chapter shall be allowed from his gross total income.

2) The amount of deduction under this chapter shall not exceed Gross Total Income.

3) No double deduction is permissible. i.e if any amount is claimed as deduction under chapter, the same amount cannot be claimed under any other provisions of the Act in the same Tax Year or any other Tax Year.

4) The Assessee has to file the Return of Income on or before the due dates prescribed under Section 263 (1). If the Return is filed belatedly, then no deduction under this Chapter is allowed.

5) The Assessee has to make the claim of deductions in his Return of Income.

6) If any transaction(s) is carried out between the different Units / Companies belongs to the same Assessee and if such transactions are eligible for deductions under this Chapter, then such transactions should be at the market price or at Arm’s Length price (for specified domestic transactions).

7) Where any deduction is claimed related to any Income of eligible business, such Income of eligible business should be computed as per the provisions of this Act (before making any deductions under this Chapter).

8) “Gross Total Income” expressed in this Chapter means total income computed as per the provisions of this Act, before making deduction under this Chapter.

Note: Interesting case Law

Consider the following facts:

Particulars	Amount Rs. In Lakhs
Income from Business – Loss Which includes Income of Rs.100 Lakhs from eligible Business, say for example Income derived by an enterprise referred to in Sec 138 of the New Act (eq. to 80 IA of the Old Act)	(-) 150
Income from other sources	(+)400
Gross Total Income	(+) 250

The question is whether the eligible business income of Rs.100 Lakhs can be deducted from Gross Total Income?

In the case of CIT v. Reliance Energy Ltd ([2022] 441 ITR 346 (SC)], the Assessing officer contended that there cannot be any deduction as the income from business is a loss. However, the Supreme Court ruled that if the Gross Total Income is positive, the deduction should be allowed.

PART B

Deduction in respect of certain payment

B1. Deductions for life insurance premia, deferred annuity, contributions to provident fund – Sec 123:

This Section 123 under the New Act is equivalent to Section 80C of the Old Act. Unlike the old Act, where the eligible payments and quantum is specified in section 80C itself, the New Act listed the eligible payments and quantum under Schedule XV of the Act.

1) Important provisions of Sec 123:

a. The provisions of this Section apply only to Individual and HUF.

b. The aggregate of such payments enumerated in Schedule XV shall not exceed Rs.1,50,000 in a Tax year.

c. The amount eligible for deductions should have been paid or deposited in the relevant Tax Year.

2) Schedule XV

List of payments eligible for deductions U/s.123, subject to a maximum of Rs.1,50,000/-.

