What is the extra ₹50,000 NPS deduction everyone talks about?

Section 80CCD(1B) allows an additional deduction of up to ₹50,000 for your own contribution to the National Pension System (NPS), over and above the ₹1.5 lakh limit of Section 80C. So if you have already exhausted 80C with EPF, ELSS, and PPF, you can still invest up to ₹50,000 in NPS and claim it separately. This is available under the old regime and is one of the most commonly missed deductions because people assume 80C is the ceiling.

Is education loan interest fully deductible?

Yes. Under Section 80E, the entire interest paid on an education loan for higher studies — for yourself, your spouse, your children, or a student for whom you are the legal guardian — is deductible with no upper limit. There is no cap on the amount, but the deduction is available for a maximum of eight years (or until the interest is fully paid, whichever is earlier), starting from the year you begin repaying. Only the interest qualifies, not the principal.

Can I claim deductions beyond 80C under the new tax regime?

Mostly no. The new tax regime removes almost all deductions, including 80C, 80CCD(1B), 80D, 80E, home loan interest on a self-occupied home, and donations under 80G. The main exception is the employer's NPS contribution under Section 80CCD(2), which remains available in the new regime. So if you want to use the deductions in this guide, you generally need to be on the old regime — check first which regime saves you more overall.

How much can interest on a savings account be claimed tax-free?

Under Section 80TTA, interest from savings bank accounts (with banks, co-operative banks, or post offices) is deductible up to ₹10,000 per year for individuals below 60. For senior citizens, Section 80TTB is more generous, allowing a deduction of up to ₹50,000 on interest from both savings accounts and fixed deposits. These are small but easy deductions, available under the old regime, that many people overlook entirely on their returns.

Tax Saving Beyond 80C: 8 Deductions People Forget

Ask most salaried Indians how they save tax and the answer is the same: Section 80C. They fill the ₹1.5 lakh bucket with EPF, a bit of ELSS, maybe an insurance premium — and stop there, assuming that is the limit of what is possible.

It is not. The Income Tax Act offers a whole set of deductions that sit entirely outside the 80C ceiling. Used together, they can reduce your taxable income by several lakhs — yet they are routinely forgotten because they live in sections most people have never heard of. This guide covers eight of the most useful deductions beyond 80C for FY 2025-26 (AY 2026-27), with a worked example showing how they stack.

A vital caveat up front: almost all of these are available only under the old tax regime. The new regime trades them away for lower slab rates. So before relying on any of them, confirm the old regime is right for you using our old vs new tax regime guide and the income tax calculator.

1. NPS — The Extra ₹50,000 (Section 80CCD(1B))

This is the most valuable forgotten deduction. Section 80CCD(1B) allows up to ₹50,000 for your own contribution to the National Pension System (NPS) — completely separate from, and on top of, the ₹1.5 lakh of Section 80C.

So a taxpayer who has already filled 80C with EPF and ELSS can invest a further ₹50,000 in NPS and deduct it. At the 30% slab, that is ₹15,000 of tax saved annually for a long-term retirement contribution. The lock-in (largely until age 60) makes NPS unsuitable as a liquid savings tool, but as a dedicated retirement deduction it is hard to beat.

2. Employer's NPS Contribution (Section 80CCD(2))

Distinct again is Section 80CCD(2) — the deduction for your employer's contribution to your NPS. This can be up to 10% of basic salary (14% for central government employees) and is not counted within your 80C or 80CCD(1B) limits.

Remarkably, this is the one deduction that survives in the new tax regime. If your employer offers NPS as part of your CTC, restructuring a portion of salary into employer NPS can save tax in either regime — a rare overlap. Our guide on salary restructuring for tax explores this.

3. Health Insurance (Section 80D)

Section 80D covers health insurance premiums and is entirely separate from 80C. The limits:

₹25,000 for self, spouse, and children (all below 60)
₹50,000 if you or your parents are 60 or above

Insuring yourself and senior-citizen parents can yield up to ₹75,000 in deductions (or ₹1 lakh if you too are a senior). For a 30%-slab taxpayer, the parents' ₹50,000 alone saves ₹15,000.

