New tax regime isn’t zero-deduction: here are 10 ways to legally cut your tax bill
Equity investors should take note: long-term capital gains (LTCG) on shares and equity mutual funds are taxed at 12.5% for gains exceeding ₹1.25 lakh, effective July 23, 2024.
- Sep 14, 2025,
- Updated Sep 14, 2025 10:34 AM IST
Most taxpayers assume the new tax regime eliminates deductions — but that’s not entirely true. For Assessment Year 2025-26, several key exemptions and deductions remain available, potentially saving you thousands.
Efiletax outlines ten major tax breaks under the new regime that salaried individuals, pensioners, and business owners can still claim.
At the top of the list is the standard deduction of ₹50,000, available to both salaried employees and pensioners. Also notable is the tax rebate under Section 115BAC, which ensures no tax liability for incomes up to ₹7 lakh — courtesy of a flat ₹25,000 rebate.
Equity investors should take note: long-term capital gains (LTCG) on shares and equity mutual funds are taxed at 12.5% for gains exceeding ₹1.25 lakh, effective July 23, 2024.
Retirement-related deductions are still in play. Employer contributions to the National Pension System (NPS) under Section 80CCD(2) qualify for deductions within specified limits. Contributions to the Agniveer Corpus Fund are also deductible.
Health insurance premiums, under Section 80D, remain deductible for self, spouse, children, and parents. Retirement benefits like gratuity and leave encashment are exempt.
For disabled taxpayers, the transport allowance remains fully exempt. Pensioners receiving family pensions can claim up to ₹15,000 or one-third of the pension (whichever is lower) as a deduction.
Business owners haven’t been left out either. Under Section 80JJAA, a deduction is available for additional employee cost, giving employers an incentive to hire.
Bottom line: The new tax regime isn’t entirely deduction-free. Before filing your return, review what’s allowed — it could make a noticeable difference in your final tax bill.
Most taxpayers assume the new tax regime eliminates deductions — but that’s not entirely true. For Assessment Year 2025-26, several key exemptions and deductions remain available, potentially saving you thousands.
Efiletax outlines ten major tax breaks under the new regime that salaried individuals, pensioners, and business owners can still claim.
At the top of the list is the standard deduction of ₹50,000, available to both salaried employees and pensioners. Also notable is the tax rebate under Section 115BAC, which ensures no tax liability for incomes up to ₹7 lakh — courtesy of a flat ₹25,000 rebate.
Equity investors should take note: long-term capital gains (LTCG) on shares and equity mutual funds are taxed at 12.5% for gains exceeding ₹1.25 lakh, effective July 23, 2024.
Retirement-related deductions are still in play. Employer contributions to the National Pension System (NPS) under Section 80CCD(2) qualify for deductions within specified limits. Contributions to the Agniveer Corpus Fund are also deductible.
Health insurance premiums, under Section 80D, remain deductible for self, spouse, children, and parents. Retirement benefits like gratuity and leave encashment are exempt.
For disabled taxpayers, the transport allowance remains fully exempt. Pensioners receiving family pensions can claim up to ₹15,000 or one-third of the pension (whichever is lower) as a deduction.
Business owners haven’t been left out either. Under Section 80JJAA, a deduction is available for additional employee cost, giving employers an incentive to hire.
Bottom line: The new tax regime isn’t entirely deduction-free. Before filing your return, review what’s allowed — it could make a noticeable difference in your final tax bill.