NPS, ELSS, PPF, SSY, Others: Invest In These Tax-Saving Schemes Before March 31 To Save FY25 Income Tax – News18
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Taxpayers have around 18 days left till March 31 to invest in tax-saving instruments like NPS, ELSS and PPS, among others, that can save some income tax for FY25 under the old tax regime.
Section 80C is the most widely used tax-saving avenue, allowing deductions of up to Rs 1.5 lakh per financial year.
The current financial year 2024-25 is going to be over on March 31, and the ITR season 2025 will start from April 1. Taxpayers have around 18 days left till March 31 to invest in tax-saving instruments like NPS, ELSS and PPF, among others, that can save some income tax for FY25 under the old tax regime. Here are all the tax-saving instruments available under the old tax regime:
1. Section 80C: Deductions Up To Rs 1.5 Lakh
Section 80C is the most widely used tax-saving avenue, allowing deductions of up to Rs 1.5 lakh per financial year. Eligible investments include:
Employees’ Provident Fund (EPF): A retirement savings scheme where both employee and employer contribute.
Public Provident Fund (PPF): A long-term investment option with a 15-year lock-in period and tax-free returns.
National Savings Certificate (NSC): A fixed-income savings scheme with a 5-year maturity.
Tax-Saving Fixed Deposits: Bank FDs with a lock-in period of 5 years.
Equity-Linked Savings Scheme (ELSS): Mutual funds with a mandatory lock-in of 3 years.
Life Insurance Premiums: Premiums paid for life insurance policies qualify under 80C.
Sukanya Samriddhi Yojana (SSY): A savings scheme for a girl child’s future expenses.
Tuition Fees: Fees paid for children’s education in recognized institutions.
Repayment of Home Loan Principal: Principal repayment of a home loan is deductible under 80C.
2. Section 80D: Health Insurance Premiums
– Premiums paid for medical insurance for self, family, and parents are eligible for deduction.
– Deduction limits:
– Rs 25,000 for self, spouse, and children.
– Rs 50,000 if parents are senior citizens.
– Additional Rs 5,000 for preventive health check-ups.
3. Section 80E: Education Loan Interest
– Interest paid on education loans for higher studies is fully deductible.
– No cap on the deduction amount, but the benefit is available for 8 years from the start of repayment.
4. Section 80EE and 80EEA: Additional Home Loan Interest Benefits
– 80EE: Additional deduction of Rs 50,000 for first-time homebuyers on home loan interest.
– 80EEA: Additional deduction of Rs 1.5 lakh for affordable housing loans.
5. Section 80G: Donations to Charitable Institutions
– Donations to eligible charities and relief funds qualify for deductions.
– Some donations qualify for a 100% deduction, while others allow 50%.
6. Section 80GG: House Rent Allowance (HRA) for Non-Salaried Individuals
– Deduction on rent paid if HRA is not part of salary.
– Maximum deduction: Rs 60,000 per year or 25% of total income, whichever is lower.
7. Section 24(b): Home Loan Interest Deduction
– Deduction of up to Rs 2 lakh per year on home loan interest for a self-occupied house.
– No upper limit for rented properties.
8. National Pension System (NPS) – Section 80CCD(1), 80CCD(1B), and 80CCD(2)
– 80CCD(1): Deduction up to 10% of salary (20% for self-employed) within 80C limit.
– 80CCD(1B): Additional deduction of Rs 50,000 for NPS contributions.
– 80CCD(2): Employer contributions up to 10% of salary are deductible (not included in 80C limit).
9. Section 80TTB: Interest Income for Senior Citizens
– Senior citizens can claim a deduction of up to Rs 50,000 on interest income from savings accounts, FDs, and post office deposits.
ITR Season 2025 To Start From April 1
The income tax return (ITR) filing for the assessment year 2025-26 is going to start from April 1, 2025. For salaried taxpayers, their employer will issue a Form 16 that will have all the income tax-related details for the current financial year 2024-25 (or AY 2025-26).
Form 16 is a certificate issued by an employer to employees, which contains details of the employee’s salary and the tax deducted at source (TDS) during the financial year. Essentially, it serves as proof that your employer has deducted and deposited tax on your behalf with the income tax department.