4. Home Loan Interest (Section 24(b))

If you have a home loan on a self-occupied property, Section 24(b) allows up to ₹2,00,000 a year as a deduction for the interest component — separate from the principal, which falls under 80C. For a let-out property the interest is uncapped (see tax on rental income).

At the 30% slab, the full ₹2 lakh interest deduction saves about ₹62,400 with cess — often the single largest deduction a middle-income taxpayer claims. Combined with the principal under 80C, a home loan is a substantial tax shield, detailed in our home loan tax benefits guide.

5. Education Loan Interest (Section 80E)

Section 80E allows the entire interest on an education loan for higher studies to be deducted — with no upper limit. The loan can be for yourself, your spouse, your children, or a student for whom you are the legal guardian.

The deduction runs for up to eight years from the year repayment begins (or until the interest is fully paid, if earlier). Only interest qualifies, not principal. For families funding expensive degrees in India or abroad, this is a meaningful, uncapped relief that is frequently overlooked.

6. Savings and Deposit Interest (Sections 80TTA / 80TTB)

Small but easy:

Section 80TTA — up to ₹10,000 on savings-account interest, for individuals below 60.
Section 80TTB — up to ₹50,000 on interest from savings accounts and fixed deposits, for senior citizens (in which case 80TTA does not separately apply).

Senior citizens in particular leave money on the table by not claiming 80TTB, which can shelter a large chunk of their FD interest income.

7. Donations (Section 80G)

Donations to eligible charitable institutions and funds qualify under Section 80G, at either 50% or 100% of the donation depending on the institution, sometimes subject to a qualifying limit. Donations to certain government funds (like the PM's relief fund) are 100% deductible without limit.

Two conditions matter: donations above ₹2,000 must be made in a non-cash mode, and the institution must be registered with a valid 80G certificate. Keep the receipt with the institution's registration details.

8. Disability and Medical Deductions (Sections 80DD, 80DDB, 80U)

A cluster of deductions for medical hardship:

Section 80DD — for expenses on the maintenance/medical treatment of a dependent with a disability: a fixed deduction of ₹75,000, rising to ₹1,25,000 for severe disability.
Section 80DDB — for treatment of specified serious diseases (for self or a dependent), up to ₹40,000, or ₹1,00,000 for senior citizens.
Section 80U — for a taxpayer who is themselves a person with a disability: ₹75,000, or ₹1,25,000 for severe disability.

These are not lifestyle deductions but genuine reliefs for families dealing with medical adversity, and they are widely under-claimed because people are unaware they exist.

A Ninth, Bonus Deduction: Rent Without HRA (Section 80GG)

What if you pay rent but your salary has no HRA component, or you are self-employed? You are not shut out. Section 80GG lets you claim a deduction for rent paid, subject to conditions, even without HRA.

The deduction is the least of: ₹5,000 per month (₹60,000 a year); 25% of your total income; or actual rent paid minus 10% of total income. You must not own a residential house at your place of work, and neither you, your spouse, nor your minor child should own a home in that city. You also file a simple declaration (Form 10BA) confirming the rent.

For a self-employed consultant paying ₹20,000 a month rent in a city where they own no home, 80GG can deliver up to ₹60,000 of deduction — modest, but entirely free relief that salaried-without-HRA and self-employed taxpayers routinely miss. If you do receive HRA, you claim the HRA exemption instead, using our HRA exemption calculator — you cannot claim both.

Understanding the 80G Qualifying Limit

Section 80G deserves a closer look because the "50% or 100%" headline hides a second layer. Donations fall into four buckets:

100% deduction, no qualifying limit — e.g. the PM's National Relief Fund. Donate ₹50,000, deduct ₹50,000.
50% deduction, no qualifying limit — e.g. the PM's Drought Relief Fund. Donate ₹50,000, deduct ₹25,000.
100% deduction, subject to qualifying limit — capped at 10% of adjusted gross total income.
50% deduction, subject to qualifying limit — most general charitable trusts fall here, also capped at 10% of adjusted gross total income.

