Tax planning is essential to reduce your tax liability legally. Here are 10 proven strategies to save tax in FY 2025-26.
Old Regime vs New Regime: Which to Choose?
| Particulars | Old Regime | New Regime |
|---|---|---|
| Tax Rate (up to ₹2.5L) | Nil | Nil |
| ₹2.5L - ₹5L | 5% | 5% |
| ₹5L - ₹7.5L | 20% | 10% |
| ₹7.5L - ₹10L | 20% | 15% |
| ₹10L - ₹12.5L | 30% | 20% |
| ₹12.5L - ₹15L | 30% | 25% |
| Above ₹15L | 30% | 30% |
1. Section 80C: Maximum ₹1.5 Lakh Deduction
Invest in these options to claim deduction:
- PPF (Public Provident Fund) - 7.1% interest, tax-free
- ELSS (Equity Linked Savings Scheme) - 3-year lock-in
- Life Insurance Premium
- EPF / VPF (Voluntary Provident Fund)
- NPS (National Pension System) - Additional ₹50,000 under 80CCD(1B)
- Principal repayment of Home Loan
- Children's Tuition Fees
- Sukanya Samriddhi Yojana (for girl child)
💡 Tip: Start early and invest ₹12,500 per month to max out ₹1.5L limit.
2. Section 80D: Health Insurance Premium
- Self & Family (excluding parents): Up to ₹25,000
- Parents (senior citizens): Up to ₹50,000
- Preventive Health Checkup: Up to ₹5,000 (within limits)
3. HRA Exemption (For Salaried Employees)
HRA exemption is least of:
- Actual HRA received
- 50% of salary (metro cities) or 40% (non-metro)
- Rent paid minus 10% of salary
4. Home Loan Benefits
- Principal repayment: Under Section 80C (up to ₹1.5L)
- Interest payment: Under Section 24(b) (up to ₹2L for self-occupied)
- First-time home buyers: Additional ₹50,000 under Section 80EEA
5. NPS (National Pension System) - Extra ₹50,000
Under Section 80CCD(1B), you can invest up to ₹50,000 in NPS over and above 80C limit.
6. Leave Travel Allowance (LTA)
Claim exemption on travel expenses for yourself and family (within India). Can be claimed twice in 4 years.
7. Standard Deduction for Salaried
₹50,000 standard deduction available in both Old and New Regime.
8. Section 80E: Education Loan Interest
Full interest paid on education loan is deductible for up to 8 years (no upper limit).
9. Donations under Section 80G
Donations to approved charities qualify for 50% or 100% deduction (subject to limits).
10. Savings Account Interest
Under Section 80TTA, interest up to ₹10,000 from savings account is deductible.
Calculate Your Tax Instantly
Use our free Income Tax Calculator to compare Old vs New Regime and see your tax savings.
Try Tax CalculatorFrequently Asked Questions
Q: Which is better - Old Regime or New Regime?
A: Old regime is better if you have investments (80C, 80D, HRA). New regime has lower rates but no deductions. Use our calculator to compare.
Q: Can I switch between regimes every year?
A: Salaried individuals can switch every year. Business/Professionals can switch only once in lifetime.
Q: What is the tax saving limit under 80C?
A: Maximum deduction under Section 80C is ₹1.5 lakh per financial year.
