Introduction:
Are you tired of seeing a big chunk of your salary go away in taxes? Don’t worry — you’re not alone. The good news is, you can legally reduce your tax liability by knowing the right deductions and planning smartly. In this post, I’ll share practical and real ways to save income tax in India for FY 2024-25, especially helpful for middle-class salaried employees.
💡 1. Use Section 80C (Up to ₹1.5 Lakh Deduction)
This is the most popular way to save tax. Under Section 80C, you can claim up to ₹1,50,000 in deductions.
What qualifies?
✅ Employee Provident Fund (EPF)
✅ Public Provident Fund (PPF)
✅ Life insurance premium
✅ ELSS mutual funds
✅ Children’s tuition fees
✅ Home loan principal repayment
✅ 5-year fixed deposits
👉 Tip: Invest in ELSS if you want tax savings + market returns with shortest lock-in (3 years).
🏠 2. House Rent Allowance (HRA)
If you live in a rented house and get HRA as part of your salary, you can claim deductions.
HRA exemption depends on:
- Actual HRA received
- Rent paid minus 10% of salary
- 50% of salary (in metro cities), 40% otherwise
📌 Note: Keep rent receipts and landlord PAN if rent exceeds ₹1 lakh/year.
🏥 3. Medical Insurance – Section 80D
Health is wealth — and it helps your taxes too.
You can claim:
- ₹25,000 for self, spouse & children
- Extra ₹50,000 for parents (if they are senior citizens)
👉 Even preventive health check-up costs up to ₹5,000 are allowed within the limit.
🏦 4. Home Loan Interest – Section 24(b)
If you have taken a home loan, you can claim deduction up to ₹2,00,000 per year on interest paid.
📌 Combine it with Section 80EE or 80EEA for first-time buyers and you save even more!
📚 5. Education Loan – Section 80E
If you or your children have taken an education loan, the interest paid is fully deductible for up to 8 years. There’s no cap on amount — that’s a big relief!
💼 6. New vs Old Tax Regime (Which One to Choose?)
Since 2020, you can choose between:
- Old Regime: with all deductions and exemptions
- New Regime: lower tax slabs but no deductions
✅ For most salaried individuals with investments, Old Regime is still more beneficial.
🧾 Example: How Much Can You Save?
If you earn ₹7.5 lakhs and invest smartly using 80C, 80D, and HRA:
➡️ Your taxable income could reduce to under ₹4.5 lakh
➡️ You might pay little to zero tax, depending on rebate (under 87A)
📌 Final Thoughts
You work hard — don’t let taxes take away more than necessary. By using the above legal tax-saving options, you can plan your finances better and build long-term wealth.
👨👩👧👦 Middle-class families, especially, should make it a habit to review their tax planning every year.