The government announced a big relief in income tax in the Union Budget 2025. Taxpayers are very happy with this. But, these changes in the tax rules will come into effect from the next financial year.
You will have to plan the tax for the financial year 2024-25 according to the old rules. There are only a few days left for the end of this financial year. Therefore, you do not have much time left for tax-savings. If you do not take steps for tax-savings before March 31, then you may have to pay a lot of tax. Moneycontrol is telling you about those methods, which will help you a lot in tax-savings.
Choosing the right income tax regime
Salaried taxpayers have the option to switch between the old income tax regime and the new regime every financial year. Changes in the tax regime can also be made while filing income tax returns. Generally, the last date for filing income tax returns is 31 July. In the old regime, there is a facility to claim deductions by investing in about a dozen options including PPF, ELSS. But, the tax rates are higher in this regime. In the new regime, there is no facility to claim most deductions. But, the tax rates are lower. Therefore, if you are a salaried taxpayer, then choose one of the new and old regimes carefully. If you are facing problems in this, then you can take the help of a tax consultant.
Claiming deduction under old regime
If you are using the old income tax regime, you can claim deduction on investment of up to Rs 1.5 lakh under Section 80C of the Income Tax Act, 1961. Apart from this, you can claim deduction by investing an additional Rs 50,000 in NPS. You can claim deduction of up to Rs 75,000 under Section 80D of the Income Tax Act. A person can claim deduction of Rs 25,000 on health policy premium for himself and family. Apart from this, he can claim deduction of Rs 50,000 on health policy premium for his elderly parents. By combining Section 80C and 80D, you can claim deduction of Rs 2.25 lakh. If you include an additional Rs 50,000 of NPS in this, then this amount becomes Rs 2.75 lakh.
Tax Benefits on Home Loan/HRA
If you are using the old income tax regime, you can also claim deduction on home loan. Under section 24B of the Income Tax Act 1961, a maximum deduction of Rs 2 lakh can be claimed on home loan interest. People who live in rented houses can claim tax benefits on HRA. This will reduce the taxpayer’s tax significantly. HRA helps a lot in tax savings. This can be understood with the help of an example.
Suppose your basic salary is Rs 50,000. You get Rs 20,000 as HRA every month. You pay Rs 25,000 as house rent in Delhi every month. You can claim exemption on HRA of Rs 20,000 per month. Or you can claim HRA on 50% of your basic salary. In your case, it will be Rs 25,000. Or you can claim exemption on the amount left after deducting 10% of your basic salary from the rent paid. In your case, it will be Rs 20,000.
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