New Regime, No 80C? 5 Tax Breaks You Can Still Claim

Most salaried taxpayers are now in the new tax regime by default, and the most common misunderstanding about it is simple: people assume that because 80C is gone, nothing can be claimed at all. That is not true. A small, specific list survives — and one of them, employer NPS, can be worth tens of thousands of rupees if your employer offers it.

Quick Answer: In the new regime under Section 202, you cannot claim 80C, 80D, HRA or LTA, but you can still claim the ₹75,000 standard deduction, your employer's NPS contribution up to 14% of basic plus dearness allowance, the family-pension deduction, the Agniveer contribution and certain retirement benefits. Your own NPS contribution does not count.

From 1 April 2026 the new regime sits in Section 202 of the Income-tax Act, 2025, replacing Section 115BAC of the 1961 Act. The slabs are unchanged: nil up to ₹4 lakh, 5% from ₹4 lakh to ₹8 lakh, 10% to ₹12 lakh, 15% to ₹16 lakh, 20% to ₹20 lakh, 25% to ₹24 lakh and 30% above ₹24 lakh. Salaried taxpayers get a ₹75,000 standard deduction, and a rebate of up to ₹60,000 under Section 156 means a resident individual with qualifying income up to ₹12 lakh pays no tax — so a salary up to ₹12.75 lakh can be effectively tax-free after the standard deduction, subject to conditions. The bargain is lower rates for fewer deductions: the old regime only wins if your actual deductions beat the new regime's lower slabs.

1. Standard deduction — ₹75,000. This applies automatically to salary and pension income. No bills, no proof, no investment needed. It is the single biggest surviving break for most salaried readers, and it is already reflected in monthly TDS. 2. Employer's NPS contribution — up to 14% of salary. Under Section 124 of the 2025 Act (the old Section 80CCD(2)), your employer's contribution to your NPS account is deductible up to 14% of basic salary plus dearness allowance, for every employer, in the new regime. This is over and above the standard deduction. The catch, stated plainly: your own NPS contribution is not deductible in the new regime, and the combined employer contribution to NPS, provident fund and superannuation above ₹7.5 lakh a year has separate tax consequences — check that limit before assuming the full amount is tax-free. 3. Family pension standard deduction — ₹25,000 or one-third, whichever is lower. Pensioners receiving family pension get this smaller standard deduction instead of the ₹75,000 salary deduction. 4. Central Government contribution to the Agniveer Corpus Fund. This narrow break applies to Agniveers under Section 125(2). 5. Retirement benefits within their limits. Gratuity, leave encashment and commuted pension exempt under the salary rules are not removed by Section 202(2), though their exemption limits still apply.

The following do not reduce tax in the new regime: Section 80C investments up to ₹1.5 lakh (PPF, ELSS, life insurance premiums, tuition fees and the rest), Section 80D health insurance premiums, HRA exemption, LTA exemption, the deduction for professional tax, and interest on a self-occupied house property loan. If your monthly budget still assumes an 80C saving that you will claim in the new regime, that saving does not exist — the investment may still be sensible for its own return, but not as a tax deduction.

Take Meera, 34, a salaried employee in Pune with a salary of ₹18 lakh and basic salary plus dearness allowance of ₹10 lakh. Her employer contributes 14% of basic plus dearness allowance to NPS: ₹1,40,000 a year. Without the employer NPS deduction, her taxable income after the ₹75,000 standard deduction is ₹17,25,000. Tax on that, including 4% cess, is ₹1,50,800. With the ₹1,40,000 employer NPS deduction, her taxable income falls to ₹15,85,000, and tax including cess falls to ₹1,22,460. The saving is ₹28,340 a year — from a contribution she did not pay herself. The maths is simplified — normal salary income only, FY 2026-27 slabs — and is an illustration, not an individual computation. If your employer does not contribute to NPS, this break is worth zero to you.

Deciding between regimes is not a slogan; it is arithmetic. This framework, dated 5 November 2026, weighs three factors: total deductions you can actually claim in the old regime (40%), your salary level (30%), and whether your employer offers NPS contributions (30%). It is not a ranking of products and it is not personal advice. As a rule of thumb from earlier worked examples on this site, a ₹15 lakh salary with only the standard deduction pays about ₹97,500 in the new regime including cess. The old regime only beats that if your 80C, 80D, HRA and home-loan deductions together are large enough to pull taxable income well below the new-regime figure. Run both computations on your own salary slip before choosing, and remember that salaried employees can generally switch regimes each year, while business-income taxpayers face stricter switching rules.

First, do not buy an ELSS fund or a PPF deposit in November assuming it will cut this year's tax if you are in the new regime — it will not. Second, do not confuse the employer's NPS contribution with your own: only the employer's share is deductible in the new regime. Third, do not assume the ₹12 lakh rebate covers every kind of income: it applies to qualifying normal income, and capital gains and certain other incomes are treated separately.

Educational content only — not financial advice. Consult a SEBI-registered investment adviser for personal guidance; investments are subject to market risk. Sources: TaxGuru, "Section 202 vs Section 115BAC", 2026; CAclubindia, "New Tax Regime 2026-27: Slabs, Rebate & Relief Explained", 2026; Moneycontrol, "New tax regime: what you can claim, what you can't", 13 July 2026; The Economic Times, "Don't miss out on these 3 key deductions", 30 May 2026.