Tax & Savings
Pay less tax.
Legally.
Every Section of the Income Tax Act that actually moves the needle for Indian salaried professionals, explained without jargon, with the exact limits for FY 2025-26.
Old regime or new regime?
Rule of thumb for FY 2025-26: if your eligible deductions (80C + 80D + home loan interest + HRA) exceed ₹3.75 L, the old regime wins. Below that, the new regime is usually better.
Use the Tax CalculatorEvery deduction that matters
Sorted by maximum tax saved. Old regime only. New regime disallows most of these.
Section 80C
ELSS, PPF, EPF, NSC, Life Insurance
The biggest deduction bucket. ELSS funds have the shortest lock-in (3 yr) and highest expected return.
Best for: ELSS
Section 80D
Health Insurance Premiums
₹25K for self + family, ₹50K for senior citizen parents. Often the most under-utilized deduction.
Best for: Mandatory
Section 80CCD(1B)
NPS Additional Tier
Over and above 80C. Locks money till retirement but gets EEE tax treatment.
Best for: If retirement-focused
Section 24(b)
Home Loan Interest
Interest on self-occupied home loan. Only under the old tax regime.
Best for: Homeowners only
Section 80E
Education Loan Interest
Full interest deduction for 8 years. Useful right after college.
Best for: First-jobbers
Section 80G
Charitable Donations
50% or 100% deduction depending on the institution. Keep your 80G certificate.
Best for: Conditional
Section 80TTA
Savings Account Interest
Deduction on interest from savings accounts (not FDs). Small but easy.
Best for: Auto-claim
Section HRA
House Rent Allowance
If you live in rented accommodation and HRA is part of your salary structure.
Best for: Renters
80C investments compared
All five major options ranked by realistic post-tax return and liquidity.
| Instrument | Lock-in | Returns | Tax on returns |
|---|---|---|---|
| ELSS Mutual Funds | 3 years | 10–12% (avg) | 10% LTCG above ₹1L/yr |
| PPF | 15 years | 7.1% (current) | Tax-free (EEE) |
| EPF | Till retirement | 8.25% (FY24-25) | Tax-free if > 5 yr |
| NSC | 5 years | 7.7% (current) | Taxable as income |
| Tax-saver FD | 5 years | 6.5–7.5% | Taxable as income |
Deep-dive guides
Common tax-saving mistakes
- Buying ULIPs or endowment policies as "tax-saving insurance." They have 5-6% IRR with terrible liquidity.
- Forgetting that your EPF contribution already counts toward 80C. Most people end up over-investing.
- Picking the new tax regime by default without doing the math for your specific deductions.
- Skipping Section 80D health insurance because employer covers you. Group cover disappears when you switch jobs.
- Investing in tax-saver FDs over ELSS. Same 5-year lock-in, but ELSS gives equity returns.