Saving tax, the straightforward way.
The right tax regime and the right investments can save thousands every year. The new Income-tax Act, 2025 renamed the sections from 1 April 2026 — but the familiar deductions still exist.
Last reviewed: October 2026 · Give a missed call to +91 91766 82150 — I will call you back.
Choose the regime first.
New regime
- Lower slab rates, very few deductions
- Slabs: up to ₹4 lakh nil · ₹4–8 lakh 5% · ₹8–12 lakh 10% · ₹12–16 lakh 15% · ₹16–20 lakh 20% · ₹20–24 lakh 25% · above ₹24 lakh 30%
- Thanks to the rebate, income up to ₹12 lakh pays no tax (₹12.75 lakh for salaried, with the ₹75,000 standard deduction)
- Employer's NPS contribution is still deductible
Old regime
- Higher slab rates, but most deductions allowed
- Worth choosing if your deductions are large — PPF, insurance, home-loan interest, health premiums
- Salaried people can choose every year; business owners have limited switching
The ones families use most.
| Deduction | Limit | What qualifies |
|---|---|---|
| 80C (now Section 123) | ₹1.5 lakh | PPF, SSY, NSC, SCSS, 5-year tax-saver FD and Post Office TD, ELSS, life-insurance premium, EPF/VPF, home-loan principal, children's tuition fees |
| 80D (now Section 126) — health insurance | ₹25,000 self & family · ₹50,000 if senior | Health-insurance premium; preventive check-up up to ₹5,000 within the limit |
| 80D — parents | ₹25,000 · ₹50,000 if parents are seniors | Premium paid for parents' health insurance |
| NPS additional (formerly 80CCD(1B)) | ₹50,000 | Your own NPS contribution, over and above the ₹1.5 lakh limit |
| Home-loan interest (self-occupied) | ₹2 lakh | Interest on a loan for your own home |
| Senior citizens' interest (formerly 80TTB) | ₹50,000 | Interest from bank and post-office deposits, for those aged 60+ |
Limits as per the rules in force for 2026-27. Confirm your situation with a chartered accountant before filing.
Deposit, interest and maturity.
EEE schemes
- PPF and Sukanya Samriddhi: deposit deductible, interest and maturity tax-free
Partly taxed
- NSC, SCSS, 5-year FD / PO TD: deposit qualifies for 80C, but interest is taxable every year at your slab rate
No deduction
- KVP, Post Office MIS, RD, regular FDs: no deduction; interest taxable
Policies
- Premium deductible under 80C (old regime)
- Maturity tax-free only within limits — for non-ULIP policies issued from April 2023, total annual premium up to ₹5 lakh
Unit-linked plans
- Maturity tax-free only if the annual premium is within ₹2.5 lakh (policies from February 2021)
Avoid unnecessary deduction
- Banks deduct TDS on interest above ₹50,000 a year (₹1 lakh for senior citizens)
- If your income is below the taxable limit, submit Form 15G (below 60) or 15H (60+) each year
- Always quote your PAN — otherwise TDS is 20%
Common questions
Is Section 80C abolished?
No. Under the Income-tax Act, 2025 it is renumbered as Section 123, with the same ₹1.5 lakh limit — available only in the old regime.
Which tax regime should I choose?
It depends on your income and deductions. If your deductions are small, the new regime is usually better; with large deductions (PPF, insurance, home loan), the old regime may save more. Calculate both.
Is health insurance premium deductible in the new regime?
No. The health-insurance deduction (80D, now Section 126) is available only in the old regime.
How do senior citizens avoid TDS on FD interest?
If total income is below the taxable limit, submit Form 15H to each bank at the start of the financial year. The TDS threshold for seniors is ₹1 lakh of interest per bank per year.
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