Top 10 Tax Saving Tips for FY 2025–26 (AY 2026–27)

 

 Introduction

With rising incomes and a revised tax system, effective tax planning is key to saving money. The government offers two tax regimes — Old and New — and choosing the right one can significantly impact your tax outgo. Here’s a detailed guide to help you plan better.

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Latest Income Tax Slabs – FY 2025–26 (AY 2026–27)

 New Tax Regime (Default Regime)

Income Range	Tax Rate
Up to 4,00,000	Nil
4,00,001 – 8,00,000	5%
8,00,001 – 12,00,000	10%
12,00,001 – 16,00,000	15%
16,00,001 – 20,00,000	20%
20,00,001 – 24,00,000	25%
Above 24,00,000	30%

 Section 87A Rebate:

• Available for income up to 7 lakh (Old Regime)
• Available for income up to 12 lakh (New Regime — FY 2025–26 onwards)
• Full rebate means no tax payable if income ≤ 12 lakh (under New Regime)

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 Old vs. New Regime: What You Can Claim

Deduction/Exemption	Old Regime	New Regime
Standard Deduction (50,000)	Yes	Yes (from FY 2023–24)
Section 80C (PPF, ELSS, LIC etc.)	Yes	No
Section 80D (Health Insurance)	Yes	No
HRA (House Rent Allowance)	Yes	No
Home Loan Interest (Sec 24b)	Yes	No
NPS – Sec 80CCD(1B)	Yes	No
Education Loan Interest (80E)	Yes	No
LTA (Leave Travel Allowance)	Yes	No

 

 Use the Old Regime if you claim many deductions.
 Use the New Regime if your income is below 12 lakh or you don't use major deductions.

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 Top 10 Tax Saving Tips (for Both Regimes)

1. Choose the Best Regime

Use income tax calculators to compare both options before filing ITR.

2. Maximize Section 80C (Old Regime Only)

Invest 1.5 lakh in options like:

• PPF
• ELSS mutual funds
• Life Insurance
• Tax-saving FDs
• Home loan principal
• Sukanya Samriddhi Yojana

3. Health Insurance (Section 80D – Old Regime)

• 25,000 for self + family
• 50,000 additional for senior citizen parents

4. NPS Contribution (80CCD(1B) – Old Regime)

• Additional 50,000 deduction
• Great for retirement planning

5. Home Loan Benefits (Old Regime)

• Up to 2 lakh interest deduction (Section 24b)
• Up to 1.5 lakh principal under 80C

6. HRA Claim (Old Regime)

If you live in rented accommodation and get HRA.

7. Standard Deduction (Both Regimes)

Automatically applies for salaried employees and pensioners – 50,000.

8. Tax-Free Investments

• PPF, EPF interest
• Sukanya Samriddhi maturity
• Agricultural income
• Gifts from relatives/marriage

9. Proper Gift Planning

Gifts up to 50,000/year (not from relatives) are tax-free.
No limit if received from relatives, under a will, or on marriage.

10. File Timely and Accurately

Use Form 16, Form 26AS, AIS, and correct regime while filing returns.
Late ITR = 1,000–5,000 penalty + interest.

Income Tax Website : https://www.incometax.gov.in/iec/foportal/

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 Tax Comparison Across Countries

 Top 10 Highest Income Tax Countries

Country	Approx. Top Tax Rate
Côte d'Ivoire	60%
Finland	56.95%
Japan	55.97%
Denmark	55.90%
Austria	55%
Sweden	52.9%
Belgium	50%
Netherlands	49.5%
Israel	50%
Slovenia	50%

 Top 10 Countries with No or Very Low Income Tax

Country	Income Tax Rate
UAE	0%
Qatar	0%
Kuwait	0%
Bahrain	0%
Oman	0%
Saudi Arabia	0%
Monaco	0%
Cayman Islands	0%
Bermuda	0%
Brunei	0%

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 Final Thoughts

Tax planning is not only about saving money — it’s about smart financial management. Choose your regime wisely based on your income and investments. With proactive planning, you can legally save tax while staying compliant.

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