Non-cash political contributions incentivised by tax deduction promote traceability and exclude public-funded entities from benefits.
Deductibility is confined to contributions made by non-cash means to political parties registered under the Representation of the People Act or to electoral trusts, with exclusions for local authorities and artificial juridical persons wholly or partly funded by the Government. The rule aims to ensure traceability and transparency by disallowing cash donations, requires contemporaneous treatment within the tax year, and imposes documentary and payment-channel compliance obligations on donors and recipients, while leaving certain interpretative points-such as the definition of artificial juridical person and acceptable modern payment modes-open to clarification.

Corporate political donation deduction limited to non cash payments to registered parties, aligned with company law governance obligations.
Clause 136 permits deduction only to Indian companies for non-cash contributions to political parties registered under section 29A of the Representation of the People Act or to electoral trusts, and defines "contribute" by reference to section 182 of the Companies Act, 2013, thereby importing board-approval, disclosure and reporting obligations and excluding cash donations to ensure traceability and alignment with corporate governance standards.

Tax deduction for research donations narrowed, shifting compliance to recipient reporting and preserving donor protection for post donation approval withdrawal.
Clause 135 provides a deduction for donations to approved institutions for scientific and social science/statistical research, requires recipient approval under the new Act's cross references, excludes donors with business or professional income from claiming the deduction, disallows large cash contributions, and conditions allowance of the deduction on information furnished by the payee to the tax authority subject to risk based verification; it also protects donors where recipient approval is withdrawn after the donation.

Charitable donation approval: new time bound, digital compliance regime for donor deductions with stricter reporting requirements.
Clause 354(1) creates a reworked approval regime for registered non profit organisations to qualify for donor tax deductions under section 133(1)(b)(ii), requiring application to the Principal Commissioner or Commissioner and satisfaction of specified conditions: non sectarian status, restriction on asset transfer to non charitable purposes, maintenance of regular accounts, filing prescribed statements with correction mechanisms, issuance of standardised donor certificates, and compliance with defined timelines for application, provisional approval and renewal.

Deduction for interest on educational loans expanded to modernize eligibility and ease higher education financing.
Clause 129 permits individual assessees to claim a deduction for interest paid on loans for higher education taken for the assessee or specified relatives, with the deduction available from the initial tax year of interest payment and continuing for a set number of subsequent tax years or until the interest is fully repaid; key terms such as higher education, financial institution, and approved charitable institution are defined to align with and modernize existing tax frameworks.

Deduction for home loan interest offered to eligible first-time buyers under the new provision, subject to exclusivity and eligibility limits.
Clause 130 provides a capped deduction for interest on loans from defined financial institutions for acquisition of residential house property, limited to loans meeting prescribed sanctioning, loan-amount and property-value conditions and where the assessee did not own residential property at sanction. The clause includes clear definitions and an exclusivity rule preventing claiming similar deductions under other provisions.

Deduction for home loan interest extends targeted tax relief to eligible buyers subject to timing, property value, and ownership conditions.
Clause 131 provides a capped deduction for interest on loans from defined financial institutions for acquisition of residential property, limited to borrowers not eligible under an alternate clause; conditions include a specified loan sanction window, a property value ceiling, absence of residential ownership at sanction, and an exclusivity rule preventing the same interest being deducted under another provision.

Tax deduction for electric vehicle loan interest continues under new clause mirroring prior eligibility and exclusivity rules.
Deduction for interest on loans to purchase electric vehicles is extended in substance by Clause 132, mirroring Section 80EEB: eligibility is limited to individuals with loans from defined financial institutions, the benefit is subject to a specified cap, loans must be sanctioned within the stated time window, claims are exclusive of other interest deductions, and "electric vehicle" is technically defined as a battery electric vehicle with regenerative braking.

Deduction for charitable donations: consolidated framework updates eligible recipients, compliance, digital reporting and anti-duplication rules.
Clause 133 creates a consolidated deduction regime for monetary donations to specified funds and institutions, distinguishing deduction tiers, imposing an aggregate income-related cap on certain donations, prohibiting duplicate claims for the same donation, and requiring non-cash payment for larger contributions. Deduction entitlement is conditional on donee institutions furnishing prescribed information and accepting risk-based verification; definitions exclude purposes wholly or substantially of a religious nature and delegate procedural detail to subordinate legislation.

Rent deduction for non-HRA assessees clarifies eligibility, computation limits, ownership exclusions and rule made procedural conditions.
Clause 134 grants a deduction for rent paid by individuals for residential accommodation occupied as their own residence, allowable only for rent exceeding 10% of total income and capped at the lower of a prescribed monthly ceiling or 25% of total income, with percentages computed on total income before this deduction. The clause excludes assessees who own residential accommodation at the relevant place or who fall within a specified schedule entry, and authorises rule making for additional conditions and procedural requirements to enable verification and prevent double benefit.