	Particulars	Conditions
a	Premium paid for a life insurance policy In case of Individual: on life of –such individual, spouse of the individual and any child of the individual In the case of HUF life of any member of the Hindu undivided family	Deductions are allowed only upto 10% of the Sum Insured, if the policy is issued on or after 1.4.2022.If the Policy is issued on or before 31.3.2022, the deduction is restricted to 20% of the Sum Insured. For persons with disability and the policy is issued on or after 1.4.2013, the deduction is restricted to 15% of the Sum Insured.
b	sum paid under a deferred annuity contract on life of the individual, spouse of the individual and any child of the individual	such contract does not contain an option to receive cash payment in lieu of the annuity.
c	sum deducted from salary payable by or on behalf of the Government to any individual for securing deferred annuity.	Deduction is restricted to 20% of salary
d	contribution by an individual to any provident fund to which the Provident Funds Act.	—
e	contribution to an account with any provident fund, set up and notified by the Central Government.	The Account should be opened in the name of the Individual or spouse of the individual and any child of the individual or in case of HUF, in the name of any member of HUF.
f	contribution by an employee to a recognised provident fund	—
g	contribution by an employee to an approved superannuation fund	—
h	subscription to any security or deposit scheme notified by the Central Government in the name of an individual or any girl child of that individual.	Sukanya Samriddhi Account (SSA)
i	subscription to savings certificate as mentioned in section 3(k) of the Government Savings Banks Act.	—
j	contribution for participation in Unit-linked Insurance Plan	Schedule II of the Unit Trust of India
k	contribution for participation in unit-linked insurance plan	Life Insurance Corporation Mutual Fund, referred to in Schedule VII (Table: Sl. No. 20 or 21)
l	sum paid to effect or to keep in force a contract for annuity plan of the Life Insurance Corporation or any other insurer	notified by the Central Government
m	subscription to any units of any Mutual Fund	serial number 20 or 21 of the Table in Schedule VII any plan formulated in accordance with such scheme notified by the Central Government;
n	contribution by an individual to any pension fund	notified by the Central Government
o	subscription to a deposit scheme or contribution to a pension fund of National Housing Bank	notified by the Central Government;
p	subscription to any deposit schemes of public sector company or authority providing long-term finance for construction or purchase of houses or dealing with housing accommodation	notified by the Central Government
q	tuition fees for full time education of any two children of such individual	Paid by the Individual to any University, college, school or other educational institution situated in India (at the time of admission or thereafter)
r	payment made for purchase or construction of a residential house property	It includes- – any instalment or part payment to any development authority, housing board or other authority – any instalment or part payment to any company or co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him – repayment of the amount borrowed by the assessee from Central Government, Bank, LIC, NHB, any public company in which the public are substantially interest, Cooperative society, Employer where such employer is a public company or a public sector company or a University established by law or a college affiliated to such University or a local authority or a co-operative society. – stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee. It does not include: – the admission fee, cost of share and initial deposit which a shareholder of a company or a member of a co-operative society – the cost of any addition or alteration to, or renovation or repair of, the house property, which is carried out after occupied by the assessee or after let out; – any expenditure in respect of which deduction is allowable under section 22 (Interest / property tax)
s	term deposit for a fixed period of not less than five years with a scheduled bank	as per such scheme framed and notified by the Central Government
t	subscription to bonds issued by the NABARD	notified by the Central Government;
u	deposit in an account under the Senior Citizen Savings Scheme Rules, 2004	—
v	5 years term deposit in an account under the Post Office Time Deposit Rules, 1981.	—
w	contribution to an additional account referred to in section 20(3) of the PFRDA Act, 2013 by an employee of the Central Government in NPS	The contribution is for a fixed period of not less than 3 years; and as per the scheme notified by the Central Government.
x	contribution for any annuity plan of Life Insurance Corporation of India or any other insurer	Fund referred to in Schedule VII (Table: Sl. No. 3);
y	contribution made by an individual to a pension scheme (NPS)	Deduction is restricted to 10% of salary* in the case of an employee of the Central Government or any other employer; and 20% of gross total income during the tax year in the case of any other individual. * salary, includes dearness allowance, if the terms of employment so provide, but excluding all other allowances and perquisites.
z	subscription to equity shares or debentures forming part of any eligible issue of capital or any units of any mutual fund referred to in Schedule VII (Table: Sl. No. 20 or 21)	Approved by the CBDT

B2. Deductions in respect of Contribution to NPS – Sec 124:

Contributions made to NPS Fund can be claimed as deductions under Section 124. Important provisions of Sec 124 is given below:

1) Employer’s contribution

In case of an Assessee, being an individual employed by any employer, contribution to NPS by the employer to the account of the employee can be claimed as deduction, subject to the maximum of –

In case of Central Govt. or State Govt. employees : 14% of the Salary.
In case of any other employees (opting for New Tax Regime U/s.202): 14% of the Salary.
In case of any other employees: 10% of the Salary.

2) Individual’s contribution

In case of any Assessee being an individual, amount paid to NPS fund to the extent of Rs.50,000/- shall be allowed as deduction. This can be contributed either to his NPS Account or his minor child’s NPS Account (NPS Vatsalya Account), however, the total contribution shall not exceed Rs.50,000/- in a Tax Year.

