Tax season often feels overwhelming, but with a little planning and awareness, salaried individuals can legally reduce their tax burden. Here are 5 practical and effective ways to save tax in FY 2025-26:
1. Maximize Section 80C Deductions (Limit Rs 1.5 Lakhs)
Use the full potential of Section 80C by investing in:
- ELSS Mutual Funds (tax-saving + growth)
- PPF (safe long-term saving)
- Life insurance premiums
- EPF and home loan principal repayment
Tip: ELSS has the shortest lock-in period (3 years) and offers higher returns than PPF.
2. Don't Ignore Section 80D: Medical Insurance
- Rs 25,000 deduction for self/spouse/children
- Additional Rs 50,000 if parents are senior citizens
Also covers preventive health checkups (up to Rs 5,000).
3. Claim HRA or Home Loan Benefits Wisely
If you're renting:
- Use HRA exemptionsubmit rent receipts even if paying to parents.
If you own a house:
- Claim interest on home loan under Section 24(b) (up to Rs 2 lakh) and principal under 80C.
4. Use Section 80E for Education Loan Interest
No upper limit on deduction for interest paid on education loans for higher studies (for self, spouse or children).
5. Opt for New Tax Regime Only if You Have Fewer Deductions
The New Tax Regime offers lower tax rates but without most exemptions.
Evaluate your income, deductions, and lifestyle before choosing.
Quick Check: If you have deductions above Rs 2.5-Rs 3 lakh, old regime may be better.
Final Words
Tax planning isn't about evading tax it's about smartly using available benefits. Consult a qualified professional to tailor your tax strategy.
Have questions or need personalized advice?
The author is a Chartered Accountant and founder of Gakhar and Associates, helping individuals and businesses with tax, GST and compliance advisory.
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