The "qualifying limit" means that for many ordinary charities, the donation eligible for deduction is capped at 10% of your adjusted gross total income, and then only 50% of that capped amount is deductible. So a large donation to a small charity may yield a smaller deduction than the sticker percentage suggests. Always check which bucket the institution falls into — its 80G certificate states it.

Putting It Together: A Worked Example

Vikram, 42, earns ₹22,00,000 in Bengaluru, supports senior-citizen parents, has a home loan, and is repaying his daughter's education loan. He is on the old tax regime. Here is how his deductions stack:

Deduction	Section	Amount
EPF + ELSS + PPF	80C	₹1,50,000
NPS (own contribution)	80CCD(1B)	₹50,000
Health insurance (self ₹25,000 + senior parents ₹50,000)	80D	₹75,000
Home loan interest (self-occupied)	24(b)	₹2,00,000
Education loan interest	80E	₹90,000
Standard deduction	—	₹50,000
Total deductions		₹6,15,000

His taxable income: ₹22,00,000 − ₹6,15,000 = ₹15,85,000.

Without anything beyond 80C and the standard deduction, his deductions would have been just ₹2,00,000 (₹1.5L + ₹50K standard), leaving ₹20,00,000 taxable. The extra ₹4,15,000 of deductions — all from sections beyond 80C — sits largely in his 30% slab.

Tax saved by going beyond 80C: roughly ₹4,15,000 × 30% = ₹1,24,500, plus 4% cess — about ₹1,29,480 in tax, in a single year. That is the cost of stopping at 80C.

The Regime Decision Comes First

None of this matters if you are on the new regime, where these deductions mostly vanish. So the very first decision is the regime choice. For someone like Vikram with ₹6 lakh of deductions, the old regime is almost certainly better. For a young earner with no loan and minimal investments, the new regime's lower rates usually win. Run both with the income tax calculator before committing — this is the foundation of sensible tax planning in India.

Common Mistakes

Stopping at the ₹1.5 lakh 80C ceiling. The biggest miss. 80CCD(1B), 80D, 24(b), and 80E are all separate buckets — treat 80C as a floor, not a cap.

Forgetting the ₹50,000 NPS top-up. 80CCD(1B) is genuinely additional. Many people never claim it.

Claiming these under the new regime. Almost all of them are old-regime only. Confirm your regime first.

Donating ₹2,000+ in cash. Cash donations above ₹2,000 do not qualify under 80G. Use a non-cash mode and keep the receipt.

Confusing education loan principal with interest. Only the interest qualifies under 80E — the principal does not.

Overlooking 80TTB for seniors. Senior citizens can shelter up to ₹50,000 of interest income but routinely forget to claim it.

Last-minute scrambling. Rushing in March to "save tax" leads to poor product choices. Plan these deductions across the year, not in the final week — the difference between tax planning and tax saving.

What to Do Next

A note on documentation. Each of these deductions needs its own proof: the NPS contribution receipt, the insurer's 80D certificate, the lender's interest certificate for home and education loans, the bank's interest summary, and the donee's stamped 80G receipt. The deductions themselves are generous, but a claim you cannot substantiate is a claim that can be disallowed if your return is reviewed. Collect these through the year rather than hunting for them in July, and store them alongside your other records. The taxpayers who save the most are not the ones who know the most obscure section — they are the ones who claim every section they qualify for, with the paperwork to back it up.

Section 80C is where tax saving starts, not where it ends. The deductions beyond it — NPS, health insurance, loan interest, donations, and medical reliefs — are where serious savings live. Map them out early, confirm your regime, and claim every bucket you qualify for.

Disclaimer: This article is for educational purposes only and is not tax advice. Tax rules change frequently — verify current provisions on the official income tax portal or with a qualified CA before filing.