Section 80C Deduction: The new Income Tax Bill will come into effect from April 1, 2026. Tax experts say that there is no change in tax and slab in it. The government will maintain the deductions available under Section 80C of the Income Tax Act, 1961. This deduction will be available only in the new income tax regime
Section 80C Deduction: The new Income Tax Bill is expected to come into effect from next year. The government has introduced this bill in the Lok Sabha. It has been sent to the Standing Committee of Parliament on Finance, which will discuss it extensively. The government has introduced this bill to simplify the income tax rules. Therefore, many provisions related to tax will change from next year. However, there is no change in tax and tax rates.
No change in deduction limit in section 80C
Tax experts say that no change has been made in tax rates, slabs and special taxes like capital gains tax in the New Income Tax Bill. In this, an attempt has been made to simplify the language and compliance of income tax rules. A major change is going to happen in the deductions available under section 80. In the old regime of income tax, deduction of up to Rs 1.5 lakh is available in a financial year under this section.
Deductions will be available under section 123 from next year
Under section 80C, deduction of up to Rs 1.5 lakh can be claimed by investing in about a dozen investment options including tax plan (ELSS) of mutual funds, PPF, life insurance policy, NPS. Deduction is also available under this section for tuition fees of up to two children. In the new income tax bill, the deduction available under section 80C has been brought under section or clause 123.
There will be a total of 536 sections in the new income tax system
Mayank Mohanka, founder-director of tax consultancy firm TaxAaram.com, said, “Section 123 in the new Income Tax Bill will replace Section 80C of the current Income Tax Act.” The new Income Tax Bill is 622 pages long. It has 536 sections. The Income Tax Act, 1961 has 298 sections. It has 823 pages. Experts say that the new Income Tax Act is likely to come into force from April 1, 2026.
Both income tax regimes will remain
Some taxpayers are confused about the tax regime in the new Income Tax Bill. Tax experts say that even after the new Income Tax Bill is implemented, the system of the new regime and the old regime will continue. Individual taxpayers can use either of the two regimes. There is not going to be any change in the tax rates and provisions on short term capital gains and long term capital gains.