If any deduction is claimed under this section, then no deduction shall be allowed under section 123 for the same contribution. (Refer to Schedule XV – sl no. y)

B3. Deductions in respect of Contribution to Agnipath Scheme – Sec 125:

The whole of the amount deposited or contribution made by the Central Govt. in Agniveer Corpus Fund shall be allowed as deduction.

B4. Health Insurance Premium Paid – Sec 126:

1) In case of an Assessee being an Individual, deductions can be claimed to the extent of aggregate of the whole of the amount paid for Health Insurance Premium / other amounts as detailed below:

Particulars	Amount eligible for deduction	Overall maximum amount
Actual amount paid for Health Insurance premium or for preventive Health check-up for an assessee or his family members	Rs.25,000	Rs.50,000
Actual medical expenditure incurred on the health of the assessee or any member of his family	Rs.50,000	Rs.50,000
Actual amount paid for Health Insurance premium or for preventive Health check-up for parents of an Individual	Rs.25,000	Rs.50,000
Actual medical expenditure incurred on the health of any parents of the assessee	Rs.50,000	Rs.50,000

Other Conditions:

(a) the amount spent for preventive health check -up shall not exceed Rs.5,000/-.

(b) In case of Senior Citizen, the amount paid for Health Insurance premium can be deducted upto Rs.50,000/-(instead of Rs.25,000/-).

(c) In case of Senior Citizen, amount spent on medical expenditure shall be allowed, only if no amount has been paid to effect or to keep in force the health insurance of such person.

2) In case of an Assessee being HUF, deductions can be claimed to the extent of aggregate of the whole of the amount paid for Health Insurance Premium / other amounts as detailed below:

Particulars	Amount eligible for deduction	Overall maximum amount
Actual amount paid for Health Insurance premium for any *member of HUF*	Rs.25,000	Rs.50,000
Actual medical expenditure incurred on the health of any *member of HUF*	Rs.50,000	Rs.50,000

Other Conditions:

(a) In case of Senior Citizen, the amount paid for Health Insurance premium can be deducted upto Rs.50,000/-(instead of Rs.25,000/-).

(b) In case of Senior Citizen, amount spent on medical expenditure shall be allowed, only if no amount has been paid to effect or to keep in force the health insurance of such person.

3) Mode of Payments:

All the payments should be made by any mode, other than cash, except in case of Preventive Health Checkups, which can be paid, including cash mode of payment.

B5. Maintenance / Medical treatment of a dependent with disability – Sec 127

An Assessee, being Individual or HUF, who is resident in India can claim the following amount as deduction expenditure for the medical treatment (including nursing), training and rehabilitation of a dependent, being a person with disability or paid or deposited any amount under a scheme framed by the Life Insurance Corporation or any other insurer or the Administrator, or the specified company, for the maintenance of a dependant:

Type	Maximum amount of deduction
Dependent Person with disability	Rs.75,000
Dependent Person severe disability	Rs.1,25,000

Dependent, disability, severe disability are defined under Section 127.

B6. Medical treatment of few diseases – Sec 128

An Assessee, being an Individual or HUF shall be allowed the following deductions for actual amount spent for the medical expenses of prescribed diseases (under Rule 62):

Particulars

Maximum amount eligible for deduction for the amount spent for medical treatment

Medical Treatment is for himself or for any dependent or any member of HUF & the treatment is for

– Senior Citizen

Rs.1,00,000

– Others

Rs. 40,000

Conditions:

(a) A deduction shall be allowed under this section only if the assessee obtains the prescription for the medical treatment from a neurologist, oncologist, urologist, haematologist, immunologist, or any other specialist, as may be prescribed under Rule 62.

(b) The deduction under this section shall be reduced by any amount received under an insurance from an insurer, or reimbursed by an employer, for the medical treatment of the person.

B7. Interest on Education Loan – Sec 129

An Assessee, being an Individual shall be allowed a deduction of amount paid as interest on a loan taken for the purpose of pursuing higher education of himself or spouse or children, subject to the following conditions:

(a) The loan must be taken from any financial institution or any approved charitable institution (approved u/s. 10(23C) or U/s. 80G of the Income Tax Act, 1961)

(b) The Loan is taken for any course of study pursued after passing the Senior Secondary Examination or its equivalent from a school, board, or University recognised by the Government.

