The financial year is coming to a close, and if you’re still following the old tax regime, now is the time to make your final tax-saving decisions. While many taxpayers are opting for the new regime, those sticking to the old one still have access to various exemptions and deductions that can significantly reduce their tax liability.
To ensure you don’t miss out on any benefits, here’s a checklist of key deductions you can claim.
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Section 80C — Tax saving investments
This is one of the most common deductions that people claim. You can invest in tax saving instruments like PPF, ELSS, NPS, NSC, Tax saving FDs and LIC premiums and reduce your taxable income by ₹1.50L.
If you fall in the highest slab of 30%, you’ll save ₹46,800 in taxes.
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Section 80CCD(1B) — Additional deduction for NPS
If you’re investing in the National Pension System (NPS), you get an additional deduction of ₹50,000. This is over and above the ₹1.50L limit of Section 80C, making it a great option for both tax saving and retirement planning.
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Section 80D — Health insurance premiums
You can claim a deduction of up to ₹25,000 for health insurance premiums paid for yourself, spouse, and children.
If you’re paying for senior citizen parents, you can claim an additional ₹50,000.
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Section 24(b) — Home loan interest deduction
If you have taken a home loan, you can claim a deduction on the interest paid during the financial year. If the property is self-occupied, you can claim a deduction of up to ₹2 lakhs.
In case the property is let-out, you can claim the exemption for the entire interest amount. -
House Rent Allowance (HRA) & Section 80GG
If you live in a rented house and receive HRA as part of your salary, you can claim HRA based on actual rent paid.
However, if you do not receive HRA from your employer or are self-employed, you can claim a deduction of up to ₹60,000 per year u/s 80GG, provided you meet certain conditions.
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Section 80E — Education loan interest
You can claim a deduction if you have taken an education loan for higher studies (for yourself, spouse, or children). There’s no upper limit and the entire interest amount can be claimed. However, the deduction is available only for 8 years from the start of repayment.
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Section 80G — Donations
If you have donated to eligible charities, relief funds, or NGOs, you can claim tax benefits. The deduction can be 50% or 100% of the donated amount, depending on the organization. For instance, donations to government relief funds, such as the PM CARES Fund, qualify for a 100% deduction.
If you’ve chosen the new tax regime, there are still a few deductions you can claim. Check out the list of eligible deductions.
Additionally, stock market investors can optimize their tax liability through tax loss harvesting—a strategy that helps offset capital gains. You can read more about it here.
No matter which tax regime you follow, March 31 is the deadline to make tax-saving investments and execute tax harvesting. Any action taken after this date won’t count for the current financial year.