Nobody likes to pay more income tax than what the law requires. The most important thing to remember is not to make investments simply because the fiscal year is ending. Tax planning requires understanding one’s income, eligible deductions, exemptions, investments and the applicable tax rules.
These income tax saving tips can help one prepare for their tax planning before the end of the year. Whether one is a salaried employee, freelancer or a business owner, having a planning schedule throughout the year gives one an advantage.
This guide highlights basic income tax saving tips for FY 2025-26 / AY 2026-27. If one needs help with their personal tax planning or return filing, a tax consultant in Gurgaon can go over one’s income and eligible deductions to help one with their specific situation.
Why Tax Planning Is More Than Just Buying An Insurance Policy In March
Tax planning is more than just buying a health insurance policy or making investments in March. It requires reviewing one’s income, investments, insurance, home-loan interest, rent and other applicable deductions before finalizing one’s tax planning.
With good income tax saving tips, one can:
- Reduce one’s overall tax liability legally
- Know the difference between the old and new tax regimes
- Claim eligible deductions
- Maintain investment and tax records
- Avoid last-minute investments
- Review one’s TDS and eligible income before filing
- File accurate returns on time
For FY 2025-26, the new tax regime is the default regime for eligible individual taxpayers, with eligible taxpayers choosing to opt for the old regime on a voluntary basis following the applicable procedures. The new regime has a tax-slab structure offering tax rates starting from zero percent for income up to ₹4 lakh and rising to 30% for income over ₹24 lakh. Additionally, eligible residents can avail of a rebate of up to ₹60,000 under Section 87A if their total income is up to ₹12 lakh, with various conditions applying. This rebate should not be treated as an exemption on all types of income.
Under the new tax regime for FY 2025-26, eligible salaried employees can also claim the standard deduction of ₹75,000. On the other hand, the old tax regime continues to offer deductions and exemptions under various sections for eligible taxpayers, subject to their individual situations.
Therefore, one of the most important income tax saving tips is to compare the tax liability under both regimes.
9 Tax-Saving Tips Worth Considering
- Compare Tax Regimes Before Finalizing : Do not follow blindly whatever one’s friend or colleague does. When comparing the tax regimes, take into account one’s income and eligible deductions under both regimes.
The new tax regime offers lower slab rates but limited deductions, whereas the old regime allows various deductions but higher slab rates. Therefore, if one has higher eligible deductions under Sections 80C, 80D, HRA and other applicable provisions, it might be beneficial to continue with the old regime.
For FY 2025-26, eligible taxpayers can choose their tax regime while filing the ITR, subject to certain conditions. Taxpayers with business or professional income have additional provisions for changing their tax regime.
Therefore, comparing one’s tax liability is one of the most important income tax saving tips.
- Claim Deduction Under Section 80C (Old Regime): If one is continuing with the old tax regime, one can make eligible investments and claim a deduction of up to ₹1.5 lakh under Section 80C. Eligible investments include:
- Employees’ Provident Fund (EPF)
- Public Provident Fund (PPF)
- Equity Linked Saving Scheme (ELSS)
- National Savings Certificate (NSC)
- Eligible five-year bank tax-saving fixed deposits
- Life insurance premium
- Children’s education fees
- Repayment of principal amount of an eligible housing loan
However, the most important income tax saving tip is not to make investments just to utilise the ₹1.5 lakh limit. One should make investments according to one’s financial needs and goals.
Claiming a deduction under Section 80C is among the most popular income tax saving tips for individuals following the old tax regime. The Income Tax Department has specified the eligible investments that can be claimed under Section 80C.
- Section 80D (Health Insurance Premium): Under Section 80D, eligible taxpayers can claim a deduction for health insurance premiums paid for themselves, their spouse, dependent children, and parents, subject to the applicable limits.
- Up to ₹25,000 for self, spouse and dependent children.
- Up to ₹50,000 if the insured individual is a senior citizen.
- An additional deduction of up to ₹25,000 is available for parents.
- The limit for parents can increase to ₹50,000 if the parent is a senior citizen.
- Preventive health check-up expenses of up to ₹5,000 are included within the applicable overall limit.
- Certain medical expenses for senior citizens who are not covered by health insurance may also qualify, subject to the prescribed conditions and limits.