(c) The deduction shall be allowed in computing the total income in respect of the initial tax year and 7 subsequent tax years, or until the loan is fully paid by the assessee, whichever is earlier.

B8. Interest on Home Loan – Sec 130

[loan sanction date between: 01.04.2016 to 31.03.2017]

An Assessee, being an Individual, can claim a deduction of interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property, subject to a maximum of Rs.50,000/- in a Tax Year.

Conditions:

(a) the loan has been sanctioned by the financial institution during the period beginning on the 1^stApril, 2016 and ending on the 31^st March, 2017;

(b) the amount of loan sanctioned for acquisition of the residential house property does not exceed Rs.35 Lakhs;

(d) the assessee does not own any residential house property on the date of sanction of loan.

(e) Where a deduction under this section is allowed for any interest, deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other tax year.

B9. Interest on Home Loan – Sec 131

[loan sanction date between: 01.04.2019 to 31.03.2022]

Conditions:

(a) the loan has been sanctioned by the financial institution during the period beginning on the 1^st April, 2019 and ending on the 31^st March, 2022;

(b) the stamp duty value of residential house property does not exceed Rs.45 Lakhs;

(d) Where a deduction under this section is allowed for any interest, deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other tax year.

B10. Interest on Electric Vehicle Loan – Sec 132

An Assessee, being an Individual, can claim a deduction of interest payable on loan taken by him from any financial institution for the purpose of purchase of an electric vehicle, subject to a maximum of Rs.1,50,000/- in a Tax Year.

Conditions:

(a) the loan has been sanctioned by the financial institution during the period beginning on the 1^stApril, 2019 and ending on the 31^st March, 2023;

(b) Where a deduction under this section is allowed for any interest, deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other tax year.

B10. Donations – Sec 133

[equivalent to Sec 80G of the Old Act]

An Assessee can claim deductions for Donations made to Funds / organisations / charitable institutions, as per the following formula:

Particulars	Amount
Total Donations made to Funds / organisations / charitable institutions listed in Annexure – 1 to this Article.	A
50% of Donations made to Funds / organisations / charitable institutions listed in Annexure – 2 to this Article.	B
Total (A+B)	C
Less: Restricted Donations, if any made to Funds organisations charitable institutions.	D
Net Amount Eligible for deduction	E

Computation of Restricted Donations:

Particulars	Amount
Total Donations made to Funds / organisations / charitable institutions listed in (xxiii) and (xxiv) of Annexure – 1 to this Article.	R1
50% of Donations made to Funds / organisations / charitable institutions listed in (ii) to (vi) of Annexure – 2 to this Article.	R2
Total (R1+R2)	R
10% of Adjusted Gross Total Income	G
Amount to be deducted (D) (if R > G)	R-G
Amount to be deducted (D) (if R < G)	Nil

Computation of Adjusted Gross Total Income:

Particulars	Amount
Gross Total Income, as computed under this Act	X
Less: Income on which income-tax is not payable and included in Gross Total Income	Y
Less: Deductions entitled under this Chapter VIII, other than this Section	Z
Adjusted Gross Total Income (G)	G= X(–) Y (-) Z

B11. Deductions in respect of rents paid– Sec 134

1) If an Assessee incurs any expenses towards rent in respect of any furnished or unfurnished accommodation occupied by him for the purposes of his own residence, a deduction can be claimed as per details given below:

2) Amount of Deduction = Lower of the following

(a) Eligible rent amount

(b) 5,000 per month

Eligible Rent Amount:

Particulars	Amount
Total Income of the Assessee in a Tax year	A
10% of the Total Income	B=10% of A
Actual Rent paid	C
Eligible Rent Amount (D) (if C > B)	C-A
Amount to be deducted (D) (if C < A)	Nil

3) Conditions: No Deduction under this Section shall be allowed-

(a) If the Assessee or his spouse or his minor child or any member of HUF (if the Assessee is a HUF) owns any Residential property at the place where he ordinarily resides or performs duties of his office or employment or carries on his business or profession.

