Tax Planning Tips for Salaried Professionals in FY 2025-26

Tax Planning Tips for Salaried Professionals in FY 2025-26

The Annual April Panic—Sound Familiar?
It’s April. You’re sipping your morning coffee when an email lands in your inbox:
Submit your income tax declarations for FY 2025-26.

And just like that, the quiet morning turns into a frantic Google search:

How to save income tax at the last minute for salaried employees?

But hey—this year, let’s do things differently. No more 11th-hour declarations or confusing jargon. Let’s walk through practical, real-life income tax saving tips for salaried professionals that won’t leave you dazed or reaching for aspirin.

New Regime vs. Old Regime: The Eternal Dilemma

You know it’s the new financial year when everyone starts asking, “Which tax regime is better for salaried professionals in 2025-26?”
It’s not a political question—it’s income tax planning talk.

Old Regime: You get to claim a bunch of income tax deductions—HRA, Section 80C, 80D, interest on home loan, etc.
New Regime: Lower tax slabs for salaried taxpayers, but no deductions or exemptions.

Pro Tip: If you have home loans, insurance premiums, tuition fees, and invest actively, the old income tax regime might offer more tax savings.
If not? The new regime’s lower slab rates could save you more.

Use a tax calculator for salaried individuals or ask your company’s payroll team for a side-by-side comparison.

Max Out Section 80C (₹1.5 Lakh Limit)

Section 80C is the holy grail of tax saving for salaried taxpayers. But don’t just blindly dump money into instruments—make tax-saving investments that also grow your wealth.

Some smart investment options under 80C:

• EPF (Employee Provident Fund) – You’re contributing to this already via salary.

• Public Provident Fund (PPF) – Great for long-term, tax-free interest.

• ELSS Mutual Funds – Equity + tax-saving mutual fund combo with a 3-year lock-in.

• Life Insurance Premiums – But avoid overpaying for bad plans just to save tax.

Real-life hack: I use ELSS for wealth creation and PPF for safety. That way, I sleep well and save tax.

Don't Forget Health Insurance (Section 80D)

Health insurance for salaried professionals = peace of mind + tax deduction.

• ₹25,000 deduction for yourself/family.

• ₹50,000 deduction for senior citizen parents’ health insurance.

So if you’re paying ₹30k for your parents’ health insurance, that’s a ₹30k deduction right there.

Bonus: Your parents will thank you—especially if you remind them during flu season.

Home Loan Tax Benefits (Section 24 & 80C)

Ah, the joy of EMI. While your bank account weeps, the income tax department offers deductions:

• Principal repayment under Section 80C.

• Interest payment up to ₹2 lakh under Section 24(b).

If it’s your first home loan, explore Section 80EE or 80EEA for extra interest deduction.

Education Loans (Section 80E)

Still paying off that MBA? Or funding your kid’s future IIT dream?

Interest on education loans gets full deduction under Section 80E—no cap. Just ensure the loan is from a recognized financial institution.

It’s one of those deductions that actually feel satisfying: “I'm investing in learning and saving taxes.”

NPS for Extra Tax Saving (Section 80CCD)

National Pension System (NPS) contributions are eligible for:

• ₹50,000 extra under Section 80CCD(1B), over and above the ₹1.5 lakh 80C limit.

Even if you’re in your 30s, starting NPS early = retirement planning + tax saving.
Plus, it impresses HR. (Okay, maybe not—but it’s still a smart move.)

WFH Tax Benefits for Salaried Employees

Thanks to hybrid work, some companies still offer tax-free WFH reimbursements:

• Internet bills

• Furniture purchases

• Office equipment like laptops, monitors, chairs

It’s not technically a "deduction," but every untaxed rupee = extra take-home salary.

Common Tax Planning Mistakes Salaried People Make

• Investing blindly just to save tax. Always evaluate returns and lock-in periods.

• Forgetting to declare investments by the deadline. Or worse—missing proof submission.

• Skipping term life insurance. It’s not just a tax-saving tool—it’s a life-saving one.

Conclusion: Plan Smart, Not Last Minute

Income tax planning for salaried professionals in FY 2025-26 isn’t just about reducing tax—it’s about aligning your financial goals with your life goals.

Whether it’s ELSS mutual funds, health insurance deductions, or NPS, start early, and make informed investment decisions that support your future—not just this year’s Form 16.