Make the Most of Section 80C (₹1.5 Lakhs Limit)

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 certain instruments, including:

• Employee Provident Fund (EPF)
  Automatically deducted from your salary, your EPF contribution qualifies under 80C.
• Public Provident Fund (PPF)
  Offers tax-free returns with a 15-year lock-in. Great for long-term savings.
• Equity Linked Savings Scheme (ELSS)
  A mutual fund with the shortest lock-in period (3 years) under 80C—ideal for those seeking higher returns and willing to take some risk.
• Life Insurance Premiums
  Whether term or traditional plans, the premiums you pay qualify for deduction.
• Principal Repayment on Home Loan
  The principal portion of your EMI qualifies under this section.
• Children's Tuition Fees
  Fees for up to two children can be claimed.

Hack: Combine EPF + ELSS + Term Insurance + Tuition Fees to reach the ₹1.5 lakh limit optimally.

Claim HRA Even if You Live With Parents

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:

• Rent is actually paid (through bank transfer, UPI, etc.)
• Your parents declare the rental income in their ITR (if taxable)

Hack: This is especially useful in metro cities where HRA forms a big chunk of your salary structure.

Use Section 80D – Health Insurance Premiums

Health insurance isn't just a safety net—it's also a tax-saving tool:

• Claim up to ₹25,000 for premiums paid for self, spouse, and children.
• Claim an additional ₹25,000 (₹50,000 if they are senior citizens) for parents.

Hack: Buy a family floater plan and an individual policy for senior citizen parents to maximize this benefit.

National Pension System (NPS) – Section 80CCD(1B)

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 from 80C.

• It's a retirement-focused investment with tax-saving perks.
• Partial withdrawal is allowed after 3 years for specific needs like marriage, home purchase, etc.

Hack: Use NPS purely for tax-saving under 80CCD(1B), especially if you've already maxed out your 80C.

Interest on Home Loan – Section 24(b)

If you've taken a home loan, the interest component of your EMI can fetch you deductions of up to ₹2 lakhs per year under Section 24(b).

• The property must be self-occupied.
• If the house is rented out, the full interest amount (with no upper limit) can be claimed, but net loss set-off is capped at ₹2 lakh.

Hack: Combine this with Section 80C (for principal) to claim a massive tax deduction on your home loan.

Standard Deduction (₹50,000)

Every salaried employee is entitled to a flat ₹50,000 standard deduction—no bills required, no forms to fill. It's auto-applied by your employer when computing taxable income.

Hack: Even if you have fewer investments or deductions, this fixed ₹50,000 cut provides breathing room.

Deduction on Education Loan Interest – Section 80E

Planning higher education or have already taken an education loan? The interest you pay on it is fully deductible under Section 80E for up to 8 years.

• No cap on the maximum amount of interest.
• Only the interest component (not the principal) is deductible.

Hack: This is especially helpful for working professionals who've taken loans for MBA or upskilling programs.

Switch to the Right Tax Regime

With the introduction of the new tax regime (optional), you can opt for lower tax rates without exemptions and deductions. It's simpler, but not always better.

Here's a quick comparison (example):

Hack: Use a regime comparison calculator like the one on TaxSavvy before finalizing.

Claim Work-From-Home Reimbursements (if applicable)

Many companies offer reimbursement components like internet, furniture allowance, etc. These are not taxable if supported with proper bills.

Hack: Submit eligible bills on time and ask your HR to structure your salary smartly with allowances like LTA, fuel, phone, etc.

File Your Taxes On Time

It sounds obvious but filing before the due date helps you:

• Avoid late filing fees under Section 234F (₹1,000 to ₹5,000).
• Get faster refunds.
• Avoid unnecessary scrutiny or notices.

Hack: Use a platform like TaxSavvy for guided filing—it's fast, simple, and built for busy professionals.

Bonus Hack: Invest in Tax-Saving Fixed Deposits

Tax-saving FDs offer deduction under 80C with a 5-year lock-in. Returns are taxable, but they're ideal for risk-averse investors.

Final Thoughts

Tax-saving doesn't mean waiting till March-end and scrambling to invest. It's a year-long game of smart decisions—from salary structuring to insurance, home loans to ELSS. By understanding and using the full power of deductions and exemptions available, you not only reduce your tax burden but also build a stronger financial future.

Want to save more and file smarter?

Join TaxSavvy today and get personalized tax-saving strategies designed just for salaried professionals.