- Avail Of Additional ₹50,000 Deduction Under Section 80CCD(1B): Eligible taxpayers following the old tax regime can claim an additional deduction of up to ₹50,000 under Section 80CCD(1B). This deduction is available for making eligible contributions to the National Pension System. This deduction is in addition to the ₹1.5 lakh deduction under Section 80C.
However, claiming this deduction is subject to the conditions prescribed under Section 80CCD(1B). The deduction is available for eligible contributions made to the National Pension System (NPS).
The Income Tax Department has specified that a deduction of up to ₹50,000 can be claimed under this sub-section.
If one is thinking of investing in this pension scheme, it can be one of one’s income tax saving tips for FY 2025-26.
- Understand House-Loan Tax Benefits: If one has taken a home loan, understand that the tax benefits depend on the type of property, its usage and the tax regime. Under the old tax regime, the repayment of the principal amount of an eligible housing loan can be claimed under Section 80C, whereas eligible interest on the loan can be claimed under Section 24(b) for a self-occupied home, subject to applicable limits.
For a let-out property, eligible home-loan interest can be claimed under Section 24(b), subject to the applicable house-property rules and conditions. The tax treatment can differ from that of a self-occupied property.
However, if the property is self-occupied, one can claim the deduction under Section 80C for the principal repayment and the deduction under Section 24(b) for the interest paid on the loan, subject to applicable limits.
Therefore, make sure that one is eligible to claim the deductions for a home loan. Do not simply assume that one can claim deductions on both the interest and the principal amount. A tax consultant in Gurgaon can help one with one’s home-loan-related deductions when one files one’s tax return.
- Claim HRA Or Section 80GG Deduction: As a salaried employee, if one is getting House Rent Allowance (HRA) as part of one’s salary, one may claim a deduction under the old tax regime subject to certain conditions. On the other hand, if one is not receiving HRA as part of one’s salary, one can claim a deduction for the rent paid under Section 80GG, subject to different conditions.
Section 80GG is applicable for individuals who are not covered by HRA. The Income Tax Department has specified that a deduction of up to ₹1.5 lakh can be claimed for individuals who have borne the rent expense. Additionally, Form 10BA information has to be submitted for claiming the deduction under this section. Make sure to keep one’s rent receipts and other supporting documents when claiming a deduction under either HRA or Section 80GG.
Checking one’s eligibility for claiming a deduction under HRA or Section 80GG falls under the income tax saving tips to consider before filing one’s return.
- Deduct Education-Loan Interest Under Section 80E: If one has taken an education loan, one can claim a deduction for the interest paid on the loan under Section 80E, subject to applicable conditions. The deduction under this section is available for the interest on an education loan that has been incurred to pursue higher studies. However, this deduction is not available for the repayment of the principal amount of the education loan. This deduction is also only available for the old tax regime.
Keep the interest certificate issued by the education lender and make sure that one meets the conditions for claiming the deduction before one claims it. Therefore, for individuals who have availed an education loan, this can be one of one’s income tax saving tips for FY 2025-26.
- Maintain Supporting Tax Documents: Even the best income tax saving tips will get one nowhere if one does not keep track of all one’s documents. Before filing one’s return, ensure that one has the following documents available:
- One’s Form 16
- Information of salary and other income
- Investment documents
- Insurance premium documents
- Home-loan interest certificate, if any
- Rent documents, if any
- Education-loan interest certificate, if any
- Documents related to capital gains, if any
- Information regarding bank and other interest, if any
- TDS statement
Ensure that the details in the return match those mentioned in one’s Form 26AS, AIS and TIS statements. If the details do not match, investigate the discrepancy before filing the return instead of blindly copying one set of numbers into another.
Maintaining the relevant documents is one of the most important income tax saving tips, as any deduction claimed has to be backed by proof.
- File Accurate Return Before The Due Date: Tax planning only gets one so far; eventually, one needs to file an accurate return with all the relevant information. For FY 2025-26 / AY 2026-27, the due date for filing the ITR depends on the taxpayer and whether they are required to get their accounts audited. As per the Income Tax Department, the due date for filing the ITR for non-audit cases is 31 July 2026, while other taxpayers have a later due date. For example, the ITR-4 due date for AY 2026-27 is 31 August 2026, according to the Department. Taxpayers with tax-audit cases have separate deadlines for filing their returns.
Therefore, when considering income tax saving tips, remember not to follow a uniform due date for everyone.
A late-filing fee may be levied if one misses the due date for filing one’s tax return. For AY 2026-27, the Income Tax Department has specified a late-filing fee under Section 234F. As per the Department, the late-filing fee for taxpayers with an income of up to ₹5 lakh is ₹1,000, while for others, it is ₹5,000, subject to certain conditions. Additionally, interest may also be levied if one has not paid the outstanding tax amount.
Filing accurate returns on time is one of the most important income tax saving tips.
Tax-Saving Mistakes To Avoid
No matter how many income tax saving tips one follows, some basic mistakes can ruin everything for one. Some of the most common mistakes to avoid include :
- Making last-minute investments without understanding them
- Claiming deductions without supporting documents
- Forgetting to report taxable interest income or other income
- Missing rental income or other capital gains
- Selecting the wrong ITR form
- Not comparing the details in one’s return with those in the AIS and Form 26AS
- Following the wrong tax regime that leads to a higher tax liability
- Missing the ITR filing date due to miscalculations
Claiming a deduction that one is not eligible for simply because someone else has claimed it
Tax planning requires taking advantage of eligible deductions, exemptions and sections. It should not involve misreporting income or claiming ineligible deductions.
Tax-Saving Tips For Salaried Employees
Salaried employees should start their tax planning before the end of the financial year. Some useful income tax saving tips for salaried employees include:
- Understanding one’s projected income
- Knowing which tax regime applies to one
- Submitting eligible investment claims to one’s employer before their deadline
- Understanding one’s salary structure and Form 16
- Checking one’s HRA eligibility, if any
- Keeping all one’s insurance and investment documents
- Checking one’s TDS details
- Comparing the details in Form 16 with those in the AIS and Form 26AS, after they become available
- Reviewing one’s final tax calculation before filing
When it comes to salaried employees and taxes, one’s employer’s TDS is not one’s final tax liability. One’s final liability depends on one’s income and eligible deductions. Therefore, when it comes to salaried employees, these are some of the best income tax saving tips.
G Dinesh & Associates: Your Tax Consultant In Gurgaon
One’s tax liability depends on one’s income, eligible deductions and other factors. A general guide will not help one much; one needs a detailed calculation based on one’s financial information.
G Dinesh & Associates offers tax-planning and return-filing services based on the taxpayer’s financial needs. If one is looking for a tax consultant in Gurgaon or needs help with income tax return filing in Gurgaon, professional assistance can help one understand the relevant provisions and file an accurate return.
A tax consultant in Gurgaon can also help one compare the old and new tax regimes, claim eligible deductions and avoid mistakes before one files one’s return. For individuals and businesses requiring income tax return filing in Gurgaon, the focus should be on accurate filing and documentation, as per the applicable rules
FAQs
One should compare the old and new tax regimes, understand deductions under the applicable regime and maintain all one’s documents. Deductions under Sections 80C, 80D, 80CCD(1B), HRA, 80GG, home-loan and education-loan provisions can help reduce one’s tax liability legally if one meets the eligibility criteria. The most useful income tax saving tips will depend on one’s personal financial situation.
The new tax regime is the default regime for eligible individual taxpayers, and eligible taxpayers can choose to continue with the old regime on a voluntary basis. However, one should always compare the tax-saving provisions under both regimes before finalizing one’s choice.
Deductions under Section 80C are not available under the new tax regime. The new tax regime has provisions that are significantly different from those under the old regime. Therefore, one should always compare the old and new tax regimes before finalizing one’s choice.
Some of the best tax-saving tips for salaried employees include comparing the old and new tax regimes, maintaining eligible documents, checking one’s Form 16, reviewing one’s TDS and comparing the details in one’s tax records before filing.
One should not make any investments solely for tax-saving purposes. One should always consider one’s financial goals and needs before making any investment decisions.
G Dinesh & Associates provides income tax return filing in Gurgaon along with other compliance services for eligible taxpayers.
If one needs income tax return filing in Gurgaon, professional assistance can help one organize one’s documents and file an accurate return.
One of the most important income tax saving tips is to begin one’s tax planning early in the year instead of leaving it to March. Early tax planning helps one utilize the time to review one’s options, make investments and meet one’s filing deadlines without any last-minute hassle.
