Are you a salaried employee looking to reduce your tax liability? You can legally lower your taxable income and save money using various deductions. Here’s how you can make the most of tax-saving options in FY 2024-25.
1. Essential Tax Deductions You Must Know
Standard Deduction (Flat ₹50,000)
Every salaried individual gets a standard deduction of ₹50,000. This applies to both the old and new tax regimes.
House Rent Allowance (HRA) – Section 10(13A)
If you live in a rented house, you can claim HRA exemption. The deduction is the least of:
- Actual HRA received
- 50% of salary (metro) or 40% of salary (non-metro)
- Rent paid minus 10% of salary
2. Popular Tax-Saving Investments
Deductions Under Section 80C (Limit: ₹1.5 Lakh)
You can invest in the following to claim deductions:
- Employee Provident Fund (EPF)
- Public Provident Fund (PPF)
- Life Insurance Premiums
- ELSS Mutual Funds
- 5-Year Fixed Deposits
National Pension System (NPS) – Section 80CCD
- Additional ₹50,000 deduction over and above the 80C limit under Section 80CCD(1B)
- Employer’s contribution (up to 10% of salary) is deductible under Section 80CCD(2)
3. Health & Home Loan Deductions
Medical Insurance – Section 80D
- Self, spouse, children → ₹25,000
- Parents (below 60) → ₹25,000
- Parents (above 60) → ₹50,000
Home Loan Interest – Section 24(b) & 80EEA
- ₹2 lakh deduction on home loan interest under Section 24(b)
- First-time homebuyers can claim an additional ₹1.5 lakh under Section 80EEA
| Deduction Type | Maximum Limit |
|---|---|
| Standard Deduction | ₹50,000 |
| 80C (Investments) | ₹1.5 Lakh |
| 80D (Health Insurance) | ₹25,000 – ₹50,000 |
| Home Loan Interest | ₹2 Lakh – ₹3.5 Lakh |
Did You Know? You can claim an additional ₹5,000 for preventive health check-ups under Section 80D!
Final Thoughts
By utilizing these deductions wisely, you can save thousands in taxes. Invest smartly and make the most of your hard-earned money!