(b) If the Assessee owns any Residential Accommodation, at any other place, which is self-occupied and the Annual value determined under section 21(6) or (7) is Nil.

(c) If the Assessee receives any Special Allowance to meet expenditure actually incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee. [generally referred to as House Rent Allowance, as specified in Schedule III (Table: Sl. No. 11)]

B12. Donations for scientific research or rural development– Sec 135

Any amount paid by the Assessee can be claimed as deduction under Sec 135, if it is paid to a Research Association, approved for the purposes of section 45(3)(a)(i) and to be used for

scientific research or a research association approved for
the purposes of section 45(3)(a)(ii) and to be used for research in social science or statistical research.

Conditions: No Deduction under this Section shall be allowed-

(a) If the Gross Total Income of the Assessee includes Profit from Business or Profession.

(b) If the contribution is made in cash in excess of Rs.2,000/-.

B13. Contribution by Companies to Political Parties – Sec 136

An assessee, being an Indian company, shall be allowed a deduction for the amount contributed by it to a political party registered under section 29A of the Representation of the People Act, 1951or an electoral trust.

Condition:

The Contribution should be made by any mode other than by way of cash.

B14. Contribution by Any Assessee to Political Parties – Sec 137

An assessee, (other than a local authority and an artificial juridical person wholly or partly funded by the Government) shall be allowed a deduction for the amount contributed by it to a political party registered under section 29A of the Representation of the People Act, 1951or an electoral trust.

Condition:

The Contribution should be made by any mode other than by way of cash.

Author’s Note:

While Sections 136 and 137 appear to operate in distinct domains, the absence of an explicit prohibition against double deduction for the same contribution creates a potential interpretational ambiguity.

Although settled judicial principles and rules of statutory interpretation would prevent such double claims in practice— particularly by applying the doctrine that a specific provision overrides a general one—the statute could have been more precise.

Notably, the Act, in several other provisions (e.g., Section 124), expressly prohibits double deduction through clear language.

Sec 124(5): No deduction under sub-sections (3) and (4) shall be allowed in respect of the amount on which a deduction has been claimed and allowed under section 123.

Sec 124(10): Where any amount paid or deposited by the assessee has been allowed as a deduction under sub-section (3), no deduction with reference to such amount shall be allowed under section 123 for that tax year.

The absence of a similar safeguard here appears to be a conscious or inadvertent legislative omission.

A practical question therefore arises—if an Indian company makes a contribution to a political party and claims deduction under both Section 136 and Section 137, would the Assessing Officer disallow such double deduction, despite the absence of an express prohibition in either provision?

When the Income-tax Act, 2025 is demonstrably cautious and incorporates stricter safeguards against double deductions in the case of individuals (for instance, Section 124), the corresponding provisions relating to political contributions appear comparatively liberal—or perhaps cautiously drafted.

