Most people start thinking about tax in February, when the employer asks for investment proofs — and end up buying whatever product is closest at hand. Planning a little earlier costs nothing and usually saves real money. These tips apply to the financial year 2025-26; limits change from budget to budget, so check with us for the year you are planning.
1. Choose your tax regime deliberately
The new tax regime is now the default, and with income up to ₹12 lakh effectively tax-free under it, many people no longer need any tax-saving investments at all. Others still save more under the old regime. Do the maths before the year begins — our old vs new regime comparison shows how.
2. Use Section 80C fully (old regime)
Under the old regime you can deduct up to ₹1.5 lakh a year for:
- your EPF contribution and voluntary PPF deposits;
- ELSS mutual funds, which have the shortest lock-in, at three years;
- life insurance premiums and the principal part of home-loan EMIs;
- children’s tuition fees, tax-saver fixed deposits, NSC and Sukanya Samriddhi deposits.
Count what you already pay — EPF and tuition fees often fill most of the limit before you invest a rupee more.
3. Insure your family’s health (old regime)
Section 80D allows up to ₹25,000 for health insurance for yourself, your spouse and children, and another ₹25,000 for your parents — ₹50,000 if they are senior citizens. Preventive health check-ups of up to ₹5,000 count within these limits. It is one deduction that protects you twice.
4. Add NPS for an extra deduction
Under the old regime, your own NPS contribution earns an extra deduction of up to ₹50,000 over and above 80C. And in both regimes, your employer’s contribution to NPS is deductible — up to 14% of basic salary under the new regime and 10% under the old. Ask HR whether your salary can be restructured to include it.
5. Make the most of your salary structure
Every salaried taxpayer gets a standard deduction — ₹75,000 under the new regime and ₹50,000 under the old. If you live in rented accommodation and choose the old regime, claim house rent allowance with rent receipts and, where the rent crosses ₹1 lakh a year, the landlord’s PAN.
6. Claim your home loan benefits
Under the old regime, interest on a loan for a self-occupied house is deductible up to ₹2 lakh a year, and the principal repayment counts under 80C. For a let-out property, interest can be set against the rent in both regimes.
7. Plan your capital gains
Long-term gains on listed shares and equity mutual funds are tax-free up to ₹1.25 lakh a year, and taxed at 12.5% above that. Selling and reinvesting enough each year to use this exemption — often called tax-gain harvesting — can save a meaningful amount over time. Short-term gains on equity are taxed at 20%, so timing your sales matters.
8. Pay advance tax on time
If your tax for the year, after TDS, is ₹10,000 or more — common for business owners, freelancers and people with large interest or capital gains — pay it in instalments:
| By | Cumulative tax paid |
|---|---|
| 15 June | 15% |
| 15 September | 45% |
| 15 December | 75% |
| 15 March | 100% |
Missing an instalment costs interest at 1% a month on the shortfall. Businesses using presumptive taxation can pay the full amount by 15 March, and senior citizens without business income don’t need to pay advance tax at all.
Keep your paperwork together
Download your AIS and Form 26AS twice a year to check that every TDS entry and high-value transaction is correct, and keep proofs for every deduction you claim. Our income-tax team can review your situation at the start of the year and give you a simple plan to follow — no last-minute scramble in March.
This article is general guidance based on the rules in force on its publish date, not professional advice for your specific case. Tax and company rules change often — check your situation with us before you act.
