What is the maximum tax I can save under Section 80C?

Under Section 80C, you can claim a deduction of up to ₹1.5 lakh per financial year. At the 30% tax bracket, this saves you ₹46,800 (including 4% health and education cess). Under the old tax regime only.

Is NPS better than ELSS for tax saving?

Both serve different purposes. ELSS has a 3-year lock-in and offers equity-level returns with Section 80C benefit. NPS offers an additional ₹50,000 deduction under Section 80CCD(1B) beyond the 80C limit, but locks in until age 60 with mandatory annuity purchase at maturity.

Should I choose old tax regime or new tax regime?

The new tax regime (default from FY 2023-24) has lower rates but allows fewer deductions. The old regime is better if your total deductions exceed ₹3.75 lakh (HRA + 80C + 80D + NPS etc.). Calculate both and choose whichever gives lower tax.

Can I claim HRA and home loan interest both?

Yes, you can claim both HRA (if you live in a rented house in a different city) and home loan interest deduction (Section 24b, up to ₹2 lakh) if your home is in a different city. However, under the new tax regime, neither HRA exemption nor Section 24b deduction is available.

Tax-Saving Investments for Salaried Employees in India 2026 — Complete Guide

Why Tax Planning Matters for Salaried Employees

A salaried employee in the ₹15–25 lakh income range can legally save ₹50,000–₹1,00,000+ in taxes every year through proper planning. Yet most Indians miss out by either not knowing the deductions available or not investing in the right instruments before March 31.

Section 80C — ₹1.5 Lakh Deduction Limit

The most popular tax-saving bucket. Eligible investments and expenses:

ELSS Mutual Funds — 3-year lock-in, equity returns, best for wealth creation
EPF / VPF — Mandatory PF + voluntary contribution
PPF — 15-year lock-in, government-backed, tax-free maturity
NSC — 5-year post office scheme, interest taxable
Tax-Saver FD — 5-year bank FD, interest taxable
Life Insurance Premium — Term + traditional plans
Tuition Fees — Children's school/college fees
Home Loan Principal — Only the principal repayment

Section 80D — Health Insurance Premium

Deduction for health insurance premiums:

₹25,000 for self + spouse + children
₹25,000 additional for parents (₹50,000 if parents are senior citizens)
Maximum total: ₹75,000 per year

Section 80CCD(1B) — NPS Additional Deduction

Contribute up to ₹50,000 to the National Pension System (NPS) and claim an additional deduction over and above the ₹1.5 lakh 80C limit. At 30% tax bracket, this saves ₹15,600 more.

HRA Exemption

If you live in a rented home, you can claim House Rent Allowance (HRA) exemption. The exempt amount is the minimum of:

Actual HRA received from employer
50% of basic salary (metro) or 40% (non-metro)
Actual rent paid minus 10% of basic salary

Ensure you collect rent receipts and your landlord's PAN (if annual rent exceeds ₹1 lakh).

Section 24b — Home Loan Interest

Claim up to ₹2 lakh deduction on home loan interest per year (for a self-occupied property). For let-out property, the full interest is deductible (subject to loss set-off rules).

Leave Travel Allowance (LTA)

Claim LTA for domestic travel expenses twice in a 4-year block. Keep travel tickets and boarding passes as proof. Air and rail tickets are covered; hotel and food are not.

Tax Planning Calendar

April–June: Plan investments for the year, start ELSS SIPs
July–September: File ITR, check Form 26AS for TDS accuracy
October–December: Review progress, top-up NPS if needed
January–March: Submit investment proofs to employer, last-minute investments

Track All Tax-Saving Investments in One Place

WealthAnalytics helps you track your ELSS SIPs, insurance premiums, NPS contributions, and EPF balance in one dashboard. Set Section 80C utilization alerts to ensure you fully utilize your ₹1.5 lakh limit before March 31.