Section 80C is now Section 123, and other things that changed
A reorganisation rather than a reform. But there is one timing detail that most coverage is getting wrong, and it affects the return you file this month.
Published 30 June 2026 · 5 min read · Sources listed at the end
What changed
The Income-tax Act, 2025 replaced the Income-tax Act, 1961 on 1 April 2026. The 1961 Act had been amended thousands of times over six decades, until sections carried letters and decimals and a single rule needed you to jump across five cross references.
The new Act reorganises everything into a clean sequential structure. Rates did not change. Deduction limits did not change. What changed is nearly every section number you had memorised.
| You knew it as | It is now |
|---|---|
| Section 80C, Rs 1.5 lakh deduction | Section 123, list in Schedule XV |
| Section 80D, health insurance | Section 126 |
| Section 80CCD(1B), extra Rs 50,000 NPS | Section 124 |
| Section 10 exemptions | Schedule II |
| Non salary TDS provisions | Section 393 |
| Section 206C(1G), TCS on remittances | Section 394 |
| Previous Year and Assessment Year | Tax Year |
The timing detail almost everyone gets wrong
The confusion is understandable. The new Act is technically in force right now, so it feels like it should apply. But the return you are preparing reports income earned up to 31 March 2026, which is assessed under the old framework.
A simple rule: confirm which year income you are reporting. That decides which Act and which section numbers apply, not today date.
What did not change
Worth stating clearly, because renumbering on this scale makes people assume more moved than did.
- The Rs 1.5 lakh deduction limit is unchanged, and the same investments qualify: PPF, ELSS, EPF, life insurance premium, NSC, tuition fees, home loan principal.
- ELSS still qualifies, and the three year lock in is unchanged.
- Capital gains rates are unchanged: 20% short term on listed equity, 12.5% long term above Rs 1.25 lakh.
- The deduction remains available only under the old tax regime. The new regime is still the default and still allows almost none of it.
What to actually do
- Nothing changes about your investments. No action is needed on any holding.
- File this July using the old numbers. Your documents will use them too.
- Update your notes for next year, particularly if you keep a personal tax spreadsheet.
- Check your regime first, before assuming any deduction helps you at all. On the new regime the only large one left is employer NPS contribution.
More detail in tax on investments and tax saving investments.
Where these facts come from
- Income-tax Act, 2025, in force from 1 April 2026
- CBDT section mapping utility for the 1961 and 2025 Acts