Section	Eligibility	Quantum of eligible deduction
Sec 138	Profits and gains derived by an undertaking or an enterprise from any business referred to in section80-IA of the Income-tax Act, 1961.	100% of profits of such eligible business
Sec 139	the gross total income of an assessee, being a Developer, includes any profits and gains derived by an undertaking or an enterprise from any business of developing a Special Economic Zone, referred to in section 80-IAB of the Income-tax Act, 1961.	100% of profits of such eligible business
Sec 140	Profits and gains derived from eligible business, carried out by an eligible start-up engaged in innovation, development or improvement of products or processes or services or a scalable business model with a high potential of employment generation or wealth creation;	100% of the profits and gains derived from such business for three consecutive tax years.
Sec 141	Profits and gains derived from any business referred to in section 80-IB of the Income-tax Act, 1961	100% of profits of such eligible business
Sec 142	Profits and gains derived from the business of developing and building housing projects or rental housing projects referred to in section 80-IBA of the Income-tax Act, 1961.	100% of profits of such eligible business
Sec 143	Profits and gains derived by an undertaking, from any business, to manufacture or produce any eligible article or thing or to undertake substantial expansion to manufacture or produce any eligible article or thing or to carry on any eligible business in any of the North-Eastern States [Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura]	100% of the profits and gains derived from such business for ten consecutive tax years commencing with the initial tax year.
Sec 144	Profits and gains derived from the export, of articles or things or from services of a Unit established in Special Economic Zones as referred to in section 10AA of the Income-tax Act, 1961.	100% of the profits and gains derived from such exports.
Sec 145	Profits and gains derived from the business of collecting and processing or treating of biodegradable waste for— (a) generating power; or (b) producing bio-fertilizers, bio-pesticides or other biological agents; or (c) producing bio-gas; or (d) making pellets or briquettes for fuel or organic manure	100% of profits and gains for 5 consecutive tax years, beginning with the tax year in which such business commences.
Sec 146	Assessees liable to file a Tax Audit Report under Sec 63 and having profits and gains derived from business.	30% of additional employee cost incurred in the course of such business in the tax year shall be allowed for 3 consecutive tax years, beginning from the tax year in which the employment is provided.
Sec 147	Income of Offshore Banking Units and Units of International Financial Services Centre of a scheduled bank, or a bank incorporated under the laws of a country outside India, and having an Offshore Banking Unit in a Special Economic Zone or a unit of an International Financial Services Centre.	100% of such Income for 10 consecutive tax years beginning from the relevant tax year in the case of an entity, being a bank incorporated under the laws of a country outside India, and having an Offshore Banking Unit in a Special Economic Zone 100% of such Income for 10 consecutive tax years out of 15 years beginning from the relevant tax year in the case of an entity, being a unit of an International Financial Services Centre.
Sec 148	If the gross total income of a domestic company in any tax year includes any income by way of dividends from— (a) any other domestic company; (b) a foreign company; or (c) a business trust,	An amount equal to so much of the income by way of dividends received as does not exceed the amount of dividend distributed by it at least one month before the due date for filing the return of income under section 263(1).
Sec 149	Deduction in respect of income of co-operative societies.	Please refer to sub- section (2) of Sec 149 for quantum of deduction.
Sec 150	For Authors, being individual & resident in India, and if their gross total income includes any income, derived by him in the exercise of his profession, on account of any lump sum consideration for the assignment or grant of any of his interests in the copyright of any book being a work of literary, artistic or scientific nature, or of royalty or copyright fees (whether receivable in lump sum or otherwise) in respect of such book.	100% such income, or an amount of Rs. 3 Lakhs, whichever is less.
Sec 151	An assessee, being an individual and resident in India, receiving income by way of royalty in respect of a patent registered on or after the 1st April, 2003 under the Patents Act, 1970	100% such income, or an amount of Rs. 3 Lakhs, whichever is less.

Readers are requested to refer to the respective sections of the New Act / Old Act for edibility conditions / quantum of deductions, as only a summary has been compiled for easy reference.

D1. Deductions for interest on SB Account or Deposits – Sec 153

Any Interest earned from Banks (including cooperative Banks) or Post Office by the following types of Assessees can be claimed as deduction, subject to the maximum limit as specified below:

Type of the Assessee	Nature of Income	Maximum Amount eligible
Assessee, who is an Individual *other* *than* a Senior Citizen Assessee being a HUF	Interest on Saving Bank Account (SB Account)	Rs.10,000
Assessee, who is an Individual, being a Senior Citizen	Interest on Saving Bank Account (SB Account) or Interest on Time Deposits (Fixed Deposits) or deposits in any account.	Rs.50,000

PART E

Other deduction

E1. Deductions in case of a person with disability– Sec 154

An individual, being resident in India, who is certified by a medical authority, at any time during the tax year as as a person with disability or person with severe disability shall be allowed a following deduction –

