Save Tax Legally in India

Tired of watching a chunk of your salary disappear to taxes?

You’re not alone.

But here’s the good news — India’s tax system offers dozens of legal ways to save, especially for salaried employees. The key is knowing where to look and planning smart.

This guide gives you 10 legitimate, actionable strategies to reduce your tax burden under the Income Tax Act, 1961.

Tax Regime Update: Old vs. New 2026

India offers two tax regimes:

Old Regime: Higher slabs but more exemptions/deductions
New Regime: Lower slabs but no major deductions

👉 If you’re claiming deductions like HRA, 80C, or home loan interest, the Old Regime may still save you more.

1. Maximize Section 80C (Up to ₹1.5 Lakh)

This is your primary weapon against taxes. Invest in:

ELSS Mutual Funds
PPF (Public Provident Fund)
EPF (Employee Provident Fund)
Life Insurance Premium
Tax-saving FDs (5-year lock-in)

💡 Pro Tip: ELSS has the shortest lock-in (3 years) and offers market-linked returns.

2. Use Section 80D: Health Insurance Premiums

Claim up to ₹25,000 for self/spouse/kids
Additional ₹25,000–₹50,000 for parents (based on age)
Covers preventive health check-ups (₹5,000 limit included)

📉 Example: Total deduction of ₹75,000 possible if covering senior parents.

3. Claim HRA (House Rent Allowance)

If you’re living in a rented house:

Submit rent receipts & landlord PAN (if rent > ₹1 lakh/year)
Use HRA calculator to estimate tax benefit
Applies only under Old Regime

4. Use Section 24(b): Home Loan Interest

Claim up to ₹2 lakh per year for home loan interest
Must be self-occupied property
You can also claim principal under 80C

🏡 Bonus: First-time homebuyers may claim extra under Section 80EEA (up to ₹1.5L)

5. Invest in NPS (Section 80CCD(1B))

Over and above 80C
Get additional ₹50,000 deduction
Low-cost, government-backed retirement plan
Tier-I account mandatory; lock-in until 60 years

6. Claim LTA (Leave Travel Allowance)

Claim travel expenses within India
Valid only on actual travel (flight/train/bus) — not hotel or food
Can be claimed twice in 4 years

✈️ Submit proof and travel tickets to your employer.

7. Deduct Standard Deduction Automatically

Every salaried employee automatically gets a ₹50,000 deduction
No proof or submission required

8. Claim Education Loan Interest (Section 80E)

No upper limit on interest deduction
Applies to loans for higher education (self, spouse, children)
Deduction valid for up to 8 years

9. Donate Smartly (Section 80G)

Donations to registered charities are 50% or 100% deductible
Must be paid via non-cash mode
Save tax and do good at the same time

10. Use Meal Coupons, Fuel Cards & Flexi Benefits

Many employers offer tax-free perks like:

Sodexo/meal coupons (up to ₹2,200/month)
Fuel reimbursement
Phone/internet bill reimbursement

📞 Talk to HR about optimizing your salary structure.

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Example Tax Savings Summary (Old Regime)

Deduction Type	Amount Saved (₹)
Section 80C (ELSS, EPF)	₹1,50,000
Section 80D	₹50,000
Home Loan (Sec 24b)	₹2,00,000
NPS (80CCD(1B))	₹50,000
Standard Deduction	₹50,000
Total Deduction	₹5,00,000+