Deduction in respect of contribution to Agnipath Scheme
[Section-125 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 125(1) of Income Tax Act 2025
125(1) An assessee, being an individual who has enrolled in the Agnipath Scheme and subscribes to the Agniveer Corpus Fund on or after the 1st November, 2022, shall be allowed a deduction in the computation of his total income, of the whole of the amount paid or deposited in his account in the said Fund during the tax year.
Section 125(2) of Income Tax Act 2025
125(2) Where the Central Government makes any contribution to the account of an assessee in the Fund referred to in sub-section (1), the assessee shall be allowed a deduction in the computation of his total income of the whole of the amount so contributed.
Section 125(3) of Income Tax Act 2025
125(3) In this section,—
- (a) “Agnipath Scheme” means the scheme for enrolment in the Indian Armed Forces introduced vide letter No. 1(23)2022/D(Pay/Services), dated the 29th December, 2022, of the Government of India in the Ministry of Defence;
- (b) “Agniveer Corpus Fund” means a fund in which consolidated contributions of all the Agniveers and matching contributions of the Central Government along with interest on both these contributions are held.
FAQs on Section 125 of Income Tax Act 2025
Who is eligible to claim deduction under Section 125 of the Income Tax Act, 2025?
An individual who has enrolled in the Agnipath Scheme and subscribes to the Agniveer Corpus Fund on or after 1st November, 2022.
From which date is the deduction under Section 125 applicable?
The provision is applicable w.e.f. 1st April, 2026.
What is the amount of deduction allowed for contributions to the Agniveer Corpus Fund?
The whole amount paid or deposited by the assessee into their account in the Agniveer Corpus Fund during the tax year.
Is there any upper limit on the amount of deduction under Section 125(1)?
No, the deduction is allowed for the entire amount paid or deposited in the Agniveer Corpus Fund.
Is the Central Government’s contribution to the Agniveer Corpus Fund also eligible for deduction?
Yes, the full amount of the contribution made by the Central Government to the assessee’s Agniveer Corpus Fund account is also deductible under Section 125(2).
Can the deduction be claimed even if the assessee makes no personal contribution but receives only the government contribution?
Yes, deduction under Section 125(2) applies independently for the government’s contribution.
Can deductions under Section 125 be claimed along with other deductions under Chapter VII of the Act?
Yes, deductions under Section 125 are allowed in addition to other eligible deductions, subject to the provisions of the Act.
What is the ‘Agnipath Scheme’ as referred to in Section 125?
It is a scheme for enrolment in the Indian Armed Forces, introduced via Government of India, Ministry of Defence letter No. 1(23)2022/D(Pay/Services), dated 29th December, 2022.
What is the ‘Agniveer Corpus Fund’?
It is a fund that holds the consolidated contributions of all enrolled Agniveers along with the matching contributions from the Central Government and interest on both.
Is the interest earned in the Agniveer Corpus Fund also eligible for deduction?
No, the deduction under Section 125 applies only to the amount contributed by the assessee and the Central Government, not on interest earned.
Can a person claim deduction under Section 125 for contributions made before 1st November, 2022?
No, only contributions made on or after 1st November, 2022 are eligible.
Is enrollment in the Agnipath Scheme mandatory to claim the deduction?
Yes, only individuals enrolled under the Agnipath Scheme can claim the deduction.
Does this deduction apply to any other fund or scheme?
No, the deduction specifically applies to contributions made to the Agniveer Corpus Fund under the Agnipath Scheme.
Are there any procedural requirements to claim the deduction under Section 125?
While Section 125 does not mention specific procedural requirements, appropriate documentation proving contribution and enrollment under the scheme should be maintained.
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