New Provision
Section 123, IT Act 2025
Replaces (IT Act 1961)
80C
Chapter
Chapter VIII — Deductions in Computing Total Income
Effective From
1 April 2026
Statutory Text — Section 123
An individual or a Hindu undivided family, shall be allowed a deduction of the whole of the amount paid or deposited in the tax year, being the aggregate of the sums enumerated in Schedule XV, as does not exceed ₹ 150000, while computing the total income for that year, subject to the conditions specified in that Schedule.
Shahi & Co. — Our Understanding
Section 123 provides the deduction for life insurance premiums, provident fund contributions, and other specified payments — the equivalent of the old Section 80C which allowed deductions up to Rs.1.5 lakh.
Practical Note: This is one of the most widely used tax-saving provisions. The deduction under Section 123 (read with Schedule XV) is available to individuals and HUFs. The investments and payments qualifying for this deduction are listed in the attached schedule.
Shahi & Co., Chartered Accountants
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Disclaimer: This is a reproduction of Section 123 of the Income Tax Act, 2025 (No. 30 of 2025) as published in the Official Gazette of India (CG-DL-E-22082025-265620) for informational and reference purposes only. Shahi & Co., Chartered Accountants makes no warranty as to completeness or accuracy. For the official authenticated text refer to
egazette.gov.in or
incometaxindia.gov.in. This does not constitute legal or tax advice.