Ways to Save Income Tax Under the Old Tax Regime: Tax planning is essential for your income to be taxed is as high as possible and possible tax dues are as low as possible. Knowing how to save income tax under the old tax regime can greatly help one during the financial year 2024-25. Below are six ways in which you can minimise your tax burden.
1. Maximize Deductions Under Section 80C
Investments in Tax-Saving Instruments
You can claim deductions up to ₹1.5 lakh under Section 80C by investing in various instruments such as:
- Public Provident Fund (PPF)
- Equity-Linked Savings Scheme (ELSS)
- National Pension Scheme (NPS)
- Tax-Saver Fixed Deposits
These are investments that not only are tax-sheltered investments but are also a way of accumulating your future wealth.
2. Claim Home Loan Interest Deduction
Tax Benefits for Homeowners
According to Section 24(b), interest on housing loans is allowed in full, up to ₹2 lakh for the year. This is especially practical for homeowners today, as it has a specked blow towards decreasing taxable income.
3. Health Insurance Premiums
Deductions Under Section 80D
Section 80D allows premiums paid for health insurance to be deducted:
- For dependent children, spouses, and oneself, up to ₹25,000.
- An additional ₹25,000 if covering parents (₹50,000 if they are senior citizens).
This not only provides tax relief but also ensures you have adequate health coverage.
4. National Pension Scheme (NPS)
Retirement Savings with Tax Benefits
You get an extra tax allowance of ₹50,000 under Section 80CCD (1B), over and above the ₹1.5 lakh allowed under Section 80C while investing in NPS. That makes NPS a perfect retirement scheme with the added advantage of a tax shield.
5. Education Loan Interest Deduction
Financial Relief for Higher Education
Interest paid on education loans is also allowed as a deduction under Section 80E in any amount. This deduction can be claimed up to a total of 8 years or when the loan has been paid in full helping students and their families save lots of money.
6. Interest Earned on Savings Accounts
Tax Exemption Under Section 80TTA
Interest on savings accounts is tax free up to ₹10,000 under section 80TTA. This promotes accumulation and at the same time reduces taxes payable.
Conclusion
In conclusion, it is recommended that tax planning be part of your strategy in order that you can maximize your savings and at the same time, minimize your tax expenses. It is here that the general working population can cut their taxable pay using different deductions and exceptions under the old form of taxation system. The things that a taxpayer can take advantage of are – investments made under Section 80C, interest on a home loan, health insurance premium, and interest on education loan, etc.
