Aothour -Tanweer Azam , Last updated: 31 July 2025
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)
You can 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
• You can get a Rs 25,000 deduction for self/spouse/children.
• An additional Rs 50,000 can be deducted if parents are senior citizens.
• This section also covers preventive health checkups (up to Rs 5,000).
3. Claim HRA or Home Loan Benefits Wisely
• If you’re renting: Use HRA exemption and submit rent receipts, even if paying to parents.
• If you own a house: Claim interest on a home loan under Section 24(b) (up to Rs 2 lakh) and the principal under 80C.
4. Use Section 80E for Education Loan Interest
There is 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. You should evaluate your income, deductions, and lifestyle before choosing.
Quick Check: If you have deductions above Rs 2.5-Rs 3 lakh, the old regime may be better.
Final Words
Tax planning isn’t about evading tax; it’s about smartly using available benefits. It is recommended to consult a qualified professional to tailor your tax strategy.
The author, Tanweer Azam , is a Chartered Accountant and founder of INDTAX FILINGS and WTA Associates, assisting individuals and businesses with tax, GST, and compliance advisory.
Frequently Asked Questions (FAQs):
👉 If your total deductions (like 80C, HRA, 80D) exceed ₹2.5–3 lakh, the old regime is usually more beneficial.
👉 Yes, if you’re paying rent in a different city or working away from your owned house, you can claim both—HRA and home loan interest.
👉 ELSS offers higher returns and a shorter 3-year lock-in, but carries market risk. PPF is safer with a 15-year term. Ideal choice depends on your risk profile.