Medical expense deduction for specified diseases allows capped relief with specialist prescriptions and insurer offset.
Clause 128 permits residents, including individuals and HUFs, to deduct out-of-pocket medical treatment expenses for specified diseases subject to prescribed monetary caps, requires prescriptions from specified medical specialists, reduces deductions by amounts reimbursed by insurers or employers, provides an increased cap for senior citizens, and defines key terms such as dependant and insurer; the clause aligns with Section 80DDB and Rule 11DD while simplifying certain documentation requirements and deferring disease enumeration to rules or notifications.

Deduction for disabled dependents: proposed clause mirrors existing relief while altering exclusions and insurance conditions and documentation requirements.
Clause 127 permits resident individuals and HUFs to deduct expenses for maintenance, medical treatment, training or rehabilitation of a dependant with a disability and contributions to qualifying insurance schemes; it prescribes standard and higher deduction limits for severe disability, conditions for scheme-based deductions (annuity or lump sum on death or at a specified age), taxability if the dependant predeceases the taxpayer, a mandatory medical certificate (with renewal where required), and an exclusion for dependants claiming relief under a separate provision.

Health insurance deduction expanded to cover premiums, medical expenditure, preventive checks, and senior citizen relief.
Clause 126 provides deductions for health insurance premia and medical expenditure for individuals and HUFs, establishes separate caps for assessees and parents, specifies an aggregate ceiling for combined insurance and medical claims, allows a sub cap for preventive health check ups, prescribes payment modes with non cash norms for most deductions, recognises enhanced relief and lump sum treatment for senior citizens, and sets definitions and insurer eligibility criteria to guide application.

Deduction for Agniveer contributions enables tax relief for enrolled personnel, encouraging savings, recruitment and retention.
A statutory deduction allows full deduction of contributions to the Agniveer Corpus Fund by individuals enrolled in the Agnipath Scheme and of corresponding Central Government contributions, with eligibility defined by enrolment and effective date; taxpayers must substantiate contributions and authorities must adapt administration and reporting to process both individual and government contributions.

Pension contribution deduction: new Clause enhances employer and individual relief while clarifying withdrawal and annuity rules.
Clause 124 establishes statutory deductions for employer and individual contributions to Central Government-notified pension schemes, prescribing differentiated employer contribution caps, an aggregate individual contribution cap applicable to both adult and minor accounts, anti-double-deduction rules, taxable treatment of withdrawals with nominee/guardian exceptions on death, annuity purchase deferral of receipt, and a defined conception of salary for limit calculations.

Deduction for specified savings: new clause aligns tax incentives with existing framework while preserving compliance conditions.
Clause 123 grants deductions to individuals and HUFs for payments in a tax year towards life insurance premia, deferred annuities, provident fund contributions and other specified investments listed in Schedule XV, subject to a maximum deduction of INR 1,50,000 and to conditions set out in Schedule XV; it aligns with Section 80C's policy of incentivising long term savings while differing in the specific catalogue of eligible investments and the detailed conditions governing deductibility.

Deductions from Gross Total Income now constrained by non-duplication and market-value rules, tightening tax compliance obligations.
Clause 122 governs deductions from gross total income by capping aggregate deductions at gross total income, prohibiting duplication of deductions between entity and member levels, restricting multiple claims under different provisions, conditioning deductions on timely filing and claiming in the return, and requiring inter-business transfers to be recorded at market value; it also defines gross total income for deduction purposes.

Filing requirement for loss carryforward: procedural return submission determines eligibility to set off future taxable income.
Only losses determined pursuant to a return filed under the prescribed statutory procedure qualify for carry forward and set off; Clause 121 conditions eligibility on a return filed under Section 263(1) while Section 80 conditions it on a return filed under Section 139(3), each referencing the statutory provisions that define eligible loss categories and thereby tying substantive loss recognition to procedural compliance.

Disallowing set off of losses against undisclosed income prevents offset after tax searches, requisitions, or surveys.
Clause 120 of the Income Tax Bill, 2025 disallows any loss, whether carried forward or otherwise, and any unabsorbed depreciation from being set off against undisclosed income included in total income where such income is detected as a consequence of a search, requisition, or survey; the clause is expressly overriding and depends on the Bill's definition of undisclosed income for its scope.

Carry forward of capital losses: long-term losses limited to long-term gains; short-term losses may be set off under new Bill.
Clause 111 and Section 74 permit carry forward and set off of unabsorbed capital losses, distinguishing long-term losses (set off only against long-term capital gains) from short-term losses (set off against any capital gains), and both limit carry forward to an eight-year period measured from the year the loss was computed; Clause 111 uses the term "tax year" and cross-references related provisions in the new Bill while Section 74 refers to "assessment year."