Tax deductions for IFSC and OBU income provide extended full relief subject to accountant certification and regulatory permission.
Clause 147 provides a consolidated deduction regime for OBUs and IFSC units in SEZs, specifying eligible assessees and qualifying income categories (OBU income, banking activities tied to SEZ undertakings/developers, approved IFSC activities, and transfers of leased aircraft or ships within the stated commencement deadline). It prescribes full deduction for designated consecutive years with an elective window for IFSC units, and conditions the allowance on submitting a prescribed accountant's certification and evidence of regulatory permission or registration.

Deduction for additional employee cost incentivises formal hiring through multi year tax relief subject to reporting and anti abuse conditions.
Clause 146 allows a deduction equal to 30% of additional employee cost for three consecutive tax years where an assessee with business income increases employee numbers and pays emoluments through prescribed modes; claims are disallowed for splitting up, reconstruction, transfer or reorganisation except for revived sick units, and are subject to exclusions based on emolument ceilings, provident fund participation, pension contribution arrangements and minimum tenure thresholds, with the deduction claim contingent on a prescribed accountant's report.

Tax deduction for bio-degradable waste businesses allows full profit exemption for a fixed multi-year period.
Clause 145 provides a deduction for businesses whose profits and gains arise from collecting, processing or treating bio-degradable waste for activities including generating power, producing bio-fertilizers, bio-pesticides or biological agents, producing bio-gas, and making pellets or briquettes for fuel or organic manure. The deduction equals the whole amount of profits and gains from the eligible business and is available for five consecutive tax years beginning with the tax year in which the business commences. Key compliance issues include defining commencement, segregating eligible profits, and clarifying interaction with other incentives.

Tax incentives for North-Eastern undertakings: full profits deduction under new clause replaces prior provision, with revised cross references and limits.
Special tax relief permits a 100% deduction of profits and gains for eligible North Eastern undertakings commencing within the specified window, subject to exclusions for certain goods and activities, anti abuse restrictions on reconstruction or transfer of used machinery, and limits on concurrent deductions and aggregate deduction periods; updated cross references modernize procedural application but may create interpretive ambiguities on commencement date and aggregation scope.

Transitional deduction continuity preserved for eligible housing projects, computed and constrained by prior statutory conditions.
Clause 142 preserves transitional tax relief by incorporating the prior housing-project deduction by reference: assessees who would have been eligible under the repealed provision may claim deductions computed under the prior statute for the tax years that would have been covered, subject to the same substantive conditions-including project approval and completion requirements, unit size and utilization thresholds, separate project accounts, exclusion of works contracts, and the clawback mechanism-while not extending benefits to new projects commenced after repeal.

Grandfathering preserves industrial tax deductions, maintaining prior eligibility and compliance requirements for ongoing transitional claims.
Clause 141 preserves existing deductions for profits and gains of specified industrial undertakings by applying the prior law's eligibility, quantum and duration of deduction as if the repealed provision remained in force. It imports legacy compliance, audit and rule based requirements for ongoing claims, maintains original commencement windows and notification statuses, and prohibits new or extended claims. The clause protects continuity of entitlement while leaving unresolved issues on procedural lapses and treatment of reorganisations.

Start-up tax deduction: eligible start-ups may claim a consecutive-years profits exemption within the first decade, subject to certification and anti-abuse rules.
Clause 140 provides that an eligible start-up deriving profits from an eligible business may claim a full deduction for three consecutive tax years chosen within ten years of incorporation, subject to eligibility limits, certification by an Inter-Ministerial Board, audit and filing requirements, restrictions on formation by splitting or asset transfer, treatment rules for previously used imported machinery and de minimis used-asset transfers, recomputation at market or arm's length value for intra-group transactions, Assessing Officer powers to adjust profits, a bar on double deductions, and a governmental power to notify prospective exclusions of classes of undertakings.

SEZ developer deductions preserved as a transitional protection, applying legacy eligibility and computation rules to ongoing projects.
Clause 139 functions as a transitional savings provision preserving deductions for profits and gains from SEZ development by applying the eligibility, computation, and temporal rules of the repealed provision to developers who commenced projects under that earlier regime, thereby maintaining investor expectations and limiting the relief to unexpired periods without creating new entitlements.

Grandfathering of infrastructure tax deductions allows continuation of prior deduction regime into the new income tax code.
Clause 138 preserves the deduction regime of Section 80-IA as a transitional grandfathering provision: where an assessee's income includes profits from businesses referred to in Section 80-IA and the assessee would have been eligible had the old Act not been repealed, a deduction is allowed computed under Section 80-IA and only for the tax years that would have been available under that section, with all eligibility, computation, anti-abuse, audit and exclusion provisions applying by reference.

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.