For most salaried individuals in India, tax season often feels like a sprint against time—collecting documents, decoding Form-16, and trying to zero in on the most applicable deductions. With proper tax planning throughout the year, you can significantly reduce your tax liability without compromising on your earnings. Let's explore the top tax-saving hacks that every salaried professional should know.
Section 80C of the Income Tax Act is your first line of defense against high tax outgo. You can claim deductions of up to ₹1.5 lakh by investing in or paying for these instruments, including:
Hack: Combine EPF + ELSS + Term Insurance + Tuition Fees to reach the ₹1.5 lakh limit optimally.
If you live with your parents and pay rent to them with proper documentation, you can still claim House Rent Allowance (HRA) deduction. Just ensure there is a rental agreement in place (even if informal) with receipts.
Hack: This is especially useful in metro cities where HRA forms a big chunk of your salary deduction.
Health insurance isn't just a safety net—it's also a tax-saving tool.
Want to save more than the 80C limit? The National Pension System (NPS) allows an additional ₹50,000 deduction under Section 80CCD(1B), over and above the ₹1.5 lakh limit of 80C.
It's a combination long-term investment with tax advantages.
Hack: The corpus becomes partially tax-free at maturity. For retirement, home purchase, etc.
Plus, use NPS partly for the existing under 80C(1)(d)—especially if you have maxed out your 80C.
If you're living in a home loan, the interest component of your EMI can fetch you deduction of up to ₹2 lakhs per year under Section 24(b).
The principal portion of the EMI qualifies for 80C benefits, making housing loan a double-tax-saving instrument.
Hack: Combine this with Section 80C pre-paid to reduce interest tax deduction on your home loan.
Every salaried employee is entitled to the ₹50,000 standard deduction — this happens automatically so be sure to verify it's auto-applied by your employer when calculating taxable salary.
Hack: This requires no proof or separate claim. It's standard for all salaried incomes.
With the introduction of the new tax regime, you can opt for lower tax rates without exemptions and deductions. It's simpler, but not always better.
When to stick completely (worksheet):
Use New/Standard Regime (with Subdivided/New Regime): Flat 20 under ₹7 Lakh(hr) - ₹25,000 tax (with 80C, HRA, no other, ₹30,000 tax deduction)etc.
Use Original/Compensated Regime: Big city, lots on Reduction Policy, housing.
Many companies offer reimbursement components like internet, furniture allowances, etc. These are not taxable if supported with proper bills. Submit original bills as they come rather than holding them monthly and document the LTA, fuel, phone bill, etc.
Consider January-end filing deadline for all advantages when you:
Hack: Keep it simple, straightforward, and honest—it's fast, simple, and best for busy professionals.
Bonus Hack: Invest in Tax-Saving Fixed Deposits
Tax-saving FDs offer deduction under 80C with a 5-year lock-in. Return are taxable, but they're ideal for risk-averse investors.
The smartest financial strategy is taking stock—save and something to invest. It's a case-by-case game of smart calculation—never solely relying/falling to templates. When done as ELSS, for double-checking we during the CA please, of deductions and exemptions available, you limit always your tax burden can late-fairly-through February.
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