Particulars	Maximum Amount eligible
Person with disability as assigned to it in section 2(i) of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 and includes “autism”, “cerebral palsy” and “multiple disability” respectively referred to in section 2(a), (c) and (h) of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999.	Rs.75,000
Person with severe disability that is person with 80% or more of one or more disabilities, as referred to in section 56(4) of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995; or a person with severe disability referred to in section 2(o) of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999.	Rs.1,25,000

Disclaimer: Readers are advised to refer to the Income-tax Act, 1961 and the Income-tax Act, 2025 and the Rules notified thereunder before taking any decision. The author is not responsible for consequences arising from reliance on this article.

Annexure — A

(i) the National Defence Fund set up by the Central Government; or

(ii) the Prime Minister’s National Relief Fund or the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND); or

(iii) the Prime Minister’s Armenia Earthquake Relief Fund; or

(iv) the Africa (Public Contributions-India) Fund;

(v) the National Children’s Fund; or

(vi) the National Foundation for Communal Harmony;

(vii) a University or any educational institution of national eminence as may be approved by the prescribed authority in this behalf; or

(viii) any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat; or

(ix) any Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district for improving primary education in villages and towns having a population up to one lakh according to the last census of which figures are published before the first day of the relevant tax year, in such district and for literacy and post-literacy activities; or

(x) the National Blood Transfusion Council or any State Blood Transfusion Council which has its sole object the control, supervision, regulation or encouragement in India of the services related to operation and requirements of blood banks; or

(xi) any fund set up by a State Government to provide medical relief to the poor; or

(xii) the Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependants; or

(xiii) the Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996; or

(xiv) the National Illness Assistance Fund; or

(xv) the Chief Minister’s Relief Fund or the Lieutenant Governor’s Relief Fund, if the fund meets all the following conditions:—

(A) it is the only fund of its kind established in the State or the Union territory;

(B) it is under the overall control of the Chief Secretary or the Department of Finance of the respective State or the Union territory;

(xvi) the National Sports Development Fund set up by the Central Government; or

(xvii) the National Cultural Fund set up by the Central Government; or

(xviii) the Fund for Technology Development and Application set up by the Central Government; or

(xix) the National Trust for Welfare of Persons with Autism Cerebral Palsy, Mental Retardation and Multiple Disabilities constituted under section 3(1) of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999); or

(xx) the Swachh Bharat Kosh, set up by the Central Government, other than the sum spent by the assessee in pursuance of Corporate Social Responsibility under section 135(5) of the Companies Act, 2013 (18 of 2013); or

(xxi) the Clean Ganga Fund, set up by the Central Government, where such assessee is a resident and such sum is other than the sum spent by the assessee in pursuance of Corporate Social Responsibility under section 135(5)34 of the Companies Act, 2013 (18 of 2013); or

(xxii) the National Fund for Control of Drug Abuse constituted under section 7A of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985); or

(xxiii) the Government or to any such local authority, institution or association as may be approved in this behalf by the Central Government, to be utilised for the purpose of promoting family planning; or

(xxiv) the Indian Olympic Association or any other association or institution established in India, as the Central Government may, having regard to the guidelines issued in this behalf, by notification, specify for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India, by an assessee being a company;

Annexure — B

(i) the Prime Minister’s Drought Relief Fund;

(ii) any fund or any institution to which this section applies, if:—

(A) it is established in India for a charitable purpose; and

(B) it is a registered non-profit organisation or an institution or fund mentioned in Schedule VII (Table: Sl. No. 1) and approved under section 354;

(iii) the Government or any local authority, to be utilised for any charitable purpose other than the purpose of promoting family planning;

(iv) an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both;

(v) a corporation established by the Central Government or any State Government for promoting the interests of the members of such minority community, as may be notified by the Central Government;

(vi) any entity, for the renovation or repair of any temple, mosque, gurudwara, church or other place which is notified by the Central Government to be of historic, archaeological or artistic importance or to be a place of public worship of renown throughout